CASE DIGEST: Filinvest vs. Backy

G.R. No. 174715 : October 11, 2012

FILINVEST LAND, INC., EFREN C. GUTIERRE and LINA DE GUZMAN-FERRER, Petitioners, v. ABDUL BACKY, ABEHERA, BAIYA, EDRIS, HADJI GULAM, JAMELLA, KIRAM, LUCAYA, MONER, OMAR, RAMIR, ROBAYCA, SATAR, TAYBA ALL SURNAMED NGILAY, EDMER ANDONG, UNOS BANTANGAN and NADJER ESQUIVEL, Respondents.

PERALTA, J.:


FACTS:

On November 24, 1991, respondents Abdul Backy, et al. were the grantees of agricultural public lands located in Tambler, General Santos City through Homestead and Free patents. On October 28, 1995, petitioner Filinvest Land, Inc. (Filinvest) and Backy, et al. executed undated deeds of conditional sale of the properties covered by the homestead patent. On the same day, Backy, et al. received the downpayment for the said properties.

A few days after the execution of the deeds, Backy, et al. came to know that the sale of their properties was null and void because it was done within the prohibited period and that the sale did not have the approval of the DENR. Hence, Backy et al. filed a complaint before the RTC for the declaration of nullity of the deeds of conditional sale.

The RTC upheld the validity of the deeds. On appeal, the CA modified the ruling of the RTC and declared the deeds as null and void. Hence, the present petition.

ISSUE: Whether or not the conditional sale violated the prohibition against alienation of homesteads under the Public Land Act?

HELD: The petition is unmeritorious.

CIVIL LAW: homestead patent

The five-year prohibitory period following the issuance of the homestead patent is provided under Section 118 of Commonwealth Act No. 141, as amended by Commonwealth Act No. 456, otherwise known as the Public Land Act. It bears stressing that the law was enacted 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 labour in cleaning and cultivating it. Its basic objective, as the Court had occasion to stress, is to promote public policy that is to provide home and decent living for destitute, aimed at providing a class of independent small landholders which is the bulwark of peace and order. Hence, any act which would have the effect of removing the property subject of the patent from the hands of a grantee will be struck down for being violative of the law.

Applying the five-year prohibition, the properties covered by the patent issued on November 24, 1991 could only be alienated after November 24, 1996. Therefore, the sale, having been consummated on October 28, 1995, or within the five-year prohibition, is as ruled by the CA, void.

The prohibition does not distinguish between consummated and executory sale. The conditional sale entered into by the parties is still a conveyance of the homestead patent. As correctly ruled by the CA, citing Ortega v. Tan: "The prohibition of the law on the sale or encumbrance of the homestead within five years after the grant is MANDATORY. Thus, the law does not distinguish between executory and consummated sales. Where the sale of a homestead was perfected within the prohibitory period of five years, the fact that the formal deed of sale was executed after the expiration of the staid period DID NOT and COULD NOT legalize a contract that was void from its inception."

Petition is DENIED.

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