Flores vs. So
162 SCRA 117
June 1988
FACTS:
On August 2, 1958, plaintiff-appellee Johnson So filed an action for specific performance before the CFI of Sorsogon, against defendant-appellant Alfonso Flores to effect the redemption of a parcel of coconut and rice land in Matnog, Sorsogon. It was alleged that one Valentin Gallano sold to Flores the said parcel of land on February 27, 1950, with right of repurchase within 4 years from the date of the sale, for a price of P2,550.00. Valentin Gallano sold in an absolute manner the same land to Johnson So on February 26, 1958 for the price of P5,000.00. On the allegation that the Pacto de Retro Sale did not embody the real intent and nature of the agreement between the parties, the transaction being a mere mortgage to secure a loan, Johnson So prayed that the court declare the said Pacto de Retro Sale as a mere equitable mortgage and order Alfonso Flores to receive the sum of P2,550.00 deposited with the court and to consider the land in question as redeemed from the latter for all legal purposes.
The lower court ruled that there was a indeed a contract of sale of a parcel of land with the reservation in favor of Gallano a retro of the right to repurchase it within a period of four (4) years from execution thereof; that Flores’ execution of the affidavit of consolidation of ownership on March 6, 1958 and its subsequent registration in the Office of the Register of Deeds of Sorsogon did not make his ownership over the subject land absolute for non-compliance with Articles 1606 and 1607 of the New Civil Code; and that Johnson So has already acquired the right of redemption belonging to Valentin Gallano when he bought the subject property. Thus, the Court ordered Alfonso Flores to deliver the possession of the land in question to Johnson So and to execute the necessary deed of resale in favor of the latter and authorized Flores to withdraw for his own use and benefit the redemption money in the sum of P2,550.00. Valentin Gallano was absolved from liability. The Court of Appeals certified the instant case to the Supreme Court for it involves purely a question of law.
ISSUE:
Who should be the absolute owner of the subject property?
COURT RULING:
The Supreme Court reversed the decision appealed from and declared Alfonso Flores the absolute owner of the subject property. In a sale with the right of redemption, the ownership over the thing sold is transferred to the vendee upon execution of the contract, "subject only to the resolutory condition that the vendor may exercise his right of repurchase within the period agreed upon." Consequently, since the pacto de retro sale in question, which was executed in February of 1950 before the effectivity of the New Civil Code in August of 1950, was a contract with a resolutory condition, and the condition was still pending at the time the new law went into effect, the provisions of the old Civil Code should still apply.
The trial court erred in allowing Johnson So to redeem the subject property. Valentin Gallano was no longer the owner of the same at the time of sale to Johnson So, thus, no right whatsoever was transmitted to the latter, except the right to redeem the property. Ownership over the subject property had long vested upon the defendant-appellant Alfonso Flores.
