FACTS:

Calagan and his wife Takura was granted a homestead application over a parcel of land. Takura died and was survived by her husband and their children. On a relevant date, Calagan sold a portion of the homestead to Sandoval. She was given the title so that the sale could be annotated. Thereafter, Calagan offered to repurchase the land but Sandoval didn't agreed. She continuously refused and was only willing to comply if Calagan would reimburse the value of the house constructed on the parcel of land. This prompted petitioners to file an action for reconveyance, on which the trial court ruled in their favor, given that they pay for the value of the house built on good faith by Sandoval.

HELD:

Since petitioners didn't exercise the option to refund the amount of the expenses incurred by private respondent for the house that the latter has built, and not to pay the increase in value acquired by the land by reason of such expenses. Sandoval may remove her house since this can be done without damage. Petitioners should not be made to refund the value of the
house since this would thwart the policy laid down in CA141.