598 Phil. 650
LEONARDO-DE CASTRO, J.:
WHEREFORE, the Court hereby orders and adjudges:A summary of the relevant facts culled from the pleadings and the evidence on record follows:
- The validity of the Deed of Absolute Sale dated February 1, 1989 executed by plaintiff [petitioner] in favor of defendants [respondents];
- That the true and correct consideration of the sale of the undivided one-half of the property now registered under TCT No. T-127771 with an area of 195 square meters in the name of plaintiff [petitioner] and defendants [respondents] is P75,000.00 partial payment of P10,000.00 having been effected by defendants [respondents] in favor of plaintiff [petitioner];
- The defendants [respondents] to pay the plaintiff [petitioner] the sum of P65,000.00 representing the balance unpaid for the total cost of the disputed property in the sum of P75,000.00. The payment of P65,000.00 should be effected by defendants [respondents] to plaintiff [petitioner] within thirty (30) days from receipt of this decision without interest;
- The claims of both parties for damages against each other are denied for insufficiency of evidence.[4]
WHEREFORE, it is respectfully prayed that judgment be rendered in favor of plaintiff and against defendants:In their Answer with Counterclaim,[6] respondents admitted the material facts of the case but chiefly contended that they purchased the subject land from petitioner in consideration of the sum of Ten Thousand Pesos (P10,000.00) only and that they never assailed the validity of the subject deed of sale in the estafa case.Plaintiff [Petitioner] likewise prays for any other relief which to this Honorable Court may be just and equitable in the premises.
- To declare the "Kasulatan ng Bilihang Tuluyan" as nullified;
- To order the repurchase of the said one-half (1/2) portion of the realty by the plaintiff [petitioner];
- That defendants [respondents] be made to pay the costs of this suit.
When plaintiff [petitioner] sold one-half (1/2) of the subject property to the defendants [respondents] on February 1, 1989, the five (5) year period from the date of issuance of the patent on August 23, 1977 had absolutely expired. There was no longer [any] barrier for the plaintiff [petitioner] to dispose or alienate the subject property. When the plaintiff [petitioner] executed the Venta con Pacto de Retro in favor of spouses Zuasola in 1985, the barrier or prohibition was likewise already inapplicable because the five (5) year period had already expired as almost eight (8) years had elapsed from the date of issuance of the patent in 1977.On appeal by both petitioner and respondents, the CA affirmed the judgment of the RTC as follows:
The filing of an Information for Estafa against plaintiff [petitioner] is a criminal action which cannot properly be considered as a basis for the annulment of a Deed of Absolute Sale executed by plaintiff [petitioner] in favor of defendants [respondents]. The plaintiff [petitioner] was convicted of Estafa on the basis of criminal evidence that supports a conviction beyond reasonable doubt. The annulment of the Deed of Absolute Sale should be ventilated in a separate civil action that needs preponderance of evidence for the purpose. At this instance it should also be considered seriously that when this action was filed on May 27, 1993, the plaintiff [petitioner] was already aware that Transfer Certificate of Title No. T-127771 on the disputed one-half portion was already issued in the name of defendants [respondents] as of September 27, 1991 and which title originated from OCT P-10302, the Free-Patent awarded to herein plaintiff [petitioner] on August 23, 1977 under Act No. 141. A perusal of the complaint shows that it seeks relief for declaration of nullity of the Deed of Absolute Sale executed by plaintiff [petitioner] in favor of defendants [respondents] on February 1, 1989 but it does not seek annulment of TCT No. T-127771 or a reconveyance of the same it appearing that said title is registered in the name of the defendants [respondents] insofar as the one-half disputed portion is concerned.
The repurchase made by the plaintiff [petitioner] of the disputed property from the spouses Zuasola is a voluntary act executed by plaintiff [petitioner] which the Court considers not binding and effective for the annulment of the Deed of Sale of February 1, 1989 in favor of defendants [respondents]. If plaintiff [petitioner] opted to repurchase the subject property from the spouses Zuasola it was because plaintiff [petitioner] was under the impression that she was under the protective mantle of the provisions of Sec. 119 of Public [Land] Act 141. This actuation of plaintiff [petitioner] is not looked [upon] with favor by the Court.
