ANTONIO LABRADOR AND FELIPA CANONIZADO, PLAINTIFFS AND APPELLANTS, VS. EMILIANO DE LOS SANTOS ET AL., DEFENDANTS AND APPELLEES.

This is an appeal taken by the plaintiffs, Antonio Labrador and Felipa
Canonizado, from the decision of the Court of First Instance of Tarlac
dismissing the complaint with the costs to the plaintiffs.

In support of their appeal the appellants assign the following errors
allegedly committed by the trial court in the said decision, to wit:

“1.
The lower court erred in not ordering the defendants to return to the
plaintiffs the amount of P1,000 which the latter had paid for the land
in question.

“2. The lower court erred in dismissing the
complaint in question with the costs to the plaintiffs and in denying
the motion for new trial.”

The facts found
proven by the lower court, which are all that we can consider in
deciding the legal questions raised in this appeal, are the following:

“The
plaintiffs in this case, Antonio Labrador and Felipa Canonizado,
sometime in April, 1928, acquired from one Santiago de los Santos,
father of the defendants Emiliano de los Santos and Nicolas de los
Santos, for the price of one thousand pesos, a land which Santiago de
los Santos, in turn, had acquired by way of homestead and over which he
had obtained the corresponding original certificate of title on January
15, 1927, after submitting his final proof of the homestead as required
by law, on April 3, 1922. Upon the death of De los Santos, his
children, the aforesaid defendants, executed on November 7, 1932, a
deed of extrajudicial partition of the said land, and upon motion dated
October 31, 1933 which they filed with this Court of First Instance,
they succeeded in cancelling original certificate of title No. 724 in
the name of their father Santiago de los Santos and in having issued,
in lieu thereof, Transfer Certificate of Title No. 8296, in the name of
the same defendants. * * *

“According to the evidence of
the plaintiffs, some days before the defendant executed the deed of
absolute sale Exhibit A, Santiago de los Santos sold the land to them,
receiving from them the amount of P1,000, and delivering to them, in
turn, the title and plan of the land, Exhibits B and B-1. Thereafter,
that is on the 2d or 8th of April 1928, they came to this capital to
entrust the drawing up of the deed to the attorney-at-law and notary
public Teotimo Duque, who, after examining the title, told the
plaintiffs and Santiago de los Santos, who came with the defendant
Emiliano de los Santos, that Santiago de los Santos could not sell the
property due to the non-expiration of the five years provided by law,
that is, section 116 of Act No. 2874. Felipa Canonizado then required
of Santiago de los Santos the return of the P1,000, but Santiago de los
Santos said that it was impossible to return the same because he had
paid his debts With said money; and in view of the insistence of the
parties and of their promise not to bring any suit, the notary public
Duque drafted the deed Exhibit A, which was executed by Santiago de los
Santos in the presence of Emiliano de los Santos.”

The first question to be resolved in the present appeal is that raised
in the first assignment of alleged error, which is whether or not the
trial court erred in not ordering the defendants to return to the
plaintiffs the amount of P1,000 which the latter had paid for the land
in question.

According to the above-narrated facts, as found
proven by the lower court, the land in suit was the property of the
deceased Santiago de los Santos, who had applied for and acquired it as
a homestead, hating obtained original certificate of title No. 724, and
homestead patent No. 10140 therefor on January 15, 1927, after having
submitted, on April 3, 1922, his final proof of occupancy and labor as
required by law. On April 2, 1928, that is, one year, two months and
seven days after the issuance of the aforesaid original certificate of
title No. 724 and homestead patent No. 10140, Santiago de los Santos
sold the aforesaid land to the herein plaintiffs Antonio Labrador, and
Felipa Canonizado (Exhibit A). Upon the death of the said Santiago de
los Santos, his children, the herein defendants and appellees, executed
a deed of extrajudicial partition of said land, and on motion dated
October 31, 1933 (Exhibit X), they obtained the cancellation of
original certificate of title No. 724, issued in the name of their
deceased father, Santiago de los Santos, and the issuance of transfer
certificate of title No. 3296 in their name.

The alienation
by Santiago de los Santos of his land in favor of the plaintiffs
Antonio Labrador and Felipa Canonizado was made in violation of the
provision of section 116 of Act No. 2874, as amended by section 23 of
Act No. 3517, which prohibits the encumbering or alienation of a land
acquired as a homestead within five years from the issuance of the
homestead patent, wherefore, it is illegal and void. As the declaration
of nullity of a contract void ab initio operates to restore
things in the state and condition in which they were found before the
execution thereof, the land in question was returned to the ownership
of Santiago de los Santos, in his lifetime, and that of his children,
after his death, with the obligation on the part of said Santiago de
los Santos to return to the purchasers, the plaintiffs, the price of
the sale, with interest (art. 1303, Civil Code). Santiago de los Santos
being the vendor, had the declaration of nullity taken place while he
was living, he would have to return said price to the purchasers; but
having died before the declaration of nullity, the plaintiffs should
have presented their claim for the return of the price in the testate
or intestate proceedings of the deceased, and they cannot go against
the children of the latter inasmuch as the said children inherit with
the benefit of inventory and only that remaining of the inheritance
after paying the indebtedness of the testate or intestate. While it is
true that the defendants inherited the land in question, the price of
the sale cannot be charged thereon, because the said section 116 of Act
No. 2874, as amended by section 23 of Act No. 3517, prohibits the
subjection of such land to the payment of said obligation which was
contracted within five years from the issuance of the homestead patent,
as above stated. In any event, the plaintiffs may institute the
intestate proceedings of Santiago de los Santos and file their claim
before the committee on claims and appraisal to be named therein.

For the foregoing considerations, we are of the opinion and so hold,
that upon the death of a person who has obtained land by way of
homestead and who has sold it within the five years from the issuance
of the homestead patent or title, because the said sale is void, the
purchasers can only recover the price which they have paid by filing
their claim with the committee on claims and appraisal to be named in
the intestate proceedings which may be instituted.

Wherefore, with the sole modification that there be reserved, as there
is hereby reserved, the right of the plaintiffs-appellants to institute
the intestate proceedings of Santiago de los Santos and to file their
claim with the committee on claims and appraisal to be named therein,
the appealed judgment is affirmed in all other respects, without
special pronouncement as to the costs. So ordered.

Avanceña, C. J., Imperial, Diaz, Laurel, and Concepcion, JJ., concur.