FRANCISCO SANTANA AND JOSE H. PANGANIBAN, PETITIONERS, VS. SOTERO MARIÑAS, RESPONDENT.

This is a petition for review by certiorari under Rule 45
of the Revised Rules of Court of the decision dated September 5, 1972 of the
Special Sixth Division of the Court of Appeals—composed of Justice E. Soriano,
M. Barcelona and L.B. Reyes—in CA-G.R. 37292-R, entitled “Sotero Mariñas vs. Francisco
Santana and Jose H. Panganiban“, Soriano, J., ponente,
which (1) reversed the decision^[1]
of the Court of First Instance of Rizal dismissing
the complaint of Sotero Mariñas
— plaintiff below and private respondent herein — for recovery of the property
in litigation under Section 119 of Com. Act No. 141, otherwise known as Public
Land Law and (2) ordered Francisco Santana and Jose H. Panganiban
— defendants below and now herein petitioners — to reconvey
the aforesaid property to respondent Mariñas upon
payment by him of the repurchase price in the amount of P4,128.60, without
special pronouncement as to costs.^[2]

Required to comment in the resolution of September 28, 1972,^[3] private respondent did so on October 20, 1972.^[4] Considering the allegations
contained, the issues raised and the arguments adduced in the petition, as well
as the comment of private respondent, the Court denied the petition for lack of
merit in its resolution of October
31, 1972.^[5]
In due time, petitioners filed their motion for reconsideration^[6]
of the aforesaid resolution denying their petition for review.  In the resolution of November 23, 1972,^[7] private respondent was required to
comment on the motion for reconsideration. 
The required comment was filed
by private respondent on December 15, 1972.^[8]

On February
9, 1973, the Court
resolved:  (a) to reconsider its October
31, 1972 resolution
of denial and (b) to give due course to the petition.^[9] Accordingly,
the parties filed their respective briefs.^[10]

The procedural, as well
as the factual, antecedents that spawned the present case are not in
dispute.  On April 21, 1960, private
respondent Sotero Mariñas —
as plaintiff — filed in the Court of First Instance of Rizal
a complaint to recover a real property alleging, insofar as material to this
petition, (1) that he acquired, on May 22, 1929, under free patent and covered
by Original Certificate of Title (OCT) No. 217, Rizal
Registry, a parcel of land containing an area of four hectares, twelve ares and eighty-six centares
(41,286 sq. m.); that on January 16, 1956, he sold the above parcel of land to
petitioner Francisco Santana — one of the defendants below — for a sum of
P4,128.60; that the other petitioner Jose H. Panganiban
— also a co-defendant below — was included in the complaint because he is a
subsequent lienholder and/or encumbrancer, the property
having been sold to him by Santana on March 25, 1956 for the same amount of P4,128.60; that the land has an annual
produce worth P400.00; and praying (2) that judgment be rendered:  (a) allowing him to repurchase the property
for the sum of P4,128.60 and (b) awarding to him P400.00 annually from date of
filing of the complaint until the property is delivered to him, with costs.^[11]

On May 26, 1960, herein petitioners, defendants below, filed
their respective answers admitting some material factual allegations in the
complaint; but denied the right of private respondent to repurchase the
property, and interposed the following affirmative defenses:  (1) that at the time the absolute sales were
entered into, they were totally ignorant of and had no knowledge whatsoever of
any encumbrance or right to repurchase by private respondent, who assured
petitioner Francisco Santana that he (Santana) could sell the land in question
absolutely and free from any encumbrance and is not subject to any right of
repurchase as he (respondent Mariñas) had been in
possession of the property for over twenty-five (25) years; (2) that they
(petitioners) have always been of the honest belief that they acquired absolute
ownership of the property, free from any lien or encumbrances whatsoever and,
hence, are purchasers in good faith; (3) that being innocent purchasers for
value, they acquired absolute ownership over the property and private
respondent cannot enforce against them any right of repurchase of whatever
nature; (4) that as absolute owners and possessors in good faith, they
(petitioners) incurred necessary and useful expenses thereon in the total
amount of not less than P10,000.00; and (5) that the property in question is
now a residential area with real estate subdivisions and roads in front and at
the back thereof and its present increased value is no less than P2.50 a square
meter.  Petitioners interposed a
counterclaim for moral damages in the amount of P10,000.00 and attorney’s fees
and litigation expenses in the total sum of P5,000.00.  In their prayer petitioners asked for the
rendition of judgment absolving them completely from the complaint, with costs,
and sentencing private respondent to pay them moral damages of P10,000.00 and
attorney’s fees and litigation expenses in the amount of P5,000.00; or in the
remote possibility that repurchase by private respondent were allowed, to
require the latter to pay the reasonable market value of not less than P2.50
per square meter.^[12]

