Case 113

Title: SANTIAGO ORTEGA, plaintiff-appelle vs. ANDRES ORCINE AND DOROTEO

ESPLANA, defendants-appellees
Locator: GR No. L-28317 Date Promulgated: March 31, 1971
Topic: Right to repurchase

Facts:
Santiago Ortega sold his agricultural land (rural land) to Orcine. The latter then later sold
it to his co-defendant, Esplana, who then had it filled with earth and then subdivided it into small
lots for residential purposes. The land then ceased to be rural, and is now urban land, and is in
fact, was and is being used and occupied by a private school.
Petitioners complaint was based originally on Article 1621 of the New Civil Code.

Issues:
Whether or not Ortega may exercise right to repurchase.

Ruling:
He cannot exercise the right to repurchase.
Even on assumption that the land in controversy is urban, still Article 1622 of the present
Civil Code is not invoked by appellant does not support his case. This Court has already
emphasized in previous cases, that an owner of urban land may not redeem an adjoining urban
property where he does not allege in his complaint, much less prove at the trial, that the latter is
so small and so situated that a major portion thereof cannot be used for any practical purpose
within a reasonable time, having been bought merely for speculation.
In view, however, of the facts that: (1) the land of appellant is a school site and (2) the
one in question has been filled with earth, developed and subdivided into small lots of residential
purposes, it is quite safe to conclude that both lands are in the populated section of the town and
are accordingly urban.
Considering that the land which Ortega seeks to redeem is 4,452 square meters in area,
which is far from being so small and so situated that a major portion thereof cannot be used for
any practical purpose for quite the contrary, it has been made a subdivision, and also that it
cannot be said that appellee Esplana bought the same merely for speculations since in less than
eight months, from when he bought it to when the present complaint was filed, he had developed
the same into a subdivision for re-sale, which shows that he must have had a definite purpose in
mind in buying the same. Ortega cannot invoke Article 1622 of the Civil Code. The Court cannot
hold that such purpose is speculative.

Prepared by: Aleiza Rikka R. Suazo

Case No. 114

Title: FIRST GLOBAL REALTY AND DEVELOPMENT CORPORATION, petitioner, vs.
CHRISTOPHER SAN AGUSTIN, respondent
Locator: G.R. No. 144499 Date Promulgated: February 19, 2002
Topic: Disposition of property on strength of dacion en pago

Facts:
A property owned by respondent was sold to Spouses Enrique and Angelina Camacho
with an agreement that it will be paid partially upon execution of the deed of sale and the balance
to be paid once title was transferred to their name. The property will be used by the Camachos to
obtain a loan with the property as the collateral.
Petitioner appeared to have granted the Camachos loan application. The Camachos failed
the pay the loan. FGRDC filed an action to foreclose the property. The court ordered the
foreclosure and the subsequent sale at public auction.
However, sale of the subject property at public auction was set aside in view of the
dacion en pago which the spouses Camacho executed in favour of FGRDC. The dacion in pago
was registered before the Register of Deeds and a new TCT was issued in the name of FGRDC.
Then, FGRDC demanded rentals from respondent (respondents mother) for their use of
the subject property. The demand was unheeded and FGRDC filed a motion of issuance of a writ
of possession.
Respondent then filed a motion for intervention, asking for the rescission of the deed of
absolute sale/mortgage, dacion en pago and cancellation of FGRDCs title over the subject
property.
Finding the motion for intervention to be futile, respondent filed a separate complaint for
rescission of the deed of absolute sale, annulment of the dacion en pago and cancellation of title
and issuance of a new title with prayer for the issuance of a temporary restraining order and/or a
writ of injunction against FGRDC, seeking to enjoin the latter from taking possession of the
subject property.
The Court denied. Petitioner filed motion for reconsideration but was denied for lack of
merit.

Issue:
Whether respondent is entitled to the possession of the property while the main case for
rescission is pending in the RTC

Ruling:
Respondent is entitled to the possession while the main case is pending.
To allow petitioner to take immediate possession of the property would result in grave
injustice. The ownership, validity of the sale between respondent and the Camachos, and
legitimacy of the dacion en pago are still subject to determination in the court. There is no
question that respondent has been in possession of the premises during all this time. He and his
family have long owned, possessed and occupied it as their family home since 1967. To
dispossess him now would definitely alter the status quo to their detriment.
The dacion en pago had many irregularities such as it was executed by the Camachos
long before, while they were still applying for a loan, not immediately prior to the supposed
foreclosure. A dacion en pago transferring property to creditor is not compatible with a mortgage
wherein property is foreclosed in case of failure to pay the principal loan. Moreover, execution of
dacion effectively waived sellers redemption period normally given to mortgagor. The
Camachos non-payment of the purchase price agreed upon and the irregularities surrounding the
dacion en pago are serious enough to allow him to possess the property pendente lite.

Prepared by: Aleiza Rikka R. Suazo

Case No. 115

Title: RURAL BANK OF DAVAO CITY, INC., petitioner vs. THE HONORABLE COURT OF
APPEALS and GABRIEL ABELLANO and FRANCISCO SEQUITAN, respondents
Locator: G.R. No. 83992 Date Promulgated: January 27, 1993
Topic: Right of Redemption

Facts:
Private respondents obtained loan from petitioner to be paid in two equal instalments.
They mortgaged a parcel of land which was acquired through a homestead patent.
The NHA filed a complaint with CFI Davao City for the expropriation of several parcels
of land, said action being directed against private respondents with respect to the mortgaged
property and 15 other persons.
The respondents failed to pay their obligation. The bank then caused the extrajudicial
foreclosure of the property. The petitioner submitted highest bid during the foreclosure sale and a
Certificate of Sale was executed by the Deputy Sheriff in petitioners favour, and was registered
with the Registry of Deeds of Davao. Private respondents failed to redeem the foreclosed
property.
Despite such failure, the petitioner extended the redemption period. Private respondents
still failed to redeem the property. Petitioner then asked for consolidation of title.
CFA ordered the NHA to pay for the properties expropriated. Private respondents notified
petitioner of their desire to repurchase the foreclosed property. Petitioner claimed that the action
will no longer prosper because their right to repurchase had become moot and academic.
Private respondents amended the complaint due to the impossibility for the plaintiffs to
reacquire the property by reason of the order of expropriation and that justice demands that
payment of the NHA for property expropriated be given to them.
Trial court and the Court of Appeals ruled in favour of the plaintiff.
Issue:
Whether private respondents may redeem the property.

Ruling:
Private respondents may redeem property by reason of the fact that such property is a
homestead covered by a Torrens title.
The rules on redemption in case of an extrajudicial foreclosure of land acquired under
free patent or homestead statutes may be summarized as follows: If the land is mortgaged to a
rural bank under RA No. 720, as amended, the mortgagor may redeem the property within two
years from the date of foreclosure or from the registration of the sheriffs certificate of sale at
such foreclosure if the property is not covered or is covered, respectively, by a Torrens title. If the
mortgagor fails to exercise such right, he or his heirs may still repurchase the property within 5
years from the expiration of the 2 year redemption period pursuant to Section 119 of the Public
Land Act. If the land is mortgaged to the parties other than rural banks, the mortgagor may
redeem the property within 1 year from the registration of the certificate of sale pursuant to Act
No. 3135. If he fails to do so, he or his heirs may repurchase the property within 5 years from the
expiration of the redemption period also in pursuant to Section 119 of the Public Land Act.
Section 119 of the Public Land Act provides that 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.

Prepared by: Aleiza Rikka R. Suazo