G.R. No. L-6628; August 31, 1954
JUAN GALANZA, plaintiff-appellee, vs. SOTERO N. NUESA, defendant-appellant.

FACTS

The plaintiff, Juan Galanza, owned a homestead parcel of land covered by Original Certificate of Title No. I-2247. On September 7, 1940, he sold this land to the defendant, Sotero N. Nuesa, with a right to repurchase within five years from the date of the deed’s execution. The original certificate of title was not cancelled, and a Transfer Certificate of Title No. T-172 was issued in the defendant’s name only on July 17, 1947. On May 19, 1951, the plaintiff filed a complaint to compel the defendant to reconvey the land, invoking his right of repurchase under Section 119 of Commonwealth Act No. 141. The defendant asserted that the plaintiff’s conventional right of redemption had lapsed for failure to exercise it within the stipulated five-year period from September 7, 1940, causing title to consolidate in him. The parties submitted an agreement of facts, and the trial court ruled in favor of the plaintiff, ordering reconveyance upon payment of the repurchase price. The defendant appealed.

ISSUE

Whether the five-year period to repurchase the homestead land should be computed from the execution of the deed of sale (September 7, 1940) or from the issuance of the transfer certificate of title in the defendant’s name (July 17, 1947).

RULING

The Supreme Court reversed the trial court’s decision and dismissed the complaint. The five-year period for repurchase commenced from the execution of the deed of sale on September 7, 1940. The plaintiff’s failure to redeem within that period rendered the defendant’s title absolute. The Court held that the registration of the deed (which occurred later) is not necessary for the contract to be effective between the parties; its purpose is to protect against third-party claims. The conventional redemption period agreed upon by the parties was valid and binding. The plaintiff’s action, filed in 1951, was filed beyond both the conventional five-year period (from 1940) and the statutory five-year period under Section 119 of Commonwealth Act No. 141. The defendant’s claim for damages, while mentioned in the stipulation, was disallowed due to lack of supporting evidence.