G.R. No. 31035 , October 12, 1929
PHILIPPINE NATIONAL BANK, plaintiff-appellant, vs. JULIA ORTIZ LUIS, defendant-appellee.

FACTS

The Philippine National Bank (PNB) filed an action to recover possession and ownership of a parcel of rice land, claiming title through a homestead patent issued to Narciso Pascua in 1918. PNB acquired the land after Pascua sold it to Severo J. Romero, who then mortgaged it to the bank. PNB foreclosed the mortgage and obtained a sheriff’s certificate of sale. However, the land had previously been included in a larger tract applied for registration by Leon Zarate and Juan Berenguer in 1910. In those land registration proceedings, both Pascua and the Director of Lands (representing the government) opposed the application, claiming the land was part of the public domain. The Court of First Instance and, on appeal, the Supreme Court, ruled that the land was private property and ordered it registered in favor of Zarate and Berenguer. Their title was later transferred to Julia Ortiz Luis. Despite this final judgment, the Director of Lands issued the homestead patent to Pascua after the Supreme Court’s decision. PNB redeemed the land from tax delinquency and paid taxes, while Luis remained in possession under her Torrens title.

ISSUE

Whether a homestead patent issued over land previously adjudicated as private property in a land registration case can prevail over a Torrens title issued pursuant to that final judgment.

RULING

No. The Supreme Court affirmed the lower court’s judgment in favor of Julia Ortiz Luis. The Court held that the homestead patent issued to Narciso Pascua was void because the land was already declared private property in a prior land registration case, which was a proceeding in rem binding against all persons, including the government. The final judgment in that case conclusively established that the land was not part of the public domain and thus not subject to homestead disposition. A homestead patent cannot convey title if the government had no title to the land at the time of its issuance. Consequently, PNB’s derivative title from the patent is inferior to Luis’s Torrens title, which originated from the valid registration decree. The Court cited De los Reyes v. Razon (38 Phil. 480), which established that a certificate of title issued pursuant to a void homestead patent confers no better right than the patent itself.