LAW ON NATURAL RESOURCES whether appellants exercised their right to repurchase
effectively, we have only to consider their filing of the
HOMESTEAD (Secs. 12-21, CA 141, as amended)
(1) STA. IGNACIA RURAL BANK, INC. v. COURT OF
APPEALS, G.R. No. 97872, 1 March 1994.
Under homestead, the original owner has the right two
repurchase within 2 years under the Rural Bank Act and
with an extended period of 5 years under C.A. 141.
FACTS. On 14 January 1980, Sta. Ignacia Rural
Bank, Inc. (defendant bank) extended to the spouses
Conrado Pablo and Juanita Gonzales (plaintiff-spouses)
a loan totalling P12,109.75. As a security, they executed
in favor of the defendant bank a Real Estate Mortgage
over their residential house and two lots covered by Free
Patent Title, OCT No. P-7941 located at Poblacion
Norte, Mayantoc, Tarlac. They defaulted in the payment
of their obligation, as a result of which, the mortgage
was foreclosed. On 28 July 1981, the subject house and
lots of the plaintiff-spouses were sold at public auction
with the defendant bank as the highest bidder for
P13,168.35.
Thereafter, the Certificate of Sale was executed in
favor of the defendant bank on 29 September 1981 and
the same was registered with the Register of Deeds of
Tarlac on 5 November 1981. The ownership of the
subject house and lots was consolidated in favor of the
defendant bank virtue of the final deed of sale executed
on 5 November 1983. On 19 December 1984, the
defendant bank sold the aforementioned real estates to
spouses Alberto Lucas and Nelia Rico (defendant-
spouses) for P47,500.00, and Transfer Certificates of
Title Nos. 184687 and 184688 over the house and lots
were subsequently issued in the name of said
defendant-spouses. Hence, the complaint for the
repurchase of the subject house and lots, annulment of
title and damages filed on 20 March 1986 by the plaintiff-
spouses.
ID., RULING OF THE LOWER COURT. The lower
court dismissed the case saying that while Section 119,
C.A. 141 provides for a five-year period of redemption
involving homestead and free patent lands, Section 5,
R.A. No. 720, as amended, provides for a two-year
redemption period in mortgage loans with rural banks.
R.A. 720, as amended, being a special law and of later
enactment prevails over C.A. 141 which is a general law.
The Certificate of Sale was registered on 5 November
1981. The redemption period is counted from the
registration of the certification of foreclosure sale
(Gorospe vs. Santos, 69 SCRA 191). Pursuant to
Section 5, R.A. 720, therefore, plaintiffs' right to redeem
within the two-year period has already expired.
ID., RULING OF THE COURT OF APPEALS. The
court reversed the decision of the trial court. Citing Oliva
vs. Lamadrid (21 SCRA 737), it essentially said that R.A.
720 does not apply to properties under Torrens Title, a
homestead, or free patent. The reckoning date would be
when the sheriff had registered the sale which will be 5
November 1981. Moreover, for purposes of ascertaining
action for the "repurchase of the subject house and lots,
annulment of title and damages" on 20 March 1986
against the appellee bank and the appellee-spouses,
which was filed within the five-year period to repurchase.
The question now of whether the appellant had actually
tendered, deposited or consigned in court the
redemption price for the subject house and lots becomes
immaterial in view of the filing of said action to
repurchase which has been equivalent to an offer to
redeem and has the effect per se of preserving their right
of recovering the disputed house and lots.
ISSUES.
1. Did the time frame under the Rural Bank Act
supersede the repurchase time period under the
Public Land Act involving the foreclosure sale
property acquired via a homestead patent?
2. When does the 5-year repurchase period under C.A.
141 be reckoned?
3. Do plaintiff-spouses have the right to repurchase the
land?
RULINGS.
1. NO. It is well-known that the homestead laws
were designed to distribute disposable agricultural lots of
the State to land-destitute citizens for their home and
cultivation. Pursuant to such benevolent intention the
State prohibits the sale or encumbrance of the
homestead (Section 116) within five years after the grant
of the patent. After that five-year period the law impliedly
permits alienation of the homestead, but in line with the
primordial purpose to favor with the homesteader and
his family the statute provides that such alienation or
conveyance (Section 117) shall be subject to the right of
repurchase by the homesteader, his widow or heirs
within five years. This Section 117 is undoubtedly a
complement of Section 116. It aims to preserve and
keep in the family of the homesteader that portion of
public land which the State had gratuitously given to him.
It would, therefore, be in keeping with this fundamental
idea to hold, as we hold, that the right to repurchase
exists not only when the original homesteader makes the
conveyance, but also when it is made by his widows or
heirs. This construction is clearly deducible from the
terms of the statute.
Because of such underlying policy and reason, the
right to repurchase under Section 119 cannot be waived
by the party entitled thereto, and applies with equal force
to both voluntary and involuntary conveyances. And, as
early as 1951, in Cassion v. Banco Nacional Filipino, the
Court declared that such right is available in foreclosure
sales of lands covered by homestead or free patent.
Consistently therewith, the Supreme Court have ruled in
a number of cases that said Section 119 prevails over
statutes which provide for a shorter period of redemption
in extrajudicial foreclosure sales.
2. AFTER THE TWO-YEAR PERIOD PROVIDED
IN THE RURAL BANK ACT. The Court has consistently
pronounced in many cases that there is no conflict
Page 1 of 15
between laws providing for a shorter period and C.A.
141 – there is no express repeal. They reveal the clear
intent of the law on redemption in foreclosure sales of
properties acquired under the free patent or homestead
statutes which have been mortgaged to banks or
banking institutions — i.e., to resolutely and unqualifiedly
apply the 5-year period provided for in Section 119 of
C.A. No. 141 and to reckon the commencement of the
said period from the expiration of the one-year period of
redemption allowed in extrajudicial foreclosure. If such
be the case in foreclosure sales of lands mortgaged to
banks other than rural banks, then, by reason of the
express policy behind the Rural Banks' Act, and
following the rationale of the Court’s ruling in Oliva, it is
with greater reason that the 2-year redemption period in
Section 5 of the Rural Banks' Act should yield to the
period prescribed in Section 119 of C.A. No. 141.
Moreover, if the Court is to be consistent, the 5-year
repurchase period under C.A. No. 141 should begin to
run only from the expiration of the 2-year period under
the Rural Banks' Act. The TOTAL redemption period
would therefore be 7 years (2 years under the Rural
Bank Act and an extended 5 years under C.A. 141).
3. YES. The plea for repurchase was not time-
barred at the time it was made. The repurchase was
made on 20 March 1986, within the extended
redemption period.
X ----------------------------------------------------------------------- X
(2) MEJIA v. GABAYAN,
G.R. No. 149765, 12 April 2005.
FACTS. Arturo Mejia is the registered owner of a
parcel of land located in Sinamar, San Mateo, Isabela,
with an area of 10.400 hectares covered by Transfer
Certificate of Title (TCT) No. 75164 which was issued by
the Register of Deeds of Isabela on 3 July 1974. The lot
was a portion of a large tract of land covered by a
homestead patent granted by the President of the
Philippines to Dalmacio Mejia on 11 December 1936, on
the basis of which Original Certificate of Title (OCT) No.
T-4184 was issued by the Register of Deeds of Isabela.
On 13 August 1978, the President of the Philippines,
through the Secretary of Agrarian Reform, issued
Certificates of Land Transfer (CLT) over portions of the
property covered by TCT No. 75164 to four
beneficiaries: (1) Carlos P. Ramos; (2) Danceso T.
Gavino; (3) Francisca Rueme; and (4) Pedro Gavino.
They are tenants of the property and the land is being
awarded under Comprehensive Agrarian Reform
Program (CARP). The certificates were filed with the
Office of the Register of Deeds. Upon learning of the
issuance of the said certificates, Mejia filed a petition
with the Department of Agrarian Reform (DAR) in 1983
for their cancellation. However, no action was taken on
the said petition. In the meantime, the Courts decision in
Alita v. Court of Appeals was promulgated, wherein it
was held that properties covered by homestead patents
were not covered by Presidential Decree (PD) No. 27.
There were several litigations in this case, viz: (You may
focus on No. 2, 5, & 9 only)
[1] PROCEEDINGS BEFORE THE DAR. On 10 May
1993, Mejia filed a petition with the DAR, for the
exclusion of the property from PD No. 27. The case was
docketed as Administrative Case No. A-0204-0001. On
26 August 1993, the Provincial Agrarian Reform Officer
(PARO) issued an Order recommending the denial of the
petition. Mejia appealed the Order to the DAR Regional
Director.
[2] CONCURRENT PROCEEDINGS WITH THE RTC.
