Vda. de Zulueta v. Octaviano
On 25 November 1952, Olimpia Fernandez Vda. de Zulueta (VDZ, for brevity) sold her land to Octaviano subject to a condition that he shall take the responsibility of redeeming the land from one Maximino Gumayan for the sum of P5,000.00 (insofar as the Deed of Pacto de Retro Sale is concerned to be due on May 21, 1955,) and for another sum also in favor of said Maximino Gumayan for the amount of Pl,600.00 (insofar as the Deed of Mortgage is concerned to be due on or before May 21, 1955.)
On 25 November 1952, the vendee, Octaviano, signed another document stating that:
xxxxxx I am giving the said Vendor, Olimpia VDZ the option to repurchase the aforesaid property from me at any time after May 1958 but not later than May 1960. Should she fail to redeem the aforesaid property by paying me back the sum of EIGHT THOUSAND SIX HUNDRED AND 00/100 (P8,600.00) PESOS, Philippine Currency within the period of time stated above, then she will lose all the right to repurchase the land from me. xxxxxxxxxx
Unlike the deed of sale, this document was not registered. Octaviano took possession of the land after the sale.
Sometime in 1953, Aurelio tried to get the certificate of title from Gumayan but the latter said that he still needs to pay additional debts incurred by ZDV. Aurelio then confronted VDZ and offered to VDZ the option to repurchase the property but the latter said she had no money at that time and even advised him to sell the land to anybody and simply disregard the option to repurchase.
Consequently, he sold the land to his brother, Isauro, in 1954. In February 1962 (or about 2 years after the lapse of the redemption period), VDZ through her lawyer manifested the intention to repurchase the land but Isauro refused. Hence, this action for recovery of ownership and possession.
- Whether or not there is pacto de retro sale between VDZ and Octaviano?
- Whether or not the same constitute a pactum commissorium?
1. NO, the sale was an absolute sale. Conventional redemption takes place “when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and other stipulations which may have been agreed upon”.
In this case, there was no reservation made by the vendor, ZDV. The “option to repurchase” was contained in a subsequent document and was made by the vendee, Aurelio. Thus, it was more of an option to buy or a mere promise on the part of the vendee, Aurelio, to resell the property to the vendor, Olimpia.
Since the sale was not pacto de retro, Aurelio had the right to sell the said property to his brother notwithstanding the unexpired period of redemption because, at that time, he was already the absolute owner of the property.
2. No, it is not a pactum commissorium. “Pactum commissorium “is a stipulation for automatic vesting of title over the security in the creditor in case of the debtor’s default. It bears reiterating, however, that Olimpia was not a debtor, but a vendor. Olimpia owed nothing to Aurelio and offered nothing to him as security for the payment of any indebtedness.