Basa v.
Aguilar It is intended to minimized co-
Facts:
Olimpia, Arsenio, Nemesio, Ricardo, Atanacia,
Juliana, and Feliciano Basa are co-owners
pro-indiviso of an undivided ½ share of a
parcel of land located in Barrio San Mateo,
Arayat, Pampanga. Private respondents
Genaro Puyat and Brigida Mesina were the
owners of the other undivided half of the
same parcel of land.
On March 6, 1964, Genaro Puyat, with
the marital consent of Brigida Mesina, sold
his 1/2 share of the parcel of land in question
for P1,000.00 in favor of private respondents
Primo Tiongson and Macaria Puyat. Primo
Tiongson is a son-in-law of Genaro Puyat who
is married to Macaria Puyat, a daughter of
Genaro Puyat.
Seven days later, petitioners filed a
suit praying that they be allowed to exercise
the right of redemption under Article 1620 of
the Civil Code, for which purpose they
deposited with the court the sum of P1,000 as
redemption money.
The trial court dismissed the case,
ruling that petitioners are not entitled to
exercise the right of redemption under Art.
1602.
Issue:
Whether or not petitioners are entitled to
exercise the right of redemption under Art.
1602.
Ruling:
YES. Legal redemption is in the nature of a
privilege created by law partly for reasons of
public policy and partly for the benefit and
convenience of the redemptioner, to afford
him a way out of what might be a
disagreeable or inconvenient association into
which he has been thrust.
ownership. The law grants a co-owner the
exercise of the said right of redemption when
the shares of the of her owners are sold to "a
third person." A third person, within the
meaning of this Article, is anyone who is not a
co-owner.
Private respondent Primo Tiongson is
definitely not a co-owner of the land in
question. He is not even an heir of private
respondents Genaro Puyat and Brigida
Mesina, nor included in the "family relations"
of the said spouses as defined in Article 217
of the Civil Code. The circumstance that he is
married to Macaria Puyat, a daughter of
Genaro Puyat and Brigida Mesina, is of no
moment. The conveyance to the Tiongson
spouses was by onerous title, made during
the lifetime of Genaro Puyat and Brigida
Mesina. The alleged inchoate right of
succession from Genaro Puyat and Brigida
Mesina, which pertained only to Macaria
Puyat. is thus out of the question. To deny to
the petitioners the right of redemption
recognized in Article 1620 of the Civil Code is
to defeat the purpose of minimizing co-
ownership and to contravene the public
policy in this regard. Moreover, it would
result in disallowing the petitioners a way out
of what, in the words of Manresa, " might be a
disagreeable or inconvenient association into
which they have been thrust."
Wherefore, the trial court’s decision is
reversed.
Francisco v. Boiser
Facts:
Adalia B. Francisco and three of her sisters,
Ester, Elizabeth and Adeluisa, were co-
owners of four parcels of registered lands. On
August 6, 1979, they sold 1/5 of their
undivided share in the subject parcels of land
to their mother, Adela Blas, for P10,000.00,
thus making the latter a co-owner of said real
property to the extent of the share sold.
On August 8, 1986, without the
knowledge of the other co-owners, Adela Blas
sold her 1/5 share for P10,000.00 to
respondent Zenaida Boiser who is another
sister of petitioner.
On August 5, 1992, petitioner
received summons, with a copy of the
complaint in Civil Case No. 15510, filed by
respondent demanding her share in the
rentals being collected by petitioner from the
tenants of the building. Petitioner then
informed respondent that she was exercising
her right of redemption as a co-owner of the
subject property. On August 12, 1992, she
deposited the amount of P10,000.00 a
redemption price with the Clerk of Court.
Petitioner alleged that the 30-day
period for redemption under Art. 1623 of the
Civil Code had not begun to run against her
since the vendor, Adela Blas, never informed
her and the other owners about the sale to
the respondent. She learned about the sale
only on August 5, 1992, after she received the
summons in Civil Case No. 15510, together
with the complaint.
