Ortega v. Tan
REITERATIONFacts
The Antecedents: Plaintiffs-appellants acquired Lots Nos. 587 and 1017, covered by Transfer Certificate of Title No. T-1108, issued on September 7, 1965. They acquired these lots by direct purchase from the heirs of Miguel Perido, Sr., who were the registered owners under Original Certificate of Title No. P-4037, issued on September 6, 1960, by virtue of a Free Patent grant. On October 14, 1965, plaintiffs-appellants discovered that on November 11, 1964, without proper surrender of the owner's duplicate copy of the original title, Transfer Certificate of Title No. T-923 was issued in favor of defendant Dominador Agripa Tan, based on a joint-affidavit executed by Miguel Perido Jr., Fabian Perido, and Espiritu Vda. de Perido. It was established that Dominador Agripa Tan had negotiated for the sale of these lots in 1959, advanced substantial amounts on the purchase price, and paid the full amount by November 1964, unaware that the lots were subject to a free patent application. The plaintiffs-appellants presented a Deed of Sale with Power of Repurchase dated September 4, 1959, an agreement dated August 7, 1962, for the mortgage of the lots, and a Self-Adjudication with Deed of Absolute Sale dated September 7, 1965. Procedural History: Plaintiffs-appellants filed a complaint for annulment of title in the Court of First Instance of Leyte. The trial court dismissed the complaint, finding that neither the plaintiffs nor the defendants were entitled to the land and that the Republic of the Philippines should institute reversion proceedings. The plaintiffs-appellants appealed the decision. The Petition: The case reached the Supreme Court on a petition for review on certiorari, seeking to reverse the decision of the Court of First Instance. The sole issue presented was whether a series of transactions involving the sale and mortgage of a homestead land, starting within the prohibitive period but finalized thereafter, constituted a violation of Section 118 of Commonwealth Act No. 141.
Issue(s)
Whether a series of transactions involving the sale and mortgage of a parcel of land, for which a patent had been issued, starting within the prohibitive period but finalized thereafter, constitute a violation of Section 118 of Commonwealth Act No. 141. Whether the transactions, including a deed of sale with right of repurchase and a mortgage, entered into within the five-year prohibitory period from the issuance of a homestead patent are valid.
Ruling
The petition is dismissed for lack of merit, and the assailed decision of the trial court is affirmed. The transactions are declared void.
Ratio Decidendi
On the violation of Section 118 of Commonwealth Act No. 141: The Court held that the series of transactions, including the Deed of Sale with Right of Repurchase dated September 4, 1959, and the mortgage dated August 7, 1962, were executed within the five-year prohibitory period from the issuance of the free patent on September 6, 1960. Section 118 of Commonwealth Act No. 141 explicitly prohibits the encumbrance or alienation of lands acquired under free patent or homestead provisions from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant. The purpose of this prohibition is to preserve the land for the homesteader and their family, ensuring they have a place to live and become productive citizens. The Court reiterated that this provision is mandatory and cannot be circumvented. The fact that the final deed of sale was executed after the expiration of the five-year period does not validate a contract that was void from its inception, as the law does not distinguish between executory and consummated sales in this regard. To allow such arrangements would open the door to fraudulent schemes to defeat the legal provisions prohibiting alienation within five years. On the validity of transactions within the prohibitory period: The Court unequivocally ruled that any alienation or encumbrance of a homestead or land acquired under free patent within the five-year prohibitory period is null and void. This prohibition applies from the date of the approval of the application up to and including the fifth year after the issuance of the patent. The Court cited numerous precedents, such as Puyat and Sons v. De las Ama, Gauiran v. Sahagun, and Pacis v. Dadulla, which consistently hold that conveyances made before the expiration of the five-year period are void and cannot be enforced. The voluntariness of the alienation, even with official approval, does not validate a gross violation of the law, and such void contracts cannot be confirmed or ratified. The Court emphasized that the legislative policy to conserve the land for the homesteader and their heirs is so strong that it cannot be obviated by any administrative acquiescence. Therefore, the mortgage executed on August 7, 1962, in favor of the plaintiff, which was within the prohibited period, is null and void. The Court also noted that the action to declare such a contract void does not prescribe.
Main Doctrine
Transactions involving the sale or encumbrance of land acquired under free patent or homestead provisions within the five-year prohibitory period from the issuance of the patent are null and void, regardless of voluntariness or subsequent approval, as the law's purpose is to preserve the land for the homesteader and their family.