Dichoso v. Roxas
REITERATIONFacts
The Antecedents: Laura A. Roxas sold a parcel of unregistered coconut land to appellants Celso Borja and Nelia Alanguilan via a pacto de retro sale for P850.00, with a five-year period for repurchase. Subsequently, Roxas received P770.00 from appellees Welgo Dichoso and Emilia Hernandez, with the agreement that after December 13, 1957, Roxas would sell the property to appellees via absolute sale for P2,000.00, with the P770.00 as advance payment. Appellees were to use P850.00 to repurchase the property from appellants. On October 22, 1957, appellees sent Roxas a check for P320.00 as full payment for the P2,000.00 consideration. Roxas returned the check, requesting it be endorsed to appellants upon repurchase, as Roxas had received additional sums from appellants beyond the P850.00. Appellees claimed they were ready to repurchase and demanded the execution of deeds. Roxas and appellants allegedly failed to execute the deeds. Procedural History: Appellants moved to dismiss, arguing no cause of action against them as their contract was with Roxas. The lower court initially dismissed the complaint but later admitted an amended complaint. The amended complaint alleged that on July 5, 1957, Roxas ceded her right to repurchase to appellees for P770.00. Appellees claimed they tendered the repurchase sum on December 13, 1957, but appellants refused, compelling appellees to consign the amount. Appellants asserted that the alleged transfer of rights was a receipt for indebtedness, not a transfer of repurchase rights. They also claimed the land had already become their absolute property before December 13, 1957, and they were possessors in good faith, harvesting fruits and paying taxes. They further argued that any agreement between appellees and Roxas did not affect third parties like them unless in a public document. Appellants filed a counterclaim for damages and attorney's fees, alleging appellees filed the case in bad faith. The Petition: The lower court rendered judgment ordering appellees to deposit P320.00 for Roxas to transfer her rights, and ordering appellants to execute a deed of re-sale to appellees. Appellants were to withdraw P850.00 as repurchase price. Roxas was ordered to return P1,684.00 to appellants. Appellants appealed, claiming they were the true, lawful, and absolute owners since December 8, 1957, evidenced by a deed of absolute sale (Exhibit "7"), and that the lower court erred in giving weight to Exhibit "I" (private document of assignment of repurchase right) and extending its effects to them.
Issue(s)
Whether the lower court erred in not finding appellants Celso Borja and Nelia Alanguilan as the true, lawful, and absolute owners of the land in question. Whether the lower court erred in not finding appellants as possessors as absolute owners from December 8, 1957, the date of the execution of the deed of absolute sale in their favor. Whether the lower court erred in not giving weight to the deed of confirmation (Exhibit "8"). Whether the lower court erred in construing Exhibit "I" as a document of sale and extending its effects to third parties. Whether the lower court erred in not sustaining the plea of res judicata by the defendant-appellants.
Ruling
The decision appealed from is reversed, and the case is dismissed. Appellees are reserved the right to file a separate action against Laura A. Roxas to enforce whatever rights they may have against her.
Ratio Decidendi
On the ownership of the land: The Court found that the lower court erred in considering Exhibit "I", executed on July 5, 1957, as a deed of sale in favor of appellees. The phraseology indicated a mere promise to sell, as Roxas only promised to execute a deed of absolute sale upon appellees' full payment of P2,000.00. At that time, Roxas could only assign her right to repurchase. Therefore, Exhibit "I" was at most an assignment of the right to repurchase, not a sale of the property itself. The Court also noted that appellants' claim of ownership was based on Exhibit "7", a deed of absolute sale executed on December 8, 1957, which superseded the earlier pacto de retro sale. This deed of absolute sale was a valid contract between Roxas and appellants, making Roxas no longer have any right to repurchase after December 8, 1957. On the application of Article 1544 of the Civil Code: The Court held that Article 1544 of the Civil Code, concerning the sale of the same thing to different vendees, did not apply. This article requires good faith and possession. While appellants were in possession, their initial possession was as vendee a retro. The Court found that appellees' contention of appellants' awareness of their agreement with Roxas was not sufficiently substantiated. Appellants only became aware of appellees' claim when they attempted to repurchase on December 13, 1957, five days after the deed of absolute sale in favor of appellants was executed. The sale to appellants was of the property itself, while the transaction with appellees, as evidenced by Exhibit "I", was at most an assignment of the right to repurchase, which appellants were unaware of until after they had acquired the property through absolute sale. On the validity of Exhibit "7" (Deed of Absolute Sale): The Court acknowledged the genuineness of Exhibit "7", the private deed of absolute sale executed by Roxas in favor of appellants on December 8, 1957, for P1,684.00. This date was prior to the appellees' attempt to repurchase on December 13, 1957. After December 8, 1957, appellants' rights were based on this absolute sale, meaning Roxas had no remaining right to repurchase. The Court found no dispute as to the genuineness and execution date of this document. On the effect of Exhibit "I" (Assignment of Repurchase Right): The Court clarified that Exhibit "I" was not a deed of sale of the land but an assignment of Roxas' right to repurchase. Since appellants were not aware of this assignment until after they had acquired the property through an absolute sale (Exhibit "7"), the assignment could not prejudice their rights. The Court also noted that the deed of confirmation (Exhibit "8"), executed after the case was filed, could not prejudice appellees' rights. On the lower court's findings: The Court found that the lower court erred in considering Exhibit "I" as a deed of sale and in extending its effects to third parties (appellants) who were unaware of it. The Court also found that the lower court failed to give due weight to Exhibit "7", the deed of absolute sale in favor of appellants, which effectively superseded the pacto de retro sale.
Main Doctrine
In cases involving the sale of unregistered land to different vendees, the ownership transfers to the person who first took possession in good faith. If there is no inscription, ownership pertains to the person who was first in possession in good faith; in the absence thereof, to the person who presents the oldest title, provided there is good faith. A private document evidencing an assignment of the right to repurchase, without knowledge by the subsequent vendee, does not prevail over a subsequent deed of absolute sale of the property itself, even if the latter is also a private document.