G.R. No. 127005 July 19, 1999
SPS. JOSE ROSARIO AND HERMINIA ROSARIO, petitioners, vs. COURT OF APPEALS, LOURDES VILLAHERMOSA, AIDA VILLAHERMOSA, RODULFO VILLAHERMOSA, NATIVIDAD V. CEBALLOS, AND JESUS VILLAHERMOSA, respondents.

FACTS

Petitioners Spouses Rosario filed an action for legal redemption over one-half of a parcel of land. Herminia Rosario was the registered co-owner of one-half of Lot 77-A, with her sister Filomena Lariosa owning the other half. Upon Filomena’s death in 1976, Herminia, believing herself to be the sole heir, paid the balance of a GSIS loan secured by the property and took possession. Respondents, the children of another predeceased sister, disturbed this possession, claiming ownership based on a 1976 deed of sale where Filomena purportedly sold the lot to their father, Emilio Villahermosa, for P380. The Rosarios offered to redeem the property, but the Villahermosas refused, insisting the sale covered the entire lot.
The Villahermosas asserted that the property originally belonged to their parents. They claimed an implied trust arrangement existed wherein Filomena was merely allowed to use half the lot in 1950 for P380, subject to the condition that she would return it before her death. They alleged the 1964 formal subdivision and sale of half the lot to Filomena, and the subsequent simulated sale of a half-share to Herminia, were only done to secure the GSIS loan for house construction. They presented the 1976 deed as Filomena’s fulfillment of the trust by “selling” the property back to them for the original P380 amount.

ISSUE

The core issue is whether the petitioners have a valid right to legally redeem the property from the respondents.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision, ruling that no right of legal redemption existed. The legal logic proceeds from the finding of an implied trust, which negates the co-ownership necessary for redemption. For legal redemption under Article 1620 of the Civil Code to arise, a sale between co-owners must be genuine. The Court found that the 1964 transaction where Herminia acquired her registered half-share from Filomena was not a true sale but a simulated one, executed solely to accommodate Filomena’s GSIS loan requirements. Consequently, Herminia was not a real co-owner but a mere trustee holding title for Filomena’s benefit. Since Filomena was the sole true owner of the entire Lot 77-A, her 1976 sale of it to the Villahermosas was not a sale of a co-owner’s share to a third party but a sale by a sole owner. Therefore, the essential element of a sale by a co-owner was absent, extinguishing any right of legal redemption. The Court upheld the existence of an implied trust under Article 1453, as the property was conveyed to Herminia without consideration for a specific purpose (securing the loan), and upon fulfillment, it was to be reconveyed to the original trustor or her rightful successors. The 1976 deed was deemed Filomena’s act of reconveyance in compliance with this trust.