Feria v. Suva
REITERATIONFacts
The Antecedents: Plaintiffs-appellants conveyed a parcel of land to the defendant-appellee on April 18, 1938, via a sale with the right to repurchase (pacto de retro). Plaintiffs alleged that the defendant agreed to re-sell the property after the 1943-1944 harvest. Procedural History: Plaintiffs filed an action in the Court of First Instance (CFI) of Nueva Ecija in 1944, praying to redeem the property. The CFI dismissed the complaint, finding that the original redemption period was not extended. The Court of Appeals (CA) affirmed the CFI's judgment, holding that the transaction was a true sale with right to repurchase, there was no extension of the redemption period, and no timely tender of the purchase price was made. The CA modified the judgment to make the sale ineffective with respect to the shares of two co-owners who did not participate. The Petition: The present action was filed on October 14, 1951, one day after the CA judgment became final. Plaintiffs alleged confusion about the repurchase date and claimed they demanded to repurchase the land on October 9, 1951, offering the full price, which the defendant ignored. They invoked Article 1606 of the Civil Code of the Philippines, which allows redemption within thirty days from the rendition of a final judgment in a civil action based on a true sale with right to repurchase. The defendant moved to dismiss on the ground of res judicata, which the trial court granted. Plaintiffs appealed.
Issue(s)
Whether the present action, filed under Article 1606 of the Civil Code of the Philippines, is barred by the prior judgment of the Court of Appeals based on res adjudicata.
Ruling
The Supreme Court affirmed the order of dismissal, holding that the present action is barred by the prior judgment of the Court of Appeals due to res judicata.
Ratio Decidendi
On Whether the present action, filed under Article 1606 of the Civil Code of the Philippines, is barred by the prior judgment of the Court of Appeals based on res adjudicata: The Supreme Court held that the present action is barred by res adjudicata. A "cursory study" of the Court of Appeals' decision reveals that it did not refuse to apply Article 1606 of the New Civil Code. Instead, it "expressly applied article 1606 but it denied the right granted thereunder because the transaction was, in the very words of the decision, 'specifically pleaded to be a sale with pacto de retro and was tried on the theory.'" The Court further clarified that the last paragraph of Article 1606, which allows a vendor to repurchase within thirty days from a final judgment declaring the contract a true sale with right to repurchase, is intended to cover suits where the seller claims the real intention was a loan with equitable mortgage, but the court decides otherwise. In the previous case, the nature and character of the transaction as a pacto de retro sale or as an equitable mortgage was never in question before the trial court, as both parties had admittedly treated it as a sale with pacto de retro. Therefore, the condition for the application of Article 1606 was not met. Furthermore, the Court reiterated that the finality of decisions is not dependent upon their correctness, but upon the expiration of the period fixed by the rules (citing Layda vs. Legazpi, 39 Phil., 83). The question now raised was actually passed upon adversely by the Court of Appeals in a resolution on a motion for reconsideration, and also by the Supreme Court in G.R. No. L-5025, thereby reinforcing the application of res adjudicata.
Main Doctrine
A subsequent action filed under Article 1606 of the Civil Code, which allows redemption within thirty days from the rendition of a final judgment in a civil action based on a contract of sale with right to repurchase, is barred by res judicata if the prior judgment had already passed upon the nature of the contract and the right to redeem, even if the specific provision of Article 1606 was not explicitly invoked or passed upon in the prior decision.