The plaintiff [petitioner], however, raised the issue of nonpayment of the full consideration of the sale of the disputed one-half portion to the defendants [respondents] in the total sum of P75,000.00. Defendants [Respondents] alleged that the full consideration is P10,000.00 as envisioned in the Deed of Absolute Sale and said amount having been fully paid to plaintiff [petitioner], defendants [respondents] are no longer obligated to plaintiff [petitioner]. The Court glaringly noticed that the Deed of Sale with right of repurchase of the subject property in favor of the Zuasolas was for the amount of P40,000.00 which shows that even in 1985 the one-half undivided portion which is now the subject of this action could command a consideration of P20,000.00 in a transaction of Venta Con Pacto de Retro. The subject property abuts a provincial road. The undivided one-half of the whole property of 195 square meters to the mind of the Court could not be fairly sold for a consideration of P10,000.00. The Court entertains a laudable and correct impression that the subject property was agreed to be sold for the sum of P75,000.00, the amount of P10,000.00 having already been paid in advance leaving a balance of P65,000.00 which should therefore be paid by the defendants [respondents] to plaintiff [petitioner].[7]
Plaintiff-appellant's [Petitioner's] right to repurchase the one-half (1/2) portion of the property no longer exists. The prohibition against the alienation of the land acquired by [petitioner] by free patent ended on August 23, 1983 or five years from its issuance. Thus, when plaintiff-appellant [petitioner] sold the one-half (1/2) portion of the property to defendant-appellants [respondents] on February 1, 1989, the redemption period contemplated by Section 119 of the Public Land Act, as amended, no longer finds application.Hence, the instant petition for review.
It may be true that the policy behind homestead laws is to distribute disposable agricultural lands of the state to land destitute citizens for their home and cultivation, but this right may not altogether be true when the person invoking the same is guilty of bad faith.
In the instant case, plaintiff-appellant [petitioner] was convicted of estafa by reason of the double sale over the same property. She repurchased the property from the first buyer only after an information had already been filed against her. It is inescapable that when she filed the complaint with the court a quo she was with unclean hands. It is an act that negates the gratuitous reward by the State.
From the foregoing, we deem it fit not to disturb the judgment of the court a quo.[8] (Emphasis supplied)
Art. 1397. The action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. However, persons who are capable cannot allege the incapacity of those with whom they contracted; nor can those who exerted intimidation, violence, or undue influence, or employed fraud, or caused mistake base their action upon these flaws of the contract.Petitioner is, therefore, precluded from seeking the annulment of the said contract based on the fraud which she herself has caused.
In the light of the records of these cases, we rule that respondent Pe cannot repurchase the disputed property without doing violence to everything that CA No. 141 (as amended) stands for.In Heirs of Venancio Bajenting v. Bañez,[20] we reiterated the doctrine applied in the above-cited cases as follows:
We ruled in Simeon v. Peña, 36 SCRA 610, 617 [1970] through Chief Justice Claudio Teehankee, that:xxx xxx xxxWe reiterated this ruling in Vargas v. Court of Appeals, 91 SCRA 195, 200, [1979] viz:
"These findings of fact of the Court of Appeals that "(E)vidently, the reconveyance sought by the plaintiff (petitioner) is not in accordance with the purpose of the law, that is, 'to preserve and keep in the family of the homesteader that portion of public land which the State has gratuitously given to him'" and expressly found by it to "find justification from the evidence of record . . ."
"Under the circumstances, the Court is constrained to agree with the Court of Appeals that petitioners' proposed repurchase of the property [do] not fall within the purpose, spirit and meaning of section 119 of the Public Land Act, authorizing redemption of the homestead from any vendee thereof.""As regards the case of Simeon v. Peña, petitioners ought to know that petitioner therein was not allowed to repurchase because the lower court found that his purpose was only speculative and for profit. In the present case, the Court of Appeals found that herein petitioners' purposes and motives are also speculative and for profit.and in Santana et. al. v. Mariñas, 94 SCRA 853, 861-862 [1979] to wit:
"It might be well to note that the underlying principle of Section 119 of Commonwealth Act No. 141 is to give the homesteader or patentee every chance to preserve for himself and his family the land that the State had gratuitously given to him as a reward for his labor in cleaning and cultivating it. (Simeon v. Peña, 36 SCRA 617). As found by the Court of Appeals, the motive of the petitioners in repurchasing the lots in question being one for speculation and profit, the same therefore does not fall within the purpose, spirit and meaning of said section.""In Simeon v. Peña we analyzed the various cases previously decided, and arrived at the conclusion that the plain intent, the raison d' etre, of Section 119, C.A. No. 141 '. . . is to give the homesteader or patentee every chance to preserve for himself and his family the land that the state had gratuitously given to him as a reward for his labor in cleaning and cultivating it.' In the same breath, we agreed with the trial court, in that case, that it is in this sense that the provision of law in question becomes unqualified and unconditional. And in keeping with such reasons behind the passage of the law, its basic objective is to promote public policy, that is, to provide home and decent living for destitutes, aimed at promoting a class of independent small landholders which is the bulwark of peace and order."Our decisions were disregarded by the respondent court which chose to adopt a Court of Appeals ruling in Lim, et al. v. Cruz, et al., CA-G.R. No. 67422, November 25, 1983 that the motives of the homesteader in repurchasing the land are inconsequential" and that it does not matter even "when the obvious purpose is for selfish gain or personal aggrandizement."
