Nabus v.

Pacson
G.R. 161318
Facts: Spouses Nabus owned a property
in Benguet which they mortaged to PNB
to secure a loan of P30,000.
On 1977, petitioners executed a Deed of
Conditional Sale for a part of the said lot
in favor of Pacson, for the consideration
of P170,000.

vendees contained the phrase partial

payment of the lot or cash value. It is
evidence of sale under the contract and
not lease. Further, as found by the trial
court, Joaquin Pacsons non-signing of the
second page of a carbon copy of the
Deed of Conditional Sale was through
sheer inadvertence, since the original
contract and the other copies of the
contract were all signed by Joaquin
Pacson and the other parties to the
contract.

In their agreement it stated that:

a. P13,000 will be paid to PNB for
payment of mortgage, which will
also form part of the purchase
price.
b. After the payment, P17,500 will be
left as balance of the mortgage.
The vendee would then pay
P3,500/month to PNB until the
mortgage is liquidated. The
payments will also form part of the
purchase price.
c. As soon as the mortgage obligation
to PNB is satisfied, the vendee will
pay the vendor P2,000/month until
the purchase price of P170,000 is
fully covered.
d. As soon as the consideration of the
sale has been paid, the transfer
documents shall be executed by
the vendor in favour of the vendee.
e. The entirety of the lot in which the
subject of the sale form part of, is
currently in litigation. And if vendor
is defeated in the civil case the
vendor obligates himself to return
to the vendee the entire price paid
by the vendee.
The loan was fully paid by the vendee,
and the people occupying said lot was
vacated. The vendees then took
possession of the lot. The vendee
continued paying their balance, not in
instalment of P2000, but in varying
amounts. Weeks after petitioner
demanded full payment of the
consideration, the respondents learned
that the lot was already sold to Betty
Tolero.
The petitioner alleged that the
respondents did not continue buying the
lot, but preferred to lease the lot, when
they learned that the property was in
litigation.
Issue: Whether the Deed of Conditional
Sale was converted into a Contract of
Lease
Held: No. The Deed was not converted to
one of lease. The receipts issued to the

Issue: Whether the Deed of Conditional

Sale was a contract of sale, or a contract
to sell
Held: The Court holds that the contract
entered into by the Spouses Nabus and
respondents was a contract to sell, not a
contract of sale.
In the case at bar, the contract
stipulated that as soon as the full
consideration of the sale has been
paid by the
vendee, the corresponding transfer
documents shall be executed by the
vendor to the vendee for the portion
sold. The aforecited stipulation shows
that the vendors reserved title to the
subject property until full payment of the
purchase price.
The full payment of the purchase price is
the positive suspensive condition, the
failure of which is not a breach of
contract, but simply an event that
prevented the obligation of the
vendor to convey title from
acquiring binding force. Without the
happening of the full payment of the
purchase price, there is no contract to
speak of. If the petitioner paid the
vendors in accordance to the Deed of
Conditional Sale, the condition would
have been fully paid by June 1983. The
vendors demanded for the full payment
only on January 1984. Since the Deed of
Conditional Sale executed in their favor
was merely a contract to sell, the
obligation of the seller to sell becomes
demandable only upon the happening of
the suspensive condition.
Since the contract to sell was without
force and effect, Julie
Nabus validly conveyed the subject
property to another buyer, petitioner
Betty Tolero, through a contract of
absolute sale, and on the strength
thereof, new transfer certificates of title
over the subject property were duly
issued to Tolero.

thereof ... with full rights to dispose,

enjoy and make use thereof in such
manner and form as would be most
advantageous to herself."

Bugarin v. Lesaca
G.R. L-15385
Facts: Lesaca sold to Bugarin two parcels
of land for P5,000. The parties then
executed a Deed of Sale for the lots.
After the sale, plaintiff tried to take
possession of the lots, but was prevented
by Deloso, who claimed to be the owner
thereof.
Bugarin then wrote to Lesaca, asking the
latter to exchange to lot sold with
another of the same class or return the
purchase price plus other expenses she
incurred.
Issue: Whether there was delivery of the
lot sold to the vendee
Held: No, there was not. Articles 1461
and 1462 of the old Civil Code provide:
ART. 1461. The vendor is bound to
deliver and warrant the thing which
is the subject-matter of the sale.
ART. 1462. The thing sold shall be
deemed delivered when the
vendee is placed in the control and
possession thereof.
If the sale should be made by
means of a public instrument, the
execution thereof shall be
equivalent to the delivery of the
thing which is the subject-matter of
the contract unless the contrary
appears or is clearly to be inferred
from such instrument.
There is nothing in the contract that the
vendor intended not to deliver the land in
question right away. The intention can be
inferred in the contract when it stipulated
that vendee takes actual possession

The vendor wasnt able to comply with

her commitment because the vendee
was prevented to do so by Deloso, who
claimed ownership of the subject matter.
And although it is postulated in the same
article that the execution of a public
document is equivalent to delivery, this
legal fiction only holds true when there is
no impediment that may prevent the
passing of the property from the hands of
the vendor into those of the
vendee. Symbolic delivery is sufficient
when vendor has control of the property,
that at the moment of sale, a delivery
can be made. Such scenario is not true in
this case.
Issue: Can the vendee rescind the
contract in view of vendors failure to
deliver the land?
Held: Yes. Art 1124 states. The right to
resolve reciprocal obligations, in case one
of the obligors should fail to comply with
that which is incumbent upon him, is
deemed to be implied.
The person prejudiced may choose
between exacting the fulfillment of the
obligation or its resolution with indemnity
for losses and payment of interest in
either case. He may also demand the
resolution of the obligation even after
having elected its fulfillment, should the
latter be found impossible.
Undoubtedly in a contract of purchase
and sale the obligation of the parties is
reciprocal, and, as provided by the law, in
case one of the parties fails to comply
with what is incumbent upon him to do ,
the person prejudiced may either exact
the fulfillment of the obligation or rescind
the sale. Since plaintiff chose the latter
alternative, it cannot be disputed that
her action is in accordance with law.

court also noted that the tax receipts and

lease receipts were all in the name of her
husband.
Furthermore, respondent already took
possession of the property. Under Art.
1498, when the sale is made through a
public instrument, the execution thereof
shall be equivalent to the delivery of the
object of the contract, if from the deed
the contrary does not appear or cannot
clearly be inferred. possession is
transferred to the vendee by virtue of the
notarized deed of conveyance.
Note: Petitioner cannot have an adverse
claim on the property because he was an
alien and was disqualified to own lands in
the Philippines. So, even if his version of
the Deed of Sale is true, the same is null
and void being contrary to law.

ONG CHING PO vs. COURT OF

APPEALS
G.R. Nos. 113472-73
Facts: Ong Joi Jong sold a parcel of land
to Soledad Parian. The said sale was
evidenced by a Notarized Deed of Sale
and was registered with the Registered of
Deeds of Manila. According to Parian,
since they were not residing in Manila,
they entrusted the property to the
brother of Parians husband, Ong Ching
Po.
Ong Ching Po, on the other hand claimed
that he bought the land from Ong Joi
Jong, and since he was still not a Filipino
during that time, he used Soledad Parian
as a dummy for the purpose of
facilitating the issuance of a new title
with the City Register of Deeds.
Issue: Whether there was a valid sale to
Soledad Parian.
Held: Yes. The Deed of Sale executed by
Ong Joi Jong with Parian was a notarized
document. Though it was alleged that
Soledad Parian did not pay anything as
consideration, it was implied that her
husband managed the property and paid
for it through their conjugal funds. The

Petitioner also cannot prove that they

were in a trustor-trustee relationship with
respondent, wherein they were trustor,
and the latter the trustee. Not even
Exhibit "B" can be considered as such a
document because private respondent,
the registered owner of the property
subject of said "deed of sale," was not a
party thereto. The oral testimony to
prove the existence of the express trust
will not suffice. Under Article 1443 of the
Civil Code of the Philippines, "No express
trust concerning an immovable or any
interest therein may be proved by parole
evidence.
Dulay Enterprises Inc. vs CA
Facts: Manuel R. Dulay Enterprises, Inc, is a domestic
corporation with the following as members of its Board
of Directors: Manuel R. Dulay with 19,960 shares and
designated as president, treasurer and general manager
Atty. Virgilio E. Dulay with 10 shares and designated as
vice-president Linda E. Dulay with 10 shares, Celia
Dulay-Mendoza with 10 shares Atty. Plaridel C. Jose
with 10 shares and designated as secretary.
They owned a property and secured a loan through its
president for construction of a hotel.
December 23, 1976 The corporations president
through a board resolution sold the said property to
Maria Theresa and Castrense Veloso for P300,000
evidenced in a deed of absolute sale. A memorandum
was executed subsequently giving Manuel Dulay until
December 9 1979 to repurchase the property for 200,000
pesos. But it was not annotated in the new TCT (Transfer
Certificate Title.)
December 24, 1976 - Veloso, without the knowledge of
Manuel Dulay, mortgaged the subject property to
Manuel A. Torres for a loan of P250,000. Having
defaulted, Torres bought the property as the highest
bidder in an extrajudicial foreclosure sale. Veloso
executed a right to redeem in favor of Dulay to
repurchase the property but both were not able to redeem
within the one year statutory period, hence Torres now
filed to claim ownership.
The corporation (Dulay) contested saying the sale of the
property to Veloso was not approved by all the members
of their board and the resolution was prepared from

someone other than the designated secretary. They also

claim Torres cannot claim ownership as it was not yet
delivered to him and he also never had actual possession
of the property.
Issue:
Is the sale void for the lack of consent of all the
members of the board of the seller corporation?

Held:

Was the property delivered to Torres?

No, corporate action taken at a board meeting
without proper call or notice in a close
corporation is deemed ratified by the absent
director unless the latter promptly files his
written objection with the secretary of the
corporation after having knowledge of the
meeting which, in his case, petitioner Virgilio
Dulay failed to do (Section 101 Corporation
Code.) Dulay Enterprises is a "family
corporation."
The mere execution of the deed of sale in a
public document is equivalent to the delivery of
the property. (Paragraph 1, Article 1498 of the
New Civil Code)

Piercing the veil of corporate fiction only applies

when it is used to defeat public convenience, justify
wrong, protect fraud or defend crime.

G.R. No. 133140

1999

August 10,

JOSE MA. T. GARCIA, petitioner

On March 9, 1981, Atty. Garcias Title

was cancelled and in its stead transferred
to the Magpayos in which the Deed of
Real Estate Mortgage was registered
(Makati
Register
of
Deeds)
and
annotated. The Magpayos failed to pay
their loan; hence the property was
extrajudicially foreclosed and bought
by PBCom at a public auction. The
redemption period expired without the
Magpayos redeeming the same. And so
the title over the land was transferred to
PBCom.

On Oct. 4, 1985 PBCom secured from the

court a writ of possession over the land
but when the writ was served to Jose Ma.
T. Garcia (Ma. Luisas Brother) who was in
possession of the land, he refused to
honor it.

He then filed a suit for recovery of realty

and damages against PBCom, the
Magpayos and the RTC Sheriff alleging
that he inherited the land as one of the
heirs of his mother. Garcia and PBCom
both filed a motion for Summary
Judgement.

In its summary judgement, the lower

court held that the mortgage executed
by the Magpayos with PBCom was void,
stating that the spouses were not yet
the owner of the property when they
mortgaged it, failing the requisites of Art.
2085. PBCom appealed.

vs.
COURT OF APPEALS, SPS. LUISITO &
MA.
LUISA
MAGPAYO
AND
PHILIPPINE
BANK
OF
COMMUNICATIONS, respondents.

Issues:
WON the Magpayos had the
right to mortgage the property?

PUNO, J.:\

Which Party is entitled to

summary judgment?

Facts: Atty. Pedro and Remedios Garcia

sold to their daughter Ma. Luisa Magpayo
and her husband Luisto Magpayo, their
parcel of land situated at Bel Air II
Village, Makati. On March 5, 1981, the
Magpayos mortgaged the land to
Philippine
Bank
of
Communications(PBCom) to secure a
loan.

Ruling:
Yes, the property was no
longer considered owned by petitioner's
parents. The mortgage to PBCom by the
Magpayo
spouses
is
valid
notwithstanding
that
the
transfer
certificate of title over the property was
issued to them after the mortgage
contract was entered into. Registration

WON Possession over

land is equivalent to Ownership?

the

does not confer ownership; it is merely

evidence of such ownership over a
particular property. The deed of sale
operates as a formal or symbolic delivery
of the property sold and authorizes the
buyer to use the document as proof of
ownership. The Magpayo spouses were
already
the
owners
when
they
mortgaged the property to PBCom.

No,
possession
and
ownership are distinct legal concepts.
Ownership
exists
when
a
thing
pertaining to one person is completely
subjected to his will in a manner not
prohibited by law and consistent with the
rights of others. It confers certain rights
to the owner, one of which is the right to
dispose of the thing by way of sale. On
the other hand, possession is defined as
the holding of a thing or the enjoyment
of a right. Literally, to possess means to
actually and physically occupy a thing
with or without right. Possession may be
had in one of two ways: possession in the
concept of an owner and possession of a
holder."A possessor in the concept of an
owner may be the owner himself or one
who claims to be so." On the other hand,
"one who possesses as a mere holder
acknowledges in another a superior right
which he believes to be ownership,
whether his belief be right or wrong."

