G.R. No. L-11269; February 28, 1958
SILVERIO FELICES, plaintiff-appellee, vs. MAMERTO IRIOLA, defendant-appellant.

FACTS

Plaintiff-appellee Silverio Felices was the grantee of a homestead under Homestead Patent No. V-2117 dated January 26, 1949, and was issued Original Certificate of Title No. 104. On February 24, 1949, within one month of the patent’s issuance, Felices conveyed a portion of the homestead to defendant-appellant Mamerto Iriola in a conditional sale for P1,700. The conveyance was expressly made subject to the provisions of Section 119 of Act 141 (the Public Land Law) and the prohibitions in the vendor’s patent, stipulating that an absolute sale would be executed after the lapse of five years or as soon as allowed by law. On April 19, 1951, Felices tried to recover the land from Iriola, but Iriola refused unless paid P2,000 for alleged improvements. Felices deposited the purchase price in court and filed an action for recovery on October 4, 1951. The lower court found that Iriola’s improvements were made either after Felices had informed him of his intention to recover the land or after the complaint was filed, with some improvements introduced even after a court commissioner was appointed. The court held Iriola in bad faith and ordered him to accept the deposited P1,700, execute a deed of reconveyance, and restore possession to Felices.

ISSUE

Whether appellant Iriola is entitled to reimbursement for the value of the improvements he introduced on the homestead land, despite the sale being void ab initio for violating the five-year prohibitive period under the Public Land Law.

RULING

No, appellant Iriola is not entitled to reimbursement. The sale executed within the five-year prohibitive period under Section 118 of the Public Land Law (Act 141) is absolutely null and void ab initio. Consequently, Felices never lost title or ownership, and the action is for mutual restitution, not repurchase. The rule in Article 453 of the Civil Code, which treats parties as if both acted in good faith when both are in bad faith, does not apply. The lower court found, and Iriola admits, that the improvements were made only after Felices had tried to recover the land and even during the pendency of the action. Once Iriola refused to restore the land and Felices was compelled to sue, Felices could no longer be regarded as having assented to subsequent improvements. Iriola, recognizing Felices’s right to recover the property, acted in bad faith by making improvements after being asked extra-judicially and judicially to surrender possession. As a penalty for such bad faith, he forfeits the improvements without right to indemnity under Article 449 of the Civil Code. The appealed judgment is affirmed with the modification that Iriola need not execute a deed of reconveyance, as the original conveyance is declared void from the beginning.