Instead of pursuing his appeal before the DAR, Mejia
opted to take advantage of the ruling of the Court in Alita
v. Court of Appeals and filed a complaint on 20 June
1994 in the Regional Trial Court (RTC) of Isabela
against the respondents Filomena Gabayan, Albin
Rueme, Ernesto Mejia, Carlos Ramos, Josefina Lacadin
and Pedro Gavino, for declaratory relief, and for the
recovery of the possession of the property covered by
TCT No. 75164 with damages and plea for injunctive
relief. The respondents on the other hand said that they
were in possession of the land under a tenancy and they
are beneficiaries of the Agrarian Reform Law. They also
claimed that the RTC had no jurisdiction over the case.
The trial court ruled in favor of the petitioner and against
the respondents ordering them to vacate in a summary
judgement.
[3] COURT OF APPEALS. The Court of Appeals
dismissed the appeal from respondents for not filing on
time. The case was remanded to the RTC for execution.
[4] DAR REGIONAL DIRECTOR. The DAR Regional
Director granted Mejia’s exemption from the
Comprehensive Agrarian Reform Program (CARP), but
ordering him to allow the respondents-tenants to remain
in possession of the property and to execute Leasehold
Contracts in their favor in accordance with Rep. Act No.
3844. Petitioner appealed.
[5] SECRETARY OF AGRARIAN REFORM. In a
parallel development, the Secretary of Agrarian Reform
issued an Order dated 27 December 1996 in
Administrative Case No. A-0204-0001 affirming the
Resolution of the Regional Director with modifications,
thus: (1) Only that portion of TCT No. T-75164 which
petitioner is personally cultivating (3.6691 hectares) shall
be exempt from P.D. No. 27 and R.A. No. 6657, thus
constituting as part of his retained area; (2) The
petitioner may choose from the tenanted portion as an
addition to compromise his aggregate area of retention
which should not exceed five (5) hectares; and (3)
CLTs/Eps recalled or cancelled by the previous Order
shall be re-issued (however this time as CLOAs since
the subject landholding is a homestead land not covered
by P.D. No. 27), except those within the landowner is
retained area which shall be under the leasehold
system. It additionally ruled that RTC has no jurisdiction
over the action of Mejia.
[6] SUPREME COURT. Mejia filed a petition for
Certiorari which was denied in a Resolution stating that
Page 2 of 15
the appropriate remedy is a petition for Review before
the CA.
[7] WRIT OF EXECUTION FOR RTC RULING. The trial
court issued a writ of execution, as prayed for, on 7 May
1997. The sheriff, in the company of policemen, placed
bamboo poles with red flags on the four (4) corners of
the property. One Ambot Rueme, son of respondent
Balbino Rueme, removed the bamboo poles, upon which
the sheriff placed bamboo poles anew on the four
corners of the property. For this, Ambot was
subsequently charged with contempt. Mejia, however,
failed to take actual possession of the property.
[8] DAR STATUS QUO ORDER. In view of the
conflicting rulings of the RTC and the DAR Secretary,
the Chief of the Legal Division of the DAR issued a
status quo order and requested the Philippine National
Police to implement the same.
[9] OTHER STEPS. Petitioner wanted to implement the
RTC decision which was favorable to him. Respondents
insisted to implement the Decision of DAR which was
favorable to them. Mejia was driven away from the
property. Mejia charged respondents for contempt of
Court for which they were found guilty. Mejia petitioned
the RTC to execute its judgement. Ultimately, the
execution was held in abeyance in view of the conflicting
rulings. Meanwhile, the DAR Decision became final and
executory. Thus this petition.
ISSUES:
1. MAIN – Up to what extent are the rights of the
parties?
2. Can the respondents be ejected from the property?
3. Who has jurisdiction over the case?
RULING:
1. MAIN: As gleaned from the pleadings of the
parties, the respondents had been in actual possession
of the property and cultivated the same as agricultural
tenants long before the petitioner filed his complaint in
the RTC. The Court ruled in Paris v. Alfeche that, under
the circumstances, the only right of the petitioner is to
retain five (5) hectares of the subject property, in
accordance with Section 6 of R.A. No. 6657. The said
Act lays down the rights of homestead grantees as
follows:
SEC. 6. Retention Limits. Except as otherwise
provided in this Act, no person may own or
retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary
according to factors governing a viable family-
sized farm, such as commodity produced,
terrain, infrastructure, and soil fertility as
determined by the Presidential Agrarian Reform
Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed
five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject
to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing the
farm; Provided, That landowners whose lands
have been covered by PD 27 shall be allowed to
keep the area originally retained by them
thereunder; Provided, further, That original
homestead grantees or their direct compulsory
heirs who still own the original homestead at the
time of the approval of this Act shall retain the
same areas as long as they continue to cultivate
said homestead.
Indisputably, homestead grantees or their direct
compulsory heirs can own and retain the original
homesteads, only for as long as they continue to
cultivate them. That parcels of land are covered by
homestead patents will not automatically exempt them
from the operation of land reform. It is the fact of
continued cultivation by the original grantees or their
direct compulsory heirs that shall exempt their lands
from land reform coverage.
In the present case, as previously pointed out,
neither petitioner nor her heirs are personally cultivating
the subject homesteads. The DAR and the CA found
that respondents were the ones who had been
cultivating their respective portions of the disputed
properties.
However, petitioner can retain five (5) hectares in
accordance with Section 6 of RA 6657, which requires
no qualifying condition for the landowner to be entitled to
retain such area. This ruling is in line with Association of
Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform, from which the Court quotes:
In any event, assuming that the petitioners have
not yet exercised their retention rights, if any,
under PD No. 27, the Court holds that they are
entitled to the new retention rights provided for
by RA No. 6657, which in fact are on the whole
more liberal than those granted by the decree.
Petitioners heirs, however, are not entitled to
awards of three (3) hectares each, since they
are not actually tilling the parcels or directly
managing the farm.
2. NO. Section 22 of RA 6657 expressly states that
actual tenant-tillers in the landholding shall not be
ejected or removed therefrom. Furthermore, there is no
reason for ejecting the tillers with respect to the area of
five hectares, which petitioner may choose to retain.
In all cases, the security of tenure of the farmers or
farm workers on the land prior to the approval of this Act
shall be respected. The current provision on retention
removes the necessity, present under PD 27, of ejecting
actual tillers. Under the current law, landowners who do
not personally cultivate their lands are no longer required
to do so in order to qualify for the retention of an area
not exceeding five hectares. Instead, they are no
required to maintain the actual tiller of the area retained
should the latter choose to remain therein.
3. THE DAR SECRETARY. The RTC had no
jurisdiction over the complaint of the petitioner for the
Page 3 of 15
declaration of his rights under Rep. Act No. 6657 and its
precursors, inclusive of the issue of whether or not the
petitioner is entitled to a retention area and, if so, how
big an area is he entitled to. Such matters are within the
exclusive jurisdiction of the DAR Secretary to delve into
and resolve. Since the RTC had no jurisdiction on the
action of the petitioner, its decision and the writs of
execution issued by it are null and void.
X ----------------------------------------------------------------------- X
(3) KINGS PROPERTIES CORPORATION v. GALIDO,
G.R. No. 170023, 27 November 2009.
FACTS. On 18 April 1966, the heirs of Domingo
Eniceo, namely Rufina Eniceo and Maria Eniceo, were
awarded with Homestead Patent No. 112947 consisting
of four parcels of land designated as Lots 1, 3, 4, & 5,
located in San Isidro, Antipolo, Rizal. The Antipolo
property with a total area of 14.8882 hectares was
registered under Original Certificate of Title (OCT) No.
535. The grant was subject to a condition that it shall not
be subject to incumbrance for a period of five (5) years
next following the date of the patent, and shall not be
liable for the satisfaction of any debt contracted prior to
the expiration of that period; that the land shall not be
alienated, transferred or conveyed after five (5) years
and before twenty-five (25) years next following the
issuance of title, without the approval of the Secretary of
Agriculture and Natural Resources.
On 10 September 1973, a deed of sale covering the
Antipolo property was executed between Rufina Eniceo
and Maria Eniceo as vendors and respondent as
vendee. Rufina Eniceo and Maria Eniceo sold the
Antipolo property to respondent for P250,000. On 5 April
1988, thinking that the OCT was lost in the process, the
Eniceo heirs registered with the Registry of Deeds of
Marikina City and also filed a petition for the issuance of
a new owners duplicate copy of OCT No. 535 with
Branch 72 of the Regional Trial Court (RTC) of Antipolo,
Rizal.
ID., PETITIONER. Petitioner says that he has an
adverse claim. Sometime in February 1995, he was
offered to buy the Antipolo property and decided to buy
it. On 14 March 1995, respondent caused the annotation
of his adverse claim in OCT No. 535.
