G.R. No. 44617 ; January 23, 1990
CECILIO ORTEGA and ADELITA V. ORTEGA, plaintiffs-appellants, vs. DOMINADOR AGRIPA TAN, HUMILIA TAN, MIGUEL PERIDO, JR., FABIAN PERIDO, and ESPIRITU A. VDA. DE PERIDO, defendants-appellees.

FACTS

Plaintiffs-appellants Cecilio and Adelita Ortega sought the annulment of Transfer Certificate of Title No. T-923 issued in the name of defendant-appellee Dominador Agripa Tan, covering Homestead Lots Nos. 587 and 1017. The lots were originally granted via free patent to the heirs of Miguel Perido, Sr., with Original Certificate of Title No. P-4037 issued on September 6, 1960. The Ortegas claimed ownership by virtue of a series of transactions with the Perido heirs, culminating in a “Self-Adjudication with Deed of Absolute Sale” dated September 7, 1965, which led to the issuance of TCT No. T-1108 in their favor.
Defendant Tan, however, had earlier negotiated with the same heirs for the purchase of the lots starting in 1959, advancing substantial payments. In November 1964, upon being informed a title had been issued to the heirs, Tan secured a joint affidavit from them confirming his ownership. Based on this affidavit, and without surrender of the owner’s duplicate certificate of title, the Register of Deeds issued TCT No. T-923 in Tan’s name on November 11, 1964. Both parties presented their respective documents during pre-trial, with Tan relying on his answer without presenting additional evidence.

ISSUE

Whether the series of transactions involving the sale and mortgage of the homestead lots, initiated within the five-year prohibitory period from the issuance of the patent, constitute a violation of Section 118 of Commonwealth Act No. 141 , thereby rendering such transactions void.

RULING

Yes, the transactions are void. The Supreme Court affirmed the trial court’s dismissal of the complaint, ruling that neither party acquired valid rights to the land. Section 118 of Commonwealth Act No. 141 explicitly prohibits the encumbrance or alienation of lands acquired under free patent or homestead provisions for a term of five years from the date of issuance of the patent. The prohibition is absolute and admits no exceptions, except in favor of the government.
The legal logic is clear: the five-year prohibitory period is counted from the actual issuance of the patent (September 6, 1960), not from the transferee’s knowledge of it. Here, the contractual negotiations and advances by Tan began in 1959, and the Ortegas’ transactions, including a 1959 deed of sale with pacto de retro and a 1962 mortgage, were all perfected within the five-year period ending September 6, 1965. The subsequent execution of formal deeds after this date cannot validate contracts that were void from their inception. The law does not distinguish between executory and consummated sales within the prohibitory period; to hold otherwise would open the door to fraudulent schemes circumventing the law. Consequently, all transactions were void ab initio. The proper remedy is reversion of the land to the state, an action that does not prescribe, but which must be initiated by the government. The Court thus directed a copy of the decision be furnished to the Solicitor General and the Director of Lands for appropriate action.