Student Name: Anne Jhae Princess R.

Antes
Date Submitted: 15 November 2022
Student Number: 2019262441 Course/Section: Property – JD2

Case Title: Avelino Baluran v. Hon. Ricardo Navarro and Antonio Obedencio
Case No.: G.R. No. L-44428 Date: 30 September 1997

ISSUE: Whether or not the barter agreement between Baluran and Sps. Obedencio transferred
the ownership of the subject property to Baluran.

RULES: The following laws and rules were cited:

o Courts are not bound by the name or title given to it by the contracting parties –
Contracts are not what the parties may see fit to call them but what they really are as
determined by the principles of law.

o Art. 1306 (2nd par), Civil Code – Contracts which are the private laws of the
contracting parties, should be fulfilled according to the literal sense of their
stipulations, if their terms are clear and leave no room for doubt as to the intention of
the contracting parties, for contracts are obligatory, no matter what their form may be,
whenever the essential requisites for their validity are present.

ANALYSIS OF FACTS:

The subject property is a 480 sq. m. parcel of land located in Sarrat, Ilocos Norte which is
owned by Spouses Paraiso. They executed an agreement with Sps. Baluran, entitled “BARTER”,
under the following conditions:
1. BOTH PARTIES shall enjoy the material possession of their respective properties. The
FIRST PARTY shall reap the fruits of the unirrigated riceland of the SECOND PARTY;
and the SECOND PARTY shall have the right to build his own house in the residential
lot of the FIRST PARTY;
2. In the event that any of the children of Natividad Obedencio (daughter of first party) shall
choose to reside in this municipality and build his own house in the residential lot, the
SECOND PARTY shall be obliged to return the lot.
3. Neither the FIRST PARTY nor the SECOND PARTY shall encumber, alienate, or
dispose of in any manner the respective properties without the consent of the other.
4. The Parties agree that this deed be registered in the Register of Deeds of Ilocos Norte.

Antonio Obedencio (son of Natividad) filed with the CFI a complaint to recover the
residential lot from Baluran. It ruled in favor of Obedencio and declares him as the owner of
the property. Baluran on the other hand, is ordered to vacate the same. Hence, this petition.
 ANALYSIS OF ARGUMENTS:

Avelino Baluran Antonio Obedencio

 The barter agreement transferred to  He is the rightful owner of the

him the ownership of the residential
lot.
 Since the execution of the agreement,
he was in possession of the subject lot,
paid its taxes, and constructed a house
thereon.
residential lot having acquired the
same from his mother (Natividad
Paraiso)
He needed the property for the
construction of his house because he is
to reside in Sarrat.

CONCLUSION:

NO. In the case at bar, the use of the term “barter” in describing the agreement is not controlling.
The stipulations in the agreement are clear and they indicate that there was no intention on the
part of the parties to convey the ownership of their respective properties. A perusal of the
document would show that all that the parties intended was to transfer the material
possession thereof. As stipulated in the 3rd condition, the parties retained the right to alienate
their respective properties which right is an element of ownership.

The agreement of the parties is not one of barter, exchange, or even sale with right to
repurchase, but is one of the use or material possession or enjoyment of each other’s real
property. With the material possession being the only one transferred, all that the parties
acquired was the right of usufruct which is the right to enjoy the property of another. The
agreement of the parties was subject to a resolutory condition which extinguishes rights and
obligations already existing. In the present case, the material possession ends if and when any of
the children of Natividad would reside in the municipality and build his house on the subject lot.

With the happening of the resolutory condition provided for in the agreement, the right of
usufruct of the parties is extinguished and each is entitled to a return of his property.