GR L 20657; (September, 1966) (Digest)
G.R. No. L-20657 September 30, 1966
PHILIPPINE NATIONAL BANK, petitioner, vs. BERNARDO P. LANDETA and COURT OF APPEALS, respondents.
FACTS
Bernardo P. Landeta, owner of a homestead (Original Certificate of Title No. 3291), mortgaged it to the Philippine National Bank (PNB) to secure a loan of P600.00 on March 19, 1948. Due to his failure to pay, PNB foreclosed the mortgage and acquired the property at the foreclosure sale on July 22, 1952. Title was issued to PNB on June 17, 1954. On September 27, 1954, PNB gave Landeta a last opportunity to repurchase the property within ten days. Landeta expressed his desire to repurchase on October 3, 1954, but requested an extension until May 1955. Despite this, PNB sold the property to Doroteo Yabes for P3,000.00 on January 6, 1955, and informed Landeta he could redeem from Yabes within five years. Yabes’ title was issued (TCT No. 2305), and he later paid delinquent taxes on the property. On November 7, 1956, Landeta filed an action against PNB and Yabes to enforce his right to repurchase under Section 119 of the Public Land Act. The trial court ordered Yabes to resell the property to Landeta for P3,414.03 and dismissed the complaint against PNB. The Court of Appeals reversed, annulling the sale from PNB to Yabes, ordering PNB to allow Landeta to repurchase for the principal obligation and accumulated interest up to the time of actual repurchase, ordering PNB to return the purchase price and expenses to Yabes, and ordering Landeta to pay Yabes the realty taxes he had paid. PNB appealed.
ISSUE
Whether Landeta should repurchase his homestead property from PNB or from Yabes, which determines the repurchase price.
RULING
The Supreme Court affirmed the decision of the Court of Appeals. Landeta is entitled to repurchase the property directly from PNB, and the consideration shall be the amount corresponding to the principal obligation and accumulated interest up to the time of actual repurchase. The Court held that allowing Landeta to repurchase from PNB is correct; otherwise, the Bank could render nugatory the statutory right of repurchase by conveying the property to a third party for an amount beyond the owner’s capacity to pay. The sale to Yabes was made before the expiration of the five-year repurchase period, and the right of repurchase may be exercised irrespective of a subsequent conveyance by the Bank.