On 20 March 1995, the Eniceo heirs allegedly
executed a deed of absolute sale in favor of petitioner
covering lots 3 and 4 of the Antipolo property for
P500,000 Lots 1 and 5 were also sold for P1,000,000.
On 17 August 1995, the Secretary of the Department of
Environment and Natural Resources approved the deed
of sale between the Eniceo heirs and respondent.
ID., RESPONDENT. On 16 January 1996,
respondent filed a civil complaint with the trial court
against the Eniceo heirs and petitioner. Respondent
prayed for the cancellation of the certificates of title
issued in favor of petitioner, and the registration of the
deed of sale and issuance of a new transfer certificate of
title in favor of respondent.
ID., RULING OF THE RTC. The trial court stated
that although respondent claims that the Eniceo heirs
sold to him the Antipolo property, respondent did not
testify in court as to the existence, validity and
genuineness of the purported deed of sale and his
possession of the duplicate owners copy of OCT No.
535. The trial court stated that as owner of a property
consisting of hectares of land, respondent should have
come to court to substantiate his claim and show that the
allegations of the Eniceo heirs and petitioner are mere
fabrications.
The trial court noticed that respondent did not
register the deed of sale with the Register of Deeds
immediately after its alleged execution on 10 September
1973. Further, respondent waited for 22 long years
before he had the sale approved by the DENR
Secretary. The trial court declared that respondent slept
on his rights. The trial court concluded that respondent’s
failure to register the sale and secure the cancellation of
OCT No. 535 militates against his claim of ownership.
The trial court believed that respondent has not
established the preponderance of evidence necessary to
justify the relief prayed for in his complaint.
ID., RULING OF THE CA. The CA ruled that the
deed of sale in favor of respondent, being a notarized
document, has in its favor the presumption of regularity
and carries the evidentiary weight conferred upon it with
respect to its due execution. The CA added that whoever
asserts forgery has the burden of proving it by clear,
positive and convincing evidence because forgery can
never be presumed. The CA found that petitioner and
the Eniceo heirs have not substantiated the allegation of
forgery.
The CA pointed out that laches has not set in. One
of the requisites of laches, which is injury or prejudice to
the defendant in the event relief is accorded to the
complainant or the suit is not held to be barred, is
wanting in the instant case. The CA added that
unrecorded sales of land brought under the Torrens
system are valid between parties because registration of
the instrument is merely intended to bind third persons.
Respondent Galido was favored.
ISSUE: Should the adverse claim of respondent
over the Antipolo property be barred by laches?
RULING: NO. The contract between the Eniceo
heirs and respondent executed on 10 September 1973
was a perfected contract of sale. A contract is perfected
once there is consent of the contracting parties on the
object certain and on the cause of the obligation. In the
present case, the object of the sale is the Antipolo
property and the price certain is P250,000.
The contract of sale has also been consummated
because the vendors and vendee have performed their
respective obligations under the contract. In a contract of
sale, the seller obligates himself to transfer the
ownership of the determinate thing sold, and to deliver
the same to the buyer, who obligates himself to pay a
price certain to the seller. The execution of the notarized
Page 4 of 15
deed of sale and the delivery of the owners duplicate
copy of OCT No. 535 to respondent is tantamount to a
constructive delivery of the object of the sale. In Navera
v. Court of Appeals, the Court ruled that since the sale
was made in a public instrument, it was clearly
tantamount to a delivery of the land resulting in the
symbolic possession thereof being transferred to the
buyer.
Petitioner alleges that the deed of sale is a forgery.
The Eniceo heirs also claimed in their answer that the
deed of sale is fake and spurious. However, as correctly
held by the CA, forgery can never be presumed. The
party alleging forgery is mandated to prove it with clear
and convincing evidence. Whoever alleges forgery has
the burden of proving it. In this case, petitioner and the
Eniceo heirs failed to discharge this burden.
Petitioner invokes the belated approval by the DENR
Secretary, made within 25 years from the issuance of
the homestead, to nullify the sale of the Antipolo
property. The sale of the Antipolo property cannot be
annulled on the ground that the DENR Secretary gave
his approval after 21 years from the date the deed of
sale in favor of respondent was executed. Section 118 of
Commonwealth Act No. 141 or the Public Land Act (CA
141), as amended by Commonwealth Act No. 456,
reads:
Sec. 118. Except in favor of the government or
any of its branches, units, or institutions, or
legally constituted banking corporations, lands
acquired under free patent or homestead
provisions shall not be subject to encumbrance
or alienation from the date of the approval of the
application and for a term of five years from and
after the date of the issuance of the patent or
grant x x x
No alienation, transfer, or conveyance of any
homestead after five years and before twenty-five years
after the issuance of title shall be valid without the
approval of the Secretary of Agriculture and Natural
Resources, which approval shall not be denied except
on constitutional and legal grounds.
In Spouses Alfredo v. Spouses Borras, the Court
explained the implications of Section 118 of CA 141.
Thus:
A grantee or homesteader is prohibited from
alienating to a private individual a land grant
within five years from the time that the patent or
grant is issued. A violation of this prohibition
renders a sale void. This, however, expires on
the fifth year. From then on until the next 20
years, the land grant may be alienated provided
the Secretary of Agriculture and Natural
Resources approves the alienation. The
Secretary is required to approve the alienation
unless there are constitutional and legal grounds
to deny the approval. In this case, there are no
apparent or legal grounds for the Secretary to
disapprove the sale of the Subject Land. The
failure to secure the approval of the Secretary
does notipso factomake a sale void. The
absence of approval by the Secretary does not
ipso facto make a sale made after the expiration
of the 5-year period, for in such event the
requirement of Section 118 of the Public Land
Act becomes merely directory or a formality. The
approval may be secured later, producing the
effect of ratifying and adopting the transaction as
if the sale had been previously authorized.
X ----------------------------------------------------------------------- X
(4) REPUBLIC V. COURT OF APPEALS,
G.R. No. 100709, 14 November 1997.
FACTS: Sometime in December, 1972, respondent
Morato filed a Free Patent Application No. III-3-8186-B
on a parcel of. On January 16, 1974, the patent was
approved and the Register of Deeds of Quezon at
Lucena City issued on February 4, 1974 Original
Certificate of Title No. P-17789. Both the free patent and
the title specifically mandate that the land shall not be
alienated nor encumbered within five years from the date
of the issuance of the patent.
Subsequently, the District Land Officer in Lucena
City, acting upon reports that respondent Morato had
encumbered the land in violation of the condition of the
patent, conducted an investigation. Thereafter, it was
established that the subject land is a portion of the
Calauag Bay and not suitable to vegetation. Moreover,
on October 24, 1974, a portion of the land was
mortgaged by respondent Morato to respondents Nenita
Co and Antonio Quilatan for P10,000.00. The spouses
Quilatan constructed a house on the land. Another
portion of the land was leased to Perfecto Advincula on
February 2, 1976 at P100.00 a month, where a
warehouse was constructed.
On November 5, 1978, petitioner filed an amended
complaint against Morato, spouses Nenita Co and
Antonio Quilatan, and the Register of Deeds of Quezon
for the cancellation of title and reversion of a parcel of
land to the public domain, subject of a free patent in
favor of respondent Morato, on the grounds that the land
is a foreshore land and was mortgaged and leased
within the five-year prohibitory period.
Petitioner’s Arguments. The grant of Free Patent
and the subsequent issuance of Original Certificate of
Title Josefina L. Morato were subject to the conditions
provided for in CA) No. 141. Nine months and eight
days after the grant of the patent Morato, in violation of
the terms of the patent, mortgaged a portion of the land
to Nenita Co, who thereafter constructed a house
thereon. Likewise, on February 2, 1976 and within the
five-year prohibitory period, Morato leased a portion of
the land to Perfecto Advincula at a monthly rent of
P100.00 who, shortly thereafter, constructed a house of
concrete materials on the subject land. Further, the
defense of indefeasibility of title is inaccurate. The
original certificate of title issued to Morato contains the
seeds of its own cancellation: such certificate specifically
Page 5 of 15
states on its face that it is subject to the provisions of
Sections 118, 119, 121, 122, 124 of CA No. 141, as
amended.
Private Respondent’s Arguments. The mortgage
executed over the improvement cannot be considered a
violation of the said grant since it can never affect the
ownership.
RTC’s Ruling. Case dismissed. There was no
violation of the 5-year period ban against alienating or
encumbering the land, because the land was merely
leased and not alienated. It also found that the mortgage
to Nenita Co and Antonio Quilatan covered only the
improvement and not the land itself.
ISSUES:
1. Can the patent and certificate of title issued by to
Morato be cancelled and annulled? (Since the
certificate of title becomes indefeasible after one
year from issuance of the title)
2. Is the questioned land part of the disposable land
and not a foreshore land?
