FIRST DIVISION
G.R. No. 247816, July 15, 2020
SPOUSES DIONISIO DUADUA SR. AND CONSOLATRIZ DE PERALTA DUADUA, SUBSTITUTED BY THEIR HEIRS GLICERIA DUADUA TOMBOC, DIONISIO P. DUADUA, JR., BIENVENIDO P. DUADUA, PAUL P. DUADUA, SAMUEL P. DUADUA, AND MOISES P. DUADUA, PETITIONERS, V. R.T. DINO DEVELOPMENT CORPORATION REPRESENTED BY ITS PRESIDENT ROLANDO T. DINO, SPOUSES ESTEBAN FERNANDEZ, JR. AND ROSE FERNANDEZ, AND THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS REPRESENTED BY ENGR. TOMAS D. RODRIGUEZ AS THE OFFICER-IN-CHARGE-DISTRICT ENGINEER OF SULTAN KUDARAT ENGINEERING DISTRICT, ISULAN, SULTAN KUDARAT, RESPONDENTS.
D E C I S I O N
LAZARO-JAVIER, J.:
1. Dismissing the complaint as well as the counterclaim interposed by R.T. Dino Development Corporation and the cross claim and counterclaim by (S)pouses Dr. Esteban Fernandez, Jr. and Roselyn Fernandez for lack of merit;The trial court held that Spouses Duadua were not land destitutes as to entitle them to homestead patent under the Public Land Act since they owned another parcel of land other than subject land. If they were allowed to repurchase subject land, they would altogether own more than five (5) hectares, which is above the retention limit under Republic Act 6657 (RA 6657) otherwise known as the Comprehensive Agrarian Reform Law of 1988 (CARL). In any event, Spouses Duadua failed to prove that the purpose of the proposed repurchase was for their home and cultivation.9]
2. Declaring the mortgage over Lot 643, Buluan Pls-73 between R.T. Dino Development Corporation and Dr. Esteban Fernandez, Jr. void;
3. Ordering R.T. Dino Development Corporation to pay additional capital gains and documentary stamp taxes based on the difference between PI, 100,000.00 and P200,000.00 and to show compliance hereof within thirty (30) days from finality of judgment,
No costs.IT IS SO ORDERED.8
ACCORDINGLY, the instant appeal is GRANTED. The Judgment dated September 26, 2012 of the Regional Trial Court, Branch 20, Tacurong City in Civil Case No. 562 is SET ASIDE. R.T. Dino Development Corporation is ordered to allow the heirs of spouses Dionisio and Consolatriz Duadua to repurchase the homestead lot identified as Lot No. 643, Buluan, Pis 73 covered by TCT No. 34211.The Court of Appeals held that the Public Land Act expressly gives the homesteader or his or her heirs the right to repurchase the homestead land within five (5) years from conveyance. It noted that R.T. Dino failed to prove its allegation that the repurchase sought was only for profit. It did not even present the purported offer of compensation from the DPWH. Assuming there was really such an offer, only 6,750 square meters out of the 49,889 square meters shall be affected by the government's proposed project. This meant that should Spouses Duadua decide at all to sell to DPWH, the profit, if any, would be very negligible. The fact, too, that Spouses Duadua had acquired another land after the homestead grant did not disqualify them from exercising their right to repurchase under the law. There is nothing in the Public Land Act which proscribes homesteaders from exercising their right to repurchase on this ground. More, the trial court erred when it applied the five (5) hectare retention limit under RA 6657 considering that said law does not apply to homestead lands granted prior to its enactment.14
Further, R.T. Dino Development Corporation is ordered to pay additional capital gains and documentary stamp taxes, including the corresponding surcharge and interest, based on the difference between Php l,100,000.00 and Php200,000.00. In consequence thereto, R.T. Dino Development Corporation must show compliance hereof within thirty (30) days from finality of this Decision.
SO ORDERED.13
WHEREFORE, in view of the foregoing, R.T. Dino Development Corporation's Motion for Reconsideration is hereby GRANTED. The Decision of this Court dated August 30, 2018 is hereby REVERSED and SET ASIDE and a new one be entered DISMISSING the appeal by the Spouses Dionisio, Sr. and Consolatriz de Peralta Duadua as substituted by their heirs. The Decision dated September 26, 2012 of the Regional Trial Court, 121'1 Judicial Region, Branch 20, Tacurong City in Civil Case No. 562 for Repurchase Under Section 119 of Commonwealth Act No. 141, as Amended with Damages and Attorney's Fees, Injunction with Prayer for Issuance of A Writ of Temporary Restraining Order, is hereby REINSTATED and AFFIRMED.This time, the Court of Appeals held that petitioners' purpose in seeking to repurchase the land is only for sentimental reasons which does not fall within the purpose, spirit, and meaning of the Public Land Act, that is, to preserve and keep in the family of the homesteader the portion of public land granted by the State. Too, Spouses Duadua were allegedly no longer land destitutes. Petitioners themselves admitted that they are no longer staying on the land and have already found residence in another barangay.18
SO ORDERED.17
Section 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of the conveyance.As expressly ordained, in case of conveyance, the homesteader and his or her legal heirs may repurchase the land within five (5) years from conveyance.
