Torres v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Spouses Ceferino and Araceli Illuscupides contracted Emilio Olores for the construction of a ten-door apartment on their land for P97,000.00. After paying P54,390.51, the Illuscupideses were sued by Olores for the outstanding balance, resulting in a favorable judgment for Olores. Subsequently, to prevent the foreclosure of their mortgaged properties with the Government Service Insurance System (GSIS), the Illuscupideses sold the land and apartment to spouses Vicencio and Socorro Torres for P130,000.00. A portion of this payment was used to settle the GSIS mortgage. An agreement was also executed on the same day, stipulating that the Torreses would resell the apartment building to the Illuscupideses. 2. Procedural History: Emilio Olores, fearing he would not collect the debt owed by the Illuscupideses, filed a rescission case against both the Illuscupideses and the Torreses. The Illuscupideses filed a counterclaim against Olores and a cross-claim against the Torreses, asserting the sale was a pacto de retro. The Court of Appeals affirmed the collection case judgment in favor of Olores. In the rescission case, the trial court dismissed Olores' complaint and ordered the Illuscupideses and/or Torreses to deliver P41,000.00 to Olores for his claim, along with attorney's fees and costs. Both Olores and the Illuscupideses appealed. The Court of Appeals affirmed the dismissal of Olores' complaint and the counterclaims but reversed the order regarding the P41,000.00, ordering the Torreses to reconvey the apartment building to the Illuscupideses. The Illuscupideses' motion for the Court of Appeals to rule on apartment rentals collected by the Torreses was denied. 3. The Petition: The Illuscupideses filed a petition for review on certiorari with the Supreme Court, arguing that the Court of Appeals erred in (1) not construing the Deed of Sale as a pacto de retro sale, and (2) in not ruling on the rentals collected by the Torreses after ordering the reconveyance of the apartment. The Supreme Court found the petition to be without merit, affirming the Court of Appeals' decision that the Deed of Sale was an absolute sale and that the Illuscupideses' claim regarding rentals was not properly raised in their brief.
Issue(s)
Whether the Deed of Sale dated October 19, 1973, should be construed as a pacto de retro sale. Whether the Court of Appeals erred in not ruling upon the rentals collected by the Torreses from the apartment.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals in toto. The Court held that the Deed of Sale was an absolute sale and that the separate agreement to resell the apartment did not convert it into a pacto de retro sale. The Court also found that the appellate court correctly refused to pass upon the issue of rentals as it was not raised as an assignment of error.
Ratio Decidendi
On the issue of whether the Deed of Sale was a pacto de retro sale: The Court held that the Deed of Sale was an absolute sale. The terms of the deed were clear and did not provide for a right of repurchase. The Illuscupideses' argument that the accompanying Agreement to Resell should convert the sale into a pacto de retro was unavailing. The Court reiterated the principle that the right of repurchase must be reserved in the same instrument of sale as a stipulation of the contract. A right granted in a separate instrument after the execution of an absolute sale cannot be considered a right to repurchase but some other right, such as an option to buy. Therefore, the Court of Appeals correctly construed the Deed of Sale as absolute. On the issue of the Court of Appeals not ruling upon the rentals: The Court found that the Court of Appeals acted correctly in not passing upon the rentals collected by the Torreses. This was because the Illuscupideses did not raise the issue of rentals as an assignment of error in their brief before the appellate court. Consequently, the appellate court was not obligated to rule on a matter that was not properly brought before it for review.
Main Doctrine
An agreement to resell executed on the same day as a deed of absolute sale, in a separate instrument, does not convert the absolute sale into a pacto de retro sale. The right of repurchase must be reserved in the same instrument of sale.