As stated at the outset, the trial court ruled out private
respondent’s right to repurchase the property and dismissed the complaint but
that on appeal, the Court of Appeals — Special Sixth Division — reversed the
trial court’s decision of dismissal and ordered petitioners to reconvey the land to private respondent upon payment to the
former of “the repurchase price thereof in the amount of P4,128.60,
without special pronouncement as to costs.”^[13]

Not satisfied with the appellate court’s decision, petitioners
filed the instant petition, contending that the Court of Appeals erred:

(1)  IN NOT FINDING THAT RESPONDENT ACTED IN
DELIBERATE BAD FAITH WHEN HE SOLD THE LAND IN QUESTION TO PETITIONER-APPELLANT
SANTANA BY DECEITFULLY CONCEALING FROM HIM THE FACT THAT IT WAS ORIGINALLY REGISTERED
UNDER ORIGINAL CERTIFICATE OF TITLE NO. 217, PURSUANT TO A FREE PATENT GRANTED
UNDER ACT NO. 2874, AND THAT PETITIONER SANTANA PURCHASED SAID LAND IN GOOD
FAITH IN VIRTUE OF A DEED OF ABSOLUTE SALE PREPARED BY THE ATTORNEY FOR THE
RESPONDENT AND SIGNED BY HIMSELF, WHEREIN IT WAS FALSELY STATED THAT THE VENDOR
IS THE REGISTERED OWNER OF SAID LAND “IN ACCORDANCE WITH THE LAND
REGISTRATION ACT NO. 496;” AND IN NOT HOLDING THAT THEREFORE SAID VENDOR
COULD NOT REPURCHASE SAID LAND.  (p. 11, rollo).

(2)  IN NOT HOLDING, AS HELD BY THE TRIAL COURT,
THAT UNDER ALL THE CIRCUMSTANCES OF THE CASE, “THE REPURCHASE OF THE LAND
IN QUESTION BY PLAINTIFF-APPELLANT IS NOT PROPER; IT IS NOT IN CONSONANCE WITH
REASON AND PURPOSE OF THE LAW; IT IS REPUGNANT TO JUSTICE AND EQUITY.  (p. 11, rollo).

(3)  IN ORDERING PETITIONERS-APPELLANTS (DEFENDANTS
BELOW) TO RECONVEY TO RESPONDENT (PLAINTIFF BELOW) THE LAND DESCRIBED IN THE
COMPLAINT UPON PAYMENT BY HIM TO THE SAID PETITIONERS ONLY OF THE PURCHASE
PRICE THEREOF IN THE AMOUNT OF P4,128.60.^[14]

And now to consider and/or resolve the foregoing issues,
seriatim.

1.  Petitioners’ contention
under the first assigned error—i.e. that private respondent acted in deliberate
bad faith when he sold the land to petitioner Santana who acted in good faith
in buying it—need not detain Us long. 
For this raises a question of fact which this Court is not at liberty to
review at this stage.  It is elementary
that the findings of facts of the Court of Appeals are not subject to review by
this Court.^[15]
Stated in another way, the findings of fact of the Court of Appeals are binding
upon this Court.^[16]

At any rate, We see no point in the argument of petitioners that
respondent Mariñas acted in bad faith for having
falsely stated in the deed of sale that he is the registered owner of the land
in accordance with the Land Registration Act. 
For indeed, a free patent or a homestead patent must be registered under
the Land Registration Act in order that the land covered thereby is brought
under the operation of the Torrens system and thus
becomes a registered land.^[17]
Neither did respondent Mariñas misrepresent that the
land is not subject to redemption, because the right of the patentee and his
heirs to effect such redemption is statutory and, therefore, the law allowing
it formed part of and was deemed incorporated in the deed of conveyance.  It is settled that an existing law enters
into and forms part of a valid contract without the need for the parties
expressly making reference to it.^[18]

