FRANCISCO SABAS, PLAINTIFF AND APPELLANT, VS. FRANCISCO GARMA ET AL., DEFENDANTS AND APPELLEES.

The
plaintiff, Francisco Sabas, appeals to this court from the judgment of
the Court of First Instance of Cagayan, the dispositive part of which
reads as follows:

“For all the foregoing,
the court declares the foreclosure of the mortgage claimed by the
plaintiff to be untenable, but orders the defendant Francisco Garma to
pay to said plaintiff the sum of P2,099.03 plus the costs of the suit.
The defendants Victorio, Juliana, Uldarico, Aurora, Juana, Damiana and
Victoria, all surnamed Garma, and the defendant Pascual de Guzman, are
absolved from the complaint.”

In support of his appeal, the appellant assigns six alleged errors as having been committed by the court a quo in its judgment in question, which will be discussed in the course of this decision.

The pertinent facts necessary for the determination of the questions of
law raised by the appellant in this appeal, which are stated in the
appealed judgment, are as follows:

“The
evidence presented during the trial of this case shows that since the
year 1920 the plaintiff Francisco Sabas and the defendant Francisco
Garma, together with his deceased wife Tarcila Vilaray, have had
between them various loan transactions involving money, the latter
spouses being the debtors and Francisco Sabas the creditor. On November
10, 1930, a liquidation was made by them, as a result of which the
spouses Francisco Garma and Tarcila Vilaray appeared to be indebted in
the sum of P2,187.53. For this reason said spouses, on the same date,
executed an instrument of mortgage in which they promise to pay the sum
in question on or before August 30, 1933 (Exhibit A). The land given as
security by the spouses Garma and Vilaray was acquired by them as
Homestead, whose patent was issued by the Governor-General on September
14, 1926. The corresponding original certificate of title was issued by
the register of deeds of Cagayan on October 18, 1926. Said instrument
of mortgage was registered in the office of said register of deeds only
on October 5, 1932 (Exhibit B). The defendant Garma and his deceased
wife have failed to pay said loan of P2,187.53, although they were able
to deliver to the plaintiff two lots of tobacco as payment on account
of the loan in question. The first lot, which consisted of 10 bales of
tobacco valued at P50, was received by the plaintiff on September 18,
1931 (Exhibit 2), and the second lot, which consisted of 11 bales
valued at P38.50, was received by the plaintiff in the year 1932. These
two lots of tobacco, the total value of which amounts to P88.50, should
be deducted from the mortgage credit claimed by the plaintiff.

“The
evidence does not establish the defendant Garma’s allegation that he
signed the instrument Exhibit A through force and intimidation.

“It
does not appear from the evidence that the children of the deceased
Tarcila Vilaray have inherited something from their deceased mother.
Therefore, they cannot be compelled to pay for the mortgage credit
claimed by the plaintiff.

“With respect to the mortgage
constituted by the defendant Francisco Garma in favor of the other
defendant Pascual de Guzman, the evidence shows that Garma obtained a
loan of P1,500 from De Guzman, for which reason he executed, on June
12, 1933, an instrument of mortgage on the same land mortgaged to the
plaintiff Francisco Sabas, which mortgage was registered in the office
of the register of deeds on June 26, 1933 (Exhibits 2-Guzman and
3-Guzman).”

The principal question to be
decided is that raised in the first assignment of alleged error,
consisting in whether or not the lower court erred in declaring null
and void from its execution the mortgage constituted by Francisco Garma
and his wife Tarcila Vilaray in favor of the plaintiff-appellant
Francisco Sabas.

The legal provisions pertinent to the case
are those contained in sections lie and 122 of Act No. 2874, the former
section as amended by section 23 of Act No. 3517, both of which read as
follows:

“Sec. 116. Except in favor of the
Government or any of its branches, units, or institutions, or legacy
constituted banking corporations, lands acquired under the free patent
or homestead provisions snail 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 improvements
or crops on the land may be mortgaged or pledged to qualified persons,
associations, or corporations.”

“Sec. 122. Any acquisition,
conveyance, alienation, transfer, or other contract made or executed in
violation of any of the provisions of sections one hundred and sixteen,
one hundred and eighteen, one hundred and nineteen, one hundred and
twenty, and one hundred and twenty-one of this Act shall be unlawful
and null and void from its execution and shall produce the effect of
annulling and cancelling the grant, title, patent, or permit originally
issued, recognized, or confirmed, actually or presumptively, and cause
the reversion of the property and its improvements to the Government.”

According to the above-quoted legal provisions, lands acquired under
free patent or homestead cannon be encumbered or alienated from the
date of the approval of the application and for a term of five years
from and alter the date of the issuance of the patent or grant, nor are
they liable to the satisfaction of any debt contracted prior to the
expiration of said period, except in favor of the Government or any of
its branches, units, or institutions. Only the improvements introduced
thereon and the crops produced on the same may be mortgaged or pledged
to qualified persons, associations, or corporations. Any contract
encumbering said lands made or executed within the above-stated period
of time, shall be unlawful and null and void from its execution.

That part of the contract entered into between the plaintiff-appellant
Francisco Sabas and the defendants-appellees Francisco Garma and
Tarcila Vilaray, whereby the latter, on November 10, 1930, constituted
a mortgage on a parcel of land which had been applied for by them as
homestead, the patent of which had been issued by the Governor-General
on September 14, 1926, and the corresponding original certificate of
title issued by the register of deeds of Cagayan on October 18th of
said year (Exhibit A), to secure the payment of an obligation resulting
from a liquidation of accounts made on November 10, 1930, was null and
void ab initio on the ground that it was executed within the
period of five years from and after the date of the issuance of the
homestead patent or grant The fact that said instrument of mortgage was
registered in the office of the register of deeds of Cagayan on October
5, 1932 (Exhibit 3), after the expiration of the above-stated period of
live years, did not and could not give said mortgage the legal effect
of encumbering said land because, if it were to produce such effect, it
would subject the same to the satisfaction of an obligation contracted
prior to the expiration of said period of five years, which is not
permitted by the above-quoted section 116 of Act No. 2374, as amended
by section 23 of Act No. 3517.

Having arrived at this conclusion, it becomes unnecessary to pass upon the remaining assignments of alleged error.

For the foregoing considerations, this court is of the opinion and so
holds that an instrument, constituting a mortgage on a parcel of land
for which an application for the issuance of a homestead or free patent
has been filed and approved, prior to the expiration of the period of
five years fixed by law from and after the issuance of the homestead or
free patent, is null and void ab initio, and the notation
thereof upon the original, certificate of Torrens title issued to the
applicant does not give validity to said mortgage, on the ground that
it would subject said land to the satisfaction of an obligation
contracted prior to the expiration of the above-stated period of five
years.

Wherefore, and although upon a different ground, the
appealed judgment is affirmed, with the costs to the appellant. So
ordered.

Avanceña, C. J., Abad Santos, Imperial, Diaz, and Laurel, JJ., concur.