GR L 10183; (April, 1958) (Digest)
G.R. No. L-10183; April 28, 1958
RAQUEL ADORABLE, ET AL., petitioners, vs. IRINEA INACALA, ET AL., respondents.
FACTS
Respondent Irinea Inacala was the registered owner of a parcel of land. On July 1, 1941, she executed a deed of sale (Exhibit B) covering a 15-hectare lot in favor of Arcadio Mendoza for P420.00. Mendoza then executed a private instrument (Exhibit C) granting Inacala the option to repurchase the lot for the same price within one year from the date of the sale. Mendoza subsequently sold the property to spouses Eugenio and Margarita Ramos, who obtained a transfer certificate of title. The petitioners, all surnamed Adorable, later bought the land from the Ramos spouses, and Transfer Certificate of Title No. 19736 was issued in their name. Since the 1941 sale, Inacala remained in possession of the land and did not redeem it from Mendoza. It was only in 1951, when the petitioners attempted to take physical possession through a lessee, that they learned of Inacala’s claim over the lot.
ISSUE
Whether the Court of Appeals correctly applied the third paragraph of Article 1606 of the new Civil Code to declare that the deed of sale should be given the effect of a mere pacto de retro sale and that respondent Inacala should be permitted to exercise the right of repurchase.
RULING
No. The Supreme Court reversed the decision of the Court of Appeals. The transaction was expressly a sale with a right to repurchase, as evidenced by Exhibit C, which granted Inacala the right to redeem within one year. Since the stipulated one-year period expired without redemption, the original purchaser, Arcadio Mendoza, irrevocably acquired ownership under Article 1509 of the old Civil Code, which was in force at the time of the transaction in 1941. The third paragraph of Article 1606 of the new Civil Code applies only to cases where one party contests or denies that the true agreement is a sale with a right of repurchase, which is not the situation here. Consequently, the petitioners are declared the owners of the land in controversy.