G.R. No. L-27547. March 31, 1980.
SOFIA MAGTIRA, petitioner, vs. THE HONORABLE COURT OF APPEALS and ZACARIAS PANGAN, respondents.

FACTS

The property in question, a parcel of riceland in Bulacan, originally belonged to Isidoro Magtira. On February 8, 1926, Isidoro executed a document entitled “Kasulatang Sanglaan” in favor of Zacarias Pangan for a consideration of P725.00. The document’s body stated that the property was “inilipat, ipinagbili nang biling mabibiling muli” (transferred, sold with a right to repurchase). It stipulated a repurchase period of four years, ending April 30, 1930, and placed the obligation to pay real estate taxes on Zacarias during the period the property was not redeemed. Zacarias took possession and paid the taxes.
Subsequently, the Magtiras obtained additional loans from Zacarias totaling P275.00, bringing the aggregate sum to P1,000.00. In an undated private instrument, the parties agreed to extend the repurchase period for another five years, until April 30, 1935. Petitioner Sofia Magtira, Isidoro’s sole heir, claimed she attempted to redeem the property orally on three occasions after 1935 but was put off by Zacarias. On August 23, 1945, Zacarias filed an Affidavit for Consolidation of Ownership with the Register of Deeds. Sofia filed a complaint for redemption only on June 18, 1956.

ISSUE

Whether the contract between the parties was an equitable mortgage or a pacto de retro sale.

RULING

The Supreme Court affirmed the Court of Appeals, ruling the contract was a true pacto de retro sale, not an equitable mortgage. The legal logic rests on the evaluation of the contract’s terms and the parties’ contemporaneous and subsequent acts, which negated the presence of indicia for an equitable mortgage under the Civil Code. The document, despite its “Sanglaan” title, explicitly used terms of absolute sale with a resolutory condition of repurchase. Critically, the vendor obligated himself not to repurchase before the lapse of four years, a stipulation incompatible with a mortgage where the debtor can repay at any time. The agreement placing the tax burden on the vendee (Zacarias) during the redemption period was also characteristic of a conditional sale.
Furthermore, the petitioner’s inaction for over two decades was fatal to her cause. The right to redeem, if it existed, was extinguished by laches. She failed to assert her claim for twenty-one years from the original redemption date (1930) and for eleven years after the consolidation (1945), despite the registration of the affidavit constituting constructive notice. This prolonged silence acquiesced to Zacarias’s open and adverse possession. Additionally, Zacarias acquired ownership through ordinary acquisitive prescription, having possessed the property publicly, peacefully, and in the concept of an owner for over ten years from the 1945 consolidation. The Court found no merit in the claim of an oral trust or repeated redemption attempts, as these were unsupported by evidence and belied by the documented extensions and her long delay in taking judicial action.