(175) Menil v. CA, GR L-43668-69, July 31, 1978 [Per J.

Guerrero, First Division]; November 21,

1978 [Per J. Guerrero, First Division]
Syllabus Topic: VOID or INEXISTENT CONTRACTS
Doctrine from eSCRA:
Contracts of sale; Homesteads; Contract of sale of homestead within the 5-year prohibitory period
is void and sale cannot be confirmed nor ratified.—It cannot be claimed that there are two contracts:
One which is undisputably null and void, and another, having been executed after the lapse of the 5-year
prohibitory period, which is valid. The second contract of sale executed on March 3, 1964 is admittedly a
Confirmatory deed of sale. Even the petitioners concede this point. Inasmuch as the contract of sale
executed on May 7, 1960 is void for it is expressly prohibited or declared void by law [CA 141, Section
118], it therefore cannot be confirmed nor ratified.
Simulated contracts; The second contract of sale for the same homestead in favor of the same
vendee for the same price is ample manifestations that the second sale is simulated and that no
object or consideration in the second contract of sale has passed between the parties.
Facts: On November 3, 1955, Agueda Garan obtained a homestead patent over the land in question. On
May 7, 1960, within the prohibitive 5-year period, Agueda Garan sold the land to movant Patenciano
Manil for P415.00, as evidenced by a deed of sale bearing the same date. But, for reasons not revealed in
the records, the contracting parties did not registered the deed of sale in the Registry of Deeds in Surigao.
Original Certificate of Title No. 220 was not cancelled and the land remained registered in the name of
Agueda Garan. On August 30, 1964, Agueda Garan executed another deed of sale over the same parcel of
land in favor of the same vendee, Potenciano Menil, and for the same price P415.00. On August 30, 1965,
the contracting parties registered the second deed of sale in the Registry of Deeds in Surigao. Original
Certificate of Title No. 220 was cancelled, and Transfer Certificate of Title No. T-60, in lieu thereof, was
issued in the name of Potenciano Menil. On February 28, 1966, Potenciano Menil mortgaged the land to
the Development Bank of the Philippines to secure an agricultural loan which the former obtained from
the latter. Potenciano Menila and hiw wife, Crispina Nayve, were in possession of the land in question
until sometime in 1967 when private respondents Agueda Garan, et. Al forcibly took possession of the
said land, and filed against the former Civil Case No. 1692 for "Quieting of Title" before Branch 11 of the
Court of First Instance of Surigao del Norte.
Issue: Whether or not the contract of sale of land acquired under free patent or homestead is valid.
Held: No, the contract of sale is void for it was executed within the 5-year prohibitory period. Under
Section 118 of C.A. 141 [Public Land Act], “Except in favor of the government or any of its branches,
units, or institutions, 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, nor shall they become liable to the satisfaction
of any debt contracted prior to the expiration of said period, but the improvements or crops on the land
may be mortgaged or pledged to qualified persons, associations, or corporations.” Here, the parties
executed the contract of sale on May 7, 1960 which was less than 5 years from the date the homestead
patent was awarded to Agueda Garan, on November 3, 1955.
Further, noteworthy is the fact that the second contract of sale over the said homestead in favor of the
same vendee, petitioner Potenciano Menil, is for the same price of P415.00. Clearly, the unvarying term
of the said contract is ample manifestation that the same is simulated and that no object or consideration
passed between the parties to the contract. It is evident from the whole record of the case that the
homestead had long been in the possession of the vendees upon the execution of the first contract of sale
on May 7, 1960; likewise, the amount of P415.00 had long been paid to Agueda Garan on that same
occasion.
Therefore, it is a contract expressly prohibited or declared void by law which is considered inexistent and
void from the beginning under the provision of Article 1409 (7) of the Civil Code. It cannot be ratified.
Neither can the right to set up the defense of illegality be waived.