RULING:
1. YES. A homestead patent, one registered under
the Land Registration Act, becomes as indefeasible as a
Torrens Title (Pamintuan v.San Agustin). Indefeasibility
of the title, however, may not bar the State, thru the
Solicitor General, from filing an action for reversion
(Heirs of Gregorio Tengo v. Heirs of Jose Aliwalas).
Sec. 118 provides that “lands acquired under free
patent or homestead provisions shall not be subject to
encumbrance or alienation 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”.
Sec. 124 provides, “any acquisition, conveyance,
alienation, transfer, or other contract made or executed
in violation of any of the provisions of sections one
hundred and eighteen, one hundred and twenty, one
hundred and twenty-one, one hundred and twenty-two,
and one hundred and twenty-three of this Act shall be
unlawful and null and void from its execution and shall
produce the effect of annulling and cancelling the grant,
title, patent, or permit originally issued, recognized or
confirmed, actually or presumptively, and cause the
reversion of the property and its improvements to the
State.”
The foregoing legal provisions clearly proscribe the
encumbrance of a parcel of land acquired under a free
patent or homestead within five years from the grant of
such patent. Furthermore, such encumbrance results in
the cancellation of the grant and the reversion of the
land to the public domain.
It is indisputable that Morato cannot fully use or
enjoy the land during the duration of the lease contract.
This restriction on the enjoyment of her property
sufficiently meets the definition of an encumbrance
under Section 118 of the Public Land Act, because such
contract impairs the use of the property by the grantee.
During the term of the lease, the grantee of the patent
cannot enjoy the beneficial use of the land leased. As
already observed, the Public Land Act does not permit a
grantee of a free patent from encumbering any portion of
such land. Such encumbrance is a ground for the
nullification of the award.
Prior to the fulfillment of the requirements of law,
Respondent Morato had only an inchoate right to the
property; such property remained part of the public
domain and, therefore, not susceptible to alienation or
encumbrance. Accordingly, if the requirements are not
complied with, the State as the grantor could petition for
the annulment of the patent and the cancellation of the
title.
Morato cannot use the doctrine of the indefeasibility
of her Torrens title to bar the state from questioning its
transfer or encumbrance. The certificate of title issued to
her clearly stipulated that its award was subject to the
conditions provided for in Sections 118, 119, 121, 122
and 124 of Commonwealth Act (CA) No. 141. Because
she violated Section 118, the reversion of the property to
the public domain necessarily follows, pursuant to
Section 124.
2. NO. The application for a free patent was made
in 1972. From the undisputed factual findings of the
Court of Appeals, however, the land has since become
foreshore. Accordingly, it can no longer be subject of a
free patent under the Public Land Act. When the sea
moved towards the estate and the tide invaded it, the
invaded property became foreshore land and passed to
the realm of the public domain. The subject land in this
case land in this case, being foreshore land, should
therefore be returned to the public domain.
X ----------------------------------------------------------------------- X
(5) LOPEZ v. COURT OF APPEALS,
G.R. No. 127827, 5 March 2003
FACTS: Fermin Lopez occupied, possessed, and
declared for taxation purposes a parcel of public land.
He filed a homestead application over the land, but his
application was not acted upon until his death in 1934.
When he died, he was survived by his heirs, the Lopez’s.
Following Fermins death, Hermogenes, being the
eldest child, worked and introduced additional
improvements on the land. In 1936, he inquired from the
Bureau of Lands the status of his late father’s application
for a homestead grant. An official of the bureau informed
him that the application remained unacted upon and
suggested that he file a new application. Following the
suggestion, Hermogenes filed a homestead application
in his own name, which was docketed as No. 138612.
After ascertaining that the land was free from claim of
any private person, the Bureau approved his application.
In 1939, Hermogenes submitted his final proof of
compliance with the residency and cultivation
requirements of the law. The land was surveyed and a
resulting plan, H-138612, was approved by the Director
Page 6 of 15
of Lands, who thereafter ordered the issuance of the
homestead patent.
Unaware that he has been awarded a homestead
patent, Hermogenes executed an Extra-judicial Partition
of the disputed land with his brothers - petitioner
Eleuterio, Juan, and Nazario. However, the three
executed a Deed of Absolute Sale of their share in the
land in favor of Hermogenes. The succeeding year,
Hermogenes applied with the Land Registration
Commission for the registration of the property in his
name. To his surprise, he found that the land has been
registered in the names of Fernando Gorospe, Salvador
de Tagle, Rosario de Tagle, Beatriz de Suzuarrequi and
Eduardo Santos, who collectively opposed his
application.
Hermogenes filed a complaint for the annulment of
the free patent and title against these persons before the
Court of First Instance.
PETITIONER’S ARGUMENTS: Fermin, their
predecessor-in-interest, has complied with all the
requirements of the Public Land Act pertaining to a
homestead grant, and is therefore entitled to a patent as
a matter of right. They claim that Fermin filed a
homestead application over the land, cultivated at least
one-fifth of it, and resided on it for at least one year.
Upon his death, they argue that they became its co-
owners through succession.
ISSUE: Was Fermin Lopez, the common
predecessor-in-interest, entitled to the grant of
homestead patent?
RULING: NO. The record is bereft of any evidence
as to when Fermin exactly filed his homestead
application over the lot in controversy, but it must have
been filed after 1920, the year he first occupied and
possessed the land, and before 1934, the year he died.
During this period, Act No. 2874 was the governing law,
which requires that for an application to be valid, it must
be approved by the Director of Lands.
The application of Fermin unfortunately remained
unacted upon up to the time of his death. It was neither
approved nor denied by the Director, as the Bureau
failed to process it. Hence, he could not have acquired
any vested rights as a homestead applicant over the
property because his application was never acted upon.
A valid application is sadly lacking in the case of Fermin.
This circumstance prevented him from acquiring any
vested right over the land and fully owning it at the time
of his death. Conformably, his heirs did not inherit any
property right from him.
The failure of the Bureau of Lands to act on the
application of Fermin up to the time of his death,
however, prevented his heirs to be subrogated in all his
rights and obligations with respect to the land applied
for.
However, at the time Hermogenes applied for a
homestead grant over the disputed property, it was still
part of alienable public land. As he applied for it in his
own name, his application inures to his sole benefit.
After complying with the cultivation and residency
requirements, he became a grantee of a homestead
patent over it, thereby making him its absolute and
exclusive owner.
X ----------------------------------------------------------------------- X
(6) FONTANILLA SR. v. COURT OF APPEALS
GR No. 119341, 29 November 1999.
FACTS: Spouses Crisanto and Feliciana Duaman
were awarded a homestead patent over a parcel of land,
and consequently, Original Certificate of Title No. I-2720
covering the same was issued to them. Upon their
death, private respondent Luis Duaman, one of their
children, inherited a four-hectare portion of the
homestead. Transfer Certificate of Title No. 33441
covering the said portion was issued in his name. On 21
July 1976, in order to expedite the loan application of his
two sons, Ernesto and Elpidio Duaman, with the
Development Bank of the Philippines, private respondent
transferred to them the ownership of his share in the
homestead. Accordingly, TCT No. 33441 was cancelled
and in lieu thereof, TCT No. T-97333 was issued in the
names of Ernesto and Elpidio.
On 8 August 1985, in view of the imminence of
foreclosure of the said lot by the bank, Ernesto and
Elpidio sold the two-hectare portion thereof to Eduardo
Fontanilla, Sr. for P30,000.00. The vendee named in the
deed of sale was Ellen M. T. Fontanilla. Pursuant to the
sale, TCT No. 172520 covering the two-hectare portion
(subject lot) was issued in the name of Ellen M. T.
Fontanilla. Sometime later, private respondent informed
Eduardo Fontanilla of his desire to repurchase the
subject lot.
Luis Duaman files with the Regional Trial Court a
case against the petitioners for the “Repurchase of the
Homestead and Delivery of Title No. T-97333.
RTC’S Decision: Dismissed for failure to state a
cause of action.
CA’s Decision: Private respondent could still
exercise the right to repurchase under Section 119 of the
Public Land Act (Commonwealth Act No. 141, as
amended) despite the fact that it was not him but his
sons who conveyed the subject lot to petitioners.
Petitioner’s (Fontanilla) Arguments: Petitioners,
urge the Court to deviate from this salutary principle
arguing that private respondent could no longer avail
himself of the right to repurchase under Section 119
because he was not the vendor of the subject lot. Only
the vendor allegedly has the right to repurchase.
Petitioners further argue that Ernesto and Elpidio cannot,
by themselves, exercise said right as they are not "legal
heirs" of the homesteader.
