G.R. No. L-17696, May 19, 1966
DIRECTOR OF LANDS, petitioner, vs. THE COURT OF APPEALS, BRAULIO COSME and DAMASO A. ACOSTA, respondents.

FACTS

On November 19, 1926, Benito Tolentino filed a sales application for a 5-hectare public agricultural land in Isabela. The land was advertised and awarded to him on February 15, 1928. Upon survey, the land was divided into Lots 8091 and 3605. On January 19, 1950, after Tolentino complied with all legal requirements, the Director of Lands ordered the issuance of a patent in his favor. However, it was discovered that Lot No. 8091 (2.3506 hectares) had been applied for as a homestead by Braulio Cosme on March 22, 1949. A homestead patent (No. V-19) was issued to Cosme on August 19, 1949, and Original Certificate of Title No. P-880 was issued on November 10, 1949. Upon Tolentino’s protest, the Director of Lands filed an action on November 27, 1953, for the cancellation of Cosme’s patent and title. Damaso A. Acosta intervened, alleging he purchased the lot from Cosme on June 27, 1957, for P1,000, and claimed to be a purchaser in good faith. The Court of First Instance of Isabela ordered the cancellation of the patent and title and the reversion of the land to the public domain, and ordered Cosme to return the purchase price to Acosta. The Court of Appeals initially affirmed this decision but, on reconsideration, reversed it and dismissed the complaint, citing precedents on the incontrovertibility of titles.

ISSUE

Whether the homestead patent and certificate of title issued to Braulio Cosme are null and void, and thus subject to cancellation, on the ground that the Director of Lands no longer had jurisdiction to dispose of the land at the time of the homestead grant, and whether the one-year incontrovertibility period under the Land Registration Act bars such an action.

RULING

The Supreme Court reversed the amended decision of the Court of Appeals and reinstated the decision of the Court of First Instance. The Court held that the action was not for review of a decree on the ground of fraud under Section 38 of the Land Registration Act, which is subject to a one-year period, but for cancellation on the ground of absolute nullity due to lack of jurisdiction. The land was no longer part of the disposable public domain when Cosme’s homestead application was filed in 1949, as it had already been awarded to Tolentino in 1928. The Director of Lands therefore had no jurisdiction to issue the homestead patent. The precedents cited by the Court of Appeals were inapplicable as they involved lands still disposable by the Director. Furthermore, Acosta could not claim status as an innocent purchaser for value because he bought the land in 1957, over three years after the cancellation action was filed in 1953, and thus had constructive notice of the pending litigation. The patent and title were declared null and void, and the land reverted to the public domain.