GR L 3540; (July, 1951) (Digest)
G.R. No. L-3540 July 30, 1951
Filomeno B. Cassion and Lorenza B. Cassion, plaintiffs-appellees, vs. Banco Nacional Filipino and Angel C. Cabatingan, defendants. Banco Nacional Filipino, defendant-appellant.
FACTS
On April 8, 1932, plaintiffs Filomeno B. Cassion and Lorenza B. Cassion mortgaged two parcels of land, which they had acquired as homesteads, to the Philippine National Bank to secure a promissory note for P600. Due to the mortgagors’ default, the Bank extrajudicially foreclosed the mortgage and became the highest bidder at the auction sale held on November 19, 1934. Over a year later, the Bank sold the two parcels to Angel C. Cabatingan. Before the expiration of five years from the date of the auction sale, the plaintiffs offered to repurchase the lands, but the Bank rejected the offer. This led to the plaintiffs filing a suit against both the Bank and Cabatingan. The lower court ruled in favor of the plaintiffs, and only the Philippine National Bank appealed.
ISSUE
Which of the conflicting statutory provisions should prevail: Section 32 of Act No. 2938 (amending the Philippine National Bank Charter) and Section 6 of Act No. 3135 (authorizing extrajudicial foreclosures), which allow the debtor only one year to redeem property sold under mortgage foreclosure, or Section 117 of Act No. 2874 (the Public Land Act), which provides a five-year repurchase period for lands acquired under free patent or homestead provisions?
RULING
The Supreme Court ruled that Section 117 of Act No. 2874 , the Public Land Act, prevails. Applying the rule of statutory construction that a particular provision controls a general one, the Court held that Act No. 2874 is a special law dealing specifically with homestead or free-patented lands, intended to promote small land ownership and preserve public land grants for the underprivileged. In contrast, Act No. 2938 and Act No. 3135 are general laws applicable to all kinds of mortgaged property. Therefore, homestead lands constitute an exception to the one-year redemption period under the general banking and foreclosure laws, and the plaintiffs’ right to repurchase within five years is upheld. The appealed decision was affirmed, with costs against the appellant Bank.