Further, petitioners also aver that assuming
arguendo that private respondent can still exercise his
Page 7 of 15
right to repurchase under Section 119, the same is
already time-barred. In support of this averment,
petitioners reckon the five-year period to repurchase
from 21 July 1976 when private respondent conveyed
the subject lot to his sons. When the complaint was filed
with the lower court on 20 June 1989, more than five (5)
years had lapsed and prescription of the right to
repurchase had allegedly already set in.
ISSUES:
1. Does the private respondent, Luis Duaman, who
was not the vendor who executed the deed of sale,
have the right to repurchase the subject land?
2. Does the homestead applicant, his widow or his
legal heirs have the right to repurchase the
homestead every time (beyond 5 years) the same is
conveyed to a third party or sold to persons outside
the family circle?
RULING:
1. Yes. There is nothing in Section 119 which
provides that the "applicant, his widow, or legal heirs"
must be the conveyor of the homestead before any of
them can exercise the right to repurchase. Rather, what
said law plainly provides is that the "applicant, his
widow, or legal heirs" shall be entitled to repurchase the
homestead within five (5) years from the date of
conveyance. In this case, there is no dispute that private
respondent is the legal heir of spouses Crisanto and
Feliciana Duaman, the homesteaders.
2. Yes. The transfer of the subject lot by the father
(private respondent Luis) to his sons (Ernesto and
Elpidio) is not the "conveyance" contemplated by
Section 119 because the subject lot remains in the
family of the homesteaders, the transferee being their
direct descendants. The avowed fundamental policy of
Section 119, e.g., "to preserve and keep in the family of
the homesteader that portion of the public land which the
State had gratuitously given to him,” is clearly not
violated by said conveyance.
Since the transfer of the subject lot by private
respondent to his sons does not fall within the purview of
Section 119, it necessarily follows that the five-year
period to repurchase cannot be reckoned from the date
of said conveyance. Rather, the date of conveyance for
the purpose of counting the five-year period to
repurchase under Section 119 is that "alienation made to
a third party outside of the family circle" which in this
case was the conveyance of the subject lot to petitioners
on 8 August 1985. Accordingly, private respondent's
complaint for the repurchase of the subject lot, which
was filed on 20 June 1989, was not time-barred as not
more than five (5) years had lapsed since the date of its
conveyance to petitioners.
X ----------------------------------------------------------------------- X
(7) FLORES v. BAGAOISAN,
G.R. No. 173365, 15 April 2010.
FACTS: The case involves a 13,552-square meter
portion of a parcel of land covered by Original Certificate
of Title (OCT) No. P-11880 in the name of the Heirs of
Victor Flores, namely: Julio, Benito, Dolores, and
Virginia, herein petitioners. OCT No. P-11880 was
issued pursuant to Homestead Patent No. 138892 given
on November 12, 1973.
On December 20, 1976 petitioners, together with
their mother Luisa Viernes, executed a Deed of
Confirmation and Quitclaim in favor of Vicente T. Lazo.
Through this document, petitioners agreed to sell, cede,
convey, grant, and transfer by way of QUITCLAIM the
subject property to Lazo. Thereafter, respondent,
Marciano Bagaoisan, bought the subject property from
Lazo.
On April 4, 1983, Viernes and petitioner Virginia
Flores-Dalere executed a Palawag A Nasapataan
(Affidavit), attesting to the fact that they conveyed to
Lazo the subject property through the Deed of
Confirmation and Quitclaim. Affiants also attested that
Lazo and his predecessors-in-interest had been in
possession of the disputed portion since 1940 and that
the same was mistakenly included in the patent
application of Victor Flores.
Respondent filed an action for ownership, quieting of
title, partition and damages against petitioners, praying
that he be declared as the true owner of the subject
property and that the entire property covered by OCT
No. P-11880 be partitioned among them.
RTC and CA Ruling:
Recognized plaintiff Marciano Bagaoisan as owner
of the parcel of land. (CA) the Deed of Confirmation and
Quitclaim merely confirmed petitioner’s non-ownership of
the subject property.
Respondent’s Arguments: He was a tenant of
Lazo and that he had been working on the subject
property since time immemorial. He bought the property
in 1977, he possessed the land as owner and paid real
property tax thereon. The subject property was
erroneously covered by OCT No. P-11880 and that
petitioners have previously recognized such fact,
considering that they executed an affidavit
acknowledging the erroneous inclusion of the property in
their title.
Petitioner’s Arguments: They did not relinquish
ownership or possession of the land to Lazo. While
admitting that they executed the Deed of Confirmation
and Quitclaim in favor of Lazo, they were misled into
signing the same, with Lazo taking advantage of their
lack of education. Further, it was too late for respondent
to assert title to the disputed portion because the title
covering the same had already become indefeasible one
year after it was issued.
ISSUE: Did the Deed of Confirmation and Quitclaim
violate Sec. 118 of the Public Land Act (prohibition of the
alienation of lands acquired through a homestead
patent)?
Page 8 of 15
 Ruling: YES. Without going into petitioner’s
allegation that they were unaware of the contents of the
Deed of Confirmation and Quitclaim, the court
nonetheless hold that the deed is void for violating the
five-year prohibitory period against alienation of lands
acquired through homestead patent as provided under
Section 118 of the Public Land Act.
The use of the words confirmation and quitclaim in
the title of the document was an obvious attempt to
circumvent the prohibition imposed by law. The
conveyance of a homestead before the expiration of the
five-year prohibitory period following the issuance of the
homestead patent is null and void and cannot be
enforced, for it is not within the competence of any
citizen to barter away what public policy by law seeks to
preserve. There is, therefore, no doubt that the Deed of
Confirmation and Quitclaim, which was executed three
years after the homestead patent was issued, is void
and cannot be enforced.
Further, it would be well to mention that the
execution of the Deed of Confirmation and Quitclaim
within the five-year prohibitory period also makes the
homestead patent susceptible to cancellation, and the
subject property being reverted to the public domain. It is
the Solicitor General, on behalf of the government, who
is by law mandated to institute an action for reversion.
Regarding the indefeasibility of the title one year
after its issuance, An OCT issued on the strength of a
homestead patent partakes of the nature of a certificate
issued in a judicial proceeding and becomes
indefeasible and incontrovertible upon the expiration of
one year from the date of the promulgation of the
Director of Lands order for the issuance of the patent.
After the lapse of such period, the sole remedy of a
landowner, whose property has been wrongfully or
erroneously registered in another’s name is to file an
action for reconveyance so long as the property has not
passed to an innocent purchaser for value. In order that
an action for reconveyance based on fraud may prosper,
it is essential for the party seeking reconveyance to
prove, by clear and convincing evidence, his title to the
property and the fact of fraud. In the present case, the
parties instituted a Deed of Confirmation and Quitclaim,
and not an action for reconveyance.
X ----------------------------------------------------------------------- X
(8) SPS. HILAGA v. RURAL BANK OF ISULAN,
G.R. No. 179781, 7 April 2010.
FACTS: Petitioners Basilio and Norma B. Hilaga
were the owners of a parcel of land, identified as Lot No.
172-A, Pls-212-D-7, located at Barrio Lopez Jaena,
Municipality of Norala, Province of South Cotabato and
containing an area of 46,868 square meters, more or
less.
Petitioners obtained a loan from respondent Rural
Bank of Isulan Inc., in the amount of P2,500.00. To
secure the loan, they executed a Real Estate Mortgage
over the above-mentioned property which was then
covered only by Tax Declaration No. 5537. The
petitioners failed to pay the loan and it was foreclosed.
Rural Bank of Isulan (Cotabato) Inc. was the highest
bidder. The respondent bank then took possession of
the foreclosed property. Unknown to respondent bank, a
Free Patent title (Original Certificate of Title No. P-
19766) had been issued in favor of petitioners on August
4, 1976 or before the foreclosure sale. More than
seventeen (17) years after the foreclosure sale,
petitioner Basilio Hilaga sent a letter conveying his
desire to redeem the subject property.
Petitioners filed a complaint for Redemption of
Foreclosed Mortgaged Property before the Regional
Trial Court of Surallah, South Cotabato.
Petitioner’s contention. Petitioners alleged that the
mortgage and subsequent foreclosure of the subject
property had not been annotated on the title nor
registered with the Register of Deeds. Also, no
annotation and consolidation of ownership was made in
favor of the respondent bank. Thus, the one (1)-year
redemption period under Act No. 3135, which
commences from the date of registration of the sale, has
not yet started.
Respondent’s contention. Respondent bank
averred that when the real estate mortgage in its favor
was executed, the parcel of land was merely covered by
a tax declaration. That unknown to the respondent bank,
petitioners proceeded to apply for and cause the
issuance in 1976 of a free patent and torrens title to the
land; hence, they are estopped to claim that the parcel of
land mortgaged is covered by a free patent and torrens
title.
