G.R. Nos. L-4804-05 November 21, 1952
FLORENTINA CLARIÑO, petitioner, vs. FLORENTINO PASCUAL, respondent.

FACTS

Two civil cases were jointly heard. In Civil Case No. 72207, Vicente Foz sued Florentina Clariño to compel her to execute a deed of resale for a lot. In Civil Case No. 72208, Florentino Pascual sued Florentina Clariño, Vicente Foz, and the Register of Deeds of Manila, seeking to annul Transfer Certificate of Title No. 77894 issued to Clariño, to have a new title issued in his name, and to recover damages. The trial court absolved Clariño from both complaints. On appeal, the Court of Appeals reversed the decision, ordering Clariño to execute a deed of conveyance in favor of Pascual and the Register of Deeds to cancel Clariño’s title and issue a new one to Pascual, and ordering Foz to pay Clariño P300. Clariño appealed to the Supreme Court via certiorari.
The proven facts are: On August 5, 1942, Florentino Pascual sold a lot with a house to Vicente Foz for P300 under a deed (Exhibit A) with a right of repurchase within one year, extendable for another year. On February 12, 1943, Vicente Foz sold all his rights under Exhibit A to Florentina Clariño for the same amount (Exhibit B), with a right to repurchase on or before August 5, 1943. This contract was registered. In July 1944, Pascual wished to redeem the lot. Foz persuaded him to accept a two-year extension of the repurchase period until August 5, 1946, documented in a private instrument (Exhibit 3-Pascual) on July 4, 1944, as Pascual felt he could not oblige Foz to accept Japanese war currency. On January 9, 1946, Pascual exercised his right to repurchase, paid Foz P300, and obtained a signed deed of resale. However, the Register of Deeds refused to register it because the lot was already registered in Clariño’s name under TCT No. 77894, issued on October 25, 1944, after she presented an affidavit to consolidate her title, as neither Pascual nor Foz had exercised their respective rights of repurchase within the agreed periods.

ISSUE

Whether Florentino Pascual validly exercised his right of repurchase and is entitled to have the property reconveyed to him, or whether Florentina Clariño became the absolute owner after the expiration of the repurchase periods.

RULING

The Supreme Court affirmed the result of the Court of Appeals’ decision but modified the rationale and dispositive portion. The Court held that when Vicente Foz sold his rights to Florentina Clariño in February 1943, she acquired ownership of the lot subject only to Foz’s reserved right to repurchase on or before August 5, 1943. Both Pascual (under Exhibit A) and Foz (under Exhibit B) lost ownership and retained only a right of repurchase. Neither exercised this right within the agreed period (on or before August 5, 1943). Upon the expiration of that period, Clariño became the absolute owner. The subsequent issuance of TCT No. 77894 in her name in October 1944, upon presentation of an affidavit of consolidation, extinguished any remaining right of repurchase. Therefore, when Foz granted Pascual a two-year extension in July 1944, Foz was no longer the owner, as his own right to repurchase from Clariño had already lapsed in August 1943. Consequently, the Register of Deeds was justified in refusing to issue a title to Pascual in January 1946. Florentina Clariño is absolved from the complaints. Vicente Foz is ordered to return the P300 he received from Pascual, with legal interest from January 9, 1946, and to pay the costs. The petition against the Register of Deeds of Manila is denied.