JESUS NEPOMUCENO, ET AL., PLAINTIFFS AND APPELLEES VS. REHABILITATION FINANCE CORPORATION (NOW DEVELOPMENT BANK OF THE PHILIPPINES), DEFENDANT AND APPELLANT.

On September 17, 1952, the spouses Jose Nepomuceno and Isabel Acuña, together
with their children, obtained from the Rehabilitation Finance Corporation a loan
of P300,000.00 to be used in the construction of certain fishing vessels and the
purchase of diesel engines to equip them. A& security for the loan, they
executed a chattel mortgage on their six fishing boats. In addition, Jesus
Nepomuceno executed, by way of accommodation, a real estate mortgage oh a parcel
of land in Quezon City covered by Transfer Certificate of Title No. 2332. At the
foot of this document, the following note appears: “Jesus Nepomuceno signed the
mortgage contract to guarantee the loan of P300,000.00 of mortgagors-debtors,
Isabel Acuña de Nepomuceno, and Jose, Lubin, Victor, Jesus and Antonio, all
surnamed Nepomuceno.” Since the borrowers failed to -comply with the terms and
conditions of the mortgage, the lending corporation foreclosed the same extra
judicially under the’ provisions of Act 3135, as amended. In the ensuing
foreclosure sale, the corporation acquired the following properties: 1 fishing
boat for P15,000.00; 105 Gray ‘Marine engines for P10,000.00; and the parcel of
land covered by Transfer Certificate of Title No. 2332 for P14,000.00. The five
other fishing boats securing the loan could not be located and so they could not
be foreclosed. As of the date of the sale, the total claim of the corporaration
against the borrowers was P309,013.42.

0n February 24, ,1958, Jesus Nepomuceno wrote the corporation offering to
redeem his foreclosed property only for P50.00 per square meter, or for a total
price of P40,080.00, but the offer was rejected on the ground that the amount
was inadequate. On March 20, 1958, the last day of the period for redemption,
Jesus Nepomuceno assigned his right as redemptioner to Rizalino Mendoza and
Adelaida R. Mendoza for the consideration of P4,000.00. On the same day, said
spouses offered to redeem the property by tendering the amount of P16,000.00.
This offer was also refused on the ground that under Section 31 of Commonwealth
Act No. 459 the Rehabilitation Finance Corporation cannot be compelled to accept
redemption unless the party redeeming pays the entire amount of the obligation
at the time of the sale. Thereupon, the spouses began this case in the Court of
First Instance of Quezon City end consigned the amount of P16,000.00 with the
clerk of court. Their purpose is to compel the lending corporation to execute a
deed of reconveyance of the property in their favor upon the payment of said sum
of P16,000.00 failing in which the property would be deemed to be the absolute
property of the spouses. And after the case was submitted for decision, the
trial court on November 3, 1958 rendered judgment ordering the lending’
corporation to accept the amount of P16,000.00 that was consigned ttfth the
clerk of court and to execute a deed of reconveyance of the foreclosed property
in favor of spouses Rizalino Mendoza and Adelaida R. Mendoza. .From this
decision, the corporation appealed to this Court on purely questions of law.

Appellant contends that the trial court erred in that in exercising his right
to redeem the land he placed as a security the mortgagor Jesus Nepomuceno, or
his assigns, is only answerable to the extent of the price for which the land
was sold and not to the extent of the obligation secured by the mortgage.
Appellant likewise contends that the trial court erred in holding that Section
31 of Commonwealth Act No. 459 is only applicable to a mortgagor-debtor and not
to a mortgagor who has not obtained any loan from the bank.

The issue posed in this appeal is: considering that the loan of P300,000.00
was obtained from the Rehabilitation Finance Corporation by spouses Jose
Nepomucetto and Isabel Acuna and Jesus Nepomuceno merely acted as accommodation
mortgagor, for what price may the mortgagor redeem his property after the same
has been sold at public auction? Would it be for the price at which the property
was sold, as contended by the mortgagor, or for the balance of the loan obtained
by the borrowers from the banking institution, as contended by appellant?

Section 6 of Act 3135 provides:

“Sec. 6. In all cases in which an extrajudicia! sale is made under the
special power hereinbefore referred to, the debtor, his successors in interest
or any judicial creditor or judgment creditor of said debtor, or any person
having a lien on the property subsequent to the mortgage or deed of trust under
which the property is sold, may redeem the same at any time within the term of
one year from and after the date of the sale; and such redemption shall be
governed by the provisions of section four hundred and sixty-four to four
hundred, and sixty-six inclusive of the Code of Civil Procedure, (now Sections
25 to 31, inclusive of Rule 39 of the Rules of Court) in so far as these
are not inconsistent with the provisions of this Act.” (Italics
supplied)

Section 26, Rule 39 of the Rules of Court provides in part:

“Sec. 26. Time and manner of, and amounts payable on, successive
redemptions. Notice to be given and filed.-The judgment debtor, or
redemptioner, may redeem the property from the purchaser, at any time within
twelve months after the sale, on paying the purchase!’ the amount of
.his-purchase, with one per centum per month interest thereon in addition, up to
the time of redemption, together with the amount of any assessments or taxes
which the purchaser may have paid thereon after purchase, and interest on such
last-named amount at the same rate; * * *.”

