G.R. No. L-30402. January 28, 1980.
MANGULON CALAGAN, ET AL., petitioners, vs. HON. COURT OF FIRST INSTANCE OF DAVAO (BRANCH II) and PETRA SANDOVAL, respondents.

FACTS

Petitioners are the heirs of a homestead grantee. In 1961, petitioner Mangulon Calagan and his daughter sold a portion of the homestead lot to private respondent Petra Sandoval. Within the five-year period prescribed by Section 119 of the Public Land Act ( Commonwealth Act No. 141 ), petitioners filed an action for reconveyance to exercise their legal right of repurchase. The trial court ordered the reconveyance upon petitioners’ repayment of the purchase price but also required them to pay Sandoval P3,000 as the value of a house she constructed on the land.
Petitioners appealed solely against the order to pay for the house. They argued that such a requirement circumvented the protective policy of the homestead law, as only necessary expenses are reimbursable, and a house on agricultural land is merely a useful improvement. They contended that a vendee who builds during the redemption period cannot be in good faith, as her possession is precarious. Sandoval countered that as owner during her possession, she built the house in good faith in the lawful exercise of her rights.

ISSUE

Whether petitioners, in repurchasing the homestead under Section 119 of the Public Land Act, must reimburse the vendee for the value of a useful improvement (a house) she constructed on the property.

RULING

No. The Supreme Court modified the trial court’s decision by eliminating the order for petitioners to pay P3,000. The legal logic proceeds from reconciling the specific policy of the homestead law with general civil law provisions on redemption and useful expenses. While Article 1616 of the Civil Code generally requires a redeeming vendor to reimburse the vendee for necessary and useful expenses, this rule cannot be applied strictly to homestead repurchases without defeating the law’s paramount purpose. The Public Land Act aims to preserve and conserve homesteads for the grantee and family, a special social justice policy.
Applying Articles 546 and 547 of the Civil Code, which govern reimbursement to possessors in good faith, the Court held that the homesteader-vendor should be given the option granted to a prevailing possessor under Article 547: either to pay for the useful improvement or to allow the builder to remove it, provided no damage is caused to the land. To compel the homesteader to pay for useful improvements as a condition for repurchase would enable a vendee to frustrate the right of repurchase by constructing improvements beyond the homesteader’s financial means. This would render the statutory redemption right nugatory. Since petitioners did not opt to pay for the increase in value, Sandoval, as the vendee, may remove the house without damage to the land. The right of repurchase is thus effectuated without the oppressive condition, upholding the protective spirit of the homestead law.