ARISTON ANDAYA, ET AL.

, plaintiffs-appellees,
vs.
DR. MELENCIO MANANSALA, defendant-appellant.

Constante R. Ayson for appellees.

Jose V. Manansala for appellant.

REYES, J. B. L., J.:

Originally brought to the Court of Appeals, this appeal was forwarded to us by said court
because it raises only legal questions.

There is no dispute as to the antecedents of the case, which the lower court found to be as
follows:

On June 13, 1934, one Isidro Fenis sold the land in question to Eustaquia Llanes, with
right of repurchase within a period of five years. After the expiry of said period, and
without repurchasing the said property, Isidro Fenis sold it again to Maria Viloria on
January 13, 1944. Seven months later, or on August 21, 1914, Maria Viloria sold by way
of sale with right to repurchase within a period of one year, the said property together
with another parcel of land to the herein defendant Melencio Manansala. On August 1,
1946, upon the expiry of the said period, Manansala registered with the Register of Deeds
an affidavit consolidating his title on the property. A year later, or on September 28,
1947, Maria Viloria sold by way of absolute sale the same property to Ciriaco Casiño,
Fidela Valdez, and the plaintiff spouses Ariston Andaya and Micaela Cabrito, for
P4,800.00, which deed contained the following stipulation:

The following month, or on October 18, 1947, Eustaquia Llanes, instituted Civil case No.
399 to quiet title and to recover possession of said parcel from Ciriaco Casiño. Eight
months later, or on June 9, 1949, a defendant Melencio Manansala sold by way of
absolute sale, the property in question to the spouses Ciriaco Casiño and Fidela Valdez,
and the plaintiffs for P1,500.00, which deed contained the following stipulation:

That from and after this date, the vendee herein named are the lawful owners of the land
herein sold which I warrant to be free from all kinds of liens and encumbrances whatever
and in case of eviction, I promise, agree and covenant to answer to and for the vendee in
the form and manner provided by law.

This document of conveyance was recorded in the Register of Deeds under Act No. 3344,
on June 9, 1948.

In the meantime, on September 28, 1948, Eustaquia Llanes, included as co-defendant in

Civil Case No. 399, Melencio Manansala (Annex C), and on September 2, 1950, as
additional defendants, Fidela Valdez and the spouses Ariston Andaya and Micaela
Cabrito (Annex D). The said defendant filed a joint answer to the second amended
complaint, claiming title on said property on the basis of the conveyance made in favor of
 Manansala, and from the latter to the other defendants. Judgment was rendered in that
case in favor of Eustaquia Llanes, and on October 17, 1955, the said judgment having
become final, a writ of execution was issued against Ciriaco Casino, Fidela Valdez,
Ariston Andaya and Micaela Cabrito. In the enforcement of said writ, the properties of
Fidela Valdez were attached and sold at public auction to cover the damages,
representing the value of the produce of the land, amounting to P676.00, costs of the suit
in the amount of P33.20, or a total of P709.20 (Annex H-1).

On March 23, 1956, plaintiffs spouses Ariston Andaya and Micaela Cabrito commenced this
case in the Court of First Instance of Ilocos Sur against defendant Melencio Manansala to
recover damages suffered by them by reason of the latter's breach of his warranty of title or
against eviction embodied in his sale of the land in question to plaintiffs. Defendant Manansala
denied liability for the damages claimed, and alleged that it was plaintiffs and their co-purchasers
who pleaded with him to sell said land to them at a low price after they had been sued by
Eustaquia Llanes in Civil Case No. 399, considering that Manansala had registered the land in
his name with the office of the Register of Deeds. After the case was submitted for a summary
judgment and the parties had agreed on a statement of facts, the lower court entered the
following decision:

Considering that the same land was already sold to the plaintiffs and their co-vendee,
Ciriaco Casiño and Fidela Valdez, it is obvious that their only purpose in acquiring the
same land from the defendant at the low price of P1,500.00 was to enable them to register
the prior deed of sale executed by Maria Viloria. This is true, because the title of the
defendant had already consolidated pursuant to Article 1509 of the Spanish Civil Code as
shown by an affidavit of the defendant registered with the Register of Deeds of this
province. This was clearly the understanding of the parties, and the plaintiffs apparently
knew that the stipulation on warranty in the deed was made pro forma and could not have
been intended, considering the above circumstances from the fact that said property was
then subject of a pending litigation as an actual warranty on the title and possession of the
purchasers. This being so, it would be inequitable now to hold that the defendant is liable
under the provisions of Article 1555 of the new Civil Code or under Act 1478 of the
Spanish Civil Code which is the law that should be applied, the said transaction being
before August 30, 1950.