BOTH, A summary judgment

is one granted by the court, upon motion
by either party, for an expeditious
settlement of the case, there appearing
from
the
pleadings,
depositions,
admissions, and affidavits that no
important questions or issues of fact are
involved (except the determination of the
amount of damages) and that therefore
the moving party is entitled to a
judgment as a matter of law. Under Rule
34, either party may move for a
summary judgment the claimant by
virtue of Section 1 and the defending
party by virtue of Section 2, viz.:
Sec. 1. Summary judgment for
claimant. A party seeking to
recover upon a claim, counterclaim, or cross-claim or to obtain a
declaratory relief may, at any time
after the pleading in answer
thereto has been served, move
with supporting affidavits for a
summary judgment in his favor
upon all or any part thereof.

Sec. 2. Summary judgment for

defending party. A party against
whom a claim, counterclaim, or
cross-claim is asserted or a
declaratory relief is sought may, at
any time, move with supporting
affidavits for a summary judgment
in his favor as to all or any part
thereof.

DIGESTS:
1. POWER COMMERCIAL V. CA
(June 20, 1997)
FACTS:
Petitioner asbestos manufacturer Power
Commercial and industrial corporation
bought the property of spouses Reynaldo
and Angelita Quiambao located in Makati
City.
Since there are lessees occupying the
subject land, part of the deed of sale is a
warranty of respondents that will defend
its title and peaceful possession in favor
of the petitioners.
The property is mortgage to PNP and as
such, petitioners filed a request to
assume responsibility of the mortgage.
Because of petitioners failure to produce
the required papers, their petition was
denied.
Petitioners allege that the contract
should be rescinded because of failure of
delivery.
ISSUE:
WON the contract is recissible due to
breach of contract.
HELD:
There is no breach of contact in this case
since there is no provision in the contract
that imposes the obligation to the
respondents to eject the people
occupying the property.
There was also a constructive delivery
because the deed of sale was made in a
public document. The contention of the
petitioners that there could be no
constructive delivery because the
respondents is not in possession of the
property is of no merit. What matters in a
constructive delivery is control and not
possession. Control was placed in the
hands of the petitioners that is why they
were able to file an ejectment case. Prior

physical delivery or possession is not

legally required and the execution of the
deed of sale is deemed equivalent to
delivery.
2. POWER COMMERCIAL vs. CA
(1997)
1. Power Commercial and Industrial
Development Corporation, an
industrial asbestos manufacturer,
needed a bigger office space and
warehouse for its products. For this,
it entered into a contract of sale
with the spouses Reynaldo and
Angelita Quiambao (private
respondents).
2. Petitioner assumed, as part of the
purchase price, the existing
mortgage on the land. In full
satisfaction, Reynaldo paid PNB
around 79k.
3. June 1 - Spouses again mortgaged
said land to PNB to guarantee a
loan of which was paid to spouses.
Petitioner agreed to assume the
payment of the loan.
4. June 26 Deed of Absolute Sale
with Assumption of Mortgage was
executed by the parties. On the
same date, the manager of Power
Commercial submitted to PNB said
deed with formal application of the
assumption of mortgage.
5. Almost 7 months after said sale,
PNB informed spouses that Power
Commercial failed to submit papers
necessary for the approval of the
mortgage. Thus application for
assumption was withdrawn. The
outstanding balance deemed due
and demandable. Power
Commercial paid and sent a letter
to PNB that there are people who
are physically occupying their lot
and it is their desire to eject them
immediately. With that, they
request that their assumption of
mortgage be given favorable
consideration. PNB replied and
asked that Power Commercial remit
payments to cover interest and at
least part of the principal.
6. Power Commercial then filed a case
for rescission and damages before
the RTC. Petitioner demanded
return of payments it made on the
ground that its assumption of
mortgage was never approved.
Subsequently, the mortgage was
closed and was bought by PNB in
the public auction.
7. TC: failure of respondent spouses
to deliver actual possession to

petitioner entitled the petitioner to

rescind the sale.
8. CA: reversed; deed of sale did not
obligate the spouses to eject the
lessees from the land as a
condition of the sale, nor was the
occupation by said lessees a
violation of the warranty against
eviction; no substantial breach to
justify rescission
Issue: was there an effective symbolic
delivery? (important issue for sales)
Held:
1. There was no express stipulation in
the contract that spouses will be
guaranteeing ejectment of the
occupants although there was a
proviso guaranteeing the peaceful
possession by the buyer of the
land.
2. Most authorities consider transfer
of ownership as the primary
purpose of sale, delivery remains
an indispensable requisite as our
law does not admit the doctrine of
transfer of property by mere
consent. Civil Code provides that
delivery can either be actual
(1497) or constructive (14981501). Symbolic delivery as a
species of constructive delivery,
effects the transfer of ownership
through the execution of a public
document. But if, notwithstanding
the execution of the instrument,
the purchaser cannot have the
enjoyment and material tenancy of
the ting and make use of it himself
or through another in his name,
because such tenancy and
enjoyment are opposed by the
interposition of another will, then
fiction yields to reality the
delivery has not been effected.
In this case, delivery was effected
through the execution of deed. The lot
sold had been placed under the control of
petitioner; thus, the filing of the
ejectment suit was subsequently done. It
signified that its new owner intended to
obtain for itself and to terminate said
occupants actual possession thereof.
Prior physical delivery or possession is
not legally required and the execution of
the deed of sale is deemed equivalent to
delivery. This deed operates as a formal
or symbolic delivery of the property sold
and authorizes the buyer to use the
document as proof of ownership. Nothing
more is required. Petition denied.
POWER COMMERCIAL v CA

When buyer assumes the risk of

ownership and possession
Facts:
PCIC bought a parcel of land from the
spouses Quiambao
in their agreement, it is stipulated that
108,000 down payment
balance upon the execution of the
deed
PCIC to assume the mortgage
payment
a second mortgage was entered into by
the spouses which was paid by the
spuoses themselves
PCIC made several payments of the
mortgage to PNB
PCIC asked PNB to trasfer the title of
the land in their name because they
cannot eject the occupants of the land
without it
PNB refused because the mortgage was
not yet paid in full
PCIC asked for the rescission of the
contract and asked the court to order
PNB to return the payment it made for
the mortgage of the property
RTC: ordered the rescission of the
contract and the return of the money
CA: reversed the decision of the RTC
Issue:
W/N the failure of the Quiambaos to
eject the occupants of the land is a
sufficient ground for the rescission of the
contract
Held:
No.
Symbolic delivery as a specie of
constructive delivery, effects the transfer
of ownership through the execution of a
public document
if the parties intended to impose on the
Quiambaos the obligation to eject the
tenants from the lot sold, it should have
included in the contract a
provision similar to that. absent the
stipulation, it is not a sufficient groung to
rescind the contract
the contention of PCIC that the control
of the land was not transferred to them
was untenable. the filing of the ejectment
suit subsequently done
by PCIC signified that it was the new
owners of the land.
prior physical delivery or possession is
not legally required and the execution of
the deed of sale is deemed equivalent to
delivery

ALFONSO L. IRINGAN, petitioner,

Vs.
HON. COURT OF APPEALS and
ANTONIO PALAO,
Represented by his Attorney-in-fact,
FELISA P. DELOS SANTOS,
respondents
G.R. NO. 129107 September 26,
2001
FACTS:
On march 22, 1985, Antonio Palao sold a
piece of land to Alfonso Iringan: Lot No.
992 located at the Poblacion of

Tuguegarao with Transfer Certificate No.

t-5790. Both parties executed a Deed of
Sale on the same date with a purchase
price of P 295, 000, payable as follows:
P 10, 000 upon execution of the
contract received on the same
date;

P 140, 000 on or before April 30,

1985;

P 145,000 on or before December

31, 1985.

However, on the second payment,

Iringan defaulted by just paying P 40,
000. Thus on July 18, 1985, Palao sent
Iringan a letter stating that he has
considered the contract to be rescinded
considering that Iringan failed to comply
with his obligation. On August 20, 1985,
Iringan replied that they were not
opposing the decision of Palao but asked
for the reimbursement of the following
amounts: (a) P 50, 000 previous cash
received by Palao; (b) P 3, 200 geodetic
engineers fee; (c) P 500 attorneys fee,
(d) current interest on the totatl amount
above.
On July 1, 1991, Palao filed a complaint
for Judicial Confirmation of Rescission of
Contract and Damages against Iringan
and his wife. In response, spouses Iringan
said that the contract consummated and
that the remedy is to collect the
remainder of the purchase price and not
rescission. Besides, they said that they
had always been ready and willing to
comply with their obligations in
accordance with said contract.
On September 25, 1992, the RTC of
Cagayan, Branch I, ruled in favor of Palao
and affirmed the rescission of the
contract; cancelled the claim of the
defendants annotated at the back of TCT
No. T-5790; ordered defendants to vacate
the premises; and lastly, ordering the
defendants to pay solidarily the sum of P
100,00 as reasonable compensation for
use of the property minus 50% of the
amount paid by them; and to pay P50,
000 as moral damages; P 10, 000 as
exemplary damages; and P 50, 000 as
attorneys fee and to pay the costs of
suit.
The Court of Appeals affirmed the lower
courts decision. Hence, this petition for
review.
ISSUE:
Whether the Ca erred in its decision
holding the lower court did not err in
affirming the rescission of the contract of
sale

The Supreme Court ruled that the

basis of the appellate court and
lower court in affirming the
rescission was Article 1191.

Petitioner contends that the action

should be deemed prescribed
based on the provision of Article
1389 of the Civil Code.

This provision of law applies only to

rescissible contracts, as
enumerated and defined in Articles
1380 and 1381.

The rescission in Article 1381 is not

akin to the term rescission in
Article 1191 and Article 1592. In
Articles 1191 and 1592, the
rescission is the principal action
which seeks the resolution or
cancellation of the contract while in
Article 1382, the action is a
subsidiary one limited to cases of
rescission for lesion as enumerated
in said Article.

In case at hand, the prescription

was still in force. The suit was
brought on July 1, 1991 or six years
after the default. It was filed within
the period of rescission. Thus, the
contract of sale between the
parties as far as the prescriptive
period applies, can still be validly
rescinded.

Iringan vs CA
ALFONSO L. IRINGAN, petitioner, Vs.
HON. COURT OF APPEALS and ANTONIO
PALAO,
Represented by his Attorney-in-fact,
FELISA P. DELOS SANTOS, respondents
G.R. NO. 129107 September 26, 2001
FACTS:
On march 22, 1985, Antonio Palao sold a
piece of land to Alfonso Iringan: Lot No.
992 located at the Poblacion of
Tuguegarao with Transfer Certificate No.
t-5790. Both parties executed a Deed of
Sale on the same date with a purchase
price of P 295, 000, payable as follows:

HELD:

P 10, 000 upon execution of the

contract received on the same
date;
P 140, 000 on or before April 30,
1985;
P 145,000 on or before December
31, 1985.

However, on the second payment,

Iringan defaulted by just paying P 40,
000. Thus on July 18, 1985, Palao sent
Iringan a letter stating that he has
considered the contract to be rescinded
considering that Iringan failed to comply
with his obligation. On August 20, 1985,
Iringan replied that they were not
opposing the decision of Palao but asked
for the reimbursement of the following
amounts: (a) P 50, 000 previous cash
received by Palao; (b) P 3, 200 geodetic
engineers fee; (c) P 500 attorneys fee,
(d) current interest on the totatl amount
above.
On July 1, 1991, Palao filed a complaint
for Judicial Confirmation of Rescission of
Contract and Damages against Iringan
and his wife. In response, spouses Iringan
said that the contract consummated and
that the remedy is to collect the
remainder of the purchase price and not
rescission. Besides, they said that they
had always been ready and willing to
comply with their obligations in
accordance with said contract.
On September 25, 1992, the RTC of
Cagayan, Branch I, ruled in favor of Palao
and affirmed the rescission of the
contract; cancelled the claim of the
defendants annotated at the back of TCT
No. T-5790; ordered defendants to vacate
the premises; and lastly, ordering the
defendants to pay solidarily the sum of P
100,00 as reasonable compensation for
use of the property minus 50% of the
amount paid by them; and to pay P50,
000 as moral damages; P 10, 000 as
exemplary damages; and P 50, 000 as
attorneys fee and to pay the costs of
suit.
The Court of Appeals affirmed the lower
courts decision. Hence, this petition for
review.
ISSUE:
Whether the Ca erred in its decision
holding the lower court did not err in
affirming the rescission of the contract of
sale
HELD:

The Supreme Court ruled that the

basis of the appellate court and
lower court in affirming the
rescission was Article 1191.
Petitioner contends that the action
should be deemed prescribed
based on the provision of Article
1389 of the Civil Code.

