G.R. No. L-33754 March 28, 1983
BARTOLOME GACAYAN, petitioner-plaintiff-appellant, vs. IRENEO LEAÑO and PATRICIA SEREMONIA, respondents-defendants-appellees.

FACTS

Petitioner Bartolome Gacayan and respondent Ireneo Leaño entered into an “Agreement of Ownership” on June 22, 1954, over a farm lot. They stipulated that Leaño would apply for a homestead patent, with the understanding that the northern half would belong to him and the southern half to Gacayan. The division was to be effected five years after the issuance of the patent. Leaño subsequently obtained Homestead Patent No. V-4600 on March 29, 1955. This patent was lost before registration. Due to a resurvey and the lost patent, the Acting Director of Lands, on May 15, 1967, revoked the 1955 patent, declared it of no legal force and effect, and ordered the issuance of a new patent, Homestead Patent No. 9844, dated August 17, 1967.
In 1969, Gacayan filed a complaint for reconveyance and damages to enforce the 1954 agreement. The respondents moved to dismiss the complaint. The trial court initially denied the motion but, upon a second motion for reconsideration, granted it, dismissing the case. The court held that the five-year period for division under the agreement should be counted from the issuance of the new patent in 1967. Since the complaint was filed in 1969, less than two years had elapsed, making the action premature.

ISSUE

Whether the trial court correctly dismissed the complaint for reconveyance on the ground that it was prematurely filed, as the five-year period under the agreement should be reckoned from the issuance of the 1967 patent and not the lost 1955 patent.

RULING

Yes, the trial court correctly dismissed the complaint. The Supreme Court affirmed the dismissal, ruling that the five-year period stipulated in the agreement commenced from the issuance of the valid and effective patent. The 1955 patent was expressly revoked and declared without legal force by the Acting Director of Lands. It was never registered, and no Torrens title was issued under it. The 1967 order was not a mere reproduction but a new issuance following a resurvey and renumbering of the lot. Therefore, the legally operative patent was the one issued in 1967. Counting from that date, the complaint filed in 1969 was premature, as the agreed five-year period had not lapsed.
The Court further found the agreement itself problematic. The arrangement, wherein a non-applicant agrees to share in a homestead after the prohibition on alienation, contravenes public policy under the Public Land Act. The law prohibits alienation or encumbrance of a homestead within five years from the grant to ensure the patentee’s commitment to develop the land. An agreement made even prior to the patent, designed to circumvent this prohibition, is void as against public policy. The petitioner, not being an applicant, had no vested right to the land, and his claim, based on an illegal contract, could not be enforced. The dismissal of the complaint was therefore proper.