Sales

DAPITON vs. COURT OF APPEALS G.R. NO. 107259; JUNE 9, 1997 FACTS: That sometime before May 5, 1967, Raymundo Dapiton who was then needing money, approached the private respondent Meljohn dela Pena and requested for a loan of P400.00 offering to place as security of said loan his residential house and lot located at Almeria, Leyte. That the fair market value of the same is not less than P3,000.00 more or less; it is the house where Dapiton has been living for thirty (30) years up to the present. That the private respondent agreed to the request of Dapiton and thereafter said private respondent prepared the corresponding document and Dapiton was made to sign the same on the 5th day of May, 1967, before Notary Public, Dionisio R. dela Peña, father of herein defendant. Thus, the petitioners contend that the transaction between Raymundo Dapiton and the private respondent was one of loan of P400.00 to be paid within one year time with the property subject of the question deed as security for the payment of the said loan. Private respondent, however, maintains that the transaction between him and the deceased Dapiton was one of absolute sale. ISSUE:

Whether or not the true nature of the contract between Dapiton and dela Pena was one of an equitable mortgage or absolute sale. HELD: Closely examining the facts of this case, we find that, contrary to the findings of the Court of Appeals, there are numerous indications that the contract effected between the parties is actually an equitable mortgage and not an absolute deed of sale. Firstly, it is without dispute that private respondent Dela Peña made two (2) annotations on the deed of sale, one at the left hand margin and another at the back of the page. These annotations grant Raymundo Dapiton the right to repurchase his property within one year. This right of repurchase is a clear contravention of private respondent‟s claim that the deed of sale was meant to be absolute. Secondly, it has been established that the deceased Dapiton habitually borrowed money from numerous acquaintances, using the said property as security for the loan. The amount borrowed, amounting to Four Hundred Pesos (P400.00), invariably remained the same. Although these loans were constantly denoted as “sale with right of repurchase,” the deceased Dapiton continously remained in possession of the property despite a succession of such loan transactions. Evidently, all these transactions were equitable mortgages.

Thirdly, we find it difficult to believe that the private respondent would tolerate the uninterrupted occupation of the property by the Dapitons simply because he has no need for it just yet. In the light of the fact that the private respondent has been in dispute with the Dapitons since 1968, and considering his claim of absolute ownership, it is unthinkable for private respondent to let Dapiton and his heirs remain and make use of the property for almost thirty (30) years. Fourthly, the private respondent is a member of the bar, well-versed in the intricacies of the law. We thus find it improbable that he would agree to add the annotations pertaining to the deceased Dapiton‟s right of repurchase only to appease Dapiton‟s children. If , as he claims, the sale was indeed absolute, the fact that he would place such annotations as would put in question the absoluteness of the sale raises some doubt as to the true nature of the transaction involved. After all, if the property is truly his by right, no amount of objections raised by the children of the elder Dapiton would change the fact that the sale is already a fait accompli. No vendee in his right mind would agree to any act which would weaken his absolute claim to a property sold to him wthout any restraint or condition. If the sale was indeed absolute, why grant Dapiton a right to repurchase at all? Lastly, Article 1603 of the New Civil Code provides:

“Article 1603. In case of doubt , a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage.” In the case at bar, the true nature of the contract between Dapiton and dela Peña is the crux of the issues raised in this petition. Considering the circumstances of this case, we resolved the doubt in favor of the petitioner. The actuations of the private respondent are highly suspect, if not downright dishonorable. AS A JUDGE and member of the bar, he is charged with the duty to act fairly and equitably. He has not been fair, nor has been forthright in his dealings with Raymundo Dapiton. LEGASPI vs. COURT OF APPEALS G.R. No. L-45510; MAY 27, 1986 FACTS: On February 8, 1971, the plaintiff now petitioner filed a complaint with the CFI of Cavite for reconveyance to enforce his right to repurchase two parcels of land, Lots Nos. 3962 and 3963 of the Imus Estate covered by TCT Nos. T-4388 and T-4389, respectively, which he sold to the defendant, now private respondent, pursuant to a sale with pacto de retro as evidenced by a Deed of Sale with the Right to Repurchase dated October 15, 1965 and marked as Exhibit “A”. Bernardo B. Legaspi is the registered owner of two parcels of