This provision of law applies only to

rescissible contracts, as
enumerated and defined in Articles
1380 and 1381.
The rescission in Article 1381 is not
akin to the term rescission in
Article 1191 and Article 1592. In
Articles 1191 and 1592, the
rescission is the principal action
which seeks the resolution or
cancellation of the contract while in
Article 1382, the action is a
subsidiary one limited to cases of
rescission for lesion as enumerated
in said Article.
In case at hand, the prescription
was still in force. The suit was
brought on July 1, 1991 or six years
after the default. It was filed within
the period of rescission. Thus, the
contract of sale between the
parties as far as the prescriptive
period applies, can still be validly
rescinded.

Katigbak vs CA
. G.R. No. L-16480
January
31, 1962
ARTEMIO KATIGBAK, petitioner,
vs.
COURT OF APPEALS, DANIEL
EVANGELISTA and V. K. LUNDBERG,
respondents.
Facts:
This case arose from an agreed
purchase and sale of a Double
Drum Carco Tractor Winch. Artemio
Katigbak upon reading an
advertisement for the sale of the
winch placed by V. K. Lundberg,
owner and operator of the
International Tractor and
Equipment Co., Ltd., went to see
Lundberg and inspected the
equipment with price of
P12,000.00. Katigbak was referred
to the owner, Daniel Evangelista
and both agreed that Katigbak was
to purchase the winch for
P12,000.00, payable at P5,000.00
upon delivery and the balance of
P7,000.00 within 60 days. The
condition of the sale was that the
winch would be delivered in good
condition. Katigbak was apprised
that the winch needed some
repairs, which could be done in the
shop of Lundberg. It was then
stipulated that the amount
necessary for the repairs will be
advanced by Katigbak but
deductible from the initial payment
of P5,000.00. The repairs were
undertaken and the total of

P2,029.85 for spare parts was

advanced by Katigbak for the
purpose. For one reason or
another, the sale was not
consummated and Katigbak sued
Evangelista, Lundberg and the
latter's company, for the refund of
such amount.
Lundberg and Evangelista filed
separate Answers to the complaint,
the former alleging non-liability for
the amount since the same
(obligation for refund) was purely a
personal account between
defendant Evangelista and plaintiff
Katigbak. Lundberg asked P500.00
by way of actual and compensatory
damages and P5,000.00 as moral
damages, claiming that the filing of
the suit was malicious; that there is
a misjoinder because he is a
stranger in the case, not being a
party to the agreement between
Evangelista and Katigbak.
Evangelista, on his part, claimed
that while there was an agreement
between him and Katigbak for the
purchase and sale of the winch and
that Katigbak advanced the
payment for the spare parts, he
(Katigbak) refused to comply with
his contract to purchase the same;
that as a result of such refusal he
(Evangelista) was forced to sell the
same to a third person for only
P10,000.00, thus incurring a loss of
P2,000.00, which amount Katigbak
should be ordered to pay, plus
moral damages of P5,000.00 and
P700.00 for attorney's fees.
The lower court ruled in favor of
Katigbak. The Court of Appeals, on
the other hand, reversed the
judgment finding that it was
appellee (Katigbak) who committed
a breach of contract, it follows that
the present action was unjustified
and he must be held liable to
appellant Evangelista for attorney's
fees in the sum of P700.00. And
according to the evidence
appellant Lundberg was merely an
agent of his co-appellant, it is
obvious that he cannot be held
liable to appellee in connection
with the refund of the sum
advanced by the latter.
Issue:
Whether or not, the Court of
Appeals erroneously applied the
doctrine enunciated in the Hanlon
v. Hausserman case and failed to
apply the law relative to rescission
of contracts
Held:

No. The facts of the case under

consideration are identical to those
of the Hanlon case. The herein
petitioner failed to take delivery of
the winch, subject matter of the
contract and such failure or breach
was, according to the Court of
Appeals, attributable to him, a fact
which We are bound to accept
under existing jurisprudence. The
right to resell the equipment,
therefore, cannot be disputed. It
was also found by the Court of
Appeals that in the subsequent
sale of the winch to a third party,
the vendor thereof lost P2,000.00,
the sale having been only for
P10,000.00, instead of P12,000.00
as agreed upon, said difference to
be borne by the supposed vendee
who failed to take delivery and/or
to pay the price.
WHEREFORE, the petition is
dismissed, and the decision
appealed from is affirmed in all
respects, with cost against
petitioner.

Carumba vs CA
31 SCRA 558
February 18, 1970
Facts:
Spouses Amado Canuto and
Nemesia Ibasco sold an unregistered
parcel of land to spouses Amado
Carumba and Benita Canuto. The deed of
sale was never registered in the Office of
the Register of Deeds, and the Notary,
Mr. Vicente Malaya, was not then an
authorized notary public in the place.
On January 21, 1957, a complaint
was filed by Santiago Balbuena against
Amado Canuto and Nemesia Ibasco for a

sum of money. It was rendered in favor of

Balbuena. The sheriff issued a Definite
Deed of Sale of the property in favor of
Balbuena, which was registered in the
Register of Deeds in Camarines Sur. It
was declared for taxation purposes in the
name of Santiago Balbuena.
Issue:
Whether or not the registration of
the land in good faith prevails over
possession in the event of a double sale
by the seller to different buyers?
Ruling:
No. The reason is that the
purchaser of unregistered land at a
sheriffs execution sale only steps into
the shoes of the judgement debtor, and
merely acquires the latters interest in
the property sold as of the time the
property was levied upon
While the time of the levy does not
clearly appear, it could not have been
made prior to April 15, 1957 , when the
decision against the former owners of the
land was rendered in favor of Balbuena.
But the deed of sale in favor of CAnuto
had been executed two years before, on
12 April 1955, and while only embodied
in a private document, the same, coupled
with the fact that the buyer had taken
possession of the unregistered land sold
is sufficient to vest ownership on the
buyer.
ARTICLE 1544 of the Civil Code does not
in this case.

Consolidated Rural Bank vs CA

Facts: Rizal, Anselmo, Gregorio, Filomeno
and Domingo Madrid were the registered
owners of Lots situated in San Mateo
issued by the Register of Deeds of
Isabela in September 1956. They had the
lots subdivided and on 15 August 1957,
Rizal Madrid sold part of his share to
Aleja Gamiao and Felisa Dayag by virtue
of a Deed of Sale without objections from

his brothers as evidenced by their Joint

Affidavit dated 14 August 1957. The deed
of sale was not registered with the Office
of the Register of Deeds of Isabela but
Gamiao and Dayag declared the property
for taxation purposes in their names.
On 28 May 1964, Gamiao and Dayag sold
the southern half to Teodoro dela Cruz
and the northern half to Restituto
Hernandez. Both took possession of and
cultivated the portions of the property
respectively.
In a Deed of Sale dated 15 June 1976, the
Madrid brothers conveyed all their rights
and interests over to Pacifico Marquez.
The deed of sale was registered with the
Office of the Register of Deeds of Isabela
on 2 March 1982.
This is where the issue of having two
sales of the same real property
happened.
Marquez and wife had the lots subdivided
and mortgaged some property to the
Consolidated Rural Bank to cover a loan
of 100,000 pesos and also to the Rural
Bank of Cauayan to secure a loan of
10,000 pesos. He also sold a lot but later
repossessed it from Romeo Calixto.
Evangeline del Rosario, the successor-ininterest of Restituto Hernandez, together
with the heirs of Teodoro dela Cruz filed
their complaints to nullify the mortgages
and sale on the property where their part
of the lot was concerned with
conveyance of the land in their favor and
a reward of damages. Later del Rosario
was no longer a standing appellant as
she failed to pay the docket fees.
Issue: Whether or not the first sale is
void? Whether or not the second sale is
void?
Held: The second sale was void.
Article 1544 of the Civil Code states in
double sale that should it be
immovable property, the ownership shall
belong to the person acquiring it who in
good faith first recorded it in the Registry
of Property
The provision is not applicable in the
present case. It contemplates a case of
double or multiple sales by a single
vendor. Subject property was not
transferred to several purchasers by a
single vendor. In the first deed of sale,
the vendors were Gamiao and Dayag
whose right to the subject property
originated from their acquisition thereof
from Rizal Madrid with the conformity of
all the other Madrid brothers.
It is an established principle that no one
can give what one does not have (nemo
dat quod non habet.) The Madrid
brothers were no longer the owners of
the subject property so at the time of the
second sale to Marquez, the latter did not
acquire any right to it. In any event,

assuming arguendo that Article 1544

applies to the present case, the claim of
Marquez still cannot prevail over the right
of the Heirs since according to the
evidence he was not a purchaser and
registrant in good faith. The same applies
to the banks as they should have
exercised the proper diligence in
inspecting the property.
Marquez also admitted that he did not
take possession of the property and at
the time he testified he did not even
know who was in possession. The rule of
caveat emptor requires the purchaser to
be aware of the supposed title of the
vendor and one who buys without
checking the vendors title takes all the
risks and losses consequent to such
failure.
While certificates of title are
indefeasible, unassailable and binding
against the whole world, they merely
confirm or record title already existing
and vested. They cannot be used to
protect a usurper from the true owner,
nor can they be used for the perpetration
of fraud; neither do they permit one to
enrich himself at the expense of others.

Dagupan Trading vs Macam

FACTS:
Sammy Maron and his seven brothers
and sisters were pro-indiviso owners of a
parcel of unregistered land located in
barrio Parayao, Binmaley, Pangasinan. In
1955, while their application for
registration of said land under Act No.
496 was pending, they executed, on June
19 and on September 21, two deeds of
sale conveying the property to herein
respondent Rustico Macam who
thereafter took possession of the
property and made substantial
improvements upon it. On October 14,
1955, OCT No. 6942 covering the land
was issued in the name of the Marons,
free from all liens and encumbrances.
On August 4, 1956, however, by virtue of
a final judgment of the Municipal Court of
Manila in a civil case in favor of Manila
Trading and Supply Co. (Manila Trading)
against Sammy Maron, levy was made
upon whatever interest he had in the
subject property. Thereafter, said interest
was sold at public auction to the
judgment creditor Manila Trading. The
corresponding notice of levy, certificate
of sale and the sheriff's certificate of final
sale in favor of Manila Trading - because
nobody exercised the right of redemption
- were duly registered, and on March 1,
1958, the latter sold all its rights and title
in the property to herein petitioner
Dagupan Trading Company (Dagupan
Trading).
On September 4, 1958, Dagupan Trading
filed an action against Macam, praying
that it be declared owner of one-eighth
portion of the subject property. The CFI of
Pangasinan dismissed the said complaint,
and the Court of Appeals affirmed its
decision.
ISSUE: Who has the superior right over
the one-eight portion of the subject
property?
COURT RULING:
The Supreme Court likewise affirmed
both decisions of the lower courts. At the
time of the levy, Sammy Maron already
had no interest on the one-eight portion
of the property he and his siblings have
inherited because for a considerable time
prior to the levy, said interest had
already been conveyed upon Macam
"fully and irretrievably" - as the Court of
Appeals held. Consequently, the
subsequent levy made on the property
for the purpose of satisfying the
judgment rendered against Sammy
Maron in favor of the Manila Trading
Company was void and of no effect.

The unregistered sale and the

consequent conveyance of title and
ownership in favor Macam could not have
been cancelled and rendered of no effect
upon the subsequent issuance of the
Torrens title over the entire parcel of
land. Moreover, upon the execution of
the deed of sale in his favor by Sammy
Maron, Macam had immediately taken
possession of the land conveyed as its
new owner and introduced considerable
improvements upon it himself. To deprive
him, therefore, of the same by sheer
force of technicality would be against
both justice and equity.

Carbonell vs. Court of Appeals, and

Poncio
69 SCRA 99
January 1976
FACTS:
On January 27, 1955, respondent Jose
Poncio executed a private memorandum
of sale of his parcel of land with
improvements situated in San Juan, Rizal
in favor of petitioner Rosario Carbonell
who knew that the said property was at
that time subject to a mortgage in favor
of the Republic Savings Bank (RSB) for
the sum of P1,500.00. Four days later,
Poncio, in another private memorandum,
bound himself to sell the same property
for an improved price to one Emma
Infante for the sum of P2,357.52, with
the latter still assuming the existing
mortgage debt in favor of the RSB in the
amount of P1,177.48. Thus, in February
2, Poncio executed a formal registerable
deed of sale in her (Infante's) favor. So,
when the first buyer Carbonell saw the
seller Poncio a few days afterwards,
bringing the formal deed of sale for the
latter's signature and the balance of the
agreed cash payment, she was told that
he could no longer proceed with
formalizing the contract with her
(Carbonell) because he had already
formalized a sales contract in favor of
Infante.
To protect her legal rights as the first
buyer, Carbonell registered on February
8, 1955 with the Register of Deeds her
adverse claim as first buyer entitled to
the property. Meanwhile, Infante, the
second buyer, was able to register the
sale in her favor only on February 12,
1955, so that the transfer certificate of
title issued in her name carried the duly
annotated adverse claim of Carbonell as
the first buyer. The trial court declared
the claim of the second buyer Infante to
be superior to that of the first buyer
Carbonell, a decision which the Court of
Appeals reversed. Upon motion for
reconsideration, however, Court of
Appeals annulled and set aside its first
decision and affirmed the trial courts
decision.
ISSUE: Who has the superior right over
the subject property?
COURT RULING:

The Supreme Court reversed the

appellate courts decision and declared
the first buyer Carbonell to have the
superior right over the subject property,
relying on Article 1544 of the Civil Code.
Unlike the first and third paragraphs of
said Article 1544, which accord
preference to the one who first takes
possession in good faith of personal or
real property, the second paragraph
directs that ownership of immovable
property should be recognized in favor of
one "who in good faith first recorded" his
right. Under the first and third
paragraphs, good faith must characterize
the prior possession, while under the
second paragraph good faith must
characterize the act of anterior
registration.

