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August 28, 2014

Vasquez vs. CA

Facts:
  • A lot of the Himalayan Cadastre was registered under the name of spouses Olea.
  • October 1959:  the lot was leased by respondent-spouses Olea to spouses Vasquezz. 
  • September 21, 1964: the spouses Olea sold the lot to spouses Vasquez under a Deed of Sale for the amount of P9,000.00. The Deed of Sale was duly ratified and notarized. 
  • On the same day and along with the execution of the Deed of Sale, a separate instrument, denominated as Right to Repurchase, was executed by the parties granting spouses Olea the right to repurchase the lot for P12,000.00, likewise duly ratified and notarized.
  • January 2, 1969: spouses Olea sold the same lot to Benito Derrama, Jr., after securing spouses Vasquez' title, for the sum of P12,000.00. Upon the protestations of spouses Vasquez, assisted by counsel, the said second sale was cancelled after the payment.
  • January 15, 1975: Respondents Spouses Olea filed an action against the Spouses Vasquez and Gayanelo seeking to redeem the subject property which was previously sold by Spouses Olea to Spouses Vasquez on September 21, 1964.
  • Spouses Vasquez resisted this action for redemption on the premise that the Right to Repurchase is just an option to buy since it is not embodied in the same document of sale but in a separate document, and since such option is not supported by a consideration distinct from the price, said deed for right to repurchase is not binding upon them. 
  • RTC ruled against spouses Vasquez ordering them to resell the lots to spouses Olea for the repurchase price of P24,000.00, which amount combines the price paid for the first sale and the price paid by defendants to Benito Derrama, Jr. 
  • Spouses Vasquez insist that they cannot be compelled to resell the lot contending that the nature of the sale over the said lot between them and spouses Olea was that of an absolute deed of sale and that the Right to Repurchase can only be either an option to buy or a mere promise on their part to resell the property. 
  • They argued that since the "RIGHT TO REPURCHASE" was not supported by any consideration distinct from the purchase price it is not valid and binding on the petitioners pursuant to Article 1479 of the Civil Code.



Issue: WON the right of repurchase was supported by a consideration distinct from the price. NO

Held:

It is clear that the right to repurchase was not supported by a consideration distinct from the price
The rule is that the promisee has the burden of proving such consideration. Unfortunately, the spouses Olea, promisees in the right to repurchase failed to prove such consideration. They did not even allege the existence thereof in their complaint.

The Sanchez ruling is not applicable
Therefore, in order that the Sanchez case can be applied, the evidence must show that the spouses Olea accepted the right to repurchase. 

The record, however, does not show that spouses Olea accepted the "Right to Repurchase" the land in question. The SC disagrees with the lower court's finding that spouses Olea accepted the "right to repurchase" under the following circumstances: 
... as evidenced by the annotation and registration of the same on the back of the transfer of certificate of title in the name of appellants. As vividly appearing therein, it was signed by appellant himself and witnessed by his wife so that for all intents and purposes the Vasquez spouses are estopped from disregarding its obvious purpose and intention."

The annotation and registration of the right to repurchase at the back of the certificate of title of the petitioners cannot be considered as acceptance of the right to repurchase Annotation at the back of the certificate of title of registered land is for the purpose of binding purchasers of such registered land. 

Purchasers of a registered land are bound by the annotations found at the back of the certificate of title covering the subject parcel of land. In effect, the annotation of the right to repurchase found at the back of the certificate of title over the subject parcel of land of the private respondents only served as notice of the existence of such unilateral promise of the petitioners to resell the same to the private respondents. This, however, cannot be equated with acceptance of such right to repurchase by the private respondent.

Neither can the signature of the spouses Vasquez in the document called "right to repurchase" signify acceptance of the right to repurchase 
The spouses Olea did not sign the offer. Acceptance should be made by the promisee, in this case, the private respondents and not the promisors, the petitioners herein. It would be absurd to require the promisor of an option to buy to accept his own offer instead of the promisee to whom the option to buy is given.

Furthermore, the actions of the private respondents –– (a) filing a complaint to compel re-sale and their demands for resale prior to filing of the complaint cannot be considered acceptance. 
The right of repurchase is not a right granted to the seller to the buyer
The right of repurchase is not a right granted the vendor by the vendee in a subsequent instrument, but is a right reserved by the vendor in the same instrument of sale as one of the stipulations of the contract. Once the instrument of absolute sale is executed, the vendor can no longer reserve the right to repurchase, and any right thereafter granted the vendor by the vendee in a separate instrument cannot be a right of repurchase but some other right like the option to buy in the instant case.

While it is true that this Court in the Zulueta case found Zulueta guilty of laches, this, however, was not the primary reason why this Court disallowed the redemption of the property by Zulueta. It is clear from the decision that the ruling in the Zulueta case was based mainly on the finding that the transaction between Zulueta and Octaviano was not a sale with right to repurchase and that the "option to repurchase was but an option to buy or a mere promise on the part of Octaviano to resell the property to Zulueta. 

In the instant case, since the transaction between the spouses Vasquez and private respondents Olea was not a sale with right to repurchase, the private respondents cannot avail of Article 1601 of the Civil Code which provides for conventional redemption.

Read the full text:
G.R. No. 83759 July 12, 1991 SPOUSES CIPRIANO VASQUEZ and VALERIANA GAYANELO, petitioners, vs. HONORABLE COURT OF APPEALS and SPOUSES MARTIN VALLEJERA and APOLONIA OLEA, respondents. Dionisio C. Isidto for petitioners. Raymundo Lozada, Jr. for private respondents.

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