G.R. No. 27245, December 31, 1927
LEONA RAMOS, ET AL., plaintiffs-appellants, vs. FRANCISCO ICASIANO, ET AL., defendants-appellees.

FACTS

In 1889, Gregorio Ramos and Vicenta Fajardo sold a piece of land to spouses Pastor Villarica and Leonor Reyes with a right to repurchase, but no specific period was fixed. In 1903, Vicenta Fajardo, with the consent of the Villarica spouses, repurchased the land using money supplied by Francisco Icasiano. That same year, Fajardo sold the land to Francisco Icasiano, again with a right to repurchase, stipulating a period of fourteen (14) years. The formal document for this sale was executed only after Fajardo’s death. Before her death, Fajardo executed a will on October 18, 1903, stating the sale to Icasiano for P5,000 with a right to repurchase within ten (10) years, extendable to fourteen (14) years if an additional P1,000 was taken. After Fajardo’s death, disputes arose between her heirs and Icasiano. On August 5, 1905, Icasiano executed a document (Exhibit D) recognizing the heirs’ right to repurchase after fourteen (14) years. Later, on August 19, 1918, Icasiano conveyed his rights to the land to Nieves Ramos and Ramon Meneses. The plaintiffs, as Fajardo’s heirs, filed an action to compel the defendants to sell the land to them, claiming their right to repurchase.

ISSUE

Whether the plaintiffs, as heirs of Vicenta Fajardo, still have the right to repurchase the land from the defendants.

RULING

No. The Supreme Court affirmed the lower court’s judgment absolving the defendants from the complaint. The Court ruled that the transaction between Fajardo and Icasiano was a sale with a pacto de retro (right to repurchase), not a promise to sell. The right to repurchase was reserved by Fajardo at the time of the original sale in 1903. The subsequent agreement in 1905 (Exhibit D) merely modified the period for exercising this pre-existing right, extending it to fourteen (14) years. Applying Article 1508 of the Civil Code, the maximum period allowed for the exercise of the right of repurchase is ten (10) years. A stipulation that totally suppresses the exercise of the right during the entire ten-year period allowed by law is unlawful. Following the doctrine in *Santos vs. Heirs of Crisostomo and Tiongson* (41 Phil. 342), the Court held that since the agreement attempted to suspend the right of repurchase for the full fourteen (14) yearsa period exceeding the legal limit and effectively prohibiting its exercise within the lawful ten-year windowthe plaintiffs lost their right to repurchase upon the expiration of the ten-year period from the 1903 sale. Therefore, the plaintiffs’ action, filed after this period, was no longer viable. The other assigned errors were deemed unnecessary to address in light of this conclusion.