G.R. No. L-10881; September 30, 1958
EULOGIO DEL ROSARIO, et al., plaintiffs-appellees, vs. PRIMITIVO ABAD and TEODORICO ABAD, defendants-appellants.

FACTS

The plaintiffs are the children and heirs of the late Tiburcio del Rosario. On December 12, 1936, a homestead patent was issued to Tiburcio del Rosario under the Public Land Act ( Act No. 2874 ), and Original Certificate of Title No. 4820 was issued on February 11, 1937. On February 24, 1937, Tiburcio obtained a loan of P2,000 from Primitivo Abad and, as security, mortgaged the improvements on the homestead land. On the same date, Tiburcio executed an “irrevocable special power of attorney coupled with interest” in favor of Primitivo Abad, authorizing him, among other things, to sell and convey the land. Tiburcio and his family later moved to Isabela. Tiburcio died in December 1945 with the mortgage debt unpaid. On June 9, 1947, Primitivo Abad, acting as attorney-in-fact for Tiburcio, sold the land to his son, Teodorico Abad, for a token sum of P1.00 and the vendee’s assumption of the mortgage debt. Teodorico took possession, and the title was transferred to his name. On December 29, 1952, the plaintiffs sued to recover possession and ownership of the land. The case was submitted on a stipulation of facts, and the trial court declared the deed of sale null and void and ordered reconveyance to the plaintiffs.

ISSUE

Whether the sale of the homestead land by Primitivo Abad, as attorney-in-fact, to Teodorico Abad is valid and effective.

RULING

No, the sale is null and void. The Supreme Court affirmed the trial court’s judgment.
First, the power of attorney executed by Tiburcio del Rosario was not truly an agency coupled with an interest and was therefore revocable. A mere statement that it is “coupled with an interest” is insufficient; the specific interest must be stated in the instrument. The separate mortgage on the improvements did not constitute such an interest in the agency itself. Consequently, the agency was terminated upon Tiburcio’s death in December 1945, and Primitivo Abad had no authority to sell the land in June 1947.
Second, even assuming the power of attorney was valid, it constituted an encumbrance on the homestead land. Under Section 116 of the Public Land Act ( Act No. 2874 ), lands acquired under a homestead patent cannot be alienated or encumbered from the date of the application’s approval and for a period of five years from the patent’s issuance. The homestead patent was issued on December 12, 1936, and the power of attorney was executed on February 24, 1937, well within the five-year prohibition period. This encumbrance was therefore in violation of the law. The appellants’ contention that the power was to be exercised only after the prohibition period is unsupported by the text of the document.
The Court also held that the plaintiffs, as heirs, cannot be compelled to reimburse Teodorico Abad for the amount he paid to discharge the mortgage, as the sale itself is void. Teodorico’s remedy is an action against Primitivo, without prejudice to Primitivo’s right to foreclose on the mortgage of the improvements if the debt remains unpaid by the heirs.