Corpuz v. Beltran
REITERATIONFacts
The Antecedents: Esteban Corpuz was granted a homestead patent for a parcel of land in San Jose, Nueva Ecija. Subsequently, Esteban Corpuz executed two deeds of sale over the same property: one with pacto de retro on March 28, 1933, and another absolute sale on July 11, 1935, in favor of spouses Leocadio L. Beltran and Maria del Rosario. The land was placed in the possession of the vendees, and a new Transfer Certificate of Title was issued in their names. Procedural History: The legitimate heirs of Esteban Corpuz filed an action for annulment of the two deeds of sale in the Court of First Instance of Nueva Ecija. The trial court dismissed the complaint on the ground of prescription, finding that more than 17 years had elapsed from the sale to the institution of the action. The Petition: Plaintiffs appealed directly to the Supreme Court, arguing that the action for annulment of a sale that is void ab initio is not subject to prescription and that the sales were void because they were executed within five years from the issuance of the homestead patent, in violation of Section 116 of Act No. 2874.
Issue(s)
Whether the action for annulment of a sale, alleged to be void ab initio, has prescribed. Whether the deeds of sale executed within five years from the issuance of the homestead patent are null and void ab initio under Act No. 2874.
Ruling
The Supreme Court modified the decision of the lower court, ordering the dismissal of the action for lack of merit, not on the ground of prescription. The sales were declared valid.
Ratio Decidendi
On the issue of prescription: The Court held that if the action is predicated on the theory that the contract is void ab initio, the defense of prescription is unavailable. Article 1410 of the new Civil Code provides that the action or defense for the declaration of the inexistence of a contract does not prescribe, as the defect of a void or inexistent contract is permanent and cannot be waived. The Court cited Tipton vs. Velasco, 6 Phil., 67, which held that the mere lapse of time cannot give efficacy to contracts that are void ab initio. Therefore, the lower court erred in dismissing the case on the ground of prescription. On the validity of the sales: The Court ruled that the validity of the sales must be determined in light of the law in effect at the time the rights of the parties vested. In this case, the homestead patent was issued under Act No. 926. Although Act No. 2874, which repealed Act No. 926, prohibits the sale of homestead land within five years from the issuance of the patent, applying this prohibition to sales made under Act No. 926 would impair vested rights acquired under the latter Act. The Court relied on the ruling in Balboa vs. Farrales, 51 Phil., 505, which held that rights vested under Act No. 926 cannot be affected by subsequent legislation like Act No. 2874. Since Act No. 926 did not contain any prohibition regarding the disposition of land covered by a homestead patent, the sales executed by Esteban Corpuz were deemed valid and binding.
Main Doctrine
Sales of land acquired under a homestead patent are governed by the law in effect at the time the rights vested, not by subsequent legislation, and if such prior law does not prohibit the sale, it is valid.