Ruling of the RTC. RTC rendered judgment in favor
of the Plaintiffs, ordering the defendant Bank to allow the
plaintiffs to exercise their right of redemption under Act
3135
Ruling of the CA. On appeal, the CA reversed the
trial court. The right of petitioners to redeem their
foreclosed property can only be exercised within two (2)
years from the date of foreclosure, as provided under
Republic Act No. 720 or the Rural Banks' Act, as
amended by Republic Act No. 2670.
ISSUE: Can petitioners still redeem their foreclosed
property?
RULING: NO. Section 5 of Republic Act No. 720, as
amended by Republic Act Nos. 2670 and 5939,
specifically provides for the redemption period for lands
foreclosed by rural banks. Loans may be granted by
rural banks on the security of lands without Torrens titles
where the owner of private property can show five years
or more of peaceful, continuous and uninterrupted
possession in the concept of an owner.
When a homestead or free patent land is foreclosed,
the homesteader or free patent holder, as well as their
heirs shall have the right to redeem the same within two
years from the date of foreclosure in case of a land not
Page 9 of 15
covered by a Torrens title or two years from the date of
the registration of the foreclosure in case of a land
covered by a Torrens title.
If the mortgagor fails to exercise such right, he or his
heirs may still repurchase the property within five (5)
years from the expiration of the two (2)-year redemption
period pursuant to Section 119 of the Public Land Act
(C.A. No. 141). If the land is mortgaged to parties other
than rural banks, the mortgagor may redeem the
property within one (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
five (5) years from the expiration of the redemption
period also pursuant to Section 119 of the Public Land
Act.
In the present case, petitioners admit that when the
property was mortgaged, only the tax declaration was
presented. Although a free patent title was subsequently
issued in their favor on August 4, 1976, petitioners failed
to inform the creditor rural bank of such issuance. As a
result, the certificate of sale was not registered or
annotated on the free patent title. Petitioners are
estopped from redeeming the property based on the free
patent title which was not presented during the
foreclosure sale nor delivered to the Register of Deeds
for annotation of the certificate of sale as required under
Section 5 of Republic Act No. 720, as amended.
Petitioners cannot fault respondent for the non-
registration of the certificate of sale because petitioners
did not inform the respondent bank that a Torrens title
had already been acquired by them on August 4, 1976.
By their silence and inaction, petitioners misled the
respondent bank to believe that their only proof of
ownership was the tax declaration.
X ----------------------------------------------------------------------- X
(9) HEIRS OF LABANON v. HEIRS OF LABANON,
G.R. No. 160711, 14 August 2004.
FACTS: During the lifetime of Constancio Labanon,
prior to the outbreak of WWII, he settled upon a piece of
alienable and disposable public agricultural land situated
at Brgy. Lanao, Kidapawan, Cotabato. Constancio
cultivated the said lot and introduced permanent
improvements that still exist up to the present. Being of
very limited educational attainment, he found it difficult to
file his public land application over said lot. Constancio
then asked his brother, Maximo Labanon who was better
educated to file the corresponding public land application
under the express agreement that they will divide the
said lot as soon as it would be feasible for them to do so.
During the time of the application it was Constancio
who continued to cultivate the said lot in order to comply
with the cultivation requirement set forth under
Commonwealth Act 141 on Homestead applications.
Due to industry of Constancio, the Homestead
Application was approved and eventually, Original
Certificate of Title No. P-14320 was issued in favor of
Maximo Labanon.
Maximo Labanon executed a document
denominated as Assignment of Rights and Ownership to
safeguard the ownership and interest of his brother
Constancio Labanon. Again, Maximo Labanon executed
a sworn statement reiterating his desire that his elder
brother Constancio, his heirs and assigns shall own the
eastern portion of the lot.
After the death of Constancio Labanon, his heirs
executed an extra-judicial settlement of estate with
simultaneous sale over the aforesaid eastern portion of
the lot in favor of Alberto Makilang, the husband of
Visitacion Labanon, one of the children of Constancio.
Subsequently, the parcel of land was declared for
taxation purposes in the name of Alberto but the heirs of
Maximo Labanon caused to be cancelled from the
records of the Provincial Assessor of Cotabato the said
tax declaration.
Petitioners filed a complaint for Specific
Performance, Recovery of Ownership, Attorneys Fees
and Damages with Writ of Preliminary Injunction and
Prayer for Temporary Restraining Order against
respondents. The lower court dismissed the complaint
and on appeal, the CA reversed the decision of the lower
court.
Petitioners argue that respondents can no longer
question Maximo Labanon’s ownership of the land after
its registration under the principle of indefeasibility of a
Transfer Certificate of Title (TCT).
ISSUE: Can the Original Certificate of Title issued in
the name of Maximo Labanon be now considered
indefeasible and conclusive?
RULING: Respondents are not precluded from
challenging the validity of the Original Certificate of Title.
The principle of indefeasibility of a TCT is embodied
in Section 32 of Presidential Decree No. (PD) 1529,
amending the Land Registration Act. The legal provision
does not totally deprive a party of any remedy to recover
the property fraudulently registered in the name of
another. Section 32 of PD 1529 merely precludes the
reopening of the registration proceedings for titles
covered by the Torrens System, but does not foreclose
other remedies for the reconveyance of the property to
its rightful owner.
The mere possession of a certificate of title under
the Torrens system does not necessarily make the
possessor a true owner of all the property described
therein for he does not by virtue of said certificate alone
become the owner of the land illegally included.
Undeniably, respondents are not precluded from
recovering the eastern portion of Original Certificate of
Title with an area subject of the Assignment of Rights
and Ownership previously owned by their father,
Constancio Labanon. The action for Recovery of
Ownership before the RTC is indeed the appropriate
remedy.
X ----------------------------------------------------------------------- X
Page 10 of 15
(10) VDA. DE PANALIGAN v. COURT OF APPEALS,
G.R. No. 112611, 31 July 1996.
FACTS: On August 13, 1956, the spouses
Gaudencio Superioridad and Socorro Barrios acquired a
79,509 square meter parcel of land located at Barrio 5,
Norala, South Cotabato under Homestead Patent No. V-
5988. Consequently Original Certificate of Title No; P-
6776 (V-5988) over the subject Lot No. 744 was issued
in their names.
The spouses Superioridad sold the subject property
to Ariston Panaligan and Clara Atong for P25,000.00.
After a little over a year, the spouses Panaligan sold the
said lot to their four children, similarly for a consideration
of P25,000.00. Lot No. 744 was subdivided into four lots,
each with an area of 19,887 square meters, and the
corresponding transfer certificates of title were issued in
favor of their four children.
Spouses Superioridad, filed a complaint for
repurchase of land under Section 119 of Commonwealth
Act No. 141 against the spouses Panaligan and their
children who were now the titled owners of the property
in question.
Panaligans countered that private respondents
abandoned their rights to the property in question, that
there was neither valid tender of payment nor
consignation in court and that they are not desirous of
preserving the land for homestead purposes but for gain
and speculative purposes.
After trial on the merits, the lower court ruled in favor
of private respondent spouses Superioridad. On Appeal,
petitioners alleged that respondents’ right to repurchase
had already expired. CA affirmed the decision of the
lower court.
Petitioners point out that during the hearings of the
case in the trial court, private respondents could not
readily deposit the P25,000.00 repurchase price with the
Clerk of Court. Petitioners assailed that the Court of
Appeals failed to appreciate that private respondents are
guilty of laches.
ISSUE: Do respondents have the right to
repurchase under CA 141?
RULING: YES. The right of repurchase sought to be
exercised by private respondents and allowed both the
trial and appellate courts, is based on Section 119 of
Commonwealth Act No. 141, the Public Land Act. Said
privilege is a part of the public policy to provide a home
and decent living for destitutes, aimed at promoting a
class of independent small landholders which is the
bulwark of peace and order.
It is uncontroverted that private respondent spouses
sold the land to petitioners on January 13, 1973 and that
a suit for reconveyance was filed on October 20, 1977.
Said suit was clearly within the five-year period to
repurchase granted under the aforequoted legal
provision.
The law is unambiguous. Tender of the payment of
the repurchase price is not among the requisites of the
law and is unnecessary, contrary to the petitioners'
claims. It is not even necessary for the preservation of
such a right of redemption to make an offer redeem or
tender of payment of purchase price within five years.
The filing of an action to redeem within that period is
equivalent to a formal offer to redeem. There is not even
a need for consignation of the redemption price. It is thus
immaterial that private respondents did not readily
deposit the repurchase price with the Clerk of Court.
X ----------------------------------------------------------------------- X
(11) MORLA v. BELMONTE,
G.R. No. 171146, 7 December 2011.
FACTS: Spouses Alfredo Nisperos and Esperanza
Urbano were the original homesteaders of an 80,873-
square meter tract of public land situated in Caliguian,
Burgos, Isabela] by virtue of Original Certificate of Title
(OCT) No. P-1542, issued on May 4, 1951.