BERNARDO
VALDEVIESO, petitioner, vs.
CANDELARIO DAMALERIO AND
AUREA C. DAMALERIO, respondents.
G.R. No. 133303. February 17, 2005
Facts
Note: take note of the dates.
On 05 December 1995, Petitioner
(Bernardo Valdevioso) bought from
Spouses Lorenzo and Elenita Uy a
parcel of land consisting of 10000
Sq. meters located in Tambler,
General Santos

The deed of sale was NOT

registered, nor was the title of
the land transferred to
petitioner.

On 07 December 1995, petitioner

declared said property for tax
purposes with the City Assessors
Office.

In April 1996, Respondents

(Candalerio and Aurea Damalerio)
filed with the RTC of General
Santos a complaint for a sum of
money against spouces Lorenzo
and Elenito with an application for
the issuance of a writ of
preliminary attachment.

The court issued the writ and said

property was levied. Said Levy was
recorded in the RoD and annotated
on the TCT.

On June 1996, the TCT under

Lorenzo Uy was cancelled and a
new one was issued for petitioner.
On August of the same year,
petitioner filed a third party claim
to discharge or annul the
attachment on the property on the
ground that UY was no longer the
owner.

The trial court ruled that the writ of

attachment was UNLAWFUL since
the property was already sold to
petitioner.

The CA reversed declaring the

attachment or levy of execution
though POSTERIOR to the sale, but
if registered before the sale is
registered, takes precedence over
the sale. THE WRIT OF
ATTACHMENT BEING RECORDED
AHEAD OF THE SALE TO
PETITIONER TAKES PRECEDENCE
(valid).

Petitioner maintains that his right

to the property is superior because
said property was attached on
1996 when it was already sold to
him on 1995. Thus, ownership was
transferred to him (petitioner) by
virtue of Art. 1498. That the delays
in registering the property or at
least an adverse claim was not his
fault but due to the DAR clearance
and other requirements prior
thereto.

Respondents argue that

registration is the OPERATIVE ACT
that binds the land and creates a
lien thereon. That before said acts,
the property is not bound in so far
as THIRD PERSONS ARE concerned.
The writ of attachment enjoys
preference because it was
registered EARLIER than the deed
of sale of petitioner.

Respondents further argue that Art.

1477 and 1498 is not applicable
since said provisions only apply
between parties.

Petitioner moved for an MR but was

denied hence PfR on Certiorari.

Issue: WON the writ of attachment on the

land is a superior lien over that of an
earlier unregistered deed of sale
Ruling: Yes.
The writ of attachment enjoys preference
over a prior unregistered sale.
The law applicable to the case is Section
51 of P.D. No. 1529
Sec. 51. Conveyance and
other dealings by registered owner.
- An owner of registered land may
convey, mortgage, lease, charge,
or otherwise deal with the same in
accordance with existing laws. He
may

The act of registration

shall be the operative act to
convey or affect the land
insofar as third persons are
concerned, and in all cases
under this Decree, the
registration shall be made in
the office of the Register of
Deeds for the province or city
where the land lies.
the subject land was deeded to petitioner
as early as 05 December 1995, it was
not until 06 June 1996 that the
conveyance was registered, in
between, the land was subjected to a
levy on attachment. At the time of the
attachment of the property on 23 April
1996, the spouses Uy were still the
registered owners of said property.
Insofar as third persons are concerned,
what validly transfers or conveys a
persons interest in real property is the
registration of the deed. Thus, when
petitioner bought the property on 05
December 1995, it was, at that point, no
more than a private transaction between
him and the spouses Uy. It needed to
be registered before it could bind
third parties, including respondents.
When the registration finally took place
on 06 June 1996, it was already too
late because, by then, the levy in
favor of respondents, pursuant to the
preliminary attachment ordered by the
General Santos City RTC, had already
been annotated on the title.
The settled rule is that levy on
attachment, duly registered, takes
preference over a prior unregistered sale.
This result is a necessary consequence of
the fact that the property involved was
duly covered by the Torrens system
which works under the fundamental
principle that registration is the operative
act which gives validity to the
transfer or creates a lien upon the
land.
notes:

The levy on attachment is not diminished

even by the subsequent registration of
the prior sale. This is so because an
attachment is a proceeding in rem. It is
against the particular property,
enforceable against the whole world. The
attaching creditor acquires a specific lien
on the attached property which nothing
can subsequently destroy except the
very dissolution of the attachment or
levy itself.
The lien continues until the debt is paid,
or sale is had under execution issued on
the judgment, or until the judgment is
satisfied, or the attachment discharged
or vacated in some manner provided by
law.

Petitioner acquired ownership of the land

only from the date of the recording of his
title in the register, and the right of
ownership which he inscribed was not
absolute but a limited right, subject to a
prior registered lien of respondents, a
right which is preferred and superior to
that of petitioner.

then sold it to Melencio Manansala with

right to repurchase within a period of one
year. Upon expiration of the one-year
period, Manansala consolidated his title
over the property. This was in 1946. In
1947, Viloria sold the property to Ciriaco
Casio, Fidela Valdez, and to spouses
Ariston Andaya and Micaela Cabrito,
which had warranty of title. Manansala
sold the same property to the same
group which sale also contained a
warranty of title and against eviction.
This sale was registered in 1948.
However, before the sale was made,
Llanes had already brought an action
against Andaya et al. for the recovery of
the property. The court ruled in favor of
Llanes and the judgment becoming final,
a writ of execution was issued and as a
result, properties of Andaya et al. were
attached and sold at public auction. In
1956, Andaya et al. brought an action
against Manansala.
ISSUE
1 Can Manansala be liable for
warranty against eviction?
2 Can the contract of sale entered
into between Manansala and
Andaya et al. be rescinded?

Andaya vs Manansala
ARISTON ANDAYA, ET AL., plaintiffsappellees,
vs.
DR. MELENCIO MANANSALA, defendantappellant
G.R. No. L-14714

April 30, 1960

FACTS
In 1934, Isidro Fenis sold a parcel of Land
to Eustaquia Llanes with right to
repurchase within a period of 5 years.
After expiration of said period, and
without redeeming the property, Fenis
sould the property to Maria Viloria, who

HELD
1 No, vendor is not liable for
warranty against eviction. The
vendors liability against eviction is
waivable and maybe renounced by
vendee. (Art. 1548, NCC) In the
case at bar, while there was a
stipulation regarding warranty
against eviction, it was only pro
forma and, therefore Manansala
cannot be bound by it. Andaya et
al. bought the property from
Viloria, then same property was
bought again from Manansala so
that Manansala can register his
prior deed of sale. The property in
question was also a subject of
litigation since Llanes instituted a
civil case to quiet the title by virtue
of an earlier sale from the original
owner. Through the final judgment,
Andaya was evicted from said land.
Since there was no appeal, it was
inferred that the warranty was
renounced and he knew he
consequences.
2 The remedy of rescission
contemplates that the one
demanding it is able to return
whatever he has received under
the contract, and when this cannot
be done, rescission cannot be
carried out (Art. 1385, NCC). It is
for this reason that the law on sales
does not make rescission a remedy

on case the vendee is totally

evicted from the thing sold. It is
only when the vendee loses a part
of of the thing sold of such
importance, in relation to the
whole, that he would not have
purchased it without said part that
he may ask for rescission, but he
has the obligation to return the
thing without other encumberances
than those which it had when he
acquired it (Art. 1566, NCC). Thus,
Manansala is not obliged to restore
the purchase price to Andaya et al.
Andaya et al. assumed the risk of
eviction which stops them asking
for rescission.

Facts:
On the 29th of April, 1905, the plaintiffs
in this action sold to Antonio Ventenilla,
since deceased, a parcel of land for the
sum of P350, expressly reserving a right
to repurchase under and in accordance
with the terms of the deed of sale.
The written contract contained the
following stipulation:
We also set forth that one of the
promises we have made to Don Antonio
is that we will repurchase this land at the
same price; neither of us make any
stipulation as to interest on the money or
the products of the land, but in the
month of March of any year, if we
repurchase.
The vendors offered to repurchase in the
month of March, 1913, but this offer was
declined on the ground that the right to
repurchase had prescribed: a contention
which is renewed by the defendant in this
action, who is the widow of original
vendee, deriving title through him.
The court below was of opinion that the
right to repurchase expired at the end of
four years from the date of the contract,
relying in support of this ruling on the
provisions of article 1508 of the Civil
Code, which are as follows:
The right mentioned in the
preceding article (right to
repurchase), in the absence of an
express agreement, shall last four
years counted from the date of the
contract.
In case of stipulation, the period of
redemption shall not exceed ten years.
Issue:
Whether the provision of Article 1508 of
the Civil Code applies, where there is an
expressed stipulation in the contract.
Held:

Bandong vs. Austria

31 Phil 749

manifestly, the statutory limitation upon

the right of repurchase to a period of four
years is not applicable to the contract
under consideration, that limitation being
applicable only to cases wherein there is
no express agreement touching the date
of redemption. We conclude, therefore,
that the provisions of the contract of
sale, whereby the parties undertook by
express agreement to secure to the
vendors a right to repurchase in the
month of March of any year after the
date of the contract, were valid and
binding upon the parties for a period of

ten years from the date of the contract

but wholly without force and effect
thereafter. It is admitted that the vendors
offered to repurchase the land in
question in the month of March, 1913,
less than eight years from the date of the
contract. This they had a perfect right to
do,

Alojado vs. Lim Siongco

G.R. No. L-27084
December 31, 1927
Doctrine: What characterizes a contract
or antichresis is that the creditor acquires
the right to receive the fruits of the
property of his debtor with the obligation
to apply them to the payment of
interests, if any is due, and then to the
principal of his credit.
FACTS:
-Juana Mabaquiao sold the land-indispute described in the complaint to
Nicolas Alegata
-Nicolas
Alegata
died.
Settlement
proceedings of his estate was instituted,
his property, which included the land-indispute was adjudicated to Lim Kang
Sang and Lim Eng Teeng, his only heirs.
-Lim Kang and Lim Eng sold the land to
Lim Ponso & Co., with the right to
repurchase for the period of one year
Period expired without this
right having exercised.
-Lim Ponso & Co. transferred this land
unconditionally to Lim Siongco and Lim
Kingko.
-Juana
Mabaquiao
dies.
Intestate
proceedings took place and Ambrosio T.
Alojado was appointed administrator.
-Ambrosio, as administration, brought
this action against Lim Sionco, Lim
Kingko and Lim Ponso & Co. prays that he
be declared the absolute owner of this
land with the improvements thereon, and
that the defendants be ordered to restore
and respect his right of ownership,
possession and usufruct of the property;
-TC: in favor of Lim Sionco, Lim Kingko,
Lim Ponso &Co
-Ambrosio contends that the contract
executed by Juana Mabaquiao with
Nicolas Alegata was not a contract of
sale with the right to repurchase, but a
contract or antichrises
ISSUE:
WON the contract was a contract of
antichresis or contract of sale with right
to redemption? Contract of sale with right
to remdemption
HELD:

The terms of the contract it is clearly a

sale with the right to repurchase. It
speaks in unequivocal terms of a sale
and the conveyance of land with the right
to repurchase, and the character of the
contract is that of a sale with the right to
repurchase.
The
contract
is
very
defective in its wording, especially so
where it refers to the period within which
to exercise the right to repurchase. But
examining it as a whole, it clearly
appears that it was the parties' intention
that the vendor could repurchase the
land without delay when he had the
means to pay the purchase price.

EN BANC
G.R. No. L-27084 December 31, 1927

What characterizes a contract or

antichresis is that the creditor acquires
the right to receive the fruits of the
property of his debtor with the obligation
to apply them to the payment of
interests, if any is due, and then to the
principal of his credit. Nowhere in the
contract in question does this character
of a contract of antichresis appear. The
only substantial thing agreed upon
between the parties was that Juana
Mabaquiao could repurchase the land
when she had the means.

SIDE ISSUE: Whether or not the title to

the land conveyed by Juana Mabaquiao
has been consolidated.?
YES. This action was brought in January,
1922, fifteen years after the contract was
entered into.
The contract fixes the period for the
exercise of the right of redemption until
Juana Mabaquiao, or her heirs has the
means. Whether or not this is considered
a period, it is clear that the title
transmitted to Nicolas Alegata has been
consolidated.
According to article 1508 of the Civil
Code, when no period of redemption is
fixed it shall last four years, and it is
fixed, it shall not exceed ten years. The
right of redemption not having been
exercised the period of ten years, the
title of Nicolas Alegata, or his heirs, has
by this fact alone been consolidated any
events.

