GR 26295; (July, 1978) (Digest)
G.R. No. L-26295 July 14, 1978
SALVACION A. CATANGCATANG, petitioner, vs. PAULINO LEGAYADA, respondent.
FACTS
On May 19, 1952, respondent Paulino Legayada executed a deed of sale with pacto de retro over a parcel of land in favor of petitioner Salvacion A. Catangcatang for P1,400, with a five-year redemption period. Petitioner paid P1,200 upon execution, leaving a P200 balance covered by a promissory note. Petitioner later discovered the land delivered had an area of only 5.0779 hectares, not the stated 8.8272 hectares. She filed an action for recovery of the deficient area. Respondent counterclaimed for rescission due to non-payment of the P200 balance. The trial court dismissed both the complaint and counterclaim, a decision which became final. Before the redemption period’s expiration, respondent forcibly retook possession on May 10, 1957. After the period lapsed, petitioner filed a new action for consolidation of title and restoration of possession.
ISSUE
The core issue is whether the failure to pay the full purchase price of P1,400 suspends the running of the five-year redemption period in a pacto de retro sale.
RULING
The Supreme Court affirmed the Court of Appeals, ruling that the redemption period did not commence due to the vendee’s failure to pay the full purchase price. The legal logic is anchored on the reciprocal nature of obligations in a contract of sale. In a pacto de retro, the vendor’s obligation to reconvey the property is contingent upon the vendee’s complete performance of paying the full price. Since petitioner paid only P1,200 of the P1,400 consideration, there was a partial failure of consideration. Consequently, the vendor’s period to exercise the right of repurchase could not begin to run, as the vendee had not fully complied with her own obligation. This suspension principle prevents a vendee from consolidating title while herself being in default. The Court also upheld the deduction of unpaid realty taxes from the amount to be returned to petitioner, as the vendee a retro, being the owner during the redemption period, bears the burden of such charges. The claim of res judicata regarding the P200 balance was unavailing, as the final judgment in the prior case merely dismissed the counterclaim for rescission without reforming the contract or declaring the balance unenforceable. Thus, petitioner’s action for consolidation was properly dismissed.