G.R. No. 75304 ; January 23, 1990
BIENVENIDA PANGILINAN, CRISENCIO PANGILINAN, and NARCISO LINTAG, petitioners, vs. FIDEL RAMOS, TARCILLA RAMOS GADUQUE, GERONIMO RAMOS, LETICIA RAMOS, ESTERLITA RAMOS, JUANITA RAMOS, EMILIA DUCUT RAMOS, LEOCADIO RAMOS, MACARIO RAMOS and CATALINO RAMOS, respondents.

FACTS

The property in dispute, an unregistered residential lot, was originally sold to Leocadio Ramos in 1964. On October 26, 1965, his daughter, Tarcilla Ramos (later Gaduque), executed a Deed of Sale with Conventional Redemption in favor of petitioners Crisencio Pangilinan, Bienvenida Lintag, and Narciso Lintag for P1,000. The deed expressly granted Tarcilla the right to repurchase the property within five years. Tarcilla subsequently left for Olongapo City for over nine years, during which her whereabouts were unknown to her family. The petitioners declared the property in their names, paid real estate taxes, and built a house on the lot in 1972. An attempt by Tarcilla’s sister to redeem the property during her absence was rejected by the petitioners, who insisted that Tarcilla herself must be the redeeming party.
After locating Tarcilla in 1973, the Ramos family initiated actions leading to a complaint for recovery of possession and annulment of document before the Court of First Instance (CFI) of Pampanga. The CFI dismissed the complaint, upholding the petitioners’ ownership. On appeal, the Court of Appeals modified the CFI decision. It declared the contract as a true sale with a right to repurchase and, applying Article 1606 of the Civil Code, granted Tarcilla Ramos Gaduque a new period of thirty days from the finality of its judgment to redeem the property by paying a computed repurchase price of P11,361.08.

ISSUE

Whether the Court of Appeals correctly applied Article 1606 of the Civil Code to grant respondent Tarcilla Ramos Gaduque a fresh 30-day period to redeem the property after the stipulated five-year redemption period had expired.

RULING

Yes, the Supreme Court affirmed the decision of the Court of Appeals. The legal logic hinges on the proper characterization of the transaction and the application of Article 1606 of the Civil Code. The contract was unequivocally a pacto de retro sale, as its terms clearly reserved to the vendor, Tarcilla Ramos, the right to repurchase within five years. Since the stipulated period lapsed without redemption, ownership would typically consolidate with the petitioners. However, Article 1606, paragraph 3, provides a specific exception: when the true nature of the contract as a sale with right to repurchase is contested or denied in a civil action, the vendor is granted a new period of thirty days from the time final judgment is rendered declaring it as such to exercise the right of redemption.
Here, the respondents’ filing of the civil action, which put the true nature of the deed in issue, triggered this statutory remedy. The Court emphasized that this 30-day period is not a prescriptive period but a preemptory legal grant designed to resolve uncertainty over title once a judicial declaration on the contract’s nature is made. Consequently, despite the lapse of the conventional five-year period, Tarcilla Ramos Gaduque was correctly afforded this final opportunity to redeem, calculated from the finality of the Court of Appeals’ judgment which conclusively established the contract as a sale with a right of repurchase. The Supreme Court found no merit in the petition