SABAS H. HOMENA AND ILUMINADA JUANEZA, PLAINTIFFS-APPELLANTS, VS. DIMAS CASA AND MARIA CASTOR AND THE REGISTER OF DEEDS FOR THE PROVINCE OF COTABATO, DEFENDANTS-APPELLEES.

Homena versus Casa

The Case

This is a lecture on the case of Sabas Homena and Iluminada Juaneza against the spouses Dimas Casa and Maria Castor, together with the Register of Deeds for the Province of Cotabato. The plaintiffs sued to recover a two-hectare portion of a homestead and to annul, in part, the original certificate of title issued to the defendant spouses on the strength of a homestead patent, alleging fraud and unlawful dispossession. The case matters because it shows, in the clearest terms, that the courts will not lift a finger to aid a party who comes to court on the strength of an illegal bargain designed to circumvent the homestead law, and that such a party has no cause of action at all.

Procedural History

The plaintiffs filed their complaint in the Court of First Instance of Cotabato. The defendants moved to dismiss on three grounds: that the action was barred by prescription, that the plaintiffs had no cause of action because the deed of sale was void, and that the plaintiffs were not the proper parties to annul the patent. The trial court granted the motion and dismissed the complaint in an order dated January 4, 1968, and it later denied the plaintiffs' motion for reconsideration in an order dated May 8, 1968.

The plaintiffs appealed to the Court of Appeals, assigning four errors against the dismissal. The Court of Appeals certified the case to the Supreme Court because it involved only a question of law. The Supreme Court thus resolved the appeal on the legal sufficiency of the complaint.

Facts

The defendant spouses applied for a homestead patent over a parcel of land in Cotabato. In their application they stated, among other things, that the lot was not claimed and occupied by another person. A homestead patent was later issued in their favor, and on its basis the Register of Deeds issued an original certificate of title.

On June 15, 1962, the defendant spouses sold a two-hectare portion of that homestead to the plaintiffs. It was agreed in the deed of sale that the actual conveyance of the portion would be made only after the lapse of the five-year period during which, under the Public Land Act, the homestead owner was prohibited from transferring his rights. The defendants later failed to abide by that agreement.

The plaintiffs then sued, complaining of unlawful acts of dispossession disturbing their peaceful, continuous, open, uninterrupted, adverse and public possession, and seeking to annul the certificate of title insofar as it covered their two hectares, on the ground that the patent had been obtained through fraud and misrepresentation. The defendants moved to dismiss, and the trial court dismissed the complaint. Hence the appeal.

Issues

• Whether or not the plaintiffs have a cause of action arising from the deed of sale over a portion of the homestead.
• Whether or not the plaintiffs may invoke the doctrine of implied trust to recover the property despite the illegal contract.
• Whether or not the issue of prescription or laches is material to the resolution of the case.

Applicable Provisions

The decision rests on the statutory prohibition against transferring a homestead within five years from the grant. The Court describes it thus:

the five-year period during which, under the Public Land Act, the homestead owner was prohibited from transferring his rights.

This prohibition is the measure against which the deed of sale is tested, and it is the reason the agreement is void from the start.

Ruling

On the first issue, the Court held that the plaintiffs' supposed cause of action rests entirely on the deed of sale of June 15, 1962, by which the defendants sold a two-hectare portion of a homestead they were still applying for, on the understanding that actual conveyance would be made only after the five-year prohibitory period had lapsed. The Court ruled:

The agreement is clearly illegal and void ab initio; it is intended to circumvent and violate the law.

Because the parties contracted against the law, the plaintiffs acquired no rights they can enforce, and the Court declared that it cannot lend itself to the enforcement of such a bargain.

On the second issue, the Court held that the plaintiffs cannot invoke the doctrine of implied trust, because that doctrine was being anchored on an illegal contract. An illegal agreement cannot be the source of a trust that the courts would protect.

On the third issue, the Court held that prescription or laches becomes irrelevant where the plaintiffs clearly have no cause of action. The dismissal therefore stood, and the errors assigned against the trial court were found to be without merit.

Doctrine

A contract to sell a portion of a homestead before the lapse of the five-year prohibitory period under the Public Land Act is illegal and void from the beginning, because it is intended to circumvent and violate the law. As parties to a void contract, the sellers and buyers acquire no enforceable rights from it, and the courts will not aid either of them.

A party cannot invoke the doctrine of implied trust when the trust is founded on an illegal contract. And where the complaint shows on its face that the plaintiff has no cause of action, the defenses of prescription and laches need not even be reached, for there is nothing to prescribe.

Disposition

The Supreme Court denied the petition and affirmed the orders of the trial court dismissing the complaint, with the defendants prevailing.

Remember This

The one line to memorize is that a contract made to circumvent the homestead law is void from the beginning, and no implied trust can be built upon it. Examiners use this case to test the consequences of an illegal contract and to remind candidates that a plaintiff who comes to court with unclean hands on an illegal bargain has no cause of action at all.