x x x x Evidently, the law, itself, allows applicants to be granted a homestead lot so long as they do not own more than 24 hectares of land. Thus, the mere fact that (S)pouses Duadua were able to acquire another lot after they were granted a homestead cannot be a valid basis for the denial of their right to repurchase the subject lot. Moreover, if this Court would follow the ratiocination of the RTC, it would, in effect, mean that grantees are proscribed to progress in themselves by denying them of the property previously granted to them if they happen to acquire another property in (the meantime). Such interpretation is not only illogical, but also contrary to the purpose of CA 141, which is to alleviate the situation of the poor.26In any event, the records are bereft of any document showing that aside from the homestead land, Spouses Duadua had actually acquired another property in their name. The only property mentioned in the records is their residence situated in another barangay, which itself was not shown to truly belong to them.27 Suffice it to state that Consolatriz Duadua herself testified before the trial court that she and her husband had not acquired any other properties aside from the homestead land.28 Respondent was unable to disprove this testimony.
Endnotes:
1Rollo, pp. 6-48.
2 Penned by Associate Justice Oscar V. Badelles and concurred in by Associate Justice Loida S. Posadas- Kahulugan and Associate Justice Florencio M. Mamauag, Jr., id. at 65-68.
3Id. at 55.
4Id.
5Id.
6Id. at 55-56.
7Id. at 56.
8 Id. at 56-57.
9Id. at 56.
10Id. at 57.
11Id.
12 Penned by Associate Justice Tita Marilyn Payoyo-Villordon and concurred in by Associate Justice Romulo V. Borja and Associate Justice Oscar V. Badelles, id. at 54-63.
13Id. at 62-63.
14Id. at 59-61.
15 Penned by Associate Justice Oscar V. Badelles and concurred in by Associate Justice Loida S. Posadas-Kahulugan and Associate Justice Florencio M. Mamauag, Jr., supra note 2.
16Id. at 75-79.
17Id. at 67.
18Id. at 67.
19 Supra note 1.
20Id. at 24.
21 Id. at 28-32.
22] Id. at 33.
23Id. at 38.
24Id. at 45-46.
25Id. at 142-145.
26Id. at 61.
27Id. at 67.
28 Id. at 21.
29Id. at 33-34.
30Development Bank of the Philippines v. Gagarani, et al., 587 Phil. 323, 328-329 (2008).
31 217 Phil. 554, 564-565 (1993), citing Jocson vs. Soriano, 45 Phil. 375, 378-79 (1923).
32Id. at 62.
CAGUIOA, J.:
I concur with the ponencia in granting the petition, and upholding the petitioners' right to repurchase the land first granted to them via a homestead patent, with such right to repurchase being anchored on Section 1191 of Commonwealth Act No. 141 (C.A. 141).2
Rightly, since petitioners herein sold the subject parcel of land to respondent R.T. Dino Development Corporation in 1996, and thereafter expressed their desire to repurchase the same a little over three years after, the petitioners have complied with the sole condition under Section 119 that said repurchase be made within five years from date of conveyance.
However, I wish to broaden the context of the present petition by situating the same in the larger conversation that involves the recent pivotal and retroactive repeal by Republic Act No. 11231 (R.A. 11231), or the "Agricultural Free Patent Reform Act of 2019" of the former restrictions put in place by C.A. 141. R.A. 11231 expressly lifted all encumbrances and conditions from conveyance of homestead property, including the general right to repurchase as previously imposed under C.A. 141. The right to repurchase herein sought to be exercised by the petitioners is, therefore, but a vestige of the homestead structure that has undoubtedly come undone.
Most on point are Sections 3 and 4 of R.A. 11231 which provide:
Section 3. Agricultural public lands alienated or disposed in favor of qualified public land applicants under Section 44 of Commonwealth Act No. 141, as amended, shall not be subject to restrictions imposed under Sections 118, 119 and 121 thereof regarding acquisitions, encumbrances, conveyances, transfers, or dispositions. Agricultural free patent shall now be considered as title in fee simple and shall not be subject to any restriction on encumbrance or alienation. (Emphasis supplied.)
