Narvaez v. Alciso
REITERATIONFacts
The Antecedents: Larry A. Ogas owned a parcel of land. He sold it to his daughter, Rose O. Alciso (Alciso). Alciso sold the property to Jaime Sansano via a Deed of Sale with Right to Repurchase. Alciso repurchased the property and then sold it to Celso S. Bate via a Deed of Absolute Sale, warranting that her title was free from liens and encumbrances, except for a lease agreement with Esso Standard Eastern, Inc., the rights to which were transferred to the buyer. Bate then sold the property to Spouses Dominador R. Narvaez and Lilia W. Narvaez (Spouses Narvaez) via a Deed of Sale of Realty. The Spouses Narvaez built a commercial building on the property. Alciso demanded that a stipulation allowing her to repurchase the property from the Spouses Narvaez be included in the deed, which was done, stating that the seller (Bate) carried over the intent of the original seller (Alciso) to buy back the property under conditions the buyers (Spouses Narvaez) might impose. Alciso alleged she informed the Spouses Narvaez of her intent to repurchase, but they demanded ₱300,000, while she was willing to pay only ₱150,000, leading to a failure to agree on the price. Procedural History: Alciso filed a Complaint praying for the annulment of the deeds of sale, cancellation of titles, reconveyance of the property, and damages, claiming the transactions were intended as real estate mortgages, not sales with right of repurchase. The Regional Trial Court (RTC) ruled that the first deed was functus officio, the action to annul the second deed had prescribed, Alciso had no personality to annul the third deed, but the third deed contained a stipulation pour autrui in favor of Alciso, which she accepted. The RTC set the repurchase price at ₱80,000 and allowed Alciso to either appropriate the building or sell the land to the Spouses Narvaez, awarding her attorney's fees and nominal damages. The Spouses Narvaez appealed. The Court of Appeals (CA) affirmed the existence of a stipulation pour autrui and Alciso's acceptance, but modified the repurchase price, remanding the case for its determination. The CA also ruled that the transaction was a sale with right of repurchase, not a mortgage, and applied Article 448 of the Civil Code regarding builders in good faith. The Petition: The Spouses Narvaez filed a petition for review on certiorari, arguing that Alciso did not communicate her acceptance of the stipulation pour autrui, thus she could not repurchase the property.
Issue(s)
Whether Alciso effectively communicated her acceptance of the stipulation pour autrui to the Spouses Narvaez. Whether Article 448 of the Civil Code is applicable to the case. Whether Alciso can still exercise her right of redemption.
Ruling
The petition is unmeritorious. The Supreme Court affirmed the Court of Appeals' decision with modification. Respondent Rose O. Alciso may exercise her right of redemption by paying the petitioners Spouses Dominador R. Narvaez and Lilia W. Narvaez the price of the sale, expenses of the contract, legitimate payments made by reason of the sale, and necessary and useful expenses made on the subject property. The Regional Trial Court is directed to determine these amounts, after which Alciso shall have 30 days to pay.
Ratio Decidendi
On the communication of acceptance of the stipulation pour autrui: The Court reiterated the requisites of a stipulation pour autrui under Article 1311, paragraph 2, of the Civil Code, including the communication of acceptance by the third party before revocation. The Court found that all requisites were present in this case. Specifically, Alciso communicated her acceptance by demanding that the stipulation be included in the deed and by informing the Spouses Narvaez of her desire to repurchase the property. The Court emphasized that the factual finding of the RTC, affirmed by the CA, that Alciso communicated her acceptance was binding and not subject to review as a question of fact, absent any exceptions. The testimony of Alciso during trial, where she recounted her conversations with Mrs. Narvaez about redeeming the property, supported this finding. The Court noted that acceptance need not be formal or express, and can be implied, as long as it is communicated before revocation. On the applicability of Article 448 of the Civil Code: The Court disagreed with the Court of Appeals' application of Article 448. Article 448 applies when a landowner builds on their land, but the issue of good faith is irrelevant when the owner themselves is the builder. In this case, the Spouses Narvaez were the owners of the land when they built the commercial building. Therefore, Article 448, which governs the rights between a landowner and a builder in good faith, is inapplicable. The Court clarified that the applicable provisions for a sale with right of repurchase are Articles 1601 and 1616 of the Civil Code, not Article 448. On the exercise of the right of redemption: The Court held that the terms of the 14 August 1981 Deed of Sale of Realty indicated a sale with right of repurchase, where the right was transferred to Alciso. Under Article 1606 of the Civil Code, in the absence of an express agreement, the right to repurchase lasts four years from the date of the contract. However, the third paragraph of Article 1606 provides a crucial exception: the vendor may still exercise the right to repurchase within thirty days from the time final judgment is rendered in a civil action determining the contract as a true sale with right to repurchase. The Court found that Alciso's intimation of repurchase was insufficient; a tender of payment is necessary to effectively exercise the right of redemption, as per Article 1616 and jurisprudence. Nevertheless, applying the third paragraph of Article 1606, Alciso was granted 30 days from the finality of the decision to exercise her right of redemption.
Main Doctrine
A stipulation pour autrui requires the communicated acceptance of the third party before its revocation. In a sale with right of repurchase, the exercise of the right requires a tender of payment, and the applicable provisions are Articles 1601 to 1616 of the Civil Code, not Article 448. The third paragraph of Article 1606 provides a 30-day period from final judgment for the vendor to repurchase if the contract is declared a sale with right to repurchase.