AMBROSIO T. ALOJADO, as administrator

of the intestate estate of the deceased
Juana Mabaquiao, Plaintiff-Appellant, vs.
M. J. LIM SIONGCO, ET AL., DefendantAppellees.
Araneta and Zaragoza for appellant.
Soriano and Nepomuceno for appellees.
AVANCEA, C. J.:
On October 12, 1907 Juana Mabaquiao
sold the land described in the complaint
to Nicolas Alegata for the sum of P7,744.
After the death of Nicolas Alegata,
proceeding for the settlement of his
estate was instituted, and on October 23,
1913 his property, which included that
purchased from Juana Mabaquiao, was
adjudicated to Lim Kang Sang and Lim
Eng Teeng, his only heirs. On November
11, 1913 they sold this land to Lim Ponso
& Co., with the right to repurchase for the
period of one year, which period expired
without this right having exercised. On
February 15, 1918 Lim Ponso & Co.
transferred this land unconditionally to
Lim Siongco and Lim
Kingko.chanroblesvirtualawlibrary
chanrobles virtual law library
Upon the death of Juana Mabaquiao,
proceeding for the settlement of her
intestate estate were also instituted in
which Ambrosio T. Alojado was appointed
administrator. The latter, in said capacity,
now brings this action against Lim
Sionco, Lim Kingko and Lim Ponso & Co.
and prays that he be declared the
absolute owner of this land with the
improvements thereon, and that the
defendants be ordered to restore and
respect his right of ownership, possession
and usufruct of the property; and,
moreover, that other pronouncements be
made as prayed for in his complaint. The
court absolved the defendants from the

complaint and plaintiff appealed from

this judgment.
The plaintiff contends that the contract
executed by Juana Mabaquiao with
Nicolas Alegata on October 12, 1907 was
not a contract of sale with the right to
repurchase, but a contract or antichrises.
This contention is untenable. From the
terms of the contract it is clearly a sale
with the right to repurchase. It speaks in
unequivocal terms of a sale and the
conveyance of land with the right to
repurchase, and the character of the
contract is that of a sale with the right to
repurchase. The contract is very
defective in its wording, especially so
where it refers to the period within which
to excercise the right to repurchase. But
examining it as a whole, it clearly
appears that it was the parties' intention
that the vendor could repurchase the
land without delay when he had the
means to pay the purchase price. What
characterizes a contract or antichresis is
that the creditor acquires the right to
receive the fruits of the property of his
debtor with the obligation to apply them
to the payment of interests, if any is due,
and then to the principal of his credit.
Nowhere in the contract in question does
this character of a contract of antichresis
appear. The only substantial thing agreed
upon between the parties was that Juana
Mabaquiao could repurchase the land
when she had the means. The decision of
this court in the case of De la Vega vs.
Ballilos (34 Phil., 683), which the
appellant invokes in support of his
contention, is in no way applicable. The
case dealt with a contract called
mortgage by the parties and the court
held that in reality it was contract of
antichresis. But in the contract in that
case it was agreed that the debtor
assigned and transfer the ownership and
possession of the land to the creditor for
his management and enjoyment as a
profit from the amount for which it had
been mortgaged. This agreement, which
characterizes the contract of antichresis,
does not exist in the instant case.
An attempt was made, by the testimony
of Eulogia Espanola, Juana Mabaquio's
granddaughter, to prove that the
contract entered into between Juana
Mabaquiao and Nicolas Alegata, was that
Mabaquiao, or any of her heirs, might
recover possession of the land any time
upon the payment of P7,744, and that
while this remained unpaid the land
would continue in the possession of
Nicolas Alegata, with the obligation to
deliver one-fifth of the products
therefrom to Mabaquiao. Eulogia
Espanola testified having been present
when the contract was entered into.

Against this declaration the witness

Vicente Gomez was presented, who also
stated that he was present at the time
the contract was entered into and
contradicted Eulogia Espanola's
testimony and, furthermore, stated that
the latter was not present then. The
evidence is of such a character as not to
justify in any manner the alteration of the
clear terms of the document in the
sentence that it expresses a contract of
sale.
This action was brought in January, 1922,
fifteen years after the contract was
entered into. This being a sale with the
right to repurchase, the question, after
this lapse of time, is reduced to whether
or not the title to the land conveyed by
Juana Mabaquiao has been consolidated.
The contract, as been noted, fixes the
period for the exercise of the right of
redemption until Juana Mabaquiao, or her
heirs has the means. Whether or not this
is considered a period, it is clear that the
title transmitted to Nicolas Alegata has
been consolidated. According to article
1508 of the Civil Code, when no period of
redemption is fixed it shall last four
years, and it is fixed, it shall not exceed
ten years. The right of redemption not
having been exercised the period of ten
years, the title of Nicolas Alegata, or his
heirs, has by this fact alone been
consolidated any events.
Considering the case from this point of
view, the appellant argues that, as it was
never intention of the parties that, after a
certain period, the land could not be
repurchased by the vendor, the contract
cannot be one of sale with the right to
repurchase, because it conflicts with the
nature of this contract, essential of which
is the right of the purchaser to
consolidate his title immediately after the
period of redemption has passed.
Another contention of the appellant is
that if the right of redemption in this case
is considered null after ten years, this
nullity must likewise affect the sale itself.
These questions have been resolved by
this court in the case of Yadao vs. Yadao
(20 Phil., 260). In that case the contract
contained a stipulation that the vendor
repurchase the land any time he had the
money, it being understood that he could
not exercise this right of redemption after
ten years, and not having done so within
that period, the court held that the
vendor irrevocably acquired title to the
land. In that case, notwithstanding the
fact that the right of redemption after ten
years had been declared null, the sale
itself however, was considered valid and
the title acquired thereunder
consolidated; and that is because the
stipulation to repurchase is accidental to

a sale and may be made at the will of the

parties. A contract of absolute sale may
be made without this stipulation. It
seems logical that if this stipulation is
made and it is declared, null, its nullity
cannot affect the sale first since the
latter might be entered into without said
stipulation.
The judgment appealed from is affirmed,
with the costs against the appellant. So
ordered.
Johnson, Street, Malcolm, Villamor, Johns,
Romualdez and Villa-Real, JJ. concur.

above described from which he can

remove earth for the sole and
exclusive use of his earthen jar
factory when the same is
established.
Issue: Whether the parties had a period
stipulated in the right to repurchase
Held: Article 1508 of the Civil Code states
that the right to repurchase, absent of
any agreement , last four years and, in
case of stipulation, does not last more
than ten years.
A term means a period of time within
which an act many, or must, be
performed or a fact take place. Applied to
the right of repurchase, it is the time
within which this right may be exercised.
It necessarily involves a beginning and
an end of time.
In the case at hand, the vendor reserved
the right to redeem the land when he
might have an earthen jar factory. It is
the establishment of the factory which
gives birth to the right to repurchase.
What is really stipulated in the clause is
the suspension of the right of repurchase
until the earthen jar factory has been
established. The parties did not establish
any time to exercise the right to
repurchase, and according to the article
it should last four years, which has
already expired.

MEDEL V. FRANCISCO
51 PHIL 367; G.R. No. L-

27891

Facts: Carlos Francisco sold his land to

Telesforo Calasan, with right to
repurchase on May 1917. Calasan also
sold the land to Medel on December
1926.
Medel brought to court an action to
compel the Register of Deeds to cancel
the notation of the right to repurchase for
the reason that the time has already
expired. Medel contends that the period
to exercise the right is four years, while
Francisco claims that it is 10 years. The
stipulation is noted in the title in the
following terms:
This sale is made with the
condition that the vendor Carlos N.
Francisco reserves the right to
repurchase, at the cost price of this
sale, a fourth part of the land

Baluyot vs Venegas
Facts: Crisanto Baluyot sold land Eulogio
E. Venegas executed on July 24, 1951
which contained a provision for
repurchase that stipulated Any time
after the expiration of the period of theft
(10) years to be computed from October
1, 1951 the Vendor, his heirs or
successors-in-interest has the option and
priority to purchase the a fore described
parcel of land for the same consideration
of P4, 000.

Art. 1606 of the Civil Code states the

right to repurchase may be expressly
stipulated in the contract provided it shall
not exceed 10 years.
The heirs of Baluyot then tried to
repurchase the property on July 18, 1963,
12 years after the sale. Venegas
contested.
Issue: Whether or not the stipulation
extending the right to repurchase to
more than 10 years contained in the
contract mentioned is enforceable.
Held: No, it is not. There may be the
obligatory force of obligation arising from
contract (Art. 1159 Civil Code). But the
same code provides in Article 1306 that
while the contracting parties are free to
establish any claims or conditions they
may deem advisable, the same must not
be contrary to law, morals, good
customs, public order or public policy.
The stipulation runs contrary to the 10
year limitation of Art 1606 of the Civil
Code, making the obligation illicit.

EN BANC
1959.]

spouses an additional amount of P800.00 on condition

that it should be covered by the same deed of sale with
right to repurchase.
On February 20, 1948, Rufino Ceynas instituted an
action before the Court of First Instance of Pangasinan
for the purpose of having said deed of sale declared as a
simple mortgage and of compelling the spouses to
accept payment of the equivalent value of the original
amount taken by them in Japanese notes thereby
declaring their obligation to have been paid in full. This
action however was dismissed without prejudice on the
ground that it was premature.
On May 12, 1953, Rufino Ceynas again filed an action
before the same court wherein he reiterated his prayer
that the deed with right to repurchase which he and his
brothers and sisters had executed on February 22, 1944
be declared as simpled mortgage and that he be allowed
to pay the original amount taken by them in its
equivalent value under the Ballantyne Schedule and,
once paid, the mortgage be deemed cancelled and
released. This complaint was amended on February 3,
1955 by including therein the other brothers and sisters
who had taken part in the transaction. In the original, as
well as in the amended complaint, only Pamfilo Ulanday
was made party defendant who, in due time, answered
both pleadings setting up the defense that the contract
entered into between him and the plaintiffs is one of sale
with right to repurchase and not an equitable mortgage
and that they had failed to exercise their right of
redemption within the period stipulated.
Issue: what is the nature of the contact between the
parties, was it a mortgage or deed of sale?
WON the vendors can still repurchased their
land?
Ruling: A contract of sale because by examining the
document Exhibit A, we find that appellants made the
following statements: In consideration of the sum of
P2,200.00, we "do by these presence, sell, cede and
convey by way of Sale With Right of Repurchase to the
said spouses, Panfilo Ulanday and Simplicia Fabia, their
heirs or assigns, all of our shares, interests and
participations in the following described land; . . . that we
reserve the right to repurchase said shares, interest and
participations in said lands within a period of TEN (10)
YEARS from the date hereof; . . . and we warrant the
peaceful possession, enjoyment and temporary
ownership of our conditional vendees within the life of
this agreement." These terms can only indicate that the
intention of the parties was to enter into a contract of
sale with right to repurchase and not an equitable
mortgage.
Yes, Article 1606, paragraph 3, of the new Civil
Code may apply to appellants and, therefore, they may
be allowed to still exercise the right of redemption within
thirty (30) days from the time the judgment may become
final. To this effect, we hold that not only Rufino Ceynas
but also his co-appellants can exercise the right to
redeem their shares in the property in question upon
payment of their respective shares in the repurchase
price, payment of which shall be made in accordance
with
the
present
currency.

[G.R. No. L-12700. June 29,

RUFINO CEYNAS, ET AL., Plaintiffs-Appellants, v.

PAMFILO ULANDAY, Defendant-Appellee.
Facts: On February 22, 1944, Rufino Ceynas and his
siblings executed a deed of sale with right to repurchase
within 10years, their shares and participation in six
parcels of land situated in San Fabian, Pangasinan for
P2,200.00 to spouses Pamfilo Ulanday and Simplicia
Fabia. In July, 1944, the siblings obtained from the

GAVINA PEREZ, ET AL. vs. JOSE C.

ZULUETA,
Appeal from an order requiring defendant
to permit plaintiffs to repurchase their
land.
Facts:

On December 27, 1959, Magtangol

P. Pedro et. al. sold a parcel of land
in Quezon City to Jose C. Zulueta
for P10,000.00 subject to their right
to repurchase within one year.
Zulueta took steps to consolidate
his title to the land in January 1952
since the vendors failed to
repurchase at the specified time.
This gave rise to a suit in the
Quezon City Court of First Instance
wherein the vendors alleged that
the contract is a mortgage
disguised a pacto de retro sale, and
asked for a declaration to that
effect plus other appropriate
remedies.
Defendant asserted the contract
was a true pacto de retro.
After hearing, the CFI held the
contract to be mortgage.
But on appeal, the Court of Appeals
reversed and held the contract to
be a true pacto de ratro sale,
however, it added "without
prejudice to the vendors right to
make the repurchase in accordance
with paragraph 3 of Art. 1606 of
the New Civil Code".
The vendors applied for review on
certiorari, but were denied and at
no time move to reconsider.
On August 2, 1955, defendant
renewed his efforts to consolidate
his title by filing a petition alleging
that the plaintiffs had failed to
exercise their reserved right to
repurchase within thirty days.
The vendors opposed the claim,
maintaining that the 30-day period
had not yet elapsed and demanded
from defendant the reconveyance
and offering to repay the price of
the property which Zulueta
refused.
Vendors filed a petition that
Zulueta be required to reconveyto
which Hon. Judge Hermogenes
Caluag granted.
Zulueta was ordered to execute a
deed of reconveyance over the
parcel of land in favor of the
Gavina Perez, et al. within five days
from receipt of the order.
Upon compliance, he may withdraw
the P10, 000.00 deposited with the
court.
Failure or refusal to do such within
the period stated, the Clerk of
Court is ordered to hold the
P10,000.00 subject to the
disposition of Mr. Zulueta, and the
Register of Deeds of Quezon City
had been ordered to cancel the
annotation of encumbrance made

and appearing on Transfer

Certificate of Title No. 8762.
Zulueta appealed to such order.