Section 4. This Act shall have retroactive effect and any restriction regarding acquisitions, encumbrances, conveyances, transfers, or dispositions imposed on agricultural free patents issued under Section 44 of Commonwealth Act No. 141, as amended, before the effectivity of this Act shall be removed and are hereby immediately lifted: Provided, That nothing in this Act shall affect the right of redemption under Section 119 of Commonwealth Act No. 141, as amended, for transactions made in good faith prior to the effectivity of this Act. (Emphasis supplied.)R.A. 11231 lifted the prohibition against the encumbrance or alienation of lands acquired under free patent, except if the same is in favor of the government or any of its branches, within five years from the issuance of the patent or grant.3 It also removed the condition for repurchase, where the applicant, his widow, or legal heirs can repurchase a land acquired under the free patent provisions within five years from the date of transfer or sale.4 Finally, it did away with the limitation that except for solely commercial, industrial, educational, religious, charitable, or right of way purposes, and upon approval of the patentee and the Secretary of Department of Environment and Natural Resources, corporations, associations, or partnerships are forbidden from acquiring any property right, title or interest on free patent.
As elucidated by this Court, the object of the provisions of Act 141, as amended, granting rights and privileges to patentees or homesteaders is to provide a house for each citizen where his family may settle and live beyond the reach of financial misfortune and to inculcate in the individuals the feelings of independence which are essential to the maintenance of free institution. The State is called upon to ensure that the citizen shall not be divested of needs for support, and reclined to pauperism. The Court, likewise, emphasized that the purpose of such law is conservation of a family home in keeping with the policy of the State to foster families as the factors of society, and thus promote public welfare. The sentiment of patriotism and independence, the spirit of citizenship, the feeling of interest in public affairs, are cultivated and fostered more readily when the citizen lives permanently in his own house with a sense of its protection and durability. It is intended to promote the spread of small land ownership and the preservation of public land grants in the names of the underprivileged for whose benefits they are specially intended and whose welfare is a special concern of the State. The law is intended to commence ownership of lands acquired as homestead by the patentee or homesteader or his heirs.8cralawlawlibraryFrom the initial point of granting the homestead, the intent of preserving the patentee's ownership of the same is provided in no uncertain terms. Section 118 prohibits the sale or encumbrance of the homestead within five years from the issuance of the patent, unless in favor of the Government, or the offering of the same homestead for the satisfaction of any debt within the same period. The Court has steadily held that this prohibition is mandatory, and any alienation in violation thereof is considered voidab initio as was pronounced in the case of Arsenal v. Intermediate Appellate Court, to wit: ChanRoblesVirtualawlibrary
The above provisions of law are clear and explicit. A contract which purports of alienate, transfer, convey or encumber any homestead within the prohibitory period of five years from the date of the issuance of the patent is void from its execution. In a number of cases, this Court has held that such provision is mandatory.10cralawlawlibraryThe enforcement of this proscription is so strict, in fact, that any such alienation in favor of even the homesteader's own descendant is void, as in the case of Gayapanao v. Intermediate Appellate Court.11 Here, the Court cautioned against the dangers of possible circumventions of this five-year ban: ChanRoblesVirtualawlibrary
It is dangerous precedent to allow the sale of a homestead during the five-year prohibition to anyone, even to the homesteader's own son or daughter. As aptly put by the petitioners, a clever homesteader who wants to circumvent the ban may simply sell the lot to his descendant and the latter after registering the same in his name would sell it to a third person. This way, public policy would not be subserved.More specifically with respect to the patentee's right to restore himself into ownership of the homestead, this Court explained in Simeon v. Pena 13 that C.A. 141 was configured in such a way that the homesteader or patentee gets every chance to preserve for himself and his family the land that the State had gratuitously given to him as a reward for his labor over it, and grant him the financial security in keeping with the noblest of public policies,14 to wit:
x x x x
x x x To hold valid the sale at bar would be to throw the door open to schemes and subterfuges which would defeat the law prohibiting the alienation of homestead within five (5) years from the issuance of the patent.12cralawlawlibrary