In determining therefore the obligations of the defendant, those applicable to a vendor in

cases of rescission of a contract should be applied.

WHEREFORE, the Court renders judgment sentencing the defendant to return to the
plaintiffs the sum of P750.00 which represent one-half of the purchase price with interest
at 6% from June 9, 1948 until fully paid, and to pay the costs of this suit.

From the above decision, defendant Melencio Manansala appealed, claiming that after finding
that he was not liable to plaintiffs-appellees for breach of warranty against eviction, the lower
court erred in holding him liable as in rescission of sale and ordering him to return to plaintiffs-
appellees the price of the land in question with interests.
There is merit in the appeal.

The vendor's liability for warranty against eviction in a contract of sale is waivable and may be
renounced by the vendee (last par., Art. 1475, Old Code; last par., Art. 1548, New). The contract
of sale between herein appellant and the appellees included a stipulation as to the warranty; but
the lower court found that the parties understood that such stipulation was merely pro forma and
that the appellant vendor was not to be bound thereby, in view of the fact that the same land had
been previously bought by appellees from Maria Viloria and that their only purpose in buying
the same again from appellant was to enable them to register their prior deed of sale; and the
further fact that when the sale between appellant and appellee was made, the property was
already the subject of a pending litigation between appellees and one Eustaquia Llanes, who
claimed its title and possession by virtue of an earlier sale from the original owner, and it was by
final judgment in this litigation that appellees were evicted from and land. Not having appealed
from the decision of the court below, appellees are bound by these findings, the implication of
which is that they not only renounced or waived the warranty against eviction, but that they
knew of the danger of eviction and assumed its consequences.

Now, according to Article 1477 of the old Code (the law applicable when the contract in this
case was made),

When the vendee has waived the right to warranty in case of eviction, and eviction shall
occur, the vendor shall only pay the price which the thing sold had at the time of the
eviction, unless the vendee has made the waiver with knowledge of the danger of eviction
and assumed its consequences. (Same as Art. 1554 of the new Code)

As already stated, appellees knew of the danger of eviction at the time they purchased the land in
question from appellant, and assumed its consequences. Therefore, the appellant is not even
obliged to restore to them the price of the land at the time of eviction, but is completely exempt
from liability whatsoever.

Neither may appellant be condemned to return the price received from appellees on the theory of
rescission of their contract of sale, as held by the court below. In the first place, the remedy of
rescission contemplates that the one demanding it is able to return whatever he has received
under the contract; and when this can not be done, rescission can not be carried out (Art. 1295,
Old Code; Art. 1385, New). It is for this reason that the law on sales does not make rescission a
remedy in case the vendee is totally evicted from the thing sold, as in this case, for he can no
longer restore the thing to the vendor. It is only when the vendee loses "a part of the thing sold of
such importance, in relation to the whole, that he would not have purchased it without said part"
that he may ask for rescission, but he has "the obligation return the thing without other
encumbrances than those which it had when he acquired it" (Art. 1479, old Code; 1556, New). In
the second place, appellees, as already stated, assumed the risk of eviction, which stops them
from asking for rescission even were it possible for them to restore what they had received under
the contract.

On their part, appellees claim that in view of the eviction from the land in question, they are
entitled to recover from appellant more items of damages under Article 1555 of the New Code
than the mere return of the price with interests as ordered by the trial court. The claim is
untenable, not only because appellant, as we have held, is exempt from any liability for appellees
eviction, but also because not having appealed from the decision of the court below, appellees
can not ask for a modification thereof or an award of damages not included therein (David vs. De
la Cruz, 103 Phil., 380; 54 Off. Gaz. [35] 8073; Pineda & Ampil Mfg. Co. vs. Bartolome, 95
Phil., 930; Gorospe vs. Peñaflorida, 101 Phil., 886).