Issues:
1. Whether or not, the transaction
was a pacto de retro sale or a
mortgage?
2. Whether or not, the counting of
such 30-day period started from
June 24, 1955, when this Supreme
Court upheld by appellate court's
decision or on July 15, 1955, after
the day the resolution of June 24
became final.
3. Whether or not, Perez, et. al. have
the right to repurchase the
property.
Held:
1. Yes. Art. 1606 of the New Civil Code
has been construed to mean that
after the courts have decided by a
final or executory judgment that
the contract is a pacto de retro and
not a mortgage, the vendor (whose
claim as mortgagor has definitely
been rejected) may still have the
privilege of repurchasing within 30
days.
If the Quezon court of first instance
had declared the contract to be a
pacto de retro, the 30-day period
would begin from the promulgation
of the judgment there, because
such judgment was "final"
(appealable) not interlocutory. If
such were the correct view, Art.
1606 would place the vendors in
the difficult position of having to
decide either to appeal within 30
days or to repurchase. The framers
of the Code could not have had
such intention. They could not have
meant to give the vendor the
privilege to repurchase in
exchange for his right to bring the
matter before a higher court. The
litigant who alleged he was a mere
mortgagor might not agree to the
court's finding that he was a
vendor, and might insist that he
was a mere mortgagor before a
higher court. Until that tribunal
decides against him, he is not duty
bound to consider himself a vendor.
2. Manresa believes and holds that
final judgment in these articles
imply a judgment that has become
final and executory.2 And
"sentencia firme" in Spanish (that
is the word in Arts. 1475 and 1480
of the Civil Code3 refer to binding,

conclusive judgment.4 Needless to

add, if in previous articles "final
judgment" signify a judgment that
has become final, it should have
the same meaning in subsequent
articles in the same Code.
American courts have held that
although "final" is often used with
"Judgment" to distinguish it from
interlocutory judgment, "final
judgment" is also used to describe
a determination effective to
exclude further proceedings in the
same cause by appeal or
otherwise, particularly where time
within which to act is limited to run
"from judgment."
It is, therefore, our opinion on this
phase of the litigation, that the 30day period within which the
vendors (plaintiffs) could exercise
their right to repurchase started to
run on July 15, 1955, when the
resolution of this Court of Appeals
became final.
3. The New Civil Code, Art. 1606,
gives the vendor a retro "the right
to repurchase within thirty days
from the time final judgment was
rendered in a civil action, on the
basis that the contract was a true
sale with the right reserved to the
plaintiffs (Pedro and others) in the
decision of the Court of Appeals.
NOTE:
PACTO DE RETRO SALE
- the title and ownership of the
property sold is immediately
vested in the vendee a retro,
subject to the restrictive condition
of repurchase by the vendor a retro
within the period provided in Article
1606 of the New Civil Code, to wit:
The failure of the vendee a retro to
repurchase the property vests upon
the latter by operation of law the
absolute title and ownership over
the property sold)

G.R. No. L-32670 December 29, 1977

ARSENIO GERARDINO, SR., VIRGINIA
GERARDINO SY, ANGELINA GERARDINO
GUMBA, and CORAZON GERARDINO
LEGAYADA, petitioners,
vs.
THE HONORABLE JUDGE, COURT OF
FIRST INSTANCE (BR. III), CAPIZ and
JOVITO GLORIA,respondents.
Manuel P. Beaniza for petitioners.
Francisco D. Firmalino for private
respondent.
FACTS:
On July 12, 1966, Jovito Gloria, private
respondent herein, instituted against Rosario
Artuz Civil Case No. M-79 in the Court of First
Instance of Capiz for consolidation of
ownership of a parcel of land.
The complaint stated that on October 10,
1964 Rosario Artuz executed in favor of
Jovito Gloria a deed of sale with right to
repurchase within a period of one (1) year of
a parcel of residential land located in
Poblacion, Tapaz, Capiz, containing an area
of 750 square meters and embraced in Tax
Declaration No. 3516 for a consideration of
P2,025.00; that the defendant allegedly
failed to exercise her right to repurchase
within the stipulated period; that the plaintiff
had been in possession of the property
immediately after the execution of the
document; and that said plaintiff had been
paying the taxes thereon. 2
In her answer the defendant Rosario Artuz
admitted the existence of the deed of sale
with right to repurchase but denied the
legality and genuineness thereof and alleged
as affirmative defenses that the document in
question was an equitable mortgage, the real
intention of the parties being merely to
secure the payment of a loan in the amount
of P2.025.00; that the defendant, who was
then deaf. totally blind and senile, did not
understand English and was made to affix
her thumbmark on the alleged deed of sale
with right to repurchase upon representation
of the plaintiff that the same was a mere
equitable mortgage; that the defendant had
remained in possession of the property in
question and had been paying the taxes
thereon that a tender of payment was made
by defendant to the plaintiff on or before

October 10, 1965 to repurchase the property

but plaintiff refused to accept the amount of
P2,025.00 because he was asking for a much
bigger amount of P6,000.00; that by reason
of such refusal, the defendant consigned the
amount of P2,025.00 with the court; and that
the actual amount of the loan received by
the defendant from the plaintiff was only
P1,525.00 inasmuch as the amount of
P500.00 was retained by plaintiff as interest
on the transaction. 3
The original defendant Rosario Artuz died.
Hence the complaint was amended to
substitute the deceased defendant with her
surviving heirs, namely, Arsenio Gerardino,
Sr., Virginia Gerardino Sy. Angelina Gerardino
Gumba and Corazon Gerardino Legayada.
In an order rendered on February 17, 1969,
the lower court set the pre-trial of the case
on March 15, 1969.
On motion of counsel for the defendants, the
pre- trial was reset to March 28, 1969.
Inasmuch as the counsel for the defendants
failed to appear on March 28, 1969, the
lower court reset the pre-trial of the case, for
the last time, on April 29, 1969.
In an order issued by the lower court on April
29, 1969, the defendants were given 15 days
within which to file a memorandum
sustaining their view that they can still
repurchase the property.
On June 17, 1969, the counsel of the plaintiff
filed a motion for judgment on the pleadings
and/or upon confession, which was set for
hearing on June 30, 1969. The lower court
denied said motion and ordered the pre-trial
of the case to be held on September 19,
1969.
The parties manifested on September 19,
1969 that there was a strong possibility of an
amicable settlement. They waived the
pretrial in order to save time and asked the
court to set the date of the trial on the
merits. The lower court set the case for trial
on October 17, 1969.
On October 17, 1969 a telegraphic motion
for postponement sent by the counsel of the
defendants was denied and the plaintiff was
allowed to present evidence in the absence
of the defendants and their counsel.
The defendants, petitioners herein, filed on
November 14, 1969 a motion for relief from
the order allowing the plaintiff, private
respondent herein, to present evidence. The
motion was denied on December 18, 1969 on
the ground that "... the failure of defendants
and their counsel to appear on the date set
for hearing, on October 17, 1969, was not
due to accident, mistake or excusable
negligence, but due to the unexcusable
negligence of the counsel for the defendants,
the consequence of which, must be suffered
by his clients.
On March 2, 1970, the defendants,
petitioners herein, filed a motion for new trial
based on the grounds provided in Section 1
(a) and (c), Rule 37, Revised Rules of Court.
The motion was denied in an order of March
30, 1970.
ISSUE:
Whether or not THE LOWER COURT ERRED IN
HOLDING AND DECLARING THAT THE

CONTRACT IN QUESTION IS A TRUE SALE

WITH RIGHT OF REPURCHASE AND NOT AN
EQUITABLE MORTGAGE.
HELD:
The CA affirmed the appeal on the grounds
that While the record discloses that the
defendants and their counsel have been
lackadaisical in attending to the case,
substantial justice demands that petitioners
be given their day in court. It appears from
the answer that the vendor-a-retro, Rosario
Artuz, who died on February 11, 1968, was
deaf and blind and was senile when she was
made to thumbmark the alleged deed of sale
with right to repurchase. The document is
written in English which was not understood
by Rosario Artuz. The answer alleged that
the intention of the parties was only to
execute a deed of equitable mortgage to
secure the loan of P2,025.00; and that
Rosario Artuz actually received only the
amount of P1,525.00 because the private
respondent retained the amount of P500.00
as interest. It is clear that the defendants
have a meritorious defense. Their motion for
new trial should have been granted.
The nature of the document in question was
squarely placed in issue. The defendants
contend that the document was only an
equitable mortgage The third paragraph of
Article 1606 of the Civil Code of the
Philippines provides that "the vendor may
still exercise the right to repurchase within
thirty days from the time final judgment was
rendered in a civil action on the basis that
the contract was a true sale with right to
repurchase." Hence even if after a new trial it
is found that the document in question is a
true sale with right of repurchase, the
defendants may still exercise the right to
repurchase the land in question within thirty
days from the time final judgment is
rendered.
In view of the foregoing, it is no longer
necessary to remand this case to the lower
court for a new trial.
The lower court erred in not allowing the
defendants, as successors-in-interest of
Rosario Artuz, to repurchase the land within
thirty days from the date the decision had
become final. Since the petitioners had duly
consigned the repurchase price, their
consignation of the amount of P2,025.00
validly effected redemption.
WHEREFORE, the decision appealed from is
hereby set aside and the private
respondent's complaint for consolidation of
ownership is dismissed. The petitioners are
declared entitled to the ownership and ion of
the property in question and the private
respondent is ordered to deriver to
petitioners the said property or any part
thereof in his possession. Without
pronouncement as to costs.

G.R. No. L-15312

November 29, 1960
Juan Tacdoro vs. Jesus Arsenas
Facts:
On December 22, 1958, petitioner Juan
Tacdoro filed in the Court of First Instance
of Davao a petition Misc. Case No. 374
alleging that appellant Jesus Arcenas had
sold to the petitioner, con pacto de
retro(repurchase
agreement),
a
residential house situated at Bolton
Street, Davao City. That February 16,
1957 was the original expiry date for
repurchasement. It was later moved to
another year counted from the aforesaid
date. However, the vendor did not
exercise the right of repurchasement. As
such, the petitioner petitioned for a
consolidation of ownership over the
property sold,pursuant to Art. 1607 of the
Civil Code. The petition was heard on
December 24, 1958, the date set by the

petitioner. Appellant was served a copy

of the petition two days previously, on
December 22, 1958. But no summons
were served by the court. The court a
quo entered an order on January 6, 1959
consolidating ownership of the property
in question in favor of the petitioner. On
January 10, 1959, appellant filled a
motion for reconsideration based on the
grounds that the lower court had no
jurisdiction to consider the petition for
the appellee for lack of summons, and
that the denominated pacto de retro sale
was actually an equitable mortgage. Heis
motion was denied by the court. Hence
his appeal in this case.
Issue:
Whether or not the lower court had the
jurisdiction over the case.
Held:
No. The Court ruled that the appellant
was correct. As stated in Article 1607 of
the Civil Code which states:
In case of real property, the
consolidation of ownership in the
ven dee by virtue of the failure of
the vendor to comply with the
provisions of article 1616 shall not
be recorded in the Registry of
Property without a judicial order,
after the vendor has been duly
heard.
The petition to consolidate ownership
under the article aforequoted does not
partake of the nature of a motion, 1) it
not being merely an incident to an action
or a special proceeding, but is an
ordinary civil action cognizable by the
Court of First Instance. As such ordinary
action, it should be governed by the rules
established for summons found in Rle 7
of the Rules of Court, stating among
other things, that upon the filing of the
complaint, the clerk of court shall
forthwith
issue
the
corresponding
summons to the defendant(sec. 1). The
defendant would then be entitled to a
period of fifteen (15) days from service of
such summons within which to file either
a motion to dismiss the petition (sec. 1,
Rule 8) or an answer (Sec. 1, Rule 9). The
failure of the court to properly observe
the rules is sufficient cuase for validly
attacking its consequent judgments and
or orders even on jurisdictional grounds.

