G.R. No. L-5045 November 26, 1952
Petra Villaflor, plaintiff-appellant, vs. Saturnino Barreto and Others, defendants-appellees.

FACTS

The plaintiff, Petra Villaflor, acquired a parcel of land in Unisan, Quezon, through a free patent (Free Patent No. 20225), and an original certificate of title (Free Patent No. 1184) was issued in her favor on April 18, 1936. On July 7, 1944, she sold the land, with her husband’s consent, via an absolute deed of sale to Saturnino Barreto for P20,000 in Japanese military currency. Subsequently, on February 28, 1945, Saturnino Barreto sold the same land to the spouses Jordan Techico and Arcadia de Jesus for P7,000 in legal Philippine currency, and Transfer Certificate of Title No. 3305 was issued in their name. Villaflor demanded that the Techico spouses resell the land to her, but they refused. The Court of First Instance of Quezon ordered the Techico spouses to resell the land to Villaflor for P7,000, with Villaflor ordered to pay legal interest on this amount from February 28, 1945, plus any real estate taxes the Techicos had paid from the time of their purchase until the resale. Villaflor appealed this decision.

ISSUE

The primary issue is the correct repurchase price for the land under Villaflor’s legal right of redemption/retracto under Commonwealth Act No. 141 . Specifically, whether the price should be P1,000 (the equivalent in Philippine currency of the P20,000 Japanese military notes she originally received) or P7,000 (the price paid by the Techico spouses to Barreto). Secondary issues include whether Villaflor effectively waived her right of redemption and whether she is liable to pay legal interest on the repurchase price and reimburse real estate taxes paid by the Techicos.

RULING

The Supreme Court modified the lower court’s decision.
1. On the Repurchase Price: The Court ruled that the repurchase price must be P1,000 in Philippine currency. Applying Article 1518 of the Civil Code, a vendor exercising the legal right of redemption is obliged to return only the price received in the original sale. Since Villaflor received P20,000 in Japanese military notes in July 1944, the repurchase price must be the equivalent value of that sum in Philippine currency at the time of the original sale. Following the Ballantyne scale, which the Court had adopted in previous cases, the exchange rate was 20 to 1, making P20,000 in Japanese notes equal to P1,000 in Philippine currency. The price paid by subsequent purchasers (the Techico spouses) is irrelevant to the redemption price owed by the original homesteader or patentee.
2. On the Waiver of Redemption Right: The Court held that Villaflor did not waive her right of redemption. The right arises not from contract but from the express provision of Commonwealth Act No. 141 (Public Land Act). Her silence in the deed of absolute sale cannot be construed as a renunciation, as the sale is subject to the legal condition of redemption by force of law. The purpose of the law is to protect homesteaders and free patent grantees.
3. On the Nature of the Redemption Right: The right of redemption/retracto under Commonwealth Act No. 141 is reserved solely to the homesteader, widow, or legal heirs. It can be exercised within five years from the date of transfer against any current possessor of the land, regardless of being the first or a subsequent buyer. Subsequent purchasers (like Barreto) do not acquire this right against their own buyers.
4. On Interest and Real Estate Taxes: The Court ruled that Villaflor is not obligated to pay legal interest on the repurchase price (P1,000) nor reimburse the real estate taxes paid by the Techico spouses. From February 28, 1945, the Techicos became owners of the land in exchange for their P7,000 and enjoyed its fruits; they are not entitled to interest on the purchase price they paid. As owners, they were legally obligated to pay the real estate taxes, a burden that follows ownership, and they cannot recover these payments after ceasing to be owners.
DISPOSITIVE PORTION:
The appealed decision was affirmed insofar as it ordered the Techico spouses to resell the land to Villaflor. It was ordered that the redemption price be P1,000 in Philippine currency, with Villaflor bearing the expenses of the resale contract. The action against Saturnino Barreto was dismissed. The decision was reversed in all other respects (regarding the payment of interest and real estate taxes). No pronouncement as to costs.