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[DEMETRIO BUNAYOG v. ANACLETA TUNAS](https://lawyerly.ph/juris/view/c3489?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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[ G R No. L-12707, Dec 23, 1959 ]

DEMETRIO BUNAYOG v. ANACLETA TUNAS +

DECISION

106 Phil. 715

[ G. R. No. L-12707, December 23, 1959 ]

DEMETRIO BUNAYOG, PLAINTIFF AND APPELLANT, VS. ANACLETA TUNAS, ET AL., DEFENDANTS AND APPELLEES.

D E C I S I O N

BAUTISTA ANGELO, J.:

On September 6, 1956, plaintiff  filed an action before the Court of First Instance of Misamis  Occidental  to foreclose a real estate  mortgage and  recover an  amount not exceeding P1,500.00, representing damages and interests.

On October 19, 1956, defendants filed a motion to dismiss on the grounds  that the  complaint states  no cause  of action; that the deed of mortgage which is  sought to  be foreclosed is null and  void; and that the action involves recovery of money which comes  within  the exclusive original jurisdiction of the justice of the peace court.

On November 7, 1956, plaintiff  filed an opposition to the motion to dismiss maintaining that the deed of mortgage  is valid because the same is authorized by Republic Act No. 133 which  permits the execution of a mortgage on private real  property in favor of any individual subject to certain conditions.   On November 17, 1956, the  trial court sustained the motion and dismissed the  complaint with costs.  On December 12, 1957, plaintiff filed a motion for reconsideration, and when the same was  denied,  he interposed the present appeal.

It appears that the real property covered by the mortgage sought to be foreclosed is covered by a homestead patent issued to defendants on October 26, 1950, and that before the expiration of the five-year period  from the issuance of said patent, or on March 27, 1952, defendants executed the mortgage in  question in favor of  plaintiff to secure the payment of certain monetary obligation.   On the other hand, Section 118 of Commonwealth Act 141, as amended by Commonwealth Act 456, provides that "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", otherwise the transaction shall  become null and void (Santos vs. Roman Catholic Church of Midsayap, 94 Phil.,  405;  50 Off.  Gaz. [4],  1588, Philippine National  Bank vs. Espinosa, 66 Phil., 716).

It would, therefore,  appear  that the deed of  mortgage in question,  which covers property acquired by a  homestead patent, is  null and void,  it having been executed within the period of five years from the  issuance of the patent.   We, however,  hold that the trial court erred in dismissing the complaint on the ground of lack of jurisdiction even if the amount sought to  be recovered is less than P2,000.00 because the issue regarding the validity of the mortgage does  not  come within the original  exclusive jurisdiction of the justice of the peace court.  It being an issue which is not capable of  pecuniary estimation, the same can only be determined by the court of first instance (Republic Act No, 296, Section  88, as amended by Republic Act  No.  646, Section  22).  The trial  court should  have therefore taken cognizance of the case and should  have acted thereon on its merits.

Wherefore, the order appealed  from is set aside  and the case  remanded to the trial court for further proceedings,  with costs  against the appellees.

Paras, C. J., Bengzon, Padilla,  Montemayor, Labrador, Concepcion, Endencia, Barrera, and Gutierrez David, JJ., concur.

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