"As it was in Simeon v. Peña, respondent Mariñas' intention in exercising the right of repurchase 'is not for the purpose of preserving the same within the family fold,' but 'to dispose of it again for greater profit in violation of the law's policy and spirit.' The foregoing conclusions are supported by the trial court's findings of fact already cited, culled from evidence adduced. Thus respondent Mariñas was 71 years old and a widower at the time of the sale in 1956; that he was 78 when he testified on October 24, 1963 (or over 94 years old today if still alive); that . . . he was not living on the property when he sold the same but was residing in the poblacion attending to a hardware store, and that the property was no longer agricultural at the time of the sale, but was a residential and commercial lot in the midst of many subdivisions. The profit motivation behind the effort to repurchase was conclusively shown when the then plaintiff's counsel, in the case below, Atty. Loreto Castillo, in his presence, suggested to herein petitioners' counsel, Atty. Rafael Dinglasan '. . . to just add to the original price so the case would be settled.' Moreover, Atty. Castillo manifested in court that an amicable settlement was possible, for which reason he asked for time 'within which to settle the terms thereof and that 'the plaintiff . . . Mr. Mariñas, has manifested to the Court that if the defendants would be willing to pay the sum of One Peso and Fifty Centavos (P1.50) per square meter, he would be willing to accept the offer and dismiss the case."
As elucidated by this Court, the object of the provisions of Act 141, as amended, granting rights and privileges to patentees or homesteaders is to provide a house for each citizen where his family may settle and live beyond the reach of financial misfortune and to inculcate in the individuals the feelings of independence which are essential to the maintenance of free institution. The State is called upon to ensure that the citizen shall not be divested of needs for support, and reclined to pauperism. The Court, likewise, emphasized that the purpose of such law is conservation of a family home in keeping with the policy of the State to foster families as the factors of society, and thus promote public welfare. The sentiment of patriotism and independence, the spirit of citizenship, the feeling of interest in public affairs, are cultivated and fostered more readily when the citizen lives permanently in his own house with a sense of its protection and durability. It is intended to promote the spread of small land ownership and the preservation of public land grants in the names of the underprivileged for whose benefits they are specially intended and whose welfare is a special concern of the State. The law is intended to commence ownership of lands acquired as homestead by the patentee or homesteader or his heirs.Analogous to the rationale in the foregoing cited cases, we cannot sustain the right to repurchase of a patentee when such repurchase would reward rather than sanction an act of injustice committed by her in her fraudulent dealings with land that she acquired from the government under the Public Land Act. We uphold the CA's finding that petitioner is guilty of bad faith and that she only made efforts to repurchase the property from the first buyers after an information for estafa had been filed against her by the second buyers. To be sure, petitioner only made an effort to enforce her right to repurchase from the second buyers (by filing the complaint subject of the present petition) during the pendency of the said criminal action for estafa. Indeed, petitioner's successive conveyances of the disputed land for valuable consideration to different vendees clearly indicate the profit-making motive of petitioner and her lack of intention to preserve the land for herself and her family. This Court cannot countenance such a betrayal of the ultimate objective of the law.
In Simeon v. Peña, the Court declared that the law was enacted to give the homesteader or patentee every chance to preserve for himself and his family the land that the State had gratuitously given to him as a reward for his labor in cleaning and cultivating it. In that sense, the law becomes unqualified and unconditional. Its basic objective, the Court stressed, is to promote public policy, that is, to provide home and decent living for destitutes, aimed at providing a class of independent small landholders which is the bulwark of peace and order.
To ensure the attainment of said objectives, the law gives the patentee, his widow or his legal heirs the right to repurchase the property within five years from date of the sale. However, the patentee, his widow or legal heirs should not be allowed to take advantage of the salutary policy of the law to enable them to recover the land only to dispose of it again to amass a hefty profit to themselves. The Court cannot sustain such a transaction which would put a premium on speculation which is contrary to the philosophy behind Section 119 of Act 141, as amended.
Art. 1318. There is no contract unless the following requisites concur:[10] Rollo, pp. 90-92.1) Consent of the contracting parties;Art. 1350. In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other; xxx xxx xxx
2) Object certain which is the subject matter of the contract;
3) Cause of the obligation which is established.
Art.1353. The statement of a false cause in contracts shall render them void, if it should not be proved that they were founded upon another cause which is true and lawful.