2.  Petitioners next assail
the order of the appellate court directing them to reconvey
the subject land to private respondent. 
Put thus in issue is the proper construction and application of Section
119 of the Public Land Law, Com. Act No. 141, which provides:

“Every conveyance of land acquired under the free patent or
homestead provisions, when proper, shall be subject to repurchase by the
applicant, his widow, or legal heirs, within a period of five years from the
date of conveyance.”

Petitioners’ specific
contention that it could not have been the intention of the Legislature to
subject to the right of repurchase a free patent or homestead conveyed 25 years
after the issuance of the title is without legal basis and is contrary to
jurisprudence laid down on the matter. 
Thus, in Isaac, et al. v. Tan Chuan Leong,
et al.20 the sale took place more than 27 years after
the issuance of the original title; while in Francisco v. Certeza, Sr.,21 one of the 2 lots was sold more than 41 years
after it was acquired.  The right to repurchase was upheld in both
cases despite the fact that the above lots were acquired under Act No. 296
which contained no provision on the right of redemption.  For the right of repurchase was provided for
only later, under Section 117 of Act No. 2874, approved on Nov.
29, 1919, and
incorporated in Com. Act No. 141 as Section 119.22

However, We uphold
petitioners’ proposition that to allow the repurchase of the subject land,
under the peculiar circumstances obtaining herein, would be repugnant to the
philosophy behind Section 119 of C.A. No. 141 and the jurisprudence laid down
on the matter.

The findings of fact of
the trial court—the then CFI Judge, Cecilia Muñoz
Palma, later a member of this Court, presiding—are clear and duly supported by
the evidence.  We quote:

“Evidence has been adduced by the defendants that this
property of Sotero Mariñas
has ceased to be in the nature of a homestead, and that instead it has been
transformed into a growing commercial and residential area.  The vicinity of the property is now a vast
expanding business empire, the lands having (been) converted into subdivisions
which are sold to the public at fantastic prices.  Close to this particular property of Sotero Mariñas the subdivision
being developed by a son of the plaintiff who has extensive business interests
centered on construction of buildings such as the Rizal
Provincial Capitol and development or subdivisions.  (See Exhs.
“1” to ‘1-G”).  By
plaintiff’s own admission on cross-examination he is 78 years old and sick with
a lung ailment; while from the testimony of his son, Antonio Mariñas, it is shown that the sons of plaintiff are all
financially independent from the latter and have their respective properties
and means of livelihood.  Under these
circumstances it is evident that to grant plaintiff the right to repurchase the
property at this time would be not for the purpose of giving him back the
land for his house and cultivation but for him to exploit it for business purposes
at the expense of the defendants who are innocent purchaser(s) in good
faith and for value.”23

In Simeon vs. Peña We analyzed the
various cases previously decided,24 and
arrived at the conclusion that the plain intent, the raison d’tre, 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.”25 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.”26

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”,27 but
“to dispose of it again for greater profit in violation of the law’s
policy and spirit.”28 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 Oct. 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;29 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.30 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 x x
x 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.”31

Respondent Mariñas‘ admission is on record that the money with which
he would repurchase the property was not his but belonged to his children one
of whom is Felix Mariñas, owner of Cristimar Subdivision.32
Furthermore, the trial court found that Mariñas‘ sons
“are all financially independent from the latter and have their respective
properties and means of livelihood.”33

The respondent Court of
Appeals anchors respondent-appellee Mariñas‘ right of repurchase on “old age and
tuberculosis having caught up with appellant, and the land in question being
his only property.” Allowing the repurchase would, thus, “help tide
over the needs of his remaining days,”34 according
to respondent court.

