Tupas vs. Damasco

Under Section 119 of Commonwealth Act 141, the five-year period to repurchase a homestead sold at an execution sale is counted from the date of the execution sale, not from the expiration of the redemption period or the registration of the consolidation of title; an action filed after that period is barred.

The Tupases held Lot No. 895 in General Santos under a homestead patent issued pursuant to the Public Land Act. Section 119 of Commonwealth Act 141, as amended, gives the homestead applicant, his widow or legal heirs a five-year period from the date of conveyance to repurchase the land. The dispute required the SC to fix the starting point of that period in the context of an execution sale and subsequent transfers.

Lot No. 895, Pls-209-D, a 128,409-square-meter parcel in General Santos, South Cotabato, was acquired by spouses Benjamin Tupas and Leonor Baldonado under the homestead provisions of the Public Land Act under Homestead Application No. 520 (NLSA) G-V-228. Homestead Patent No. V-240 was issued to them on March 8, 1951, and on July 8, 1952, Original Certificate of Title No. V-1042 was issued in their names by the Register of Deeds of Cotabato.

On November 30, 1951, the Tupases sold the land for P3,000 to Juanita Bulaong, then eleven years old and represented by her father Eusebio Bulaong. Because that deed was executed within the prohibited five-year period from the issuance of the homestead patent, another Deed of Sale for the same consideration of P3,000 was executed on May 1, 1957 by the Tupases in favor of Juanita Bulaong, and on December 16, 1957, Transfer Certificate of Title No. T-5281 was issued in her name. From 1951 to the present, Juanita and Eusebio occupied the parcel and later caused the construction of a residential building valued at P35,000, more or less.

Meanwhile, Benjamin Tupas obtained a special crop loan from the Philippine National Bank. For failure to pay, PNB, Cotabato Branch, instituted Civil Case No. 770 for Sum of Money before the then Court of First Instance of Cotabato against Benjamin Tupas. A writ of preliminary attachment was issued and annotated on August 23, 1954 at the back of the original copy of TCT No. V-1642; the attachment was later re-entered by the Register of Deeds on Transfer Certificate of Title No. T-5281 issued to Juanita Bulaong pursuant to the May 1, 1957 deed. On April 4, 1959, pursuant to a writ of execution in Civil Case No. 770, the Provincial Sheriff of Cotabato sold the land at public auction to PNB for P6,400, PNB being the sole bidder. The certificate of sale dated April 6, 1959 specified that the one-year redemption period would expire on April 4, 1960, and it was registered on August 26, 1959.

On March 26, 1960, Juanita Bulaong, then married to Daniel Damasco, instituted Civil Case No. 264 against PNB for recovery of ownership; the complaint was amended on April 9, 1962 into an action for quieting of title, joining the Register of Deeds of Cotabato and the Provincial Sheriff. Judgment was rendered in favor of PNB, nullifying the May 1, 1957 sale by the Tupases to Juanita. Juanita and Daniel appealed to the CA as CA-G.R. No. 3287-R, but withdrew the appeal on April 3, 1964 after entering into a compromise agreement to purchase the land from PNB. On June 4, 1964, Juanita and Daniel executed a Deed of Absolute Sale transferring the land to Eusebio Bulaong, married to Consuelo Sabile Bulaong, for P1.00, the deed stating that the nominal consideration was because all expenses in the acquisition were advanced and defrayed by Eusebio. On September 23, 1964, pursuant to the agreement in CA-G.R. No. 3387-R, PNB executed a Deed of Sale in favor of spouses Daniel Damasco and Juanita Bulaong for P10,089.35.

On March 2, 1965, title over the land was consolidated in PNB's name pursuant to an affidavit of consolidation; on March 17, 1965, after registration of the affidavit, Transfer Certificate of Title No. T-13103 was issued in PNB's name. The Deed of Sale dated September 23, 1964 was then presented for registration, and Transfer Certificate of Title No. 13104 was issued in the name of the Damascos. On April 26, 1965, Eusebio Bulaong filed Civil Case No. 585 against the Damascos for recovery of real property. Judgment was rendered holding that the land was actually purchased from PNB by Eusebio Bulaong for P10,089.35 on September 23, 1964, not by the Damascos, and ordering the Damascos to convey the land to Eusebio; no appeal was taken and the decision became final. On June 10, 1965, the Tupases filed Civil Case No. 597 against the Damascos, the Register of Deeds, and PNB for repurchase under Section 119 of Commonwealth Act 141.

• Computation of Repurchase Period: Whether the five-year period under Section 119 of Commonwealth Act 141 is counted from the date of the execution sale or from the expiration of the redemption period or registration of the consolidation of title.