On June 8, 1988, the Nisperos spouses executed a
Partial Deed of Absolute Sale wherein they sold a
portion of Lot No. 4353 with an area of 50,000 square
meters to the brothers Ramon and Rodolfo Morla for the
sum of Two Hundred Fifty Thousand Pesos
(₱250,000.00).
The Morla brothers acknowledged and confirmed in
writing that they had bought from the Nisperos spouses
the subject land, and that they had agreed to give the
Nisperos spouses a period of ten (10) years within which
to repurchase the subject land for the price of Two
Hundred Seventy-Five Thousand Pesos (₱275,000.00).
Nisperos spouses filed a Complaint for Repurchase
and/or Recovery of Ownership Plus Damages against
the Morla brothers. They alleged that the deed of sale
was registered by the Morla brothers only when they had
signified their intention to repurchase their property.
Thus, Transfer Certificate of Title (TCT) No. 225544 for
the subject land was issued in favor of the Morla
brothers, and TCT No. 225545, for the remaining 30,870
square meters of Lot No. 4353, to the Nisperos spouses.
The Morla brothers claimed that the Nisperos
spouses had no cause of action, as the repurchase of
the subject land was improper for being outside the five-
year period provided under Section 119 of
Commonwealth Act No. 141.
The Nisperos spouses deposited the amount of
₱275,000.00, with the clerk of court of the RTC for the
repurchase of the subject land.
The RTC rendered its judgment in favor of Nisperos
Spouses. The RTC said that the only issue to be
resolved was the validity of the 1988 contract, which the
Morla brothers neither attacked nor denied. The RTC
held that it was clear from the 1988 contract, which the
Morla brothers executed, that they had bound
themselves to its terms and conditions. The RTC further
Page 11 of 15
proclaimed that what was prohibited was the shortening
of the five-year redemption period under Section 119 of
Commonwealth Act No. 141, and not its prolongation.
The Court of Appeals affirmed the RTCs decision. It
declared that the RTC did not err in allowing the
Nisperos spouses to repurchase the subject land. It
upheld the validity of the 1988 contract and concurred
with the RTCs rationale that the arrangement to prolong
the period for redemption of the subject land was not
prohibited by law as it was in line with the intent of
Section 119 to give the homesteader or patentee every
chance to preserve for himself and his family the land
that the State had gratuitously given to him as a reward
for his labor in cleaning and cultivating it.
ISSUE: May the parties a deed of sale of a land
covered by a homestead patent extend or prolong the 5-
year period of repurchase under Section 119 of Act 141,
under a private writing subsequently executed by them?
RULING: YES. Since the subject land was acquired
by the Nisperos spouses pursuant to a homestead
patent, the applicable law is Commonwealth Act No.
141, or the Public Land Act. Section 119 thereof
specifically speaks about repurchases of a homestead or
free patent land by the applicant, his widow, or legal
heirs, within a period of five years from the date of the
conveyance.
Nowhere in Commonwealth Act No. 141 does it say that
the right to repurchase under Section 119 thereof could
not be extended by mutual agreement of the parties
involved. Neither would extending the period in Section
119 be against public policy as the evident purpose of
the Public Land Act, especially the provisions thereof in
relation to homesteads, is to conserve ownership of
lands acquired as homesteads in the homesteader or his
heirs. What cannot be bartered away is the
homesteader’s right to repurchase the homestead within
five years from its conveyance, as this is what public
policy by law seeks to preserve.
The 1988 contract was executed freely and willingly
between petitioner and his late brother, and the Nisperos
spouses. The freedom of contract is both a constitutional
and statutory right, and the contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they
are not contrary to law, morals, good customs, public
order, or public policy. The 1988 contract neither
shortens the period provided under Section 119 nor
does away with it. Instead, it gives the Nisperos spouses
more time to reacquire the land that the State
gratuitously gave them. The 1988 contract therefore is
not contrary to law; instead it is merely in keeping with
the purpose of the homestead law.
X ----------------------------------------------------------------------- X
(12) PARIS v. ALFECHE,
G.R. No. 139083, 30 August 2011.
FACTS: Petitioner is the registered owner of a
parcel of land situated in Bukidnon with an area of
10.6146 hectares, more or less, covered by TCT No. T-
8275 and another property with an area of 13.2614
hectares covered by OCT No. P-4985, also Bukidnon.
The property are tenanted by private respondents who
are recipients of Emancipation Patents in their names
pursuant to Operation Land Transfer under P.D. 27
notwithstanding the fact that neither the tenants nor the
Land Bank of the Philippines has paid a single centavo
for the said land. Petitioner and the tenants have not
signed any Land Transfer Production Agreement.
Petitioner and her children have been deprived of their
property without due process of law and without just
compensation, Subsequently, the tenants have already
stopped paying rentals as of December 1988.
PETITIONER’S ARGUMENTS: The tenants are not
supposed to acquire the subject land and the
Emancipation Patents precipitately issued to them are
null and void for being contrary to law. Petitioner claims
that she owns the subject property covered by OCT No.
P-4985 as original homestead grantee who still owned
the same when Republic Act No. 6657 was approved,
thus she is entitled to retain the area to the exclusion of
her tenants.
As regards TCT No. 8275, petitioner has applied for
retention of seven hectares per Letter of Retention', are
covered by Homestead Patents, and as decided by the
Supreme Court in the cases of Patricio vs. Bayug (112
SCRA 41) and Alita vs. Court of Appeals (170 SCRA
706), the homesteaders and their heirs have the right to
cultivate their homesteads personally, which is a
superior right over that of tenant-farmers.
RESPONDENT’S ARGUMENT: That petitioner's
right to retain seven (7) hectares is not absolute since
she owns other agricultural landholdings, thus
disqualifying her to retain the area. The criteria set forth
under P.D. 27 were observed before the generation of
the Emancipation Patents; that under Executive Order
No. 228, the tenant-farmers under P.D. 27 are deemed
full owners of the lands they till and the lease rentals
paid by them should be considered as amortization
payments; that under LOI 474, petitioner who owns more
than seven (7) hectares of lands are not entitled to
retention.
The Adjudicator a quo rendered the decision in
favor or petitioners cancelling the Emancipation Patents
issued to tenants-respondents and that the Register of
Deeds of Malaybalay, Bukidnon shall cancel all
Emancipation Patents registered under the names of
tenants-respondents. That back rentals due to the shall
be given to the said petitioner
Ruling of the Court Appeals: It ruled that she could
not retain her homesteads, since she was not the actual
cultivator. It also held that she and her heirs had not
been deprived of their right to retain the area mandated
by law, because they had other agricultural landholdings.
Finally, it ruled that she had not been deprived of her
properties without just compensation, since tenant-
Page 12 of 15
farmers of agricultural lands under P.D. 27 are deemed
owners of the land they till and the lease rentals paid by
them shall be considered as amortization payments.
ISSUE:
1. Are petitioner’s homesteads exempted from land
reform?
2. Can the tenants be ejected?
RULING:
1. NO. Indisputably, homestead grantees or their
direct compulsory heirs can own and retain the original
homesteads, only for "as long as they continue to
cultivate" them. That parcels of land are covered by
homestead patents will not automatically exempt them
from the operation of land reform. It is the fact of
continued cultivation by the original grantees or their
direct compulsory heirs that shall exempt their lands
from land reform coverage.
In the present case, as previously pointed out,
neither petitioner nor her heirs are personally cultivating
the subject homesteads. The DAR and the CA found
that respondents were the ones who had been
cultivating their respective portions of the disputed
properties.
However, petitioner can retain five (5) hectares in
accordance with Section 6 of RA 6657, which requires
no qualifying condition for the landowner to be entitled to
retain such area.
Petitioner's heirs, however, are not entitled to
awards of three (3) hectares each, since they are not
actually tilling the parcels or directly managing the farm.
2. NO. There is no justification for ejecting
respondents. Besides, Section 22 of RA 6657 expressly
states that "actual tenant-tillers in the landholding shall
not be ejected or removed therefrom." Furthermore,
there is no reason for ejecting the tillers with respect to
the area of five hectares, which petitioner may choose to
retain.
The current provision on retention removes the
necessity, present under PD 27, of ejecting actual tillers.
Under the current law, landowners who do not
personally cultivate their lands are no longer required to
do so in order to qualify for the retention of an area not
exceeding five hectares. Instead, they are now required
to maintain the actual tiller of the area retained, should
the latter choose to remain therein.
X ----------------------------------------------------------------------- X
(13) ABELGAS v. COMIA,
G.R. No. 163125, 18 April 2012.
FACTS: Comia obtained a free patent situated in
Oriental Mindoro with an area of 6,790 square meters.