However, it is important to stress that the ultimate objective of the law is "to promote public policy, that is, to provide home and decent living for destitutes, aimed at providing a class of independent small landholders which is the bulwark of peace and order." Our prevailing jurisprudence requires that the motive of the patentee, his widow, or legal heirs in the exercise of their right to repurchase a land acquired through patent or grant must be consistent with the noble intent of the Public Land Act. We held in a number of cases that the right to repurchase of a patentee should fail if his underlying cause is contrary to everything that the Public Land Act stands for.22cralawlawlibraryTo be sure, the five-year ban on alienation admits of a sole exception: the alienation is in favor of the Government or any of its branches, units or institutions. This exception created a mechanism where the State could recover by sale in its favor lands it had granted as homesteads so that it could turn around and redistribute these repurchased land to other patent applicants, and is rooted in the constitutionally enshrined regalian doctrine, as the Court ratiocinated in Unciano v. Gorospe: 23
The proscription against the sale or encumbrance of property subject of a pending free patent application is not pointedly found in the aforequoted provision. Rather, it is embodied in the regalian doctrine enshrined in the Constitution, which declares all lands of the public domain as belonging to the State, and are beyond the commerce of man and not susceptible of private appropriation and acquisitive prescription. What divests the Government of its title to the land is the issuance of the patent and its subsequent registration in the Office of the Register of Deeds. Such registration is the operative act that would bind the land and convey its ownership to the applicant. It is then that the land is segregated from the mass of public domain, converting it into private property.24cralawlawlibraryThe jurisprudential history has consistently supported the wisdom of the State's foremost concern in preserving lands for agricultural use, and maintaining these lands in the hands of patentees who will develop these lands for agronomic purposes. The arch of interpreting and applying C.A. 141 has always leaned towards the goal of distributing and, in cases, redistributing the homesteads to qualified patent applicants, to serve the ends of uplifting communities through fair land use. The protection by restriction under C.A. 141 gave smaller landholders counterweight against mounting economic burdens under the sheer pressure of which their financial structures tended to collapse. This overarching inclusionary principle sought to ensure that homesteaders previously at the fringes of land ownership are invited into the framework of socio-economic invulnerability that owning and cultivating a piece of land, however modest, secures.
Endnotes:
1 Section 119, C.A. 141 states: ChanRoblesVirtualawlibrarySECTION 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of the conveyance.2 Otherwise known as THE PUBLIC LAND ACT or 1936.
3 Section 1 18, C.A. 141 provides: ChanRoblesVirtualawlibrarySECTION 118. Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.4 Supra note 1.
No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after issuance of title shall be valid without the approval of the Secretary of Agriculture and Commerce, which approval shall not be denied except on constitutional and legal grounds.
5 Mari Chrys Pablo, Making Agricultural Land More Bankable and Tradable, The Asia Foundation, Coalitions for Change (CfC) Reform Story No. 13, citing Department of Environment and Natural Resources' estimate data (1986 to 2017); available at httpsy/asiafoiindation.org/wpcontent/uploads/2020/02/Philippines CFC Making-Aaiciiltuicil-Land-More-Bankable-and-TiBdeable.pdf
6 Id.
7 G.R. No. 166190, September 20, 2006, 502 SCRA 531.
8 Id. at 552-553. Emphasis supplied.
9Arsenal v. Intermediate Appellate Court, G.R. No. L-66696, July 14, 1986, 143 SCRA 40, 54.
10 Id. at 49, citing De Los Santos v. Roman Catholic Church ofMidsayap, 94 Phil. 405.
11 G.R. No. 68109, July 17, 1991, 199 SCRA 309.
12 Id. at 314.
13 G.R. No. L-29049, December 29, 1970, 36 SCRA 610.
14 See also Heirs of Bajenting v. Bañez, supra note 7.
15Simeon v. Pena, supra note 13 at 618.
16 See Rural Bank of Davao City, Inc. v. Court of Appeals, G.R. No. 83992, January 27, 1993, 217 SCRA 554,565.
17 See Spouses Alcuitas v. Villanmva, G.R. No. 207964, September 16, 2015, 771 SCRA 1, 10-11.
18Simeon v. Pena, supra note 14 at 618.
19 G.R. No. L-4091,May28, 1952,91 SCRA 389.
20Id. at 394-395. See also Belisariov. Intermediate Appellate Court, G.R. No. 73503, August 30, 1988, 165 SCRA 101 and Philippine National Bank v. De Los Reyes, G.R. Nos. L-46898-99, November 28, 1989, 179 SCRA 619.
21 G.R. No. 152413, February 13, 2009, 579 SCRA 176.
22 Id. at 188. Emphasis supplied.
23 G.R. No. 221869, August 14, 2019.
24Id.chanRoblesvirtualLawlibrary