los Reyes died. On May 3, 1965,Isabelo Rebollos, filed a

petition for consolidation of ownership. Summons was then
issued, and received by Damaso, Ernesto, Fortunata,
Montano, Guadalupe, Luis and Rosalia, allsurnamed Yturralde
However, summons could not be served on three of the
respondents therein, Josefina, Zosima and Ramon Yturralde,
as they were no longer residing at their last known addresses.
The Judge then presiding the Court of First Instance of
Zamboangadel Sur, Hon. Dimalanes Buissan, in his order
dated October 7, 1965, directed that summons be served upon
the said three respondents therein (Annex C, Petition). On
November 20, 1965, the Court rendered a decision
consolidating the ownership of the subject property in favor of
Rebollos, and ordering the Register of Deeds of Zamboanga
del Sur to cancel Original Certificate of Title No.
2356covering said property and, in lieu thereof, to issue a
transfer certificate of title in the name of Rebollos (Annex H,
Petition).
Issue: Whether the requirements for consolidation of
ownership by vendee a retro had been complied with?
Held: Unlike the old Civil Code, Article 1607 of the new
Civil Code of 1950 provides that consolidation of ownership
in the vendee a retro of real property by virtue of the failure of
the vendor a retro "to comply with the provisions of Article
1616 shall not be recorded in the Registry of Property without
a judicial order, after the vendor has been duly heard." In the
case of Teodoro vs. Arcenas, 1 this Court, through Mr. Justice
Jose B. L. Reyes, ruled that under the aforesaid Article 1607
of the new Civil Code, such consolidation shall be effected
through an ordinary civil action, not by a mere motion, and
that the vendor a retro should be made a party defendant, who
should be served with summons in accordance with Rule 14 of
the Revised Rules of Court; and that the failure on the part of
the court to cause the service of summons as prescribed in
Rule 14, is sufficient cause for attacking the validity of the
judgment and subsequent orders on jurisdictional grounds. 2
The Court in said case stressed that the reason behind the
requirement of a judicial order for consolidation as directed by
Article 1067 of the new Civil Code is because "experience has
demonstrated too often that many sales with right of repurchase have been devised to circumvent or ignore our usury
laws and for this reason, the law looks upon them with
disfavor (Report of the Code Commission, pp. 63-64). When
,therefore, Article 1607 speaks of a judicial order after the
vendor shall have been duly heard, it contemplates none other
than a regular court proceeding under the governing Rules of
Court, where in the parties are given full opportunity to lay
bare before the court the real covenant. Furthermore, the
obvious intent of our Civil Code, in requiring a judicial
confirmation of the consolidation in the vendee a retro of the
ownership over the property sold, is not only to have all
doubts over the true nature of the transaction speedily
ascertained, and decided, but also to prevent the interposition
of buyers in good faith while such determination is being
made. Under the former method of consolidation by a mere
extrajudicial affidavit of the buyer a retro, the latter could
easily cut off any claims of the seller by disposing of the
property, after such consolidation, to strangers in good faith
and without notice. The chances of the seller a retro to recover
his property would thus be nullified, even if the transaction
were really proved to be a mortgage and not a sale."
Yturralde vs CA
FACTS: Spouses Francisco Yturralde and Margarita de los
Reyes, owned a parcel of agricultural registered in their names
in Zamboanga del Sur. Francisco Yturralde died intestate,
survived by his wife, Margarita de los Reyes, and who are
the petitioners, Ernesto, Fortunata, Montano, Zosimo, Ramon,
Guadalupe, Luis, Josefina and Rosalia, all surnamed
Yturralde.
Margarita de los Reyes contracted a second marriage with her
brother-in-law and uncle of the petitioners, Damaso
Yturralde .
Damaso Yturralde and Margarita de los Reyes executed a
deed of sale with right of repurchase in favor Isabelo
Rebollos, covering property in consideration of the sum of
P1,715.00. The vendors a retro failed to exercise the right to
repurchase the property within the three-year period agreed
upon, which expired on May 30, 1955. In 1961, Margarita de

HEIRS OF JOSE A. ARCHES, vs. MARIA

B. VDA. DE DIAZ
Facts:
On January 21, 1954 MARIA B. VDA. DE
DIAZ executed in favor of the late Jose A.
Arches a deed of sale with pacto de retro
(A sale pacto de recto transfers the legal
title to the vendee and the vendee is
subrogated to all the rights and actions
of the vendor, subject to the latters right
to redemption. Vendee a retro has
therefore a registrable title thereto which
may be the subject of initial registration.

The right to redeem the property is only

to be noted in the decree and certificate
of title that may be issued) over a parcel
of land in consideration of P12,500.00
that Jose A. Arches during his lifetime
filed a petition on to consolidate
ownership over the lot; that the
defendant opposed the petition alleging
among other things that the said deed of
sale with pacto de retro did not express
the true intention of the parties,
which was merely to constitute a
mortgage on the proper security for a
loan; that after hearing the case on the
merit trial court denied the petition
holding in effect that the contract was an
equitable mortgage; that Jose A. Arches
appealed to the Court of Appeals,
rendered judgment affirming the order of
the trial court; this Court dismissed the
petition on the ground that the issues
involved were factual; that in addition to
the sum of P12,500.00, the consideration
mentioned in the deed of sale a retro,
Jose A. Arches spent P1,543.70 in
connection with the reconstitution of the
title to Lot No. 2706 in the name of the
vendor and in paying the real estate
taxes on said lot for the years 1951 to
1960; that Jose A. Arches died on August
18, 1965, before he could file an action in
court for the collection of the aforestated
sums from the defendant; that on May
31, 1966, the petitioners, as forced heirs
of the deceased Jose A. Arches,
demanded by registered letter from
defendant the payment of the sum of
P12,500.00, the consideration mentioned
in the sale a retro, and reimbursement of
the sum of P1,543.70; and that the
defendant failed and refused to pay.
They, therefore, prayed among things
that the defendant be ordered to pay the
aforementioned sums, plus damages.
Issue: WON the Heirs of Jose Arches can
collect the debt in a pacto de retro sale
after the failure of the vendor to redeem
the said property.
Held:
The contract of sale is one of an
equitable mortgage. Jose A. Arches
elected to consolidate without
alternatively opting to foreclose. When
he opted to consolidate and prosecuted
his option to a final determination he was
thereby barred from pursuing the other
alternative and inconsistent remedy of
foreclosure of mortgage or collection of
debt. The law abhors injustice. It would
be unjust in this case to allow the
defendant to escape payment of his debt
and, worse still, to rationalize such a
result by his very claim that he is a
debtor and not, as the plaintiff says, a

vendor of property in favor of the latter.

Strictly speaking, where the petition of
the vendee in a pacto de retro sale is for
a judicial order pursuant to Article 1607
of the Civil Code, so that consolidation of
ownership by virtue of the failure of the
vendor to redeem may be recorded in the
Registry of Property, the right of action to
foreclose the mortgage or to collect the
indebtedness arises from the judgment
of the court declaring the contract as
equitable mortgage. Although an
alternative prayer to this effect may be
made in the petition, the same cannot
but be conditional, that is, only in the
event such a declaration made, contrary
to the plaintiff's claim and the principal
relief he seeks. His failure to make that
alternative prayer, and the failure of the
court to grant it in the judgment
dismissing the petition, should not be
considered as a bar to collecting the
indebtedness in a proper action for that
purpose. Wherefore, the orders appealed
from are hereby reversed and the case
remanded to the trial court for further
proceedings. Costs against defendantappellee.

Labasan vs. Lacuesta

G.R. No. L-25931 (1978)

Facts: Spouses Lacuesta were the owners of an

unregistered, irrigated riceland in Ilocos
Norte. They conveyed by means of a
written document the land with the right
to repurchase after 10 years. They failed
to exercise their right within the
stipulated period.
They filed a petition seeking the
reconveyance of the parcel of land,
allegedly as security for a loan. The trial
court ruled that the document executed
by the Lacuestas was a pacto de
retro sale and that they lost their right to
redeem the land for not having taken any
step within the agreed 10 years.
On appeal, the Court of Appeals set aside
the judgement of the trial court and
declared the contract an equitable
mortgage and ordered the Labasans to
reconvey the land, and that the loan by
the Lacuestas be deemed paid from the
fruits of the property which the Labasans
had been receiving for the past 32 years.

RUBY H. GARDNER and FRANK

GARDNER, JR., petitioners,
vs.
COURT OF APPEALS, DEOGRACIAS R.
NATIVIDAD and JUANITA A.
SANCHEZ, respondents.
G.R. No. L-59952 August 31, 1984
Facts
A chain of successive transfers of real
property, five in all, is involved.
Petitioner (THE GARDNERS ) was
the registered owner of two
adjoining parcels of agricultural
land in Laguna.

In November 1961, THE GARDNERS

and the spouses Ariosto Santos and
Cirila Serrano (THE SANTOSES)
entered into an agreement for the
subd. Of the two parcels, with THE
SANTOSES binding themselves to
Advance a payment of 93,000.00 in
installments to THE GARDNERS. A
deed of sale was issued but despite
this, THE GARDNERS appeared in
the subd. Joint venture Agreement
as owners and THE SANTOSES
as brokers. It appears that the
land was held in trust for the
protection of THE SANTOSES

Unknown to The GARDNERS, THE

SANTOSES transferred in 1964 1 lot
to Jose Cuenca ( The JOSE
CUENCAS) and the other lot to Juan
Cuenca
(the
JUAN
CUENCAS)
respective titles were issued.

The GARDNERS, upon learning of

the fact, caused the inscription of
an adverse claim on the titles of
THE CUENCAS with the RoD on
1965.

On 1966 the JUAN CUENCAS AND

THE JOSE CUENCAS transferred the
lots to Michael VERROYA, Santos
office assistant. The adverse claim
was carried over.

On
March
1967
VERROYA
constituted a mortgage on both
lots in favor of Anita Nolasco and
Rosario Dalina.

On June 1967 VERROYA ARROYA

executed a deed of transfer of the
properties
to
respondent
Deogracias
NATIVIDAD
(
THE
NATIVIDADS)

Issue: Whether or not the contract is a pacto de

retro sale or an equitable mortgage.
Held: The contract is an equitable mortgage.
It is a basic fundamental rule in the
interpretation of a contract that if the
terms thereof are clear and leave no
doubt upon the intention of the
contracting parties the literal meaning of
the stipulation shall control, but when the
words appear to be contrary to the
evident intention of the parties, the latter
shall prevail over the former (Article
1370, NCC).
In case of doubt concerning the
surrounding circumstances in the
execution of a contract, the least
transmission of rights and interest shall
prevail if the contract is gratuitous, and if
onerous, the doubt is to be settled in
favor of the greatest reciprocity of
interest.

On Sep 1967 the NATIVIDADS

transferred the lots to Ignasio
Bautista and Encarnacion de los
santos (THE BAUTISTAS) no title
was issued.

It should be noted that from the

titles of the CUENCAS (the Second
Transferees) to the titles of the
NATIVIDADS (the Fourth Transferee),
the Adverse Claim of the GARDNERS
continued to be carried, and that
throughout the successive transfers,
or over a span of approximately six
years, the GARDNERS continued to
remain in possession, cultivation
and occupation of the disputed
properties.
The GARDNERS filed a suit on 1969 for
the declaration of nullity, rescission and
damages against the 5 transferees
including the mortgagees.
The SANTOSES claim that the
sale was conditional in the
sense that it was to be
considered as an investment of
the GARDNERS in the subd.
venture and in the event that it did
not materialize, they will return the
lots
with
the
corresponding
reimbursement. That the deed of
sale served only to protect their
(SANTOSES) interests.

The
NATIVIDADS
contended
that they purchased the lots in
GOOD FAITH notwithstanding
the adverse claims. Said titles
were not shown to them by
VERROYA at the time of the sale.
(really? You wont check the title
when buying a property?) And that
they paid good and valuable
consideration.

The
Mortgagees
filed
counterclaim for damages.

The CUENCAS contend that the

transfer to VERROYA of the
properties was not simulated and
was
supported
by
valuable
consideration.

VERROYA and the BAUTISTAS were

declared in default.

On 1972 the trial court ruled in favor of

the GARDNERS declaring the five
transfers as null and void, rescinding the
subd joint venture and ordering the
GARDNERS to reimburse the SANTOSES.
The court also required the 5 transferees
but not mortgagees to pay the

GARDNERS
actual
and
exemplary
damages.
On appeal, the CA affirmed the
judgement but in December of 1979, the
court reversed after a series of motion for
reconsideration etc etc, in so far as the
NATIVIDADS are concerned, declaring the
sale to them as valid and the titles issued
thereto. The GARDNERS sought to have
the resolution set aside for lack of
jurisdiction but the court denied it hence
the petition.
Issue: Did the CA err in reversing its
resolution that the sale and title of the
lots to Natividad were valid; that they
purchased the lot in good faith and for
value?
Ruling: Yes. All 5 transferees were NULL
AND VOID for having been SIMULATED
AND FICTITIOUS.
The First Transfer in favor of the
SANTOSES
was
"indubitably
established" to have been without
consideration and is, therefore,
void and inexistent. That sale
was executed merely as a
means of protection to the
SANTOSES for their promised
cash
advances
to
the
GARDNERS in one year in the sum
of P93,000.00. Added to this is
the admission against his own
interest by Ariosto SANTOS
that the GARDNERS did not
receive
from
him
any
consideration, 15 thereby
corroborating the declarations of
the GARDNERS. The Subdivision
Joint Venture Agreement (Exhibit
"D")
and
the
Supplemental
Agreement (Exhibit "E") eloquently
express that the true and real
nature of the agreement between
the GARDNERS and the SANTOSES
was for a subdivision and not a sale
transaction.

