VICENTE SANTANDER, ET AL., PLAINTIFFS AND APPELLANTS VS. PACIFICO DE LA SERNA, DEFENDANT AND APPELLEE.

On May 19, 1950, the plaintiffs, Vicente Santander and the children
of the deceased Fortunata Villiniso, named Constancio, Matias, Jose,
Genoveva, Anatolia, Paz and Irineo, all surnamed Santander, filed a
complaint in the Court of First Instance of Cotabato against the
deiendant, Pacifico de la Serna, alleging in substance (1) under the
first cause of action, that they are the owners of a parcel of land
situated in Midsayap, Cotabato, which they acquired from the Government
as homestead, the patent having been issued on July 26,1937; that on
April 30, 1940, Vicente Santander and his wife Fortunata Villiniso
obtained from the defendant a loan in the sum of P370, payable within
five years, and as security for its payment they mortgaged all the
improvements existing on a portion of the homestead containing an area
of 12,406 square meters; that by reason of the last war the plaintiffs
were not able to pay the loan, but the defendant has never foreclosed
the mortgage; that in 1947, the plaintiffs offered to redeem the
mortgage but the defendant refused to receive payment; (2) under the
second cause of action, that by means of fraud the defendant caused
Vicente Santander to execute on March 2, 1946t a deed of sale in favor
of the defendant covering a portion of plaintiff’s homestead containing
an area of some 15,000 square meters (the same portion included in the
mortgage of April 30, 1940), the purported consideration being the sum
of P470; that said sale was inoperative for lack of approval by the
Secretary of Agriculture and Natural Resources; (3) under the third
cause of action, that the defendant has been in possession of 14,365
square meters of plaintiffs’ homestead, or 1,859 square meters in
excess of the mortgaged portion; that, assuming the deed of sale of
March 2, 1946 to be valid, it cannot affect the rights of the children
of Fortunata Villiniso, because it was executed by Vicente Santander
alone, after Fortunata Villiniso had already died; that the plaintiffs
suffered a damage in the amount of P600 for having been deprived of
said excess. The complaint prays that judgment be rendered in favor of
the plaintiffs and against the defendant, ordering the defendant to
receive the sum of P370 in complete satisfaction of the mortgage and to
return the land in question to the plaintiffs; ordering the annulment
of the deed of sale of March 2, 1946, or allowing the plaintiffs to
repurchase the land in accordance with the provisions of Act No. 141;
and ordering the defendant to pay damages in the sum of P500.

On June 6, 1950, the defendant filed an answer denying specifically
the allegations contained in paragraphs 3 to 18 of the complaint and,
as special defense and by way of counterclaim, alleging that in 1940,
the plaintiff Vicentem Santander and his wife Fortunata Villiniso
obtained from the defendant a loan of P370, secured by a mortgage over
the improvements on a portion of plaintiffs’ homestead; that five years
thereafter, the plaintiffs offered to sell the mortgaged portion, and
although the defendant refused to buy the land, the plaintiffs
insisted, with the result that on March 2, 1946, a deed of sale was
executed by Vicente Santander in favor of the defendant who thereupon
took possession of the lot sold and introduced thereon improvements
worth P30,000; that the land in question has grown in value and is now
worth P15,000; that in the belief that he could speculate, plaintiff
Vicente Santander desired to get back the property; that said plaintiff
had disposed of the greater part of his homestead at extraordinarily
high prices in favor of several innocent purchasers; that he cannot be
allowed to repurchase in virtue of section 119 of Act No. 141 because
he had violated said law by engaging in speculative ventures. The
defendant prayed that the complaint be dismissed; that the deed of sale
of March 2, 1946, be declared valid, and the plaintiffs required to
surrender their owner’s duplicate certificate of title to the Register
of Deed of Cotabato for the corresponding annotation of the sale; that
should the court allow the plaintiffs to repurchase the land in
question, the repurchase price should be fixed at P15,000; besides the
payment of the sum of P30,000, value of the improvements introduced by
the defendant.

No evidence was presented by either party, and the case was
submitted on the basis of the complaint and the answer. On September
25, 1951, the Court of First Instance of Cotabato rendered a decision
ordering the cancellation of the deed of sale of March 2, 1946;
ordering the plaintiffs to pay to the defendant the sum of P30,000 for
the improvements made in good faith by the defendant; and recommending
to the Director of Lands that steps be taken with a view to canceling
the homestead patent issued to plaintiff Vicente Santander, and that
the buyers of portions of his homestead be given preferential right to
acquire the same if they are qualified under the Public Land Law. From
this decision only the plaintiffs have appealed, and their sole
assignment of error refers only to that part of the appealed decision
ordering the plaintiffs to pay to the defendant the sum of P30,000,
alleged value of the improvements introduced on the land in question by
the defendant.

Appellants’ assignment of error is well taken. Under section 8, Rule
9, of the Rules of Court, “material averment in the complaint, other
than those as to the amount of damage, shall be deemed admitted when
not specifically denied” and under section 1 of Rule 11, if the
plaintiff fails to make a reply, all the new matters alleged in the
answer are deemed controverted. Under either reglementary provision,
the appellants cannot be considered as having admitted the appellant’s
allegation as to the value of the improvements claimed by him.
Certainly the amounts of P30,000 is being sought in the nature of
damages for losing the alleged improvements as a result of the
cancellation of the deed of sale and the return of the property to the
plaintiffs. In the absence, as in this case, of any proof of the amount
thereof, the defendant is not therefore entitled to a judgment for
damages.

Although the appealed decision did not order the appellants to pay
the amount of the loan of April 30, 1940, or the price of the sale of
March 2, 1946, the appellants in their brief admit their liability for
the payment of P470 in consideration of the cancellation of the sale
and the return to them of the land in question. In appellee’s brief, it
is claimed that the deed of sale should be declared valid, and that, in
;case the plaintiffs should be allowed to repurchase, they should be
sentenced to pay not the sum of P470, the price stated in the deed of
sale of March 2, 1946, but the sum of P15,000, the current market value
of the land. Appellee’s contention cannot now prosper, since he had not
appealed from the decision of the lower court

Appellants have called attention to the following observations made
by the trial court in the appealed decision: “The plaintiff Vicente
Santander is motivated by avarice and greed for money. He victimizes
innocent people who, in good faith, have purchased portions of his
homestead. The plaintiff Vicente Santander now is taking advantage of
the provisions of section 118 of Act 141 to attain that despicable
objective of victimizing innocent buyers in good faith.” We agree with
the appellants that said observations are not supported by any evidence
and therefore out of place.

Wherefore, it being understood that the appealed judgment is
modified by eleminating therefrom the directive for the payment by the
plaintiffs of the sum of P30,000, and by ordering the plaintiffs to pay
to the defendants the sum of P470, the said judgment is in all other
respects affirmed without costs. So ordered.

Pablo, Bengzon, Padilla, Montemayor, Reyes, A. Jugo, Baustista Angelo, Labrador and Concepcion, JJ., concur.