Unciano v Gorospe

G.R. 221869 August 14, 2019

Justice Reyes, Jr. | Second Division
Topic: Sale – Essential element.
Nature of Action: Action for reconveyance

FACTS:
1. Enrique Unciano, Sr., filed a free patent application over a parcel of land in Cagayan. During the
pendency of the application, he advertised the property for sale because he needed financial
assistance. He sold it to his daughter, for P 70,000 after signing a waiver by which he expressly
relinquished in favor of petitioner his rights as a free patent applicant.
2. Later on, he executed a Deed of Absolute Sale, followed by a Deed of Confirmation of Sale.Upon
approval of the application, the OCT was issued in the name of Enrique. He immediately executed a
Deed of Reconveyance in favor of petitioner. The OCT does not contain any annotation of the
previous transactions affecting the property. Thereafter, a TCT was issued in the name of petitioner,
and she commenced paying the realty taxes on the property.
3. Gorospe was then cultivating the land when the underlying transactions were entered into by
petitioner and Enrique. After Enrique’s death, a controversy arose when respondents refused to
surrender the property to petitioner. As a result, petitioner was compelled to file an action for the
reconveynce of property with a prayer for a TRO and damages before the MTC.
4. Petitioner, under a claim of ownership by virtue of the Deeds of Absolute Sale and Reconveyance
and the TCT in her name, prayed that respondents be ordered to vacate the property so that she
could cultivate it herself. Respondents, on their part, argued that the sale was void under
Commonwealth Act 141 (CA 141), which prohibits the sale or encumbrance of awarded public lands
within five years from the issuance of the patent.
5. MTC ruled in favor of petitioner and ruled that she is the lawful owner of the land, through the Deed
of Absolute Sale. As the sale was perfected prior to registration and titling, the same was not
prohibited under CA 141. CA reversed, holding that the Waiver, Deed of Absolute Sale and the Deed
of Confirmation of Sale were all inconsequential because they were executed pending approval of
the free patent application, as in fact they were not annotated on the OCT. Deed of Reconveyance
executed after the issuance of the OCT was likewise ineffective and not binding because any
alienation or encumbrance of the property is prohibited by the CA 141.

ISSUE:
Whether or not the Deed of Absolute Sale is valid? – NO.

HELD:
1. The transfer was made prior to the issuance of free patent, the land still forms part of the public
domain and therefore, cannot be transferred or alienated by a private person. As to the Deed of
Reconveyance executed after the issuance of the free patent, it is not valid because it is covered by
the prohibition under CA 141.
a. The proscription against the sale or encumbrance of property subject of a pending free
patent application is embodied in the Regalian Doctrine enshrined in the Constitution.
Under the Regalian Doctrine, all lands of the public domain belongs 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 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.
2. In property law, it is a fundamental principle that no one can give what he does not have. In other
words, a seller may sell only what he owns, or that which he does not own but has authority to
transfer, and a buyer can acquire only what the seller can legally transfer.
a. In fact, the Civil Code states that in a contract of sale, the seller binds himself to transfer the
ownership of the thing sold, and to do so, he must have the right to convey ownership of
the thing at the time it is delivered. The thing must be licit.
3. Applying the foregoing, the contested lot in this case was still part of the public domain and
therefore, an illicit subject of a contract of sale between Enrique and petitioner.
a. At the time, Enrique did not have the right to transfer ownership in as much as he merely
had an inchoate right as patent applicant. By lodging an application for a free patent, he had
acknowledged and recognized the land to be part of the public domain. His application is an
unmistakable recognition of his non-ownership of the subject land, such that his waiver of
rights and execution of the Deed of Absolute Sale only suggest bad faith on his part for
violating the condition of the sworn application that the same is for his exclusive benefit
 alone. Indeed, the fact that the OCT was later issued in his name is an affirmation that the
state will award homestead lots only to the person in whose name the application was filed
and to no one else.
b. Furthermore, the Deed of Reconveyance executed by Enrique in favor of petitioner is
likewise void and ineffective in transferring rights to petitioner as it involved a prohibited
alienation under CA 141.