G.R. No. 59228 October 27, 1989
Republic of the Philippines, represented by the Director of Lands, plaintiff-appellee, vs. Enrique V. Atencio and the Register of Deeds of Davao del Sur, defendants-appellants.

FACTS

The National Abaca and Other Fibers Corporation (NAFCO) sold Lot No. 179 to Dr. Enrique V. Atencio in October 1950 under Republic Act No. 477 . Section 8 of this law, and a corresponding condition in the deed of sale, prohibited the alienation or encumbrance of the land for ten years from the issuance of the certificate of title. Original Certificate of Title No. P-16675 was issued to Atencio on November 16, 1964, containing this prohibition.
However, prior to receiving his title and within the prohibited period, Atencio executed several conveyances over the property: a “Sale of Fruits (Harvest)” in 1956, a “Sale of Rights with the Right of Repurchase” in 1961, and a “Transfer of Rights” in 1962. In 1969, a CFI declared these transactions null and void for violating R.A. 477. Subsequently, in 1974, the Republic filed a complaint for annulment of Atencio’s patent and title and for reversion of the land to the State, citing his violations. The trial court ruled in favor of the Republic, ordering reversion.

ISSUE

Whether the subsequent amendments to Section 8 of R.A. 477 by presidential decrees have extinguished the government’s cause of action for reversion against Atencio.

RULING

Yes. The Supreme Court reversed the trial court’s decision and dismissed the complaint. During the pendency of Atencio’s appeal, Presidential Decree No. 967 (issued July 24, 1976) amended Section 8 of R.A. 477 by removing the prohibition against the sale or encumbrance of lands acquired under the Act. This was further amended by P.D. No. 1304 (issued February 24, 1978), which explicitly provided that “all previous sales, transfers, conveyances and encumbrances regarding such land… made and consummated prior to July 24, 1976, are hereby confirmed, ratified and validated.”
The legal logic is clear: these amendments constitute a supervening event that fundamentally altered the applicable law. Atencio’s contested transactions were all consummated prior to July 24, 1976. By virtue of P.D. No. 1304, the previous illegality of these acts—stemming from the original prohibition in R.A. 477—was expressly “washed away” or cured by legislative ratification. Consequently, the very foundation of the Republic’s reversionary action, which was predicated on Atencio’s violation of the now-repealed prohibition, was removed. The government’s cause of action was extinguished, rendering the case moot and academic. The Court applied the new law, which validated the prior transactions, leading to the dismissal of the complaint.