land which he sold to his son-inlaw, Leonardo B. Salcedo on October 15, 1965 for the sum of Php25,000 with the right to repurchase the same within 5 years from the execution of the deed of sale. Before the expiry date of the repurchase period Legaspi offered and tendered to Salcedo the amount of Php25,000 for the repurchase of the two parcels of land; that the tender of payment was refused by Salcedo on the ground that the repurchase price should have been Php42,250 due to extraordinary inflation. Salcedo, furthermore; refused to convey the property to Legaspi. As a result of his refusal, Legaspi consigned with the CFI of Cavite the amount of Php25,000. ISSUE: Whether or not the petitioner validly exercised his right to repurchase the properties within the five-year period as stipulated in the sale with pacto de retro entered into between the petitioner as vendor a retro and private respondent as vendee a retro. HELD: Since the case at bar involves the exercise of the right to repurchase, a showing that petitioner made a valid tender of payment is sufficient. It is enough that a sincere or genuine tender of payment and not a mock or deceptive one was made. The fact that he deposited the amount of the repurchase money with the Clerk of Court was simply an additional security for the petitioner. It was not an essential act that had to be performed after tender of payment was refused by the private

respondent although it may serve to indicate the veracity of the desire to comply with the obligation. On the issue of whether or not the tender of payment in the manner described by the petitioner resulted in the exercise of the right to repurchase, we rule that it was erroneous on the part of the respondent court to reverse the factual finding of the trial court that a valid tender of payment was made seasonably. The records do not show that this finding is grounded entirely on speculation, surmises, or conjectures. ALONZO vs. INTERMEDIATE APPELLATE COURT G.R. NO. L-72873; MAY 28, 1987 FACTS: Five brothers and sisters inherited in equal pro indiviso shares a parcel of land registered in „the name of their deceased parents. One of them transferred his undivided share by way of absolute sale. A year later, his sister sold her share in a “Con Pacto de Retro Sale”. By virtue of such agreements, the petitioners occupied, after the said sales, an area corresponding to two-fifths of the said lot, representing the portions sold to them. The vendees subsequently enclosed the same with a fence. with their consent, their son Eduardo Alonzo and his wife built a semi-concrete house on a part of the enclosed area. One of the five coheirs sought to redeem the area sold to petitioners but was dismissed when it appeared that he was an American citizen.

Another coheir filed her own complaint invoking the same right of redemption of her brother. Trial court dismissed the complaint, on the ground that the right had lapsed, not having been exercised within thirty days from notice of the sales. Although there was no written notice, it was held that actual knowledge of the sales by the coheirs satisfied the requirement of the law. Respondent court reversed the decision of the Trial Court. ISSUE: Whether or not actual knowledge of the sales by the co-heirs satisfied the requirement of the law. HELD: Where co-heirs filed an action for redemption of co-heirs sold share only after thirteen years had elapsed from the sale, they are deemed to have been actually informed thereof sometime during those years although no written notice of sale was given to them. While we do not here declare that this period started from the dates of such sales in 1963 and 1964, we do say that sometime between those years and 1976, when the first complaint for redemption was filed, the other co-heirs were actually informed of the sale and that thereafter the 30-day period started running and ultimately expired. This could have happened any time during the interval of thirteen years, when none of the co-heirs made a move to redeem the properties sold. By 1977, in other words, when Tecla Padua filed her complaint, the right of redemption had already been

extinguished because the period for its exercise had already expired. REYES vs. CONCEPCION G.R. NO. 56550; OCTOBER 1, 1990 FACTS:

The plaintiffs, the defendants and the intervenor are the pro-indiviso coowners of the properties cited and described in the complaint. That on 16 April 1980, the plaintiffs received a written notice from the defendants and the intervenor that the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION had offered to buy the latter's share in the properties listed in the complaint. The VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION is ready, willing and able to purchase not only the aliquot shares of the defendants and the intervenor, but also that of the plaintiffs, in and to all the properties subject of this case, for and in consideration of the net amount of TWELVE and 50/100 (P12.50) PESOS per square meter and under the aforequoted terms. The plaintiffs were requested: a) To exercise their pre-emptive right to purchase defendants' and intervenor's shares under the above-quoted terms. Petitioners filed with the CFI a complaint for injunction and damages, seeking to enjoin private respondents Socorro Marquez Vda. De Zaballero, Eugenia Z. Luna and Leonardo M. Zaballero from selling to a third party their proindiviso shares as co-owners in eight parcels of registered land located in