Respondent, on the other hand,
contended that petitioner knew about the
sale as early as May 30, 1992, because, on
that date, she wrote petitioner a letter
informing the latter about the sale, with a
demand that the rentals corresponding to her
1/5 share of the subject property be remitted
to her. On the same date, letters were
likewise sent by respondent to the tenants of
the building, namely, Seiko Service Center
and Glitters Corporation, informing them of
the sale and requesting that, thenceforth, they
pay 1/5 of the monthly rentals to respondent.
That petitioner received these letters is
proved by the fact that on June 8, 1992, she
wrote the building’s tenants advising them to
disregard respondent’s request and continue
paying full rentals directly to her.
Issue:
Whether or not the letter of May 30, 1992
sent by respondent to petitioner notifying her
of the sale on August 8, 1986 of Adela Blas'
1/5 share of the property to respondent,
containing a copy of the deed evidencing such
sale, can be considered sufficient as
compliance with the notice requirement of
Art. 1623 for the purpose of legal redemption.
Ruling:
NO. The notice contemplated by Art. 1623 of
the Civil Code must be given by the co-owner
and not the vendee. The letter should have
been given by Blas, not Boiser.
Art. 1623 of the Civil Code is clear in
requiring that the written notification should
come from the vendor or prospective vendor,
not from any other person; there is no room
for interpretation. Moreover, effect must be
given to the change in statutory language. The
reason for this is that: a) the co-owner-
vendor is in the best position to know who his
co-owners are, that under the law must be
notified of the sale, b) said notice also
removes all doubts as to fact of the sale, its
perfection, and its validity – an assurance that
the fact of the sale will no longer be
questioned.
However, given the delay (the sale
was made in 1986 and the Padalia was
notified only in 1992), the Court ruled that
the summons received by Padalia is sufficient
notice, and constitutes actual knowledge of
the sale. The SC noted that she had already
consigned the amount with the Court, thus
the redemption must be given effect.
Si v. Court of Appeals
Facts:
Escolastica and Severo Armada, Sr. were the Spouses Si, on the other hand, alleged
original owners of a 340-sqm parcel of land in that on October 2, 1954, Escolastica, with the
Pasay City. During the lifetime of the spouses, consent of her husband executed three
the property was transferred to their separate deeds of sale conveying 113.34
children. The Pasay Registry of Deeds issued square meters of the property to Severo, and
TCT No. 16007 in the names of the three sons, 113.33 square meters each to Crisostomo and
as follows: "DR. CRISOSTOMO R. ARMADA, Jose. The three deeds of sale particularly
married to Cresenciana V. Alejo, 113.34 described the portion conveyed to each son in
Square Meters; JOSE R. ARMADA, married to metes and bounds. The Spouses Si contend
Remedios Almanzor, 113.33 Square Meters; that since the property was already three
and DR. SEVERO R. ARMADA, Jr., single, all of distinct parcels of land, there was no longer
legal age, Filipinos." co-ownership among the brothers. Hence,
Jose and Severo, Jr. had no right of
In the aforementioned title, there was
redemption when Crisostomo sold his share
an annotation regarding the cancellation of
to the spouses Si. Petitioners point out that it
the said title by virtue of a Deed of Sale which
was only because the Armada brothers failed
was executed by Cresecencia Alejo (as
to submit the necessary subdivision plan to
attorney-in-fact of Crisostomo Armada). The
the Office of the Register of Deeds in Pasay
Deed of Sale conveyed 113.34 square meters
City that separate titles were not issued and
of the property herein, in favor of ANITA
TCT No. 16007 was issued and registered in
BONODE SI, married to Serafin D. Si, for the
the names of Jose, Crisostomo, and Severo, Jr.
sum of P75,000.00.
The trial court ruled in favor of the
Spouses Jose Armada and Remedios
Spouses Si. The Court of Appeals, however,
Almanzor, filed a complaint for Annulment of
reversed the trial court of ruled that the
Deed of Sale and Reconveyance of Title with
portion sold by virtue of the Deeds of Sale to
Damages, against petitioners Anita and
the Armada brothers do not appear in the
Serafin Si and Conrado Isada, brother-in-law
said title, neither does it indicate the
of Cresenciana (Isada brokered the sale). The
particular area sold. It stated that the
Spouses Jose and Remedios alleged that,
evidence on record shows that the Deed of
among others, that Conrado Isada sold
Absolute Sale executed by Cresencia Armada
Crisostomo's share by making it appear that
in favor of Spouses Si, manifested that the
Cresenciana, the attorney-in-fact of her
portion sold was the 'undivided one hundred
husband, is a Filipino citizen and that when
thirteen & 34/100 (113.34) square meters' of
Spouses Si registered the deed of absolute
the parcel of land covered by TCT NO. 16007
sale they inserted the phrase "... and that the
of the Registry of Deeds for Pasay City, which
co-owners are not interested in buying the
means that what was sold to defendants are
same in spite of notice to them." Further, the
still undetermined and unidentifiable, as the
complaint alleged that the other owners, Jose
area sold remains a portion of the whole.