Pursuant to this free patent, the property was was
originally registered as Original Certificate of Title No. P-
8553.
Subsequently, by virtue of a notarized Deed of
Relinquishment, Renunciation of Rights and Quitclaim,
Comia voluntarily conveyed a 3,000-square-meter said
lot to the spouses Abelgas. It was stated in the said
Deed that the subject portion was the sole property of
the spouses and it had only been included in the title of
Comia for it adjoined his land. Based on the Subdivision
Survey, the 3,000-sqm portion bordered Lot No. 919-E
owned by Jose Abelgas, Jr.
By virtue of this subsequent voluntary dealing over
the property, the Register of Deeds cancelled OCT No.
P-8553 in the name of Comia. (TCT) No. T-46030 was
issued in the names, Sps. Comia and Sps Abelgas, as
co-owners of Lot No. 919-B.
Thereafter, the spouses subdivided their 3,000-sqm
portion into twelve (12) lots. Using their TCTs, the
Abelgas, used the lots to secure their loan obligations
with Rural Bank of Pinamalayan, Inc., Rural Bank of
Socorro, Inc., and the Philippine National Bank. Said lots
were issued in favor of RBSI for failure of the Spouses to
meet their obligations with said bank.
Comia claimed that he was the sole owner of Lot
No. 919-B; and that the Deed of Relinquishment,
Renunciation of Rights and Quitclaim, which resulted in
the issuance of TCT Nos. T-46030, and T-4634 to
46375, is fictitious and nonexisting.
Respondent assailed the encumbrances in favor of
the mortgagee banks as void ab initio and obtained in
bad faith as these were executed within the period of
prohibition to dispose lands subject of a free patent
under Section 118 of the Public Land Act (CA 141).
RULING OF RTC: The Deed as signed by him
voluntarily relinquished the subject parcel of land in favor
of its rightful owner and possessors the spouses
Abelgas. The trial court also upheld the validity of the
mortgages, since encumbrances made in favor of banks
are exempted according to the amendatory laws of the
Public Land Act.
RULING OF CA: The CA modified the RTCs
Decision. While the appellate court sustained the due
execution of the Deed of Relinquishment, Renunciation
of Rights and Quitclaim, it construed the document as an
alienation prohibited by CA 141. The CA pronounced
that in an attempt to circumvent the law, it was made to
appear that the 3,000 square meters adjoining the land
of Comia was owned by the spouses. However, based
on testimonial evidence, Abelgas purchased the said
portion contrary to law.
Likewise, the CA nullified the mortgages, as the
exemption of the banks had been removed by
Commonwealth Act 456amending Section 118 of
Commonwealth Act 141, which took effect on 8 June
1939. Nevertheless, the banks may recover the value of
the loans with interest. In view of the Deeds nullity, and
in the absence of escheat proceedings, the CA restored
to Comia Lot No. 919-B.
Page 13 of 15
 ISSUE: Does the prohibition on Section 118 of CA
141 apply?
RULING: NO. For the prohibition in Section 118 of
CA 141 to apply, the subject property must be acquired
by virtue of either a free patent or a homestead patent.
In this case, the 3,000-sqm portion subdivided into
twelve (12) lots as evidenced by TCT Nos. T-4634 to
46375 has not been shown to be under a free patent. As
it appears, what was submitted to the mortgagee banks
were TCTs not derived from a free patent.
Thus, the encumbrances thereon are not null and
void, as these do not fall within the ambit of the
prohibition. This being the case, it cannot be said that
the banks were in bad faith for accepting the
encumbered properties that did not originate from a free
patent. In any event, at the time of the mortgage, the
Rural Banks Act (Republic Act No. 720), as amended by
Republic Act No. 5939, already allows banks to accept
free patents as security for loan obligations.
Absent any finding of nullity, we sustain the RTCs
ruling that the alienation and encumbrances are valid.
Consequently, there is no cause to cancel the
subsequent TCTs and the resulting mortgages thereon.
X ----------------------------------------------------------------------- X
(14) RABAJA RANCH DEVELOPMENT
CORPORATION v. AFP RETIREMENT AND
SEPARATION BENEFITS SYSTEM,
G.R. No. 177181, 7 July 2009.
FACTS: Rabaja Ranch Development Corporation
(petitioner), a domestic corporation, is a holder of (TCT)
No. T-88513 covering the subject property particularly
identified as Lot 395, Pls 47, with an area of 211,372
square meters more or less, and located Oriental
Mindoro.
Respondent Armed Forces of the Philippines
Retirement and Separation Benefits System is a
government corporation, which manages the pension
fund of the Armed Forces of the Philippines (AFP), and
is duly organized under Presidential Decree (P.D.) No.
361, as amended by P.D. No. 16566 (respondent).
Respondent is a holder of TCT No. T-51382 covering the
same subject property.
Petitioner filed a Complaintfor Quieting of Title
and/or Removal of Cloud from Title before the RTC.
PETITIONER’S ARGUMENTS: A Free Patent was
issued in the name of Jose Castromero Jose. the Free
Patent was registered, and (OCT) No. P-2612 covering
the subject property was issued. Sometime in the first
half of 1982, Jose sold the subject property to Spouses
Veloso and TCT No. T-17104 was issued in favor of the
latter. Spouses Veloso, in turn, sold the subject property
to petitioner for the sum of ₱634,116.00 and TCT No. T-
88513 was issued in petitioner’s name. Petitioner
alleged that it was the lawful owner and possessor of the
subject property.
RESPONDENT’S ARGUMENT: Homestead Patent
was issued in the name of Charles. The Homestead
Patent was registered and OCT No. RP-110 (P-6339)
was issued in Charles's name, covering the same
property. Thereafter, Charles sold the subject property to
JMC Farm Incorporated (JMC), which was then issued
TCT No. 18529. JMC obtained a loan from respondent in
with real estate mortgage over several parcels of land
including the subject property. JMC failed to pay; hence,
after extra-judicial foreclosure and public sale,
respondent, being the highest bidder, acquired the
subject property and was issued TCT No. T-51382 in its
name.
Title over the subject property was protected by the
Torrens system, as it was a buyer in good faith and for
value; and that it had been in continuous possession of
the subject property since November 1989, way ahead
of petitioner's alleged possession in February 1997.
RTC RULING: RTC ruled in favor of the petitioner
on the ground that petitioner's title emanated from a title
older than that of the respondent. There were substantial
and numerous infirmities in the Homestead Patent of
Charles. There was no record in the Bureau of Lands
that Charles was a homestead applicant or a grantee of
Homestead Patent No. 113074. Upon inquiry, the RTC
also found that a similar Homestead Patent bearing No.
V-113074 was actually issued in favor of one Mariano
Costales over a parcel of land with an area of 8.7171
hectares. Charles's Homestead Patent was fraudulent
and spurious, and respondent could not invoke the
protection of the Torrens system, because the system
does not protect one who committed fraud or
misrepresentation and holds title in bad faith.
CA RULING: The CA reversed and set aside the
RTC's Decision upon the finding that Charles's
Homestead Patent was earlier registered than Jose's
Free Patent. The CA held that Jose slept on his rights,
and thus, respondent had a better right over the subject
property. Further, the CA opined that while "it is
interesting to note that petitioner's claim that Homestead
Patent No. V-113074 was issued to Mariano Costales,
per Certification issued by the Lands Management
Bureau, there is nothing on record which would show
that said Homestead Patent No. V-113074 and
Homestead Patent No. 113074 granted to Charles were
one and the same."
ISSUE: Who between the petitioner and respondent
has a better right over the subject property?
RULING: RESPONDENT. Settled is the rule that no
valid TCT can issue from a void TCT, unless an innocent
purchaser for value had intervened. An innocent
purchaser for value is one who buys the property of
another, without notice that some other person has a
right to or interest in the property, for which a full and fair
price is paid by the buyer at the time of the purchase or
before receipt of any notice of the claims or interest of
some other person in the property. The protection given
to innocent purchasers for value is necessary to uphold
Page 14 of 15
a certificate of title's efficacy and conclusiveness, which
the Torrens system ensures.

Clearly, respondent is an innocent purchaser in

good faith and for value. Thus, as far as respondent is
concerned, TCT No. 18529, shown to it by JMC, was
free from any flaw or defect that could give rise to any
iota of doubt that it was fake and spurious, or that it was
derived from a fake or spurious Homestead Patent.
Likewise, respondent was not under any obligation to
make an inquiry beyond the TCT itself when,
significantly, a foreclosure sale was conducted and
respondent emerged as the highest bidder.

Respondent's transfer certificate of title, having been

derived from the Homestead Patent which was
registered under the Torrens system on May 27, 1966,
was thus vested with the habiliments of indefeasibility.

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