G.R. No. L-24107. April 30, 1979.
MELITONA VDA. DE ARCEO, et al., plaintiffs-appellants, vs. LAURO L. GO and JACINTA S. GO, defendants-appellees.

FACTS

On July 6, 1944, Eusebio Arceo sold two contiguous residential parcels of land in Mogpog, Marinduque, to Jacinta S. Go under a deed of sale with a right to repurchase within one year. The Go spouses immediately took possession, secured a tax declaration, and later obtained a Torrens title for a portion of the property. Over the years, they mortgaged and sold parts of the land to third parties. In a prior partition case (Civil Case No. 654) involving the Arceo estate, the court in 1947 issued an order approving a project of partition but excluded the subject lots due to an intervention filed by the Gos’ counsel. Subsequently, in 1955, in another case (Civil Case No. 903) filed by Pilar Arceo to recover her alleged share, the court upheld the validity of the 1944 pacto de retro sale and declared the Gos as entitled owners.
On February 18, 1964, the heirs of Eusebio Arceo filed the present complaint (Civil Case No. 1290) against the Gos. They sought reconveyance of the property, alleging that the 1944 contract was an equitable mortgage and that they were entitled to redeem it. The defendants moved to dismiss the complaint on grounds including prescription and bar by prior judgment. The trial court granted the motion to dismiss, and the plaintiffs’ motion for reconsideration was denied, prompting this appeal.

ISSUE

Whether the action for judicial declaration that the contract is an equitable mortgage and for reconveyance has prescribed.

RULING

Yes, the action has prescribed. The Supreme Court affirmed the trial court’s dismissal. The contract in question was executed on July 6, 1944. The appellants’ cause of action, which seeks to recharacterize the pacto de retro sale as an equitable mortgage and to recover the land, is subject to prescription. Citing the precedent in Fernandez vs. Fernandez, the Court ruled that the right to question the nature of such a transaction, as well as any action to recover the land, prescribes ten years after the vendor’s right to repurchase is extinguished and ownership is consolidated in the vendee. In this case, the one-year redemption period expired in 1945. The Gos’ ownership was effectively consolidated thereafter, and any impugnment of the contract’s nature should have been made within ten years from that consolidation. The filing of the complaint in 1964, nearly twenty years after the execution of the deed, was clearly beyond the prescriptive period. The defense of prescription is a valid ground for dismissal, rendering a discussion on the ground of res judicata unnecessary. The judgment was affirmed with costs against the appellants.