G.R. No. 32482 , 32483; March 14, 1931
FELICIDAD A. DE PALAD, ET AL. vs. K. SAITO and JOSE MADRAZO

FACTS

Santiago Palad, a Bagobo by birth, acquired over 350 hectares of land, forming an hacienda. Between 1923 and 1924, he executed three documents: a contract of antichresis over his abaca plantation in favor of K. Saito, a deed of sale of improvements to Saito, and a deed of sale of the plantation itself to Jose Madrazo (subject to Saito’s encumbrance). None of these documents were submitted to the Director of the Bureau of Non-Christian Tribes for approval. After Palad’s death, his widow and children from his first marriage sued to annul the documents and recover possession of the plantation, alleging fraud and that the documents were void for lack of the required approval since Palad was a non-Christian.

ISSUE

Whether the conveyances executed by Santiago Palad are invalid for lack of approval by the Director of the Bureau of Non-Christian Tribes under Section 118 of Act No. 2874 .

RULING

No. The Supreme Court held that Section 118 of Act No. 2874 applies only to conveyances or encumbrances involving public lands granted or acquired under the Public Land Act. It does not apply to private property. Since the land in question was Palad’s private property, acquired by purchase and occupation, the requirement of approval from the Director of the Bureau of Non-Christian Tribes was inapplicable. The Court further noted that imposing such a restriction on the disposition of private property would be an unconstitutional deprivation of property rights. The conveyances were thus not rendered invalid by the lack of such approval. (The Court also found indications of fraud and overreaching in the transactions but based its decision primarily on the legal interpretation of the statute.)

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