and Severo, Jr., had no written notice of the
sale and upon learning of the sale to the Issue:
spouses Si, private respondents filed a
Whether Jose Armada and Remedios
complaint for annulment of sale and
Almanzor are co-owners who are legally
reconveyance of title with damages, claiming
entitled to redeem the lot under Article 1623
they had a right of redemption.
of the Civil Code.
Ruling:
NO. Jose Armada and his wife are not co-
owners of the parcel of land sold, thus, they
are not entitled to redeem the lot under the
Civil Code.
Under Article 1623 of the Civil Code,
the right of legal pre-emption or redemption
shall not be exercised except within thirty
days from the notice in writing by the
prospective vendor, or by the vendor, as the
case may be. The deed of sale shall not be
recorded in the Registry of Property, unless
accompanied by an affidavit of the vendor
that he has given written notice thereof to all
possible redemptioners. The right of
redemption of co-owners excludes that of
adjoining owners."
Here, the lot in question had already
been partitioned when their parents executed
three (3) Deeds of Sale in favor of Jose,
Crisostomo and Severo, all surnamed
Armada, which documents purports to have
been registered with the Register of Deeds of
Pasay City, and as a consequence, TCT No.
16007 was issued. Notably, every portion
conveyed and transferred to the three sons
was definitely described and segregated and
with the corresponding technical descriptions
— an extrajudicial partition. Moreover, every
portion belonging to the three sons has been
declared for taxation purposes with the
Assessor's Office of Pasay City on September
21, 1970.
All these lead to the conclusion that
the portion sold to defendant spouses Si by
Crisostomo Armada and Cresenciana Armada
was concretely determined and identifiable.
The fact that the three portions are embraced
in one certificate of title does not make said
portions less determinable or identifiable or
distinguishable, one from the other, nor that
dominion over each portion less exclusive, in
their respective owners. Hence, no right of
redemption among co-owners exists.
Further, Jose Armada and Remedios
Almanzor cannot deny the fact that they did
not have knowledge about the impending sale
of this portion. They were actually properly
notified and reacting to such knowledge and
notification, they wrote Dr. Crisostomo
Armada a letter which stated “Well you are
the king of yourselves, and you can sell your
share of Levereza.”
After the physical division of the lot
among the brothers, the community
ownership terminated, and the right of
preemption or redemption for each brother
was no longer available.
Lumayag v. Heirs of Jacinto Nemeo
Facts:
Jacinto Nemeñ o and Dalmacio Dayangco-
Nemeñ o owned 2 parcels of coconut land in
Manaca, Ozamiz City. In 1979, Dalmacia died
and was survived by her husband and their 6
children. Subsequently, on February 25, 1985,
Jacinto, joined by his 5 children, conveyed to
his daughter, Felipa and the latter’s husband
Domingo Lumayag the 2 parcels of coconut
land. The instrument of conveyance is a Deed
of Sale with Pacto De Retro.
The contract stipulated that: “The
vendors a retro have the right to repurchase
the same lots within 5 years from the date of
the execution of the instrument on February
25, 1985” and “In the event no purchase is
effected within the stipulated period of 5
years conveyance shall become absolute and
irrevocable without the necessity of drawing
up a new absolute and irrevocable without
the necessity of drawing up a new absolute
deed of sale, subject to the requirements of
law regarding consolidation of ownership of
real property.”