Wherefore, the decision appealed from is reversed and the complaint dismissed, with costs
against appellees Ariston Andaya, et al.
Labasan vs. Lacuesta
March 25, 2016

G.R. No. L-25931 (1978)

Ponente: J. Muñoz- Palma

FACTS

Spouses Lacuesta were the owners of an unregistered, irrigated riceland in Ilocos Norte. They
conveyed by means of a written document the land with the right to repurchase after 10 years.
They failed to exercise their right within the stipulated period.

They filed a petition seeking the reconveyance of the parcel of land, allegedly as security for a
loan. The trial court ruled that the document executed by the Lacuestas was a pacto de retro sale
and that they lost their right to redeem the land for not having taken any step within the agreed 10
years.

On appeal, the Court of Appeals set aside the judgement of the trial court and declared the contract
an equitable mortgage and ordered the Labasans to reconvey the land, and that the loan by the
Lacuestas be deemed paid from the fruits of the property which the Labasans had been receiving
for the past 32 years.

ISSUE

Whether or not the contract is a pacto de retro sale or an equitable mortgage.

HELD

The contract is an equitable mortgage.

It is a basic fundamental rule in the interpretation of a contract that if the terms thereof are clear
and leave no doubt upon the intention of the contracting parties the literal meaning of the
stipulation shall control, but when the words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former (Article 1370, NCC).

In case of doubt concerning the surrounding circumstances in the execution of a contract, the least
transmission of rights and interest shall prevail if the contract is gratuitous, and if onerous, the
doubt is to be settled in favor of the greatest reciprocity of interest.
ANGELA M. BUTTE vs. MANUEL UY
September 12, 2016

By Robinson Manaig

Art 42

ANGELA M. BUTTE, plaintiff-appellant, vs. MANUEL UY a SONS, INC., defendant-

appellee

Facts: Jose V. Ramirez, during his lifetime, was a co-owner of a house and lot located at Sta. Cruz,
Manila. Other owners are Marie GarnierVda. de Ramirez, 1/6; José V. Ramirez, 1/6; José E.
Ramirez, 1/6; Belen T. Ramirez, 1/6; Rita De Ramirez, 1/6; and José Ma. Ramirez, 1/6.

On October 20, 1951. José V. Ramirez died. Subsequently, Special Proceeding No. 15026 was
instituted to settle his estate, that included the one-sixth (1/6) undivided share in the
aforementioned property. His last will and testament has been admitted to probate, wherein he
bequeathed his estate to his children and grandchildren and one-third (1/3) of the free portion to
Mrs. Angela M. Butte, hereinafter referred to as plaintiff-appellant. The Bank of the Philippine
Islands was appointed judicial administrator.

Meanwhile, on December 9, 1958, Mrs. Marie GarnierVda. de Ramirez, one of the co-owners of
the late José V. Ramirez in the Sta. Cruz property, sold her undivided 1/6 share to Manuel Uy&
Sons, Inc., defendant-appellee herein, for the sum of P500,000.00. After the execution an affidavit
to the effect that formal notices of the sale had been sent to all possible redemptioners, the deed of
sale was duly registered and the old TCT was cancelled in lieu of which a new one was issued in
the name of the vendee and the other-co-owners.

On the same day (December 9, 1958), Manuel Uya l Son Inc. sent a letter to the Bank of the
Philippine Islands as judicial administrator of the estate of the late José V. Ramirez informing it
of the above-mentioned sale. This letter, together with that of the bank, was forwarded by the latter
to Mrs. Butte.

On January 15, 1959, Mrs. Angela M. Butte, sent a letter and a Philippine National Bank cashier’s
check in the amount of P500,000.00 to Manuel Uy a l Sons, Inc. offering to redeem share sold by
Mrs. Marie GarnierVda. de Ramirez. This tender having been refused, plaintiff on the same day
consigned the amount in court and filed the corresponding action for legal redemption. Without
prejudice to the determination by the court of the reasonable and fair market value of the property
sold which she alleged to be grossly excessive, plaintiff prayed for conveyance of the property,
and for actual, moral and exemplary damages.

May 13, 1959, the court dismissed the plaintiff’s complaint.

