G.R. No. 242722 - Carlos Cereza, Roger Estolonillo, Raymundo Lopez, Yolanda Pascual, Merly Ann Montes, and May Ann Villa vs. Hon. Danilo vs. Suarez, et al.

On February 13, 1979, Free Patent No. 586681 was issued in favor of Eusebio Borromeo over agricultural land in San Francisco, Agusan del Sur, covered by OCT No. P-9053.
The land, being under a free patent, was subject to the provisions of the Public Land Act, particularly the five-year prohibitory period during which alienation is not allowed.
On June 15, 1983—within this five-year period—Eusebio Borromeo sold the property to Eliseo Maltos.

Eusebio Borromeo died on January 16, 1991. His heirs claimed that before his death, he had directed his wife Norberta Borromeo and his children to nullify the sale due to its occurrence within the prohibited period.
On June 23, 1993, Norberta Borromeo and her children (the acknowledged heirs) filed a Complaint for Nullity of Title and Reconveyance against Eliseo Maltos, Rosita Maltos, and the Register of Deeds of Agusan del Sur, leading to the docketing of Civil Case No. 946.

The trial court assessed issues including the proof of heirship of the deceased and the validity of the sale executed during the five-year prohibitory period.
It found that the heirs failed to conclusively establish their status as legal heirs through documentary evidence.
The court ruled that the sale was null and void because it was executed within the prohibitory period, thereby mandating reversion of the property to the public domain.
The defense of indefeasibility of title was rejected, given that the title itself indicated the property was "subject to the provisions" of several sections of the Public Land Act.
The trial court dismissed the complaint, also addressing the in pari delicto argument by noting that it does not apply to an inexistent contract that is void ab initio.

On appeal, the heirs argued that they had sufficient testimony (albeit not documentary) to prove their status as heirs and sought to have the title revived in their names.
The Court of Appeals reversed the trial court by stating that, although the sale is null due to the violation of the prohibitory period, reversion under Section 101 of the Public Land Act is not automatic and must be initiated by the Office of the Solicitor General.
The appellate court ordered the reconveyance of the land from the Maltos Spouses to the heirs upon refund of a determined purchase price despite no action having yet been filed for reversion.
The Maltos Spouses filed a Motion for Reconsideration, contending that the prohibition should only affect the heirs and that they should be reimbursed for improvements made on the land, arguing for in pari delicto applicability.
The Court of Appeals denied the motion, emphasizing that the determination of title and the effect of proper reversion rests with the government, in keeping with state policies and public welfare considerations.

Post-appeal submissions included additional pleadings on issues of heirship, the evidentiary basis of such claims, and disputes regarding reimbursement for improvements.
The heirs maintained that the testimony provided was sufficient to prove their right to succeed and that public policy favored their re-acquisition of the homestead.
The parties further debated the application of the in pari delicto doctrine, with the court clarifying that its application should not contravene public policy objectives inherent in the homestead law.
Ultimately, while the court affirmed the decision ordering reconveyance, it noted that the government must separately institute reversion proceedings as mandated by the law.

Whether the sale conducted by Eusebio Borromeo to Eliseo Maltos during the five-year prohibitory period under the Public Land Act is valid or void ab initio.
Whether the title conveyed by such a sale, despite being executed in good faith by the purchaser, maintains indefeasibility given the conditions stated on the title.

Whether the property should revert to the public domain due to the sale occurring within the prohibited period.
Whether Section 101 of the Public Land Act, which requires the Office of the Solicitor General to file an action for reversion, precludes automatic reversion despite the statutory violation.

Whether the doctrine of in pari delicto should bar the heirs of Eusebio Borromeo from seeking reconveyance, given that both parties may be equally at fault.
Whether applying in pari delicto in this context would violate public policy, particularly with regard to preserving the family homestead.

Whether the Maltos Spouses are entitled to reimbursement for the improvements they made on the property, such as the planting of fruit-bearing trees and construction of residential houses.
Whether the claim for reimbursement, having not been properly raised in the initial pleadings, should be entertained by the appellate court.