More than a decade later, on August
28, 1996, the Spouses Lumayag filed with the
RTC of Ozamiz City a petition for the
reconstitution of the owner’s duplicate copy
of OCT covering the lots subject of the earlier
Deed of Sale with Pacto De Retro because
such was lost during a typhoon. However, the
petition was opposed by the other heirs of
Jacinto and Dalmacia, claiming that the
owner’s duplicate copy is in the possession
and custody of their brother Meliton Nemeñ o,
the administrator of the property, and that it
was burned in a fire. The RTC ordered the
issuance of a new OCT to Spouses Lumayag.
Hence, the heirs were prompted to
file against the Spouses Lumayag, a
Declaration of Contract as Equitable
Mortgage, Accounting and Redemption with
Damages. The heirs alleged that the contract
in question was an equitable mortgage for the
following reasons:
1. The price of 20,000 is grossly
inadequate because the sum total
market value of the lots is 44,880.
2. The heirs continued the payment of
realty taxes.
3. The land title and tax declaration of
the subject lots remained in the
names of their parents, Jacinto and
Dalmacia.
4. The possession of the Spouses
Lumayag are only 2/3s share of the
harvest therefrom.
5. The pactum commissorium
stipulation in the subject contract.
The Spouses Lumayag denied that the
contract is an equitable mortgage and they
further asserted that the action was already
barred by laches and prescription and the
complaint itself states no cause of action.
The RTC held that the subject Deed of
Sale with Pacto De Retro is an equitable
mortgage and ordered the Spouses Lumayag
to reconvey the lots to the plaintiff heirs for
Php 20,000. The CA affirmed with
modifications the RTC decision, it ruled that
the mortgaged properties are subject to
foreclosure should the respondent heirs fail
to redeem the same within 30 days from the
finality of the decision.
Issue:
Whether the deed of sale with pacto de retro
is actually an equitable mortgage.
Ruling:
YES. The deed of sale with pacto de retro is
actually an equitable mortgage.
The law requires the presence of any
one and not the concurrence of all of the
circumstances enumerated under Article
1602, to conclude that the transaction is one
of equitable mortgage. In this case, the CA
correctly found the presence of not one but
four circumstances indicative of the true
nature of the subject transaction as an
equitable mortgage:
1. Gross inadequacy of the contract price
of the land.
2. Respondent heirs remained in
possession of the subject property
even after the execution of the deed of
sale.
3. Heirs’ continued payment of realty
taxes.
4. The provision on pactum
commissorium.
Regarding the gross inadequacy of the price,
the Supreme Court is not in full accord with
the CA’s findings since the values were not
made on or before the date of the subject
contract on February 25, 1985 but only on
June 8, 1994. However, the other
circumstances are highly evident.
As to the heirs’ continued possession
of the subject lots, if the instrument in
question was truly a pacto de retro sale, the
Spouses Lumayag should have asserted their
rights for immediate delivery of the lots to
them instead of allowing some of the
respondents to freely stay in the premises. It
is a well settled doctrine that where the
vendor remains in physical possession of the
land as lessee or otherwise, the contract
should be treated as an equitable mortgage.
Furthermore, the Heirs’ payment of the realty
taxes, coupled with continuous possession of
the property constitutes strong evidence that
a person under whose name the realty taxes
were declared has a valid and rightful claim
over the land.
Lastly, there is a presence of pactum
commissorium. The stipulation in the
contract of pacto de retro sale stating,
“conveyance shall become absolute and
irrevocable without the necessity of drawing
up a new absolute and irrevocable without
the necessity of drawing up a new absolute
deed of sale, subject to the requirements of
law regarding consolidation of ownership of
real property.” is contrary to the nature of
pacto de retro sale. In a pacto de retro sale,
ownership of the property sold is
immediately transferred to the vendee a retro
upon execution of the sale, subject only to the
repurchase of a vendor a retro within the
stipulated period.
Vda. de Delfin v. Dellota
Facts:
Dionisia Delfin, represented by her heirs, was
the registered owner of Lot No. 1213 in Capiz
with an area of 143,935 sq.m.
On 16 June 1929, Dionisia executed a
pacto de retro sale of over 50,000 sq.m. in
favor of Spouses Ildenfonso Dellota and
Patricia Delfin. On 9 June 1949, Dionisia sold
another 50,00 sq.m to Gumersindo Delena as
evidenced by a “Deed of Sale with Right of
Redemption”. Dionisia failed to exercise her
right of redemption in both cases.