It could be true that the
land in question is the only land owned by respondent-appellee.  But this is not the determinant factor in allowing
the repurchase of land acquired through homestead or free patent.  The doctrine in Simeon v. Peña,
supra, is explicit that what is “unqualified and unconditional”
is the right of the homesteader or patentee to preserve the land
“for himself and his family.” 
We can, therefore, properly inquire into the motives behind the
repurchase and convinced as We are in the instant case, that the intention is
not so, but to exploit it for business purposes or greater profit, We can deny
the repurchase.  To sustain respondent-appellee’s claim under the circumstances would put a
premium on speculation contrary to the philosophy behind Sec. 119 of Com. Act
No. 141, otherwise known as the Public
Land Law.  Thus, this Court, speaking
through Mr. Justice J.B.L. Reyes, held in Santander,
et al. v. Villanueva35 that the law discourages homesteaders
from taking advantage of the “salutary policy behind the Public Land Law
to enable them to recover the land in question from (vendees) only to dispose
of it again at much greater profit to themselves.”

3.  In view of Our holding
above, disallowing the repurchase of the homestead property, it is unnecessary
to resolve this assigned error.

ACCORDINGLY, the Court of Appeals decision appealed
from, directing the reconveyance of the subject
homestead lot to respondent Sotero Mariñas is hereby REVERSED, without special
pronouncement as to costs.

SO ORDERED.

Barredo, (Chairman), Antonio, Aquino, Concepcion, Jr., and Abad Santos,
JJ., concur.

^[1]
RA, pp. 36-45; Rollo, p. 71.

^[2]
Rollo, pp. 48-49.

^[3]
Id., p. 73.

^[4]
Id., p. 78.

^[5]
Id., p. 87.

^[6]
Id., p. 88.

^[7]
Id., p. 90.

^[8]
Id., p. 95.

^[9]
Id., p. 107.

^[10]
Id., pp. 112 and
125.

^[11]
Id., p. 71; RA, pp.
2-4.

^[12]
Id., p. 71; Id.,
pp. 9, 11-13.

^[13]
Id., pp. 48-49.

^[14]
Id., p. 24.

^[15]
Alaros vs. CA, et al., 64 SCRA 671;
Evangelista & Co. vs. Santos,
51 SCRA 416; Acosta vs. People, L-17427, July 31, 1962, 5 SCRA 774.

^[16]
Chan vs. CA, L-27488, June 30, 1970, 33 SCRA 737; Ramirez Telephone
Corp. vs. Bank of America, L-22614, Aug. 29, 1969, 29 SCRA 191; Lucero vs.
Loot, L-16995, Oct. 28, 1968, 25 SCRA 687; Tan vs. CA, L-22793, May 16,
1967, 20 SCRA 54.

^[17]
Pajomayo, et al. vs. Manipon,
et al., L-33676, June 30, 1971,
39 SCRA 676.

^[18]
Lakas Ng Manggagawang Makabayan (LMM) vs. Abiera, L-29474, December
19, 1970, 36 SCRA 437.

20 89 Phil. 24 (1951).

21 L-16849, Nov. 29, 1961, 3 SCRA 565.

22 See Francisco v. Certeza, supra, p. 567.

23 Record on Appeal, pp.
39-40; Emphasis supplied.

24 Pascua
v. Talens, 80 Phil. 792; Isaac, et al. v. Tan Chuan Leong, et al, L-3324, May 23, 1951; Sigbe Lasud, et al. v. Sontay
Lasud, et al., L-19242, Feb. 29, 1964; Sagucio
v. Bulos, Nos. L-17608-09, July 31, 1962; Francisco, et al.
v. Certeza, et al., L-16849, Nov. 29, 1961.

25 Simeon v. Peña, L-29049, Dec.
29, 1970, 36 SCRA 610, 615-616; Emphasis supplied.

26 Id.,
p. 616; Emphasis supplied.

27 Id.,
p. 618.

28 See ibid.

29 Rollo, pp. 2-3, 8 (Petition).

30 Id.,
pp. 4, 6, 8.

31 Id.,
pp. 6-7.

32 Id.,
pp. 8, 9.

33 See note 22, supra
(CFI Decision).

34 Id.,
p. 16 (CA Decision).

35 103 Phil. 1, 5 (1958).