Issue: WON the plaintiff in the case at bar has a right to redeem the property
Held: By law, the rights to the succession of a deceased person are transmitted to his heirs from
the moment of his death, and the right of succession includes all property, rights and obligations
that survive the decedent so from the instant of Jose Ramirez’ death, his heirs became co-owners
of an undivided share and co-owner of the whole property thus they became entitled to exercise
the right of legal redemption as soon as another co-owner has sold his undivided share to a
stranger. The presence of the judicial administrator is of no moment because the rights of
the administrator of possession and administration of the real and personal estate of the deceased
do not include the right of legal redemption of the undivided share sold to Manuel Uy and Sons
because the right to redeem only
came into existence when the sale was perfected 8 years from the death of Jose Ramirez. Thead
ministrator cannot exercise the right of redemption since the land was sold AFTER the death of
Ramirez. The administrator may exercise the right to redeem only if the right pertains to the estate,
and this can only happen if the sale of said portion to Uy was done before the death of Ramirez.
G.R. No. L-27759 April 17, 1970

CRESENCIANO DE LA CRUZ, plaintiff-appellant,

vs.

JULIO CRUZ, ZENAIDA MONTES and ALFONSO MIRANDA, defendants-appellees.

Segundo C. Mastrille for plaintiff-appellant.

E. A. Bernabe for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal from a summary judgment of the Court of First Instance of Rizal (Pasay City), in its Civil Case No. 2723-P, dismissing the
plaintiff's complaint against the defendants for the pre-emption and legal redemption of a portion of registered land and granting, in the main,
the latter's counterclaim for damages and attorneys' fees.

The undisputed facts are as follows.

The spouses Julio Cruz and Zenaida Montes were once the owners of a parcel of land covered by Transfer Certificate of Title No. 10680 of
the Office of the Registry of Deeds for Pasay City, which parcel of land is more particularly described therein as follows:

A PARCEL OF LAND (Lot 10) of the subdivision plan Psd-790, being a portion of the land described on plan Psu-2031-
Amd. 2-A, LRC (G.L.R.O.) Record No. 2484, situated in the Barrio of Malibay, Municipality of Pasay, Province of Rizal.
Bounded on NE., by Lot 9 of the subdivision plan: containing an area of SIX HUNDRED SIXTY TWO (662) SQUARE
METERS.'" On 16 December 1965, Julio Cruz and Zenaida Montes sold a portion of the aforesaid parcel of land to the
plaintiff-appellant, Cresenciano de la Cruz. The deed of absolute sale described the portion sold as —

... a portion with an area of Three Hundred and Thirty-One Square Meters (331 sq. m.) on the northern part ...

Inserted in the deed was a stipulation, reading as follows:

It is hereby agreed that a plan will be made on the whole parcel of land above-described showing the portion with an
area of Three Hundred and Thirty-one Square Meters (331 sq. m), hereby conveyed, and the remaining portion with an
area of Three Hundred Thirty-One Square Meters (331 sq. m.), together with the technical description of each portion,
that is, the portion hereby conveyed, and the portion remaining.

On 28 February 1966, Julio Cruz and Zenaida Montes sold the remaining portion of the land to Alfonso Miranda. The deed of sale described
the portion sold as —

... that unsegregated portion with an area of THREE HUNDRED THIRTY ONE (331) SQUARE METERS bordering C.
Jose and F. Francisco Streets, Malibay, Pasay City, which is at the southern part of the parcel of land covered by
T.C.T. No. 10680 above-described.

Under date of 25 April 1966, Cresenciano de la Cruz, filed a complaint against Julio Cruz, Zenaida Montes and Alfonso Miranda, praying the
court to have himself (plaintiff-appellant Cresenciano de la Cruz) declared as entitled to purchase, by way of pre-emption and legal
redemption, the one-half (½) portion of the land that was sold to Miranda.

Upon joinder of issues, the parties agreed, during the pre-trial of the case, to submit the case for decision on the pleadings, and, on the basis
thereof, the court below rendered judgment, as stated at the beginning of this decision.

Not satisfied with the court's decision, plaintiff-appellant Cresenciano de la Cruz interposed the present direct appeal to the Supreme Court
and assigns the following errors as having been committed by the lower court;

1. The trial court