Dionisia then executed a “Deed of
Mortgage and Promise to Sell” in favor of
Salvador over 90,000 sq.m. portion of the lot,
without specifying whether it included the
portion sold to Gumersido.
Dionisia filed a complaint for recovery
of possession and damages with an
application for a writ of preliminary
mandatory injunction against the respondent.
The CA affirmed RTC’s Decision that
Dellota shall allow Delfin to redeem the
40,000 sq.m. portion of the lot and that the
ownership of the 50,000 sq.m. portion of the
lot as consolidated by operation of law to and
in the name of Gumersido.
Heirs of Dionisia contended that the
CA erred in not holding that the Deed of Sale
with Right of Redemption entered by Dionisia
and Gumersido is an equitable mortgage
under Article 1602 of the Civil Code. They
insist that the price of P5,300 for a 5-hectare
portion of the lot is grossly inadequate and
that is why the contract is an equitable
mortgage and not a sale with right of
redemption.
Issue:
Whether the Deed of Sale with Right of
Redemption executed by Dionisia and Dellota
is an equitable mortgage under Article 1602
of the Civil Code.
Ruling:
NO. An equitable mortgage is one which,
although lacking in some formality, or form,
or
words, or other requisites demanded by a
statute, nevertheless reveals the intention of
the parties to charge real property as security
for a debt, and contains nothing impossible or
contrary to law.
The essential requisites of an
equitable mortgage are: (1) the parties enter
into what appears to be a contract of sale; and
(2) but their intention is to secure an existing
debt by way of mortgage.
There is no conclusive test to
determine whether a deed purporting to be a
sale on its face is really a simple loan
accommodation secured by a mortgage.
However, it is consistently held that the
presence of even one of the circumstances
enumerated in Article 1602 suffices to
convert a purported contract of sale into an
equitable mortgage.
In this case, what should be
determined is whether the consideration of
P5,300.00 paid by Gumersindoto Dionisa for a
five-hectare portion of Lot No. 1213 on June
9, 1949 is unusually inadequate.
Following De Ocampo and
Buenaventura, this Court finds no cogent
reason to conclude that the 1949 price of
P5,300.00 as agreed upon by the parties was
unreasonable or unusually inadequate.
Moreover, under the rules of evidence, it is
presumed that a person takes ordinary care
of his concerns. In the present case, there is
no evidence herein whatsoever to show that
Dionisia did not understand the ramifications
of her signing the Deed of Sale with Right of
Redemption. Nor is there any showing that
she was threatened, forced or defrauded into
affixing her signature on the said contract.
If the terms of the pacto de retro sale
were unfavorable to Dionisia, this Court has
no business extricating her from that bad
bargain. Courts are not guardians of persons
who are not legally incompetent, like
Dionisia.
Sen Po Ek Marketing Corp. v. Martinez
Indeed, the right of first refusal may be
provided for in a lease contract. However, in
this case, such right was never stipulated in
any of the several lease contracts between
petitioner and Sofia. Petitioner claims that it
was Teodora herself who assured them that
they can have the first priority to buy the
subject parcels of land, but there is absolutely
no proof of this. Such grant of the right of first
refusal must be clearly embodied in a written
contract, but there is none in the present case.
Facts:
Sofia P. Martinez, the mother of respondent
Teodora P. Martinez, was the registered
owner of Lot Nos. 50 and 106 located in
Tacloban City. In 1961, Sofia leased her two
lots to Yu Siong, the president of Sen Po Ek for
a period of 10 years. The lease contract
required the lessee, Sen Po Ek, to construct a
commercial building of the leased property
which shall become the property of Sofia
upon the expiration of the lease. Two years
thereafter, the building was constructed and
Sen Po Ek declared the building, for taxation
purposes.
On October 25, 1971, the contract of
lease expired. Two years after said expiration
of the lease, Yu Siong’s wife, Lim Hua, who
succeeded him, renewed the lease. The
contract of lease underwent several renewals
until the last written contract of lease was
executed in 1982 for a term of five (5) years
or of January 1, 1987.
