Petitioners vs. vs. Respondents Manuel P. Beaniza Francisco D. Firmalino

FIRST DIVISION
[G.R. No. L-32670. December 29, 1977.]
ARSENIO GERARDINO, SR., VIRGINIA GERARDINO SY, ANGELINA

GERARDINO GUMBA, and CORAZON GERARDINO LEGAYADA ,
petitioners, vs. THE HONORABLE JUDGE, COURT OF FIRST INSTANCE
(BR. III), CAPIZ and JOVITO GLORIA , respondents.
Manuel P. Beaniza for petitioners.

Francisco D. Firmalino for private respondent.
DECISION
FERNANDEZ , J : p
This is a petition for certiorari to review the decision of the Court of First
Instance of Capiz in Civil Case No. M-79 entitled "Jovito Gloria versus Arsenio Gerardino
Sr., et al.", the dispositive part of which reads:
"WHEREFORE, judgment is rendered in favor of the plaintiff and against
the defendants, ordering, as it hereby, orders the consolidation of the title and/or
ownership over the property in question in favor of the former, without
pronouncement as to costs.
SO ORDERED.
Mambusao, Capiz, December 26, 1969.
(SGD) SILVESTRE Br. BELLO

Judge" 1
On July 12, 1966, Jovito Gloria, private respondent herein, instituted against
Rosario Artuz Civil Case No. M-79 in the Court of First Instance of Capiz for
consolidation of ownership of a parcel of land.
The complaint stated that on October 10, 1964 Rosario Artuz executed in favor
of Jovito Gloria a deed of sale with right to repurchase within a period of one (1) year of
a parcel of residential land located in Poblacion, Tapaz, Capiz, containing an area of 750
square meters and embraced in Tax Declaration No. 3516 for a consideration of
P2,025.00; that the defendant allegedly failed to exercise her right to repurchase within
the stipulated period; that the plaintiff had been in possession of the property
immediately after the execution of the document; and that said plaintiff had been
paying the taxes thereon. 2
In her answer the defendant Rosario Artuz admitted the existence of the deed of
sale with right to repurchase but denied the legality and genuineness thereof and
alleged as a rmative defenses that the document in question was an equitable
mortgage, the real intention of the parties being merely to secure the payment of a loan
in the amount of P2,025.00; that the defendant, who was then deaf, totally blind and
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senile, did not understand English and was made to a x her thumbmark on the alleged
deed of sale with right to repurchase upon representation of the plaintiff that the same
was a mere equitable mortgage; that the defendant had remained in possession of the
property in question and had been paying the taxes thereon; that a tender of payment
was made by defendant to the plaintiff on or before October 10, 1965 to repurchase
the property but plaintiff refused to accept the amount of P2,025.00 because he was
asking for a much bigger amount of P6,000.00; that by reason of such refusal, the
defendant consigned the amount of P2,025.00 with the court; and that the actual
amount of the loan received by the defendant from the plaintiff was only P1,525.00
inasmuch as the amount of P500.00 was retained by plaintiff as interest on the
transaction. 3
The original defendant Rosario Artuz died. Hence the complaint was amended to
substitute the deceased defendant with her surviving heirs, namely, Arsenio Gerardino,
Sr., Virginia Gerardino Sy, Angelina Gerardino Gumba, and Corazon Gerardino Legayada.
In an order rendered on February 17, 1969, the lower court set the pre-trial of the
case on March 15, 1969.
On motion of counsel for the defendants, the pre-trial was reset to March 28,
1969.
Inasmuch as the counsel for the defendants failed to appear on March 28, 1969,
the lower court reset the pre-trial of the case, for the last time, on April 29, 1969.
In an order issued by the lower court on April 29, 1969, the defendants were
given 15 days within which to le a memorandum sustaining their view that they can
still repurchase the property.
On June 17, 1969, the counsel of the plaintiff led a motion for judgment on the
pleadings and/or upon confession, which was set for hearing on June 30, 1969. The
lower court denied said motion and ordered the pre-trial of the case to be held on
September 19, 1969.
The parties manifested on September 19, 1969 that there was a strong
possibility of an amicable settlement. They waived the pre-trial in order to save time
and asked the court to set the date of the trial on the merits. The lower court set the
case for trial on October 17, 1969.
On October 17, 1969 a telegraphic motion for postponement sent by the counsel
of the defendants was denied and the plaintiff was allowed to present evidence in the
