JUAN SALA, PETITIONER, VS. COURT OF FIRST INSTANCE OF NEGROS ORIENTAL (BRANCH V), HON. ALEJANDRO BONCAROS, PRESIDING JUDGE, AND CRISPIN SALVERON, RESPONDENTS.

Sala versus Court of First Instance of Negros Oriental

The Case

This is a petition for review of a decision of the Court of First Instance of Negros Oriental, Branch Five, in an action for recovery of possession. Juan Sala, the judgment creditor who bought the land at a public auction, seeks to recover a portion of it from Crispin Salveron, who had earlier bought that same portion from the homestead grantee. The case matters because it settles the effect of a sale made in violation of the five-year prohibition against alienation of lands acquired under a free patent or homestead, and whether a later auction sale and a Torrens title can cure that nullity.

Procedural History

Juan Sala filed with the then Court of First Instance of Negros Oriental an action for recovery of possession against Crispin Salveron. After trial on the merits, the trial court, presided over by Judge Alejandro Boncaros, rendered a decision dismissing the complaint. The trial court relied on the ruling in Dagupan Trading versus Macam and considered Salveron a buyer in good faith, concluding that the sale by Daniel Junco to Salveron was valid. Sala then brought the matter to the Supreme Court by petition, assigning as errors the trial court's declaration that the sale was valid despite the prohibition, and its finding that what Sala bought at the sheriff's auction was only the remaining interest of Daniel Junco, excluding the portion earlier sold to Salveron.

Facts

On April 15, 1967, Daniel Junco was granted by the President homestead patent number 255492 over lots 4 and 5 of the cadastral survey of Basay, Negros Oriental, with a total area of 72,941 square meters. Without knowing of the issuance of the patent, Junco conveyed by a deed of sale dated June 16, 1967, a portion of 7,500 square meters of the lots to Crispin Salveron. Sometime in 1968, Junco received information of the issuance. He registered the patent only on December 19, 1968, and was issued Original Certificate of Title number 7936 covering the lots.

Salveron registered the deed of sale but was never issued any title. His grandfather, however, paid the real estate taxes on the portion sold to him up to 1974. On February 24, 1974, the entire lots were sold at a public auction held by the provincial sheriff. On that same day, the sheriff executed in favor of Juan Sala, as judgment creditor and highest bidder, a certificate of sale. Original Certificate of Title number 7936 was cancelled and Transfer Certificate of Title number 1300 was issued to Sala.

Since he bought the lots, Sala had been in possession of them except the portion sold to Salveron. Sala made demands on Salveron for the surrender of that portion, but Salveron refused. Sala then filed the action for recovery of possession.

Issues

• Whether or not the sale by Daniel Junco to Crispin Salveron, made within five years from the issuance of the homestead patent, is valid under Section 118 of Commonwealth Act Number 141, as amended.
• Whether or not the later sheriff's auction sale in favor of Juan Sala, and the Torrens title issued to him, cured the nullity of that earlier sale.

Applicable Provisions

Section 118 of Commonwealth Act Number 141, as amended by Commonwealth Act Number 456, provides:

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 improvement or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

This is the provision the Court construes, and it is the measure of whether the sale to Salveron was valid.

Ruling

On the first issue, the Court held that the sale by Daniel Junco to Salveron was made barely one month and eleven days from the issuance of the patent to him. The sale was therefore null and void and without effect because it violated Section 118. The Court explained that the prohibition has the avowed purpose of giving the homesteader or patentee every chance to preserve for himself and his family the land that the State had gratuitously given him as a reward for his labor in cleaning and cultivating it. The prohibition to alienate commences to run from the date the application is approved, which may be earlier than the date of the patent, while the period of five years within which alienation or encumbrance is restricted starts to be computed from the date of issuance of the patent. The Court added that the nullity of the sale of only a portion of the lots extended to the entire lots, and that the sale produced the effect of annulment and cancellation of the title issued to Daniel Junco and caused the reversion of the lots and their improvements to the State.

On the second issue, the Court held that although the sheriff's sale was conducted after five years from the issuance of the patent, and although Sala, in good faith, was subsequently issued title over the lots, those proceedings did not cure the nullity of the first sale. The provision against alienation is mandatory. Where a grantee is found not entitled to hold and possess the land in fee simple by reason of his having violated Section 118, the Court may properly order its reconveyance to the grantor, although the property has already been brought under the Torrens System. The right of the government to bring an action for reconveyance or reversion is not barred by the lapse of time, because the Statute of Limitations does not run against the State. The principle of conclusiveness of title, though sound, cannot defeat the express policy of the State prohibiting the alienation or encumbrance of lands of the public domain acquired under the Public Land Act within five years from the date of the patent. The Court also found that the trial court's reliance on Dagupan Trading versus Macam was erroneous, because the land involved in that case was not covered by a free patent.

Doctrine

A sale of land acquired under a free patent or homestead, made within five years from the issuance of the patent, is null and void under Section 118 of Commonwealth Act Number 141, as amended. The prohibition is mandatory, and its purpose is to preserve for the homesteader and his family the land the State gratuitously gave him. The five-year period is counted from the date of issuance of the patent, while the prohibition itself runs from the date of approval of the application. The nullity of a sale of only a portion extends to the entire lots, and it produces the annulment and cancellation of the title issued to the grantee and the reversion of the land to the State. A later auction sale and a Torrens title issued to a good-faith purchaser do not cure the nullity of the earlier sale, and the State's right to seek reconveyance or reversion is not barred by the lapse of time.

Disposition

The Court affirmed the judgment of the trial court insofar as it dismissed the complaint for recovery of possession, and directed that a copy of the decision be furnished the Office of the Solicitor General for appropriate action.

Remember This

The single line worth memorizing is that a sale within five years of the patent is void, and neither a later auction sale nor a Torrens title can cure it. Examiners use this case to test the mandatory character of the prohibition against alienation of homestead lands and the State's imprescriptible right to reversion.