G.R. No. 152413 . February 13, 2009.
BARCELIZA P. CAPISTRANO, Petitioner, vs. DARRYL LIMCUANDO and FE S. SUMIRAN, Respondents.

FACTS

Petitioner Barceliza P. Capistrano owned a parcel of land covered by a Free Patent issued on August 23, 1977. On December 31, 1985, she sold this land with a right of repurchase to spouses Felimon Zuasola and Anita Subida. On February 1, 1989, petitioner sold half of the same parcel of land to respondents Darryl Limcuando and Fe S. Sumiran for P75,000.00, with P10,000.00 as partial payment and the balance payable in monthly installments. Petitioner signed a “Kasulatan ng Bilihang Tuluyan” (deed of absolute sale) purportedly for the amount received. Respondents defaulted on the installments and refused to pay the P65,000.00 balance, claiming the consideration was only P10,000.00. Respondents later discovered the prior sale to the spouses Zuasola and Subida and filed a criminal complaint for estafa against petitioner, resulting in her conviction. On August 19, 1991, petitioner repurchased the land from the spouses Zuasola and Subida. She offered to repurchase the portion sold to respondents, but they refused. Transfer Certificate of Title No. 127771 was issued in the names of respondents on September 27, 1991. On May 27, 1993, petitioner filed a complaint for annulment of the deed of sale or, alternatively, to repurchase the land under Section 119 of the Public Land Act.

ISSUE

The primary issues were: (1) whether the deed of absolute sale dated February 1, 1989, is null and void; and (2) whether petitioner has the right to repurchase the property under Section 119 of the Public Land Act.

RULING

The Supreme Court denied the petition and affirmed the decisions of the lower courts. The deed of absolute sale was declared valid. The Court found that the true consideration was P75,000.00, not P10,000.00 as claimed by respondents, and ordered them to pay the balance of P65,000.00 to petitioner. The Court held that the five-year prohibition against alienation under Section 118 of the Public Land Act had expired on August 23, 1983, five years after the patent’s issuance on August 23, 1977. Therefore, the sale to respondents on February 1, 1989, was valid. The Court also ruled that petitioner’s right to repurchase under Section 119 of the Public Land Act was no longer applicable as the prohibition period had lapsed. Furthermore, the Court noted petitioner’s bad faith, as she was convicted of estafa for the double sale and only repurchased the property from the first buyers after the criminal case was filed. The criminal conviction for estafa did not automatically nullify the civil contract of sale, and the validity of the deed must be determined in a separate civil action based on preponderance of evidence.