the province of Cavite, with an aggregate area of about 96 hectares. Petitioner claimed that under Article 1620 of the new Civil Code, they, as co-owners, had a preferential right to purchase these shares from private respondents for a reasonable price. ISSUE: Whether or not a co-owner has a preemptive right to purchase the proindiviso shares of his co-owners. HELD: This claim is patently without basis. In this jurisdiction, the legal provisions on co-ownership do not grant to any of the owners of a property held in common a pre-emptive right to purchase the proindiviso shares of his co-owners. Petitioners' reliance on Article 1620 of the New Civil Code is misplaced Article 1620 contemplates of a situation where a co-owner has alienated his proindiviso shares to a stranger. By the very nature of the right of "legal redemption", a co-owner's light to redeem is invoked only after the shares of the other co-owners are sold to a third party or stranger to the coownership [See Estrada v. Reyes, 33 Phil. 31 (1915)]. But in the case at bar, at the time petitioners filed their complaint for injunction and damages against private respondents, no sale of the latter's pro-indiviso shares to a third party had yet been made. Thus, Article 1620 of the New Civil Code finds no application to the case at bar. UY vs. COURT OF APPEALS G.R. NO. 107439; JULY 20, 1995 FACTS: The Catador spouses offered to sell to private respondent Rosa Sauler the whole parcel of land for P80.00 per

square meter. The latter agreed and, on 07 July 1977, she paid the spouses an initial amount of P45,000.00. On 18 October 1978, the Catador spouses hypothecated the property to the State Investment House, Inc. ("SIHI"), to "accommodate" their niece, Angelina Cadieva-Lacson, who had secured a loan of P250,000.00 from SIHI. The mortgage was registered with the Registry of Deeds in Bulacan and annotated on the transfer certificate of title of the property. Upon learning of the mortgage, private respondent met with the Catador spouses in order to "renegotiate" their standing agreement. It would appear that private respondent gave up a claim to get the entire property and agreed to instead retain, with the conformity of the Catador spouses, an area within the lot as the "katumbas" or as equivalent of the downpayment of P45,000.00. 2 Private respondent opted for the 555-squaremeter area which she was then occupying and on which she had theretofore made improvements. Her request for a survey and subdivision of the property, as well as a separate title, could not, however, be granted by the Catador spouses since the certificate of title over the whole lot was by then already handed over to SIHI. Angelina Cadieva-Lacson, the niece of the Catador spouses, defaulted on her loan; whereupon, SIHI foreclosed on the security. One year thereafter, or on 17 March 1981 (the expiry date of the oneyear redemption period under Act No. 3135), SIHI received a letter from private respondent asserting her ownership over the 555 square meters of the foreclosed land. The letter was followed, on 13 August 1981, by another communication sent this time by private respondent's son, William Ang, who offered to buy from SIHI one-

half of the property for P225,000.00. SIHI did not respond to both letters. Two years later, petitioner Michael T. Uy bought the property from SIHI. The deed of sale presented for registration before the land registration authority 4 showed that petitioner obtained the property for P60,000.00 on 13 December 1983 (although another deed of sale, also dated 13 December 1983, indicated an additional purchase price of P300,000.00 5). TCT No. 48467 in SIHI's name was cancelled and TCT No. 108486 was issued to petitioner on 29 March 1984. 6 Alleging title over the portion of the property sold to her, private respondent filed, on 11 July 1985, with the Regional Trial Court in Valenzuela, Metro Manila, a complaint for legal redemption with damages against Michael T. Uy and SIHI. ISSUE: Whether or not the private respondent has a right of legal redemption under Article 1620 of the Civil Code.

HELD: The exercise of a right of legal redemption under Article 1620 of the Civil Code presupposes the existence of a co-ownership at the time the conveyance is made by a co-owner and when it is demanded by the other co-owner or co-owners. The facts that would indicate private respondent's rightful title to a specific portion of the foreclosed asset, i.e., her being in possession of the 555-squaremeter area, her repairing and improving the house standing thereon, her enclosing the premises with concrete fence and a steel gate, installing drainage (pipes), as well as filling up

the site with earth ("tambak") and her constructing a bodega for the raw materials and supplies of her "Kastiron Foundry & Machine Shop" business, verily, are the circumstances that negate, rather than bolster, her claim for legal redemption over the entire property on the basis of Article 1620, in relation to Article 1623, of the Civil Code. The exercise of a right of legal redemption thereunder presupposes the existence of a coownership at the time the conveyance is made by a co-owner and when it is demanded by the other co-owner or coowners. There is co-ownership when "the ownership of anundivided thing or right belongs to different persons."