G.R. No. 48188 . October 23, 1942.
GONZALO PUYAT & SONS, INC., petitioner-appellant, vs. PANTALEON DE LAS AMA and GRACIANO ALIÑO, oppositors-appellees.

FACTS

Pantaleon de las Ama was issued a homestead patent for a 16-hectare parcel of land in Talavera, Nueva Ecija, on January 17, 1929. On June 30, 1933, he incurred a debt of P930 to Gonzalo Puyat & Sons, Inc. This debt was reduced to judgment, and Puyat levied execution on the homestead land. The provincial sheriff of Nueva Ecija sold the land at public auction on September 24, 1934, adjudicating it to Puyat as the highest bidder for P569.61. After one year, a final deed of sale was executed by the sheriff in favor of Puyat, and both the levy and sale were annotated on the back of the certificate of title.
On March 2, 1935, Pantaleon de las Ama sold and conveyed the same land to Graciano Aliño for P2,400, subject to an existing mortgage of P417.76 in favor of the Philippine National Bank, which Aliño assumed and later paid. On June 8, 1939, Aliño registered the deed of sale and obtained Transfer Certificate of Title No. 15118 in his name, with annotations of the levy and sale in favor of Puyat as an encumbrance.
Puyat filed an amended motion in the cadastral case demanding cancellation of Aliño’s certificate of title and issuance of a new one in its name. Aliño countermoved for cancellation of the annotations regarding the levy and sale in favor of Puyat. After hearing, Judge Potenciano Pecson denied Puyat’s motion and granted Aliño’s countermotion, ordering the register of deeds to cancel the encumbrances on Aliño’s title upon payment of fees. Puyat appealed.

ISSUE

Who between the two purchasers—Gonzalo Puyat & Sons, Inc. (purchaser at the execution sale) and Graciano Aliño (purchaser by voluntary sale from the homesteader)—acquired a valid title to the homestead land?

RULING

The Supreme Court affirmed the trial court’s order, ruling in favor of Graciano Aliño.
1. Invalidity of the Execution Sale to Puyat: Under Section 116 of Act No. 2874 , as amended by Act No. 3517 , lands acquired under homestead or free patent provisions shall not be liable for the satisfaction of any debt contracted prior to the expiration of five years from the date of issuance of the patent. The homestead patent was issued on January 17, 1929, and the debt was contracted on June 30, 1933, which was within the five-year period. Therefore, the levy and execution sale on September 24, 1934, were void ab initio as they contravened the law. The exemption is based on public policy and cannot be waived by the homesteader; its violation could lead to cancellation of the grant and reversion of the land to the Government.
2. Validity of the Sale to Aliño: The sale from de las Ama to Aliño occurred on March 2, 1935, after the five-year exemption period had lapsed. The fact that Aliño had advanced money to de las Ama prior to that date to pay the mortgage did not mean the sale took place earlier, especially in light of the notarized deed executed on March 2, 1935. Moreover, Puyat, having acquired no valid interest in the land through the void execution sale, lacked the legal personality to impugn the voluntary transfer to Aliño; only the Government could challenge such a transfer if it violated the law.
Thus, the appeal was without merit. The order cancelling the encumbrances on Aliño’s title and denying Puyat’s motion was affirmed, with costs against Puyat.