GR 47342; (June, 1941) (Digest)
G.R. No. 47342 ; June 30, 1941
HILARIO C. RODRIGUEZ, en su concepto de Administrador Judicial del Abintestado del finado Carlos Cervantes, demandante y apelante, vs. RAMON ECHEVARRIA, demandado y apelado.
FACTS
Carlos Cervantes was the owner of a property in Davao. On March 5, 1928, he executed a deed of sale with pacto de retro in favor of Santiago de la Rosa for P4,200, with a two-year repurchase period ending March 4, 1930. On October 3, 1931, with Cervantes’s knowledge and consent, de la Rosa transferred his rights under the pacto de retro to Ramon Echevarria for P3,000. The new contract (Exhibit B) stipulated that Cervantes could repurchase the property by paying P3,000 to Echevarria on or before December 31, 1932. Cervantes failed to repurchase by that date. On January 5, 1933, Echevarria notified Cervantes that the sale had become absolute. Echevarria then secured the cancellation of the original title and obtained a new Transfer Certificate of Title in his name on January 21, 1933. Cervantes died on September 7, 1933, and his heirs remained in possession without paying rent. On June 18, 1937, one of Cervantes’s heirs, through a letter, offered to repurchase the property for P3,000 but did not tender payment. The judicial administrator of Cervantes’s estate filed this action on June 26, 1937, to compel Echevarria to allow the repurchase upon payment of P3,000, cancel Echevarria’s title, issue a new one, and pay indemnity for rentals. The trial court dismissed the complaint.
ISSUE
Whether the plaintiff, as judicial administrator of Carlos Cervantes’s estate, has the right to repurchase the property from the defendant after the expiration of the stipulated repurchase period.
RULING
The Supreme Court affirmed the trial court’s dismissal of the complaint. The contract between Cervantes and Echevarria (Exhibit B) was a true sale with pacto de retro, not an equitable mortgage. The terms were clear: Cervantes had the right to repurchase by paying P3,000 on or before December 31, 1932. He failed to do so. Upon such failure, the sale became absolute by operation of law, and Echevarria became the absolute owner. The subsequent offer to repurchase in 1937, made years after the deadline and without an actual tender of payment, was invalid and could not revive the extinguished right of redemption. The action was therefore correctly dismissed.