MARIANO DIAZ AND LEONCIA REYES, PLAINTIFFS AND APPELLEES VS. PASCUAL MACALINAO, ET AL., DEFENDANTS AND APPELLANTS.

Diaz versus Macalinao

The Case

This is an appeal by the defendants, Pascual Macalinao and others, from a judgment of the Court of First Instance of Isabela ordering them to restore to the plaintiffs, Mariano Diaz and Leoncia Reyes, the possession of a parcel of land in Barrio Aneg, Tumauini, Isabela, to pay damages of 2,100 pesos, and to pay the costs. The plaintiffs are the parents of Maria Diaz, who acquired the land as a homestead in 1939 and whose homestead application was approved in 1950; the plaintiffs claim to have succeeded to her possession. The case matters because it fixes two rules a reviewee must know: that a homestead entry segregates the land from the public domain and divests the Director of Lands of control over it, and that a default judgment may be set aside only upon a timely motion, since once it becomes final and executory the court loses the power to disturb it.

Procedural History

The plaintiffs filed an action for recovery of possession and damages before the Court of First Instance of Isabela. The defendants filed a motion to dismiss, which the trial court denied. Because the defendants failed to file an answer, they were declared in default, and after the plaintiffs presented their evidence, the court rendered judgment ordering the restoration of the land, the payment of 2,100 pesos, and the payment of costs. On November 18, 1953, the trial court set aside that judgment on a motion for relief, finding that the defendants' attorney had not been furnished a copy of the order denying the motion to dismiss, and it set the case for trial in the 1954 calendar. The defendants were again declared in default, and on August 25, 1955, the court rendered a judgment identical to the first. The defendants moved for a new trial, which the court denied, and it also denied their motion for reconsideration of that denial. The defendants appealed directly to the Supreme Court.

Facts

Maria Diaz acquired a parcel of land in Barrio Aneg, Tumauini, Isabela, as a homestead in 1939, by virtue of her homestead application approved by the Secretary of Agriculture and Natural Resources on November 29, 1950. The plaintiffs, her parents, succeeded to the possession of the homestead. In 1948, the defendants entered and took possession of a portion of the homestead containing six hectares, which yielded an annual harvest of 480 cavans of palay valued at seven pesos per cavan.

The plaintiffs sued to recover the land and its produce. The defendants sought dismissal on the ground that the land was still part of the public domain, no homestead patent or title having been issued, and that jurisdiction lay with the Director of Lands. The trial court denied the motion, and the defendants were declared in default for failure to answer.

After the first default judgment was set aside to give the defendants a chance to answer, they still failed to file an answer for about two years. A second default judgment was rendered on August 25, 1955. The defendants moved for a new trial, claiming excusable negligence of counsel and a meritorious defense, namely that Pascual Macalinao was himself a homestead applicant whose application conflicted with that of Maria Diaz. The trial court denied the motion, and the defendants appealed.

Issues

• Whether or not the trial court had jurisdiction over the subject matter of the action, the land being still part of the public domain and no homestead patent having been issued.
• Whether or not the trial court erred in holding that its default judgment of August 25, 1955, had already become final and executory and could no longer be set aside to grant a new trial.
• Whether or not the trial court erred in not entertaining the motion for new trial so as to allow the defendants to put up their defense of res adjudicata.

Applicable Provisions

The decision does not quote any statutory provision; it applies the settled rule on homestead entries and the rule on finality of judgments. The governing principle on homestead entries, as stated by the Court, is this:

A homestead entry having been permitted by the Director of Lands the homestead is segregated from the public domain and the Director of Lands divested of the control and possession thereof except if the application is finally disapproved and the entry annulled or revoked.

This principle bears on the first issue, because it answers the claim that the Director of Lands, and not the court, had jurisdiction over the land.

Ruling

On the first issue, the Court held that the action is not one of ownership, although the plaintiffs alleged ownership and prayed that the land be declared in their favor. The allegation of ownership is not incompatible with the allegation that the plaintiffs succeeded to the right of a homesteader who has been granted entry but to whom no homestead patent has yet been issued. The allegation of ownership and the prayer therefor may be considered as mere surplusage, and the case treated as an action for possession. Since the defendants entered possession in 1948 and their possession had lasted more than three years, the action falls within the jurisdiction of the court of first instance and not of the justice of the peace court. The contention that the Director of Lands has jurisdiction to determine which of the rival homesteaders should be entitled to possess is without merit, because a homestead entry having been permitted, the homestead is segregated from the public domain and the Director of Lands divested of control and possession, except if the application is finally disapproved and the entry annulled or revoked.

On the second issue, the Court held that the record sustains the finding of the trial court that the motion for new trial was presented after the judgment had become final and executory. The first order of default was issued on June 15, 1953, and the defendants learned of the decision on September 26, 1953. The court set aside the first default judgment on November 18, 1953, precisely to give the defendants an opportunity to file an answer. From September 26, 1953, up to the second default judgment on August 25, 1955, the defendants had not filed any answer at all. The reason that another lawyer was notified of the order setting aside the judgment is no excuse, because the lawyer who appeared for the defendants to secure relief from the first default judgment was the lawyer who should be notified of the order of relief, and the defendants were bound by the notice to such lawyer. For about two years they failed to file an answer, and they cannot now claim that their motion for new trial was presented in due time.

On the third issue, the Court held that the resolution of the second assignment of error renders unnecessary the consideration of the third assignment.

Doctrine

First, a homestead entry permitted by the Director of Lands segregates the homestead from the public domain and divests the Director of Lands of control and possession thereof, except where the application is finally disapproved and the entry annulled or revoked. Consequently, a suit between rival homesteaders over possession lies with the court of first instance, not with the Director of Lands.

Second, an allegation of ownership in a complaint is not incompatible with the claim of succession to the right of a homesteader who has been granted entry but to whom no patent has yet been issued; such allegation may be treated as mere surplusage, and the action considered as one for possession.

Third, a motion for new trial filed after the judgment has become final and executory cannot be entertained; the court loses the power to set the judgment aside, and the negligence of counsel in failing to file an answer, where the client was duly notified through the lawyer who appeared for him, is no excuse.

Disposition

The Supreme Court affirmed the judgment of the trial court, with costs against the defendants-appellants.

Remember This

Memorize this line: a homestead entry segregates the land from the public domain and divests the Director of Lands of control, so possession may be litigated in the courts. Examiners use this case to test jurisdiction over homestead lands before patent issuance and the finality of default judgments.