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The contract for the sale of a homestead property executed on May 7, 1960 was void as it occurred within the 5-year prohibitory period under Section 118 of the Public Land Act. Lands acquired through a homestead cannot be alienated or encumbered within 5 years of being granted. The second contract of sale on August 30, 1964 for the same property, same seller, and same price was a simulated contract intended to ratify the first void contract, which is prohibited. As the initial contract of sale was inexistent and void from the beginning under Article 1409(7) of the Civil Code, it cannot be ratified or validated.
The contract for the sale of a homestead property executed on May 7, 1960 was void as it occurred within the 5-year prohibitory period under Section 118 of the Public Land Act. Lands acquired through a homestead cannot be alienated or encumbered within 5 years of being granted. The second contract of sale on August 30, 1964 for the same property, same seller, and same price was a simulated contract intended to ratify the first void contract, which is prohibited. As the initial contract of sale was inexistent and void from the beginning under Article 1409(7) of the Civil Code, it cannot be ratified or validated.
The contract for the sale of a homestead property executed on May 7, 1960 was void as it occurred within the 5-year prohibitory period under Section 118 of the Public Land Act. Lands acquired through a homestead cannot be alienated or encumbered within 5 years of being granted. The second contract of sale on August 30, 1964 for the same property, same seller, and same price was a simulated contract intended to ratify the first void contract, which is prohibited. As the initial contract of sale was inexistent and void from the beginning under Article 1409(7) of the Civil Code, it cannot be ratified or validated.
(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.