absence of the defendants and their counsel.
The defendants, petitioners herein, led on November 14, 1969 a motion for
relief from the order allowing the plaintiff, private respondent herein, to present
evidence. The motion was denied on December 18, 1969 on the ground that ". . . the
failure of defendants and their counsel to appear on the date set for hearing, on
October 17, 1969, was not due to accident, mistake or excusable negligence, but due to
the unexcusable negligence of the counsel for the defendants, the consequence of
which, must be suffered by his clients." 4
In its decision dated December 26, 1969, the lower court ordered the
consolidation of the title and/or ownership over the property in question in the name of
the plaintiff because: cdrep
"From the evidence of the plaintiff, it appears that he bought the property in
question from the original defendant, namely, the deceased Rosario Artuz, on
October 10, 1964, for a purchase price of P2,025.00, with said vendor-a-retro
reserving the right to repurchase within a period of one (1) year from the date
thereof, i. e., under a 'Deed of Sale with Right of Repurchase' (See Exh. 'A'), which
the vendee-a-retro registered in the O ce of the Register of Deeds of Capiz; that
immediately upon the execution of the document of sale, the plaintiff, as vendee-
a-retro, took actual and material possession of the property bought and
constructed a nipa house thereon, which is presently occupied by his son, the
picture of which nipa house, is Exhibit 'B'; that since the time said plaintiff took
actual and physical possession of said property, nobody prevented him from
doing so, much less has his possession of the same been disturbed by anybody
up to the present time; that when plaintiff took possession of the property in
question, there were three (3) coconut, two (2) orange and three (3) mango trees
already standing thereon, the former are now fruit bearing which said plaintiff had
enjoyed and/or perceived and as to the mango trees, it is only this year that they
are bearing fruits as the plaintiff was smoking them; that the property bought is
covered by Tax Declaration No. 3516, still in the name of the vendor-a-retro, the
original defendant (Exh. 'C') which has not yet been declared in his name because
at the time he bought said property, the same was delinquent in real estate taxes
since the year 1953, that when he paid the delinquent real estate taxes on June
20, 1966 (Exh. 'D'), he was not able to pay all the delinquent taxes and besides,
the land was then involved in the instant case, which was led by said plaintiff on
July 2, 1966, and that said property in question was not redeemed and/or
repurchased by anybody on or before the expiration of the date of repurchase on
October 10, 1965.
For what has been said, above, there can be no more dispute that the
plaintiff bought the property in litigation from the deceased original defendant,
Rosario Artuz, for the sum of P2,025.00 on October 10, 1964, with right of
repurchase within a period of one (1) year. The period of one (1) year within which
to repurchase having expired without the vendor-a-retro having exercised her right
to repurchase the property sold, it follows as a consequence thereof, that the
plaintiff, is entitled to consolidation of his ownership. Indeed, the fact that the
original defendant, Rosario Artuz, as vendor-a-retro deposited the repurchase price
of P2,025.00, with the court on August 30, 1966, under O cial Receipt No.
595356, issued by the Clerk of Court Leopoldo B. Dorado, with which counsel for
the substituted defendants wanted to be transferred with the Philippine National
Bank, Roxas City Branch, in his urgent motion led on October 8, 1968 (see pp.
53-55, record), is not only the best re ection and healthiest index that she knew
that what she had executed in favor of the plaintiff was a sale with right of
repurchase (Exh. 'A'), the same deposit having been made by her on August 30,
1966, before she died on February 11, 1968, and after the expiration of the period
of repurchase but also an abandonment and/or waiver of what she had alleged in
the answer that the real intention of the parties, i.e., the vendee-a-retro and vendor-
a-retro, in the Deed of Sale with Right of Repurchase (Exh. 'A') was only an
'Equitable Mortgage.' 5
On March 2, 1970, the defendants, petitioners herein, led a motion for new trial
based on the grounds provided in Section 1 (a) and (c), Rule 37, Revised Rules of Court.
The motion was denied in an order of March 30, 1970. 6
The defendants appealed to this Court assigning the following errors:
"I
THE LOWER COURT ERRED IN HOLDING AND DECLARING THAT THE

