GR 28102; (December, 1981) (Digest)

G.R. No. L-28102 December 14, 1981
ELIAS L. PENACO, plaintiff-appellee, vs. ZOILO H. RUAYA and FELICITAS E. RUAYA, defendants-appellants.

FACTS

On January 14, 1957, defendants-appellants Zoilo and Felicitas Ruaya executed a pacto de retro sale of their residential building to Pershing Tan Queto for P1,000. The contract stipulated a one-year repurchase period after a one-year lapse and provided that upon the vendors’ failure to repurchase, title to the building would consolidate in the vendee. Crucially, the contract also contained a guarantee that upon such consolidation, the vendors would “relinquish and effect complete legal transfer” of all their rights and interests, as public land claimants, in the lot (Portion of Lot No. 373, Misamis Cadastre) upon which the building stood. The Ruayas failed to repurchase. Consequently, the vendee a retro, Queto, obtained a court judgment consolidating title to the building. Queto later assigned his rights to plaintiff-appellee Elias Penaco.

ISSUE

The core issues are: (1) Whether the promise to relinquish rights over the lot is void for lack of consideration; and (2) Whether the subject parcel of land has been sufficiently identified to enforce the obligation.

RULING

The Supreme Court affirmed the lower court’s decision, ordering the Ruayas to convey their rights over the lot to Penaco. The Court rejected the first contention that the promise to transfer the lot was a separate, unsupported contract. The legal logic is that there was only one integrated contract of sale with pacto de retro. The P1,000 consideration covered not merely the building but the entire agreement, which included the ancillary promise regarding the lot. This promise was a vital and inseparable condition to secure the vendee’s possession, as buying a building without rights to the land would leave him vulnerable to ejectment. The Court cited the principle that a valuable consideration, however nominal, if given in good faith, is sufficient.
Regarding the second issue, the land was sufficiently identified. The contract described it with reference to a specific Bureau of Lands decision (dated June 8, 1954) and a claim number (B.L. Claim No. 181 (N), Portion of Lot 373), which were made integral parts of the document. This reference to an administrative decision, which presumably contained a technical description, provided adequate identification for enforcement. The Court also noted that any question regarding Penaco’s qualification to acquire public land should be addressed in the proper administrative proceedings before the Director of Lands, not in this action for specific performance.