The Second Transfer to the

CUENCAS
was
fictitious
and
simulated for not having been
supported with any consideration.
By his own admission, Ariosto
SANTOS
transferred
to
the
CUENCAS,
who
are
his
"compadres",
the
disputed
properties, together with others
that he owned, merely to conceal
his ownership and "to protect
them from persons who had
filed suits against him and
were
running
after
the
properties registered in his
name." It was SANTOS who had

caused the execution of those

deeds of sale (note: the CUENCAS
did not dispute the adverse claim)

The Third Transfer in favor of

VERROYA was similarly without
consideration and, therefore, void
ab initio. The evidence on record
shows that Ariosto SANTOS
himself caused the execution of
the deeds of sale (Exhibits "P" &
"Q") in favor of VERROYA, who is
SANTOS' office manager in his
brokerage business. The only
purpose of the transfer was to
enable VERROYA to secure for
SANTOS a loan with the Veterans
Bank. The ' fact that Verroya was
declared in default and had not
even bothered to resist the
suit, which he would have done
if the sale transaction were
genuine.

The Fourth Transfer from VERROYA

VERROYA to private respondents
NATIVIDADS. It was SANTOS who
had caused the preparation of
the deed of sale in favor of the
NATIVIDADS after sensing that
VERROYA was not inclined to return
the title to the properties.The
amount of P 80,000.00 stated in
the document of sale was not
actually paid by the NATIVIDADS to
VERROYA, according to SANTOS'
own testimony. The latter further
declared that VERROYA was only
coerced to sign the deeds (Exhibits
"V" & ("V-4") after he was boxed by
NATIVIDAD in SANTOS' office at the
Escolta.

The Fifth Transfer to the BAUTISTAS

partook of the same nature a
simulated
and
fictitious
transaction, for being without
consideration, as shown by the
evidence. They too, made no
attempt to answer or dispute the
allegations
in
the
Complaint
against them.
The mortgage of the properties by
VERROYA in favor of Anita Nolasco
and Rosario Dalima was executed
after the inscription of the
adverse claim on the titles so
that
they
can
neither
be
considered
as
innocent
mortgagees for value.

The
fact
that
the
GARDNERS
remained
in
actual
possession,
cultivation and occupation of the

disputed lots throughout the entire

series of transactions.
The statement of respondent Court in its
Resolution of reversal that "until the
validity
of
an
adverse
claim
is
determined judicially it cannot be
considered a flaw in the vendor's title,
contradicts the very essence of adverse
claims. The annotation of an adverse
claim is a measure designed to protect
the interest of a person over a piece of
real property, and serves as a notice and
warning to third parties dealing with said
property that someone is claiming an
interest on the same or has a better right
than the registered owner thereof.24 A
subsequent sale of the property cannot
prevail over the adverse claim which was
previously annotated in the certificate of
title of the property.
Misc.
Issue: Did the CA still have jurisdiction to
reverse its resolution and declare the
sale to NATIVIDAD valid?
Ruling: no.
Respondent Court had lost jurisdiction to
entertain the second Motion for
Reconsideration because its Decision of
January 11, 1979 had already become
final and executory as the following
chronological data before respondent
Court will show:
Jan 16, 1979 Receipt by
respondents of CA Decision
dated Jan. 11, 1979.
Jan. 29, 1979 Private
respondents filed motion for
extension of 30 days from
Jan, 31, 1979 to file motion
for reconsideration.
This was granted.
Due Mar. 2,
1979.
Mar. 2, 1979 Motion for
Reconsideration filed (on the
last day).
Nov. 7, 1979 Reconsideration
was denied.
Nov. 19, 1979 Receipt by
private respondents of above
resolution.
Dec. 28, 1979 Motion for
Leave to file Second Motion
for Reconsideration denied.
Dec. 28, 1979 Second Motion
for Reconsideration filed by
private respondent.

Jan. 8, 1980 Motion for

Reconsideration of Resolution
of Dec. 28, 1979 filed by
private respondents.
April 24, 1980 Resolution
reconsidering denial of
Motion for Leave, and Second
Motion for Reconsideration
admitted. This is one of the
admitted. This is one of the
disputed Resolutions.
Dec. 24, 1980 Resolution
reversing Decision of January
11, 1979. This is other
Resolution assailed.
Section 1, Rule 52 of the Rules of Court,
provides:
Section 1. Motion for rehearing. A motion for rehearing or reconsideration
shall be made ex-parteand
filed within fifteen (15) days
from notice of final order or
judgment. No more than one
motion for re-hearing or
reconsideration shall be filed
without express leave of
court. A second motion for
reconsideration may be
presented within fifteen (15)
days from notice of the order
or judgment deducting the
time in which the first motion
has been pending.
Evidently, the Second Motion for
Reconsideration was filed beyond the
reglementary, period
It is well settled that once a Decision has
become final and executory, it is
removed from the power and jurisdiction
of the Court which rendered it to further
alter or amend it, much less to revoke it.
The subsequent filing of a motion for
reconsideration
cannot
disturb
the
finality of the judgment, nor restore
jurisdiction to the court.

ANGELA M. BUTTE, plaintiff-appellant,

vs.
MANUEL UY and SONS,
INC., defendant-appellee.
G.R. No. L-15499
February
28, 1962
FACTS
Jose V. Ramirez was a co-owner of a
house and lot located at Sta Cruz, Manila.
Upon the death of Jose V. Ramirez, all his
property including the 1/6 undivided
share was bequeathed to his children and
grandchildren and 1/3 of the free portion
to Mrs. Angela M. Butte. Mrs. Marie
Garnier Vda de Ramirez sold the property
to Manuel Uy and Sons, Inc. including the
undivided 1/6 share property in Sta Cruz,
Manila. On the same day, a copy of letter
regarding the above-mentioned sell was
sent to Bank of the Philippine Islands, as
administrator of the property of Jose V.
Ramirez.
Mrs. Angela M. Butte filed a case against
Manuel Uy and Sons, Inc for legal
redemption when the latter refused Mrs.
Butte to redeem the said sold property.
ISSUE
Whether or not Mrs. Angela M. Butte has
the right of succession to exercise legal
redemption over the share sold by Mrs.
Marie Garnier Vda de Ramirez.
HELD
Yes, Mrs. Angela M. Butte has the right of
succession to exercise legal redemption
over the share sold by Mrs. Marie Garnier
Vda de Ramirez for being one of the coowners of the heirs of the 1/6 undivided
property of Jose V. Ramirez.
According to Article 1620 of the Civil
Code of the Philippines, a co-owner of a
thing may exercise the right of
redemption in case the shares of all the
other co-owners or of any of them, are
sold to a third person. If the price of the
alienation is gross expensive, the
redemptioner shall pay only a reasonable
one.
Should two or more co-owners desire to
exercise the right to redemption, they
may only do so in proportion to the share
that may respectively have in the thing
owned in common.

not make said portions less determinable

or identifiable or distinguishable, one
from the other, nor that dominion over
each portion less exclusive, in their
respective owners. Hence, no right of
redemption among co-owners exists.

Dela Cruz vs. Cruz

32 scra 307
Facts:
Spouses Julio Cruz and Zenaida
Montes(defendants) were once owner of
a parcel of land with the total area of 662
sq. m. On December 16, 1965, the
defendants sold a portion of the said
parcel of land to plaintiff Cresenciano
Dela Cruz. The portion sold was
described in the deed of absolute sale as
A portion with an area of 331 sq.
meters on the northern part.
On February 28, 1966, the defendants
sold the remaining portion of the land to
Alfonso Miranda. The deed of absolute
sale described the portion sold asThat
segregated portion with an area of 331
sq. meters which is the southern part
of the parcel of land covered by land
described above.
Plaintiff Dela Cruz filed an action against
defendants, praying to have himself
declared as entitled to purchase, by way
of pre-emption and legal redemption, the
one-half of the land sold to Miranda,
contending that after he bought the
northern half of the parcel of land, he
and the defendant spouses became the
co-owners of the said land. Considering
the situation or location of the parts
owned by plaintiff and defendant
spouses, the parts are adjacent to each
other, consequently, thay are adjacent
owners. Such that plaintiff has the right
of pre-emption or legal redemption over
the portion sold to Miranda.
Issue:
Whether the plaintiff and the defendant
spouses are co-owners of the
aforementioned parcel of land.
Held:
No, the foregoing theory is untenable.
Tested against the concept of coownership, plaintiff is not a co-owner of
the registered parcel of land, taken as a
unit or subject of co-ownership, since the
portions of appellant-plaintiff and of the
defendant spouses are concretely
determined and identifiable, for to the
former belongs the northern half, and to
the latter belongs the remaining southern
half, of the land. That their respective
portions are not technically described, or
that said portions are still embraced in
one and the same certificate of title, does

Nor is plaintiff-appellant entitled, as an

adjoining owner, to the right of preemption or redemption over the southern
portion of the parcel of land because he
had not alleged in his complaint and has
not proved that said portion is so small
and so situated that a major portion
thereof cannot be used for any practical
purpose within a reasonable time, having
been bought merely for speculation.
FELICES V. COLEGADO
G.R. No. L-23374
Facts: Felipe Felices died and left his heirs
a homestead, comprising 21 hectares
that was registered under his name. After
his death, 5 of his 7 surviving children
physically partitioned among themselves
the homestead, taking actual and
exclusive possession of the homestead
pertaining to him/her.
One of the heirs, Maria Felices, sold her
share to Roman Iriola with right to
repurchase. The deed of conditional sale
was signed by all her brothers and
sisters.
Sometime in 1951, Maria Felices along
with 3 other siblings, sold their share to
Francisco Colegado for the total price of
P8,500. Since the share of Maria is still in
the possession of Iriola, Colegado
advanced the amount for the repurchase
of Marias share from Iriola, which Irilola
refused.
After litigation for the said share, on
August 1962, as determined by the Court
of Appeals, the heirs of Iriola finally
surrendered the property to Colegado.
Teofila Felices, a sister of Maria, informed
Colegado of her desire to repurchase
Marias share from him. Teofila claims
that she has a right to repurchase the lot
as a co-owner, invoking Article 1602 of
the Civil Code which reads:
A co-owner of a thing may exercise
the right of redemption in case the
shares of all the other co-owners or
of any of them, are sold to a third
person. If the price of the alienation
is grossly excessive, the
redemptioner shall pay only a
reasonable one.

Colegado, on the other hand, based his

defense on Article 1088 of the Civil Code
which states:
Should any of the heirs sell his
hereditary rights to a stranger
before the partition, any or all of
the co-heirs may be subrogated to
the rights of the purchaser by
reimbursing him for the price of the
sale, provided they do so within the
period of one month from the time
they were notified in writing of the
sale by the vendor.
Issue: Whether Teofila can exercise the
right to redemption of the land in
question from Colegado
Held: Article 1088 has no application in
the case because the article speaks of
the hereditary right itself, without
specifying any portion thereof. This
article presupposes that there has as yet
been no distribution of the estate among
the heirs, for the moment such
distribution has taken place, even in a
state of pro-indiviso, the heirs ceased to
be considered simply as co-heirs, but
they have thereby become co-owners.
The plaintiff also has no right under Art.
1620. Co-ownership exists when the
ownership of an undivided thing or right
belongs to different persons. Every coowner is the owner of the whole, and
over the whole he exercises the right of
dominion, but he is at the same time the
owner of a portion which is truly abstract,
because until division is effected such
portion is not concretely determined.
In the case, it is admitted that after the
death of their father, the remaining heirs
divided among themselves their portion
extra-judicially, each one taking
exclusive possession of their aliquot
share. The portion that Maria sold to
Iriola constituted her distinct share,
which is marked by metes and bounds. It
was that share that was in turn delivered
to Colegado. Therefore, it was Marias
exclusive share that was sold, and no
longer the community of interest over
the entire estate of their father. As such,
Teofila was no longer co-owner over that
specific property.
However, even granting the claim of
plaintiff-appellant that co-ownership of
the homestead still existed as of the time
defendant-appellee repurchased the
share of Maria Felices from Roman Iriola
still she can not exercise the right of legal
redemption of the controverted property.
The record shows that on September 11,

1953 defendant-appellee Colegado

bought the respective shares of Silverio
Felices, Pedro Felices, and Marta Felices
in the homestead. By such purchase
defendant-appellee had thereby become
a co-owner of the homestead. When
defendant-appellee thereafter paid for
the portion allotted to Maria Felices, in
August, 1962, he was at that time not a
stranger but already a co-owner of the
homestead. hence, plaintiff-appellant
cannot redeem the land from defendantappellee because the latter and plaintiffappellant had become co-owners, and as
co-owners neither of them has the right
of legal redemption against the other.