CONTRACT IN QUESTION IS A TRUE SALE WITH RIGHT OF REPURCHASE AND
NOT AN EQUITABLE MORTGAGE.
II
THE LOWER COURT ERRED IN NOT PRONOUNCING CATEGORICALLY
(GRANTING ARGUENDO, THAT THE CONTRACT IS A SALE WITH RIGHT OF
REPURCHASE) WHETHER OR NOT ARTICLE 1606, THE LAST PARAGRAPH
THEREOF, OF THE NEW CIVIL CODE OF THE PHILIPPINES IS APPLICABLE OR
AVAILABLE TO DEFENDANTS.
III
THE LOWER COURT ERRED IN HOLDING AND DECLARING THAT

DEFENDANTS WERE IN DEFAULT AND DENYING THEM THE REMEDY PRAYED
FOR IN THEIR MOTION FOR RELIEF FROM SAID ORDER OF DEFAULT.
IV
THE LOWER COURT ERRED IN HOLDING AND DECLARING THAT

DEFENDANTS' MOTION FOR NEW TRIAL WITHOUT MERIT AND DENYING THEM
THE REMEDY PRAYED FOR THEREIN." 7
This appeal is meritorious.

While the record discloses that the defendants and their counsel have been
lackadaisical in attending to the case, substantial justice demands that petitioners be
given their day in court. It appears from the answer that the vendor-a-retro, Rosario
Artuz, who died on February 11, 1968, was deaf and blind and was senile when she was
made to thumbmark the alleged deed of sale with right to repurchase. The document is
written in English which was not understood by Rosario Artuz. The answer alleged that
the intention of the parties was only to execute a deed of equitable mortgage to secure
the loan of P2,025.00; and that Rosario Artuz actually received only the amount of
P1,525.00 because the private respondent retained the amount of P500.00 as interest.
It is clear that the defendants have a meritorious defense. Their motion for new trial
should have been granted. LibLex
The nature of the document in question was squarely placed in issue. The
defendants contend that the document was only an equitable mortgage. The third
paragraph of Article 1606 of the Civil Code of the Philippines provides that "the vendor
may still exercise the right to repurchase within thirty days from the time nal judgment
was rendered in a civil action on the basis that the contract was a true sale with right to
repurchase." Hence even if after a new trial it is found that the document in question is a
true sale with right of repurchase, the defendants may still exercise the right to
repurchase the land in question within thirty days from the time nal judgment is
rendered. 8
In view of the foregoing, it is no longer necessary to remand this case to the
lower court for a new trial.
The lower court erred in not allowing the defendants, as successors-in-interest of
Rosario Artuz, to repurchase the land within thirty days from the date the decision had
become nal. Since the petitioners had duly consigned the repurchase price, their
consignation of the amount of P2,025.00 validly effected redemption.
WHEREFORE, the decision appealed from is hereby set aside and the private
respondent's complaint for consolidation of ownership is dismissed. The petitioners
are declared entitled to the ownership and possession of the property in question and
the private respondent is ordered to deliver to petitioners the said property or any part
thereof in his possession. Without pronouncement as to costs.
SO ORDERED.
Teehankee (Chairman), Makasiar, Muñoz Palma, Martin and Guerrero, JJ., concur.
Footnotes
1. Rollo, p. 38.
2. Brief for Petitioners, pp. 3-4, Rollo, p. 55.
3. Ibid., pp. 4-5, Rollo, p. 55.

4. Petition, p. 6, Rollo, p. 23.
5. Decision, Rollo, pp. 36-38.
6. Petition, Rollo, p. 24.

7. Brief for Petitioners, pp. pp. 1-2, Rollo, p. 55.
8. Gonzales, et al. vs. De Leon, et al., G.R. No. L-17250, January 31, 1962, 4 SCRA 332.

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FIRST DIVISION

[G.R. No. L-32670. December 29, 1977.]

ARSENIO GERARDINO, SR., VIRGINIA GERARDINO SY, ANGELINA

Manuel P. Beaniza for petitioners.

(SGD) SILVESTRE Br. BELLO

THE LOWER COURT ERRED IN HOLDING AND DECLARING THAT THE

THE LOWER COURT ERRED IN HOLDING AND DECLARING THAT

THE LOWER COURT ERRED IN HOLDING AND DECLARING THAT

This appeal is meritorious.

3. Ibid., pp. 4-5, Rollo, p. 55.

6. Petition, Rollo, p. 24.

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