Meanwhile in 1979, Sofia executed a
Deed of Sale in favor of her daughter,
Teodora, but such was only notarized six (6)
years later in 1985.
After expiration of the lease, it was no
longer renewed by the parties. However, Sen
Po Ek continued to occupy the building and
paid rent to Sofia until her death in August
1989. After Sofia’s death, rentals were paid to
her heirs through Teodora.
On November 11, 1989, Teodora sent
a letter to Sen Po Ek informing it of her
intention to sell the leased premises and
authorizing Remedios Petilla to negotiate the
sale “with any and all interested parties.”
However, Sen Po Ek was only able to receive
said letter a month later. Sen Po Ek offered to
purchase the property and Sofia advised him
Ruling:
to formalize the offer in writing.
Despite Sen Po Ek’s offer, Teodora
sold the property to Tiu Uypong brothers and
a transfer certificate of title was issued in the
latter’s favor. Sen Po Ek, aggrieved by the
sale, filed a complaint with the RTC
contending his right to purchase the property.
The RTC ruled in Sen Po Ek’s favor in so
ruling: (1) the recission of the Deed of
Absolute Sale that Teodora executed in the
Tiu Uyping brothers; (2) Sen Po Ek has the
first preference to purchase the property; (3)
payment of Teodora and Tiu Uyping of the
selling price; and (4) ordering the payment of
attorney’s fees in favor of Sen Po Ek.
The respondents appealed the case to
the appellate court and the latter reversed the
trial court’s decision. Petitioner filed for a
motion for reconsideration however the same
was denied, hence the present controversy.
Issues:
1. Did the CA err in upholding the
validity of the Deed of Sale between
Teodora and her late mother, Sofia?
2. Did the CA err in holding that the
corporation has no legal and equitable
right to purchase the property in
question, as against respondent Tiu
Uyping?
3. Did the CA arbitrarily and
capriciously in a way not accord with
law and jurisprudence in upholding
the validity of the Deed of Sale
between Teodora and the Tiu
Uypings?
4. Did the CA err in finding no credence
on the testimony of the respondent’s
witness, Leopold Petilla and for
discrediting petitioner’s Alfredo Yu
Siong, considering that the former did
not even have legal authority to sell or
negotiate the sale of the property in
question?
1. YES. The Court found that the Deed of
Sale between Teodora and her late
mother, Sofia, was void for being
fictitious. Under Art. 1490(2) of the
New Civil Code, one type of contract
which can be declared void and
inexistent is that which is absolutely
simulated or fictitious. The Deed of
Sale is fictitious because when the
Contract of Sale of the subject
property was executed, such contract
was only notarized 6 years later and
that said sale inspired more doubt
when upon close reading of the
contract of lease executed thereafter,
Teodora signed not as owner but
merely as an instrumental witness.
Likewise, the Deed of Sale is found to
be simulated when it was found that
despite the sale of the property
between Sofia and Teodora, Sofia was
still the one who receives payment
from their lessee, Sen Po Ek
Marketing Corporation.
2. NO. In fact, neither any law nor any
contract grants preference in the
purchase of the leased premises. The
corporation, being the lessor in the
leased premises, had no equitable
right to purchase the property subject
in the present controversy.
3. NO. The sale sale between Teodora
and the Tiu Uyping is valid. Teodora,
as only one of the co-heirs of Sofia,
had no authority to sell the entire lot
to the Tiu Uyping brothers. She can
only sell her undivided portion of the
property. Thus, when she sold the
leased premises to private
respondent brothers Tiu Uyping, the
sale is unenforceable having been
entered into by Teodora on behalf of
 her co-heirs who, however, gave no
authority or legal representation.
However, such a contract is
susceptible of ratification. In this case,
the ratification came in the form of
"Confirmation of Sale of Land and
Improvements" executed by the other
heirs of Sofia.Since the sale by private
respondent Teodora Martinez of the
leased premises to private
respondents Tiu Uyping brothers was
ratified by her co-heirs, then the sale
is considered valid and binding.
4. NO. Sen Po Ek does not have a right of
first refusal to assert against the
private respondents. Said corporation
cited P.D. No. 1517, R.A. No. 1162, and
Article 1622 of the New Civil Code
however none of these cited laws are
applicable in the present case.