GR L 14132; (January, 1920) (Digest)
G.R. No. L-14132; January 22, 1920
LUCIANO VITUG DIMATULAC, plaintiff-appellee, vs. DOLORES CORONEL, defendant-appellant.
FACTS:
On June 30, 1911, Luciano Vitug Dimatulac sold several parcels of land with improvements to Dolores Coronel under a contract of sale with pacto de retro for P9,000, reserving the right to repurchase within five years. The contract included a leaseback provision, making Dimatulac a lessee obligated to pay annual rent. It stipulated that failure to pay rent for any year would extinguish the right to repurchase and consolidate ownership in Coronel. Dimatulac defaulted on rent payments for at least three years. Consequently, Coronel filed a civil action to recover possession and collect unpaid rent. The case was settled by a compromise agreement approved by the court on April 9, 1915, wherein Dimatulac agreed to surrender the property and crops to Coronel, who would apply the proceeds to the unpaid rent. Coronel took possession of most, but not all, of the property. In May 1916, before the five-year redemption period expired, Dimatulac offered to redeem the property. Coronel refused, claiming absolute ownership due to Dimatulac’s prior default. Dimatulac then filed this action to compel redemption.
ISSUE:
Whether Dimatulac retained the right to redeem the property under the original pacto de retro contract despite his default in rent payments and the subsequent compromise agreement.
RULING:
Yes, Dimatulac retained the right to redeem. The Supreme Court affirmed the trial court’s decision ordering Coronel to allow redemption. The Court held:
2. By entering into the 1915 compromise agreement, which provided for payment of past-due rent, Coronel effectively waived the forfeiture and treated the rent as a continuing obligation. Thus, the right to redeem was not extinguished.
3. The compromise agreement did not conclusively establish Coronel’s absolute ownership or extinguish the redemption right. Her possession under the agreement remained subject to the original pacto de retro terms.
4. Dimatulac’s failure to surrender all property per the compromise did not affect his redemption right, though he might be liable for the use and occupation of the retained portions.
The redemption offer was made within the stipulated five-year period, and Dimatulac was entitled to exercise it. The judgment was affirmed with costs against Coronel.