G.R. No. L-8200; March 17, 1914
LEONARD LUCIDO, plaintiff-appellee, vs. GELASIO CALUPITAN, ET AL., defendants-appellants.

FACTS:
The plaintiff, Leonard Lucido, had chattels and real estate sold at an execution sale on February 10, 1903. The purchaser, Rosales, transferred a one-half interest to Zolaivar. On March 30, 1903, a public document was executed by Rosales, Zolaivar, Lucido, and the defendant Gelasio Calupitan, stating that Rosales and Zolaivar, with Lucido’s consent, sold their rights and obligations in the property to Calupitan for the execution purchase price plus interest, computed under the Code of Civil Procedure. On the same day, Lucido and Calupitan executed a separate agreement wherein Calupitan ceded possession of the irrigated lands and certain chattels to Lucido until Lucido could repurchase all the lands. The agreement stipulated that Lucido could not redeem or repurchase the property until three whole years had elapsed from the date of the instrument.

Lucido filed the present action on February 17, 1910, seeking to redeem the property. The lower court held the transaction was a sale with a conventional right of redemption (pacto de retro) under the Civil Code. It ruled that the redemption period had not expired, that Lucido had made a valid tender of the redemption price, and ordered the property returned to Lucido upon payment. The defendants appealed.

ISSUE:
1. Whether the transaction between Lucido and Calupitan constituted a sale with a conventional right of redemption (pacto de retro) or merely an assignment of the rights of an execution purchaser.
2. Whether the right of redemption had expired when the action was filed.
3. Whether there was a valid tender of the redemption price.
4. What rights, if any, a subsequent purchaser (Dorado) from Calupitan had against Lucido’s right to redeem.

RULING:
The Supreme Court affirmed the decision of the lower court.

1. Nature of the Transaction: The Court ruled the transaction was a sale with a conventional right of redemption (pacto de retro) governed by Articles 1507 et seq. of the Civil Code. While the first document resembled an assignment of an execution purchaser’s rights, the separate agreement between Lucido and Calupitan clearly established a vendor-vendee relationship with a right to repurchase. This was corroborated by Calupitan’s original answer (pleading) admitting it was a pacto de retro sale and by evidence that Lucido contributed part of the redemption money, indicating he was redeeming his own property with a loan from Calupitan, who took possession as security.

2. Expiration of Redemption Period: The Court held the right to redeem had not expired. The contract prohibited redemption for three years from March 30, 1903. Following its precedent in Rosales v. Reyes and Ordoveza, the four-year period for exercising the right of redemption under Article 1508 of the Civil Code began to run only after the three-year prohibition ended, i.e., from March 30, 1906. The action, filed on February 17, 1910, was within this four-year period.

3. Valid Tender: The Court concurred with the lower court’s factual finding that Lucido had tendered the redemption price to Calupitan prior to filing the suit. Following Rosales, such a tender was legally sufficient.

4. Rights of Subsequent Purchaser (Dorado): The defendant Dorado, who purchased the property from Calupitan after Lucido’s tender, acquired no superior right. Applying Article 1510 of the Civil Code, the vendor (Lucido) may bring an action against any possessor deriving title from the vendee (Calupitan). The provisions of the Mortgage Law for the protection of third persons were not applicable to Dorado under the circumstances.

5. Redemption Price: The Court modified the redemption price ordered by the lower court. The correct amount was P1,600 (the peso equivalent of $1,600.74 Mexican which Calupitan advanced), plus legal interest from the date of the tender until payment, and the costs of executing the repurchase document. Lucido’s own contribution of $120 Mexican was not part of the debt to Calupitan.

DISPOSITIVE PORTION:
The judgment was affirmed with the modification that the plaintiff shall pay to the defendant Calupitan the sum of P1,600, with legal interest from the date of the tender until payment, and the costs of executing the repurchase document. Costs of the appeal were taxed against the appellants.