BALBOA VS FARRALES

GR NO. L-27059 FEBRUARY 14, 1928

FACTS:
Sometime in 1913, plaintiff Buenaventura Balboa filed with the Bureau of Lands an
application for homestead under the provisions of Act No. 926. Five years thereafter, or in 1918,
Balboa submitted proof showing his residence upon, and cultivation of said land, as well as his
compliance with all of the other requirements of section 3 of said Act No. 926, which final proof
was approved by the Director of Lands on February 15, 1918 (Exhibit 3). On July 1, 1919, said
Act No. 926 was repealed by Act No. 2874.
On September 10, 1920, or over a year after Act No. 2874 had gone into effect, the
homestead patent for said land, otherwise known as certificate of title No. 91was issued in favor
of Balboa by the Governor-General of the Philippine Islands. On August 11, 1924, Balboa, sold
said land to the defendant Cecilio L. Farrales for a consideration of the sum of P950,
Plaintiff Balboa commenced the present action for the purpose of having said sale
declared null and void on the ground of lack of consent on his part and fraud on the part of the
defendant, and on the further ground that said sale was contrary to, and in violation of the
provisions of section 116 of Act No. 2874. The trial judge rendered judgment in favor of the
plaintiff and held the sale deed as null and void, in view of the fact that it was executed before
the lapse of five years from the date of the issuance of the certificate of title in favor of Balboa,
in violation of the prohibition contained in section 116 of Act No. 2874.

ISSUE:
Whether or not the validity of the sale of the land should be determined under the
provisions of Act No. 2874.

RULING:
No, the validity of the sale of the land should not be determined under the provisions of
Act No. 2874.
The land in question was acquired by Buenventura Balboa as homestead under the
provisions and pursuant to the requirements of Act No. 926. He filed his application and
complied with all of the requisites to the acquisition of said homestead, in conformity with the
provisions of said Act No. 926. Thus, he became entitled to a homestead patent or certificate of
title to the land covered by his application.
Section 3 of Act No. 926 provides, inter alia, that upon the filing of final proof by the
applicant and the approval thereof by the Director of Lands, "he (the applicant) shall be entitled
to a patent" or certificate of title. Therefore, on February 15, 1918, after Buenaventura Balboa
had submitted his final proof and after the same had been approved by the Government, and
while Act No. 926 was still in force, he became the owner of the land and "entitled to a patent."
At least on that date his right to the land, as owner, ripened into a vested right.
Vested right "is some right or interest in property which has become fixed and
established and is no longer open to doubt or controversy."

Section 3, paragragh 1, of the Jones Law provides:

"That no law shall be enacted in said Islands which shall deprive any person of
life, liberty, or property without due process of law, etc."

Thus, in this jurisdiction, vested rights are also protected from impairment by express
constitutional provision. Therefore, the right vested in Buenaventura Balboa by Act No. 926
cannot be divested, impaired or restricted by section 116 of Act No. 2874. Said right should be
governed entirely and exclusively by the provisions of Act No. 926, which it was acquired.

Now, the vested right of Buenaventura Balboa to his homestead land necessarily carries
with it the right to alienate and dispose of the same. The only prohibition contained in Act No.
926 against alienation of homestead acquired under said law, appears in section 4 thereof,
which reads as follows: "No lands acquired under the provisions of this chapter shall in any
event become liable to the satisfaction of any debt contracted prior to the issuance of a patent
therefor." It follows, therefore that the sale of the land in question by the plaintiff Buenventura
Balboa to the defendant Cecilio L. Farrales does not infringe said prohibition, and consequently
said sale is valid and binding, and should be given full force and effect.
The right, title and interest of the appellant having become vested under the provisions
of Act No. 926, his rights cannot be affected by any law passed subsequent thereto. The
provisions of Act No. 2874 cannot be invoked for the purpose of defeating the vested right
acquired by the appellant before its adoption.