G.R. No. 27084 , December 31, 1927
AMBROSIO T. ALOJADO, as administrator of the intestate estate of Juana Mabaquiao, plaintiff-appellant, vs. M. J. LIM SIONGCO, ET AL., defendant-appellees.

FACTS

On October 12, 1907, Juana Mabaquiao sold a parcel of land to Nicolas Alegata for P7,744. The contract, though defectively worded, stipulated that Mabaquiao could repurchase the land when she had the means. After Alegata’s death, the land was adjudicated to his heirs, who later sold it to Lim Ponso & Co. under a pacto de retro sale. The right to repurchase was not exercised, and Lim Ponso & Co. subsequently transferred the land unconditionally to Lim Siongco and Lim Kingko. Upon Mabaquiao’s death, Ambrosio T. Alojado, as administrator of her estate, filed an action to recover the land, contending that the original 1907 contract was an antichresis (a loan secured by the fruits of the property) and not a sale with a right to repurchase.

ISSUE

Whether the contract executed between Juana Mabaquiao and Nicolas Alegata on October 12, 1907, is a contract of sale with a right to repurchase or an antichresis.

RULING

The Supreme Court AFFIRMED the lower court’s judgment, holding that the contract was a sale with a right to repurchase (pacto de retro) and not an antichresis. The Court ruled that:
1. The clear terms of the contract conveyed ownership with a right of repurchase, and nothing in its stipulations indicated the essential feature of an antichresis, which is the creditor’s right to receive the property’s fruits to be applied to interest and principal.
2. Even assuming the repurchase period was indefinite (“when she had the means”), the vendor’s title had already been consolidated. Under Article 1508 of the Civil Code, the redemption period cannot exceed ten years. Since the action was filed in 1922, more than ten years after the 1907 sale, the right of redemption had long expired, and the purchaser’s (or his successors’) title became absolute.
3. The nullity of the repurchase stipulation (for exceeding the ten-year limit) does not invalidate the underlying sale, as the right to repurchase is merely an accidental stipulation that can be separated from the principal contract of sale.

The Court found the testimonial evidence attempting to prove an antichresis unconvincing and insufficient to override the document’s clear terms. Consequently, the defendants were declared the rightful owners, and the plaintiff’s action for recovery was denied.