Legaspi v. Court of Appeals
REITERATIONFacts
The Antecedents: The underlying dispute concerns the petitioner, Bernardo B. Legaspi, who sold two parcels of land to his son-in-law, Leonardo B. Salcedo, under a sale with a right to repurchase for P25,000.00, with the repurchase period set for five years from October 15, 1965. The petitioner claims he offered to repurchase the properties before the October 15, 1970 deadline, but Salcedo refused. Consequently, Legaspi deposited the repurchase amount with the Court of First Instance of Cavite. Procedural History: The petitioner filed a complaint for reconveyance on February 8, 1971, with the Court of First Instance of Cavite. The trial court ruled in favor of the petitioner, ordering the reconveyance of the properties and awarding damages. Upon appeal, the Court of Appeals reversed this decision, dismissing the complaint and holding that neither a valid tender of payment nor a timely consignation was made. A motion for reconsideration was denied, leading to the present appeal. The Petition: This case is an appeal by way of certiorari filed by Bernardo B. Legaspi. The petitioner argues that the Court of Appeals erred in substituting its judgment for that of the trial court regarding witness credibility and committed a legal error by finding that no valid consignation was made, despite an official receipt evidencing the deposit of the repurchase amount on the last day of the period. The core issue is whether the petitioner validly exercised his right to repurchase within the stipulated five-year period.
Issue(s)
Whether the Court of Appeals erred in reversing the factual findings of the trial court regarding the tender of payment, and whether the petitioner validly exercised his right to repurchase the properties within the stipulated five-year period. Whether the consignation of the repurchase money with the Clerk of Court was a necessary act to preserve the right to repurchase.
Ruling
The decision of the former Court of Appeals is REVERSED and SET ASIDE. The decision of the Court of First Instance of Cavite, 7th Judicial District, Branch III is REINSTATED but MODIFIED by the deletion of the award of P20,000.00 for moral, punitive, exemplary and corrective damages. In all other respects, the trial court's decision is AFFIRMED.
Ratio Decidendi
On the validity of the tender of payment and exercise of the right to repurchase: The Court held that the appellate court erred in reversing the trial court's factual finding that a valid tender of payment was made seasonably. A mere tender of payment, if sincere, is sufficient to preserve the right of repurchase, even without consignation, as a basis for an action to compel the vendee a retro to resell the property. The records showed that the petitioner made a valid tender of payment on October 14, 1970, by offering P25,000.00 to the private respondent, who refused to accept it, claiming devaluation. The subsequent deposit with the Clerk of Court, evidenced by an official receipt, served as additional security and indicated the veracity of the petitioner's desire to comply with his obligation. The discrepancy in the time of consignation (morning vs. afternoon) was deemed unsubstantial and did not negate the fact that the deposit was made on the last day of the repurchase period, as evidenced by a public document. The Court reiterated the doctrine that conclusions and findings of fact by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong and cogent reasons, as the trial court is in a better position to observe witnesses and examine evidence. The respondent court's reversal was not grounded on strong and cogent reasons, making it erroneous. On the necessity of consignation: The Court clarified that consignation is not always required to preserve the right of repurchase. A mere tender of payment, if made on time, is enough as a basis for an action to compel the vendee a retro to resell the property, citing Villegas vs. Capistrano and other cases. Consignation is generally required when the creditor refuses to accept payment, but it is an act preparatory to a private settlement before proceeding to judicial solemnities. In this case, the petitioner's sincere tender of payment, followed by his deposit of the repurchase money with the Clerk of Court, sufficiently demonstrated his intent to exercise his right to repurchase within the stipulated period. The deposit was an additional security and not an essential act that had to be performed after the refusal of the tender, although it served to indicate the veracity of his desire to comply with the obligation. Therefore, the appellate court's conclusion that no valid consignation was seasonably made was an error in law, as the tender of payment itself was sufficient to preserve the right.
Main Doctrine
A mere tender of payment, if made on time and is sincere, is sufficient to preserve the right of repurchase in a sale with pacto de retro, even if consignation is not made or is made imperfectly, provided the tender is followed by an action to compel the vendee a retro to resell.