Galanza v. Nuesa
REITERATIONFacts
The Antecedents: Juan Galanza (plaintiff-appellee) owned a parcel of land acquired as a homestead, covered by Original Certificate of Title No. I-2247. On September 7, 1940, he sold this land to Sotero N. Nuesa (defendant-appellant) with a right to repurchase within 5 years from the date of the deed of sale. The original certificate of title was not cancelled until July 17, 1947, when Transfer Certificate of Title No. T-172 was issued in the name of the defendant. Procedural History: On May 19, 1951, the plaintiff filed a complaint praying for reconveyance of the land under Section 119 of Commonwealth Act 141. The defendant asserted that the plaintiff failed to exercise the right of redemption within the stipulated period, consolidating title in his name. The parties entered into a stipulation of facts. The Court of First Instance of Isabela ordered the defendant to convey the land to the plaintiff upon payment of P1,328, and the Register of Deeds to cancel the title, finding that the 5-year period of repurchase should be computed from the registration of the deed of sale with pacto de retro on January 17, 1947, applying Section 50 of the Land Registration Law. The Petition: The defendant appealed the decision of the Court of First Instance.
Issue(s)
Whether the 5-year period to repurchase the land should be counted from the execution of the deed of sale with right to repurchase or from the issuance of the transfer certificate of title. Whether the plaintiff's right of repurchase under Section 119 of Commonwealth Act 141 subsists despite the expiration of the conventional redemption period stipulated in the deed of sale.
Ruling
The appealed decision is reversed, and the complaint is dismissed.
Ratio Decidendi
On the period to repurchase: The Supreme Court held that the 5-year period for repurchase should be counted from the date of the execution of the deed of sale on September 7, 1940, not from the issuance of the transfer certificate of title. Both Section 50 of the Land Registration Law and Section 119 of Commonwealth Act 141 do not prohibit parties from agreeing on a specific period for repurchase starting from the date of the deed of sale. The Court emphasized that Section 50 of the Land Registration Law states that the act of registration is the operative act to convey and affect the land, but a deed purporting to convey or affect registered land operates as a contract between the parties even without registration. Registration is primarily for the protection of the buyer against third parties. On the applicability of Section 119 of Commonwealth Act 141: The Court clarified that while Section 119 of Commonwealth Act 141 grants a right of repurchase for land acquired under free patent or homestead provisions within 5 years, this statutory right does not preclude parties from agreeing to a shorter or specific conventional redemption period. In this case, the plaintiff's right of repurchase under the deed of sale had already expired because he failed to exercise it within five years from September 7, 1940. The Court cited Carillo vs. Salak to support the principle that an unregistered transaction is valid and binding between the parties, even if ineffective against third persons. Therefore, the plaintiff's failure to redeem within the stipulated period meant his title had already become absolute in favor of the defendant.
Main Doctrine
The period for exercising the right of repurchase under a deed of sale with pacto de retro, even for land acquired under homestead provisions, commences from the date of the execution of the deed of sale, not from the issuance of the transfer certificate of title, unless otherwise stipulated. Registration of the deed is not necessary to give effect to the contract between the parties.