G.R. No. 46294 December 13, 1938

THE PHILIPPINE NATIONAL BANK, plaintiff-appellant, vs. JOSE T. ESPINOSA, defendant-appellee.

FACTS

A writ of execution was issued against defendant Jose T. Espinosa to satisfy a deficiency judgment. His parcel of land, acquired under a homestead title issued on October 26, 1923, was attached on February 26, 1936, and sold at public auction to the Philippine National Bank (PNB) on May 21, 1936. Espinosa moved to annul the attachment and sale, arguing that the five-year prohibition against alienation or encumbrance of a homestead under the Public Land Act had not yet expired when the attachment was levied. The Court of First Instance of Tarlac declared the attachment and sale null and void. PNB appealed.

ISSUE

Whether the attachment and execution sale of a homestead within the five-year prohibitory period is valid when the judgment creditor is the Philippine National Bank, a government-controlled banking corporation.

RULING

Yes. The Supreme Court reversed the lower court’s order. Section 116 of Act No. 2874, as amended by Act No. 3517, prohibits the encumbrance or alienation of a homestead for five years from the issuance of the patent, “*except in favor of the Government or any of its branches, units, or institutions, or legally constituted banking corporations*.” The Philippine National Bank is a government-controlled banking corporation expressly exempted from the prohibition. Therefore, the attachment and execution sale to satisfy PNB’s judgment against the homesteader was valid and legal, regardless of the lack of voluntary act by the homesteader.

AI Generated by Armztrong.