Sale within the 5-year homestead period, void

The sale of a homestead lot within the five-year prohibitory period is illegal and void. The law does not distinguish between executory and consummated sales.

The bilateral promise to buy and sell the homestead lot at a price certain, which was reciprocally demandable (Article 1479. Civil Code), was entered into within the five-year prohibitory period and is therefore, illegal and void. Further, the agency to sell the homestead lot to a third party was coupled with an interest inasmuch as a bilateral contract was dependent on it and was not revocable at will by any of the parties. (Article 1927, ibid.) To all intents and purposes, therefore, there was an actual executory sale perfected during the period of prohibition except that it was reciprocally demandable thereafter and the agency to sell to any third party was deferred until after the expiration of the prohibitory period. That "rentals" were ostensibly to be paid during the five-year prohibitory period, and the agency to sell made effective only after the lapse of the said period, was merely a devise to circumvent the prohibition.

The Supreme Court held that the bilateral promise to buy and sell, and the agency to sell, entered into within five years from the date of the homestead patent, was in violation of Section 118 of the Public Land Law, although the executed sale was deferred until after the expiration of the five-year-prohibitory period. (Zambales v. Court of Appeals, G.R. No. L-54070, February 28, 1983)

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