On the other hand, Section 31 of Commonwealth Act No. 459 provides:

“Sec. 31. The mortgagor or debtor to the Agricultural and Industrial Bank,
whose real property has been sold at public auction, judicially or
extra-judicially, for the” full or partial payment of an obligation to said
Bank, shall, within one year from the date of the auction sale, have the right
to redeem the real property by paying to the Bank all the amount he owed the
latter on the date of the sale, with interest on the total indebtedness at
the rate agreed upon in the obligation from said date, unless the bidder has
taken material possession of the property or unless this has been delivered to
him, in which case the proceeds of the property shall compensate the interest.
If the Agricultural and Industrial Bank was not the highest bidder at the
auction sale, the Bank shall, in case of. redemption, return to the bidder the
amount it received from him asf a result of the auction safe with the
corresponding interest paid by the debtor.” (Italics supplied)

From a cursory reading of the foregoing provisions it would appear that
Section 26, Rule 39 of the Rules of Court, which is referred to as a
complementary provision of Section 6 of Act 3133, is wider in scope than Section
31 of Commonwealth Act 459. The first embraces all properties mortgaged in favor
of any person as mortgagee white the latter merely relates to
properties mortgaged to the Agricultural and Industrial Bank, later substituted
by the Rehabilitation Finance Corporation. Stated otherwise. Section 26, Rule
39, operates on every mortgaged property in the hands of, any mortgagee that
comes within the purview of Act 3135 whereas Section 31 of Commonwealth Act
459-operates only on properties mortgaged to the Rehabilitation Finance
Corporation. It thus appears that Commonwealth Act No. 459 is a special law
exclusively applicable to properties mortgaged to the Rehabilitation Finance
Corporation, while Act 3135, as implemented by Section. 26, Rule 39, is a
general law which embraces all properties mortgaged to any party to the
exclusion of said corporation as mortgagee. Therefore, under the familiar rule
that a special law should prevail over a general law when the application of
their provision should conflict on a particular transaction, we cannot but
conclude that the law that should apply to the redemption for the foreclosed
property is Commonwealth Act No. 459.

“* * * It is a familiar rule of statutory construction that to the extent of
any necessary repugnancy between a general and a special law or provision, the
latter will control the former, without regard to the respective dates of
passage. (Lichauco & Co. vs. Apostol and Corpuz, 44 Phil., 138; 59
C.J. 1050; 1057; Grawford, The construction of Statutes, Section 230.)” (Cassion
vs. Banco Nacional Filipino, 89 Phil., 560).

“* * * Where one statute deals with a subject in general terras, and another
deals with a part of the same subject in a more detailed way, the two should be
harmonized if possible; but if there is any conflict, the latter1 will prevail,
regardless of whether it was passed prior to the general statute, * * * (Vol. 2
Sutherland, Statutory Construction, pp. 541-542.)

Considering the above premise, and it appearing that under Section 31,
Commonwealth Act 459, a mortgagor or debtor whose property is sold at public
auction, judicially or extra judicially, may only redeem said property by paying
to the bank all the amount he owes the latter on the date of the sale,
with interest on the total indebtedness at the rate agreed upon, the inescapable
conclusion is that the mortgagor herein or his assignees cannot redeem the
property in dispute without paying the balance of the total indebtedness then
outstanding on the date of the sale to the Rehabilitation Finance Corporation.
The fact that Section 31 speaks of a mortgagor or debtor is of no moment, for
precisely said terms denote that the law contemplates a case where the one
borrowing or dealing with th’e institution may be a debtor who mortgages his own
property, or one not a debtor but lends his property as a security. This
interpretation may be harsh or onerous on the part of an accommodation
mortgagor, but we find no other course of action considering that the paramount
purpose of the law is to protect the investment of the government in the
institution. When the law is clear it is not susceptible of interpretation. It
must be applied regardless of who may be affected.

Wherefore, the decision appealed from is reversed. Appellees are hereby given
30 days grace within which to effect redemption if they so desire in line with
the terms of this decision. No pronouncement as to costs.

Paras, C.J., Benzon, Padilla, Labrador, Reyes, J.B.L. Gutierrez David,
Paredes, and Dizon, JJ., concur.

Judgment reversed.