Case Digest - Civil Law, Property

Republic of the Philippines vs. CA/Morato

GRN 100709 November 14,1997

Panganiban, J.;

FACTS:

In December 1972, respondent Morato filed a free patent application on a parcel of land which was granted but with the condition that the land shall not be alienated or encumbered within five years from the date of issuance of the patent. Respondent mortgaged a portion of property in 1974 and another portion was based to another party whereby a house and warehouse were respectively constructed. RTC and CA found that there was alienation because the land was merely based adding that the improvement and not the land itself.

ISSUE:

Whether or not the base and/or mortgage of a portion of realty acquired through free patent constitute sufficient ground for the nullification of such land grant.

RULING:

Public Land Act, Sec 118 states:

“Except in favor of Government or any of its branches… 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 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.”

Encumbrance has been defined as “anything that impairs the use or transfer of property; anything which constitutes a burden on the title; a burden or charge upon property; a claim or lien upon property.”

Respondent Morato, although the land mortgaged/leased does not significantly affect his possession and ownership, cannot fully use or enjoy the land during the duration of lease contract. The prohibition against any alienation or encumbrance of the land grant is a proviso attached to the approval of every application. Prior to the fulfillment of the requirements of law, Morato had only an inchoate right to the property; such property remained a public domain and therefore not susceptible to alienation or encumbrance.