Duadua v. R.T. Dino Development Corporation
REITERATIONFacts
The Antecedents: Spouses Dionisio and Consolatriz Duadua were granted a parcel of land via Homestead Patent No. V-24359, covering 49,889 square meters, and were issued Original Certificate of Title (OCT) No. (V-2866) P-2220. On May 14, 1996, they sold this land to respondent R.T. Dino Development Corporation for P200,000.00, and a Transfer Certificate of Title (TCT) No. 34211 was issued in R.T. Dino's name. Three years later, on July 28, 1999, the Spouses Duadua informed R.T. Dino of their intent to repurchase the land under Commonwealth Act 141 (Public Land Act), but R.T. Dino refused. The Spouses Duadua then sued to compel the repurchase, while R.T. Dino argued that the repurchase was not for family retention but for profit, and that the repurchase price should be higher than the P200,000.00 stated in the deed, as they had actually paid P1,100,000.00 and had also mortgaged the land for P3,000,000.00 to Spouses Esteban and Rose Fernandez. The complaint was later amended to include Spouses Fernandez and the Department of Public Works and Highways (DPWH) as defendants. Procedural History: The Regional Trial Court (RTC), Branch 20, Tacurong City, dismissed the Spouses Duadua's complaint on September 26, 2012. The RTC found that the Spouses Duadua were not land destitutes, that allowing repurchase would exceed the five-hectare limit under the Comprehensive Agrarian Reform Law (CARL), and that they failed to prove the repurchase was for home and cultivation. The heirs of the Spouses Duadua were substituted as petitioners, and their motion for reconsideration was denied. On appeal, the Court of Appeals (CA) initially reversed the RTC's decision on August 30, 2018, ordering R.T. Dino to allow the repurchase. However, upon R.T. Dino's motion for reconsideration, the CA, in an Amended Decision dated May 10, 2019, reversed its earlier ruling and dismissed the appeal, reinstating the RTC's decision. The CA reasoned that the repurchase was for sentimental reasons, not for family preservation, and that the Spouses Duadua were no longer land destitutes. The Petition: Petitioners, the heirs of Spouses Duadua, seek reversal of the CA's Amended Decision through a petition for review on certiorari under Rule 45 of the Rules of Court. They argue that their parents had no other land besides the homestead, that there is no law disqualifying them for acquiring another lot, and that they have the right to repurchase the land. They contend the repurchase price should be P200,000.00 as stated in the deed of sale and that they are not liable for the P3,000,000.00 mortgage. Petitioners assert that the Public Land Act's purpose is to keep the land within the family, and that the CA erred in disqualifying them based on their current residence or alleged sentimental reasons. They also point out that they have no registered lands in their names. The Supreme Court granted the petition, finding that the Spouses Duadua exercised their right to repurchase within the five-year period and that acquiring another property or residing elsewhere does not disqualify them. The Court ruled that the repurchase price should be P1,100,000.00, the actual amount paid, to prevent unjust enrichment, and that the mortgage amount is not their responsibility.
Issue(s)
Whether the Court of Appeals erred in holding that petitioners and their deceased parents lost their right to repurchase the homestead land. In the event petitioners are allowed to repurchase the land, how much should they pay R.T. Dino.
Ruling
The petition is GRANTED. The Amended Decision dated May 10, 2019 of the Court of Appeals is REVERSED and SET ASIDE. Petitioners Heirs of Spouses Dionisio, Sr. and Consolatriz Duadua are declared to be rightfully entitled to repurchase the land covered by Original Certificate of Title (OCT) No. (V-2866) P-2220 (now TCT No. T-34211) from R.T. Dino Development Corporation upon payment of P1,100,000.00. R.T. Dino Development Corporation is ordered to pay the Bureau of Internal Revenue additional capital gains and documentary stamp taxes, including surcharge, interest, and penalties, based on the difference between P1,100,000.00 and P200,000.00.
Ratio Decidendi
On the right to repurchase the homestead land: The Court held that Section 119 of the Public Land Act expressly grants the homesteader or his heirs the right to repurchase the land within five (5) years from the date of conveyance. Spouses Duadua invoked this right within the prescribed period, as they notified R.T. Dino of their intention to repurchase just over three years after the conveyance. The Court found that the RTC and the CA erred in disqualifying the Spouses Duadua or their heirs based on the acquisition of another property or change of residence. The Public Land Act does not provide these as disqualifying factors. The Court reiterated that the purpose of homestead laws is to conserve a family home and provide social amelioration, not to serve corporate business interests. The acquisition of another lot by the Spouses Duadua did not preclude them from repurchasing the homestead land, especially since there was no definitive proof they owned another property, and their testimony indicated otherwise. Furthermore, the heirs also presented certifications showing no registered lands in their names. The Court emphasized that the State's policy is to foster families and promote general welfare through land ownership, and the sentiment of keeping the land in the family, even if termed 'sentimental value,' aligns with the law's intent to provide beneficiaries with a quality life and dignity. On the repurchase price: The Court ruled that the repurchase price should be P1,100,000.00, which was the actual purchase price paid by R.T. Dino and received by Spouses Duadua, as evidenced by receipts that were not denied. The Court found that insisting on the P200,000.00 reflected in the deed of sale would result in unjust enrichment for the petitioners. The Court affirmed the directive for R.T. Dino to pay additional capital gains and documentary stamp taxes based on the difference between the actual price and the stated price, noting that this directive had already become final and executory. The P3,000,000.00 mortgage loan obtained by R.T. Dino from Spouses Fernandez was deemed an exclusive contract between them and not binding on the petitioners or their deceased parents, as they were not privies to that agreement.
Main Doctrine
The right to repurchase a homestead land under Section 119 of the Public Land Act is a statutory right granted to the homesteader or his heirs within five years from conveyance, and the acquisition of other properties or change of residence by the homesteader or heirs does not automatically disqualify them from exercising this right, provided the repurchase is not for speculative purposes but to preserve the land for the family.