• Computation of Repurchase Period: No. The five-year period is counted from the date of the conveyance or execution sale; the action filed on June 10, 1965 was beyond five years from April 4, 1959, and even beyond five years from April 4, 1960.

• Computation of Repurchase Period: Section 119 of Commonwealth Act 141 provides that every conveyance of land acquired under the free patent or homestead provisions, when proper, is subject to repurchase by the applicant, his widow or legal heirs within five years from the date of the conveyance. The SC treated Olivia vs. Lamadrid as the case in point and applied its doctrine that the five-year period runs from the date of the conveyance or foreclosure sale. Applying that doctrine, the Tupases could exercise the right to repurchase only within five years from April 4, 1959, the date of the execution sale, or up to April 4, 1964; since the action was filed on June 10, 1965, it was filed out of time. Even if the period were computed from the expiration of the redemption period on April 4, 1960, the five-year period would end on April 4, 1965, and the June 10, 1965 complaint would still be late. The SC rejected the lower court's view that the period should run from August 26, 1960 or from March 17, 1965. It also held that the policy of liberal construction in favor of the homesteader no longer applied because, as held in Vargas vs. Court of Appeals, the sale by the Tupases of their homestead even before the expiration of the five-year prohibited period indicated lack of intent to preserve the homestead for themselves and their family.

• Homestead Right of Repurchase Under Section 119 — Section 119 of Commonwealth Act 141, as amended, subjects every conveyance of land acquired under free patent or homestead, when proper, to repurchase by the applicant, his widow or legal heirs within five years from the date of the conveyance. The SC applied this to an execution sale and counted the period from the date of the execution sale.
• Execution Sale as Conveyance for Repurchase Period — For purposes of Section 119, the five-year period runs from the date of the conveyance or foreclosure/execution sale, not from the expiration of the redemption period or the registration of the consolidation of title. The SC relied on Olivia vs. Lamadrid and held the complaint filed June 10, 1965 time-barred from April 4, 1959, and even from April 4, 1960.
• Liberal Construction of Homestead Law Not Available to Homesteader Who Sold Within Prohibited Period — The policy of interpreting homestead laws in favor of the homesteader does not apply where the homesteader sold the land before the expiration of the five-year prohibited period; such sale indicates lack of intent to preserve the homestead for himself and his family. The SC applied Vargas vs. Court of Appeals.

• "Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow or legal heirs, within a period of five years from the date of the conveyance." — The statutory basis for the right of repurchase and the five-year period applied by the SC.
• "It is therefore our considered view that plaintiff herein has the right to repurchase the property in question within five (5) years from the date of the conveyance or foreclosure sale or up to February 4, 1966, and that having exercised such right and tendered payment long before the date last mentioned, defendants herein are bound to reconvey the property to him." — The SC quoted this from Olivia vs. Lamadrid as the doctrine it applied to the execution sale.
• "Applying the aforesaid doctrine to the case at bar, appellees could only exercise the right to repurchase his former homestead within five years from April 4, 1959, the date of the execution sale or up to April 4, 1964. Since this action to repurchase was filed on June 10, 1965, the same was filed out of time." — The SC applied the doctrine to the facts and held the repurchase action time-barred.
• "As held in the case of Vargas vs. Court of Appeals, the sale by appellees of their homestead even before the expiration of the five-year prohibited period indicates lack of intent on the part of the homesteader to preserve the homestead for himself and his family." — The SC used this to reject the lower court's liberal-construction rationale.

• Olivia vs. Lamadrid, 21 SCRA 739 — The SC treated it as the case in point and applied its doctrine that the five-year repurchase period runs from the date of the conveyance or foreclosure sale.
• Vargas vs. Court of Appeals, 91 SCRA 195 — The SC relied on it to hold that the homesteader's sale before the expiration of the prohibited five-year period negates the policy of liberal construction in favor of preserving the homestead.

• Section 119, Commonwealth Act 141, as amended — Provides that every conveyance of land acquired under free patent or homestead, when proper, is subject to repurchase by the applicant, his widow or legal heirs within five years from the date of the conveyance. The SC applied it to the execution sale and counted the period from April 4, 1959, making the June 10, 1965 complaint late.
• Section 118, Commonwealth Act 141, as amended — Cited in the text for the prohibited five-year period from issuance of the homestead patent; the sale within that period was noted in the SC's rejection of the lower court's liberal-construction rationale.

• Justice Aquino (Concurring) — Justice Aquino concurred. He agreed that the repurchase action had prescribed, but computed the five-year period from April 4, 1960, when the bank was entitled to a final deed of sale, and held that the June 10, 1965 action was beyond that period; he cited Paras vs. Court of Appeals, 91 Phil. 389, and Monge vs. Angeles, 101 Phil. 563.