Gonzaga v. Go
REITERATIONFacts
The Antecedents: On December 6, 1930, the plaintiff sold a parcel of land to Juliana M. de Tomas with pacto de retro for P250, stipulating that the seller could repurchase the property at any time by paying the same price plus expenses. After the death of Francisco Tomas, husband of Juliana M. de Tomas, the property was inventoried as part of his estate. With judicial authorization, the administrator sold the property to Victorina Cabelin, married to Go Juanco, on March 23, 1935, for P170. This sale was approved by the court handling the intestate proceedings of Francisco Tomas on May 6, 1935. The land was registered under the Torrens system in the plaintiff's name, with Original Certificate of Title No. 1402 issued in his favor. An annotation of the transfer of the property to Victorina Cabelin, married to Go Juanco, appears on the back of this title. It is not stated that the defendants or Victorina Cabelin obtained a transfer certificate of title, nor that the original certificate was cancelled. Procedural History: In October 1936, the plaintiff requested the defendants to execute the deed of repurchase, but the defendant requested time, claiming he had to go to Cebu to lift a lien on the property, promising to execute the repurchase deed upon his return. Several months later, the plaintiff insisted on repurchasing the land, but the defendants refused, alleging that the four-year period for redemption had already expired. This led to the filing of the present action. The defendants appealed the decision of the Court of First Instance of Leyte, which ordered them to execute the deed of repurchase in favor of the plaintiff, upon payment by the plaintiff of P250 and the expenses for the deed, without costs. The Petition: The defendants appealed the decision of the Court of First Instance of Leyte.
Issue(s)
Whether the plaintiff was obligated to offer the repurchase price before his right to repurchase could be recognized. Whether the stipulated period for repurchase was ten years.
Ruling
The Court of First Instance declared that according to the terms of the contract of sale with pacto de retro, the plaintiff was granted the right to repurchase the land at any time. This fell under Article 1508, paragraph 2 of the Civil Code, which states that if the period is not stipulated, it shall not exceed ten years. Consequently, the court decided that the stipulated period should be extended to ten years, which had not yet expired. The court also held that Article 1518 of the Civil Code was inapplicable because the plaintiff was not yet obligated to make the offer of the repurchase price, as the defendants flatly refused to allow the repurchase. The Supreme Court affirmed the appealed decision.
Ratio Decidendi
On Whether the plaintiff was obligated to offer the repurchase price before his right to repurchase could be recognized: The defendants contend that the lower court erred in not concluding that the plaintiff was obligated to offer the repurchase price before his right to repurchase could be recognized. The Supreme Court found that the lower court correctly appreciated the facts and applied the law. It was established that when the plaintiff requested the repurchase, the defendants refused to allow it, citing the expiration of the four-year period for redemption. Therefore, Article 1518 of the Civil Code is inapplicable because the plaintiff was not obligated to offer the price or the expenses of the deed. An offer must be made when the repurchase is assented to by the vendees, not when, as in this case, they have categorically refused to permit the repurchase. The obligation to offer the price arises only when the vendees are amenable to the repurchase, which was not the situation here. On Whether the stipulated period for repurchase was ten years: The defendants insist that the lower court erred in declaring that the stipulated period for repurchase was ten years. In the contract of sale with pacto de retro, it was stipulated that the plaintiff could repurchase the land at any time upon returning P250 and the expenses of the contract. This stipulation clearly indicates that the contracting parties fixed a period for repurchase, leaving the term or expiration to the will of the seller. This is precisely one of the cases referred to in Article 1508, paragraph 2 of the Civil Code, which provides that the period shall not exceed ten years. The Supreme Court noted that the cases cited by the defendants, Manalo v. Gueco and Medel v. Francisco, are not strictly applicable because the facts in those cases are not similar to the present case. The stipulation of repurchasing "at any time" implies a period left to the seller's discretion, but Article 1508 limits this discretion to a maximum of ten years.
Main Doctrine
In a contract of sale with pacto de retro, where the parties stipulate that the seller may repurchase the property at any time, the period for repurchase is governed by Article 1508, paragraph 2 of the Civil Code, which limits the period to ten years. Furthermore, the seller is not obligated to make an offer of the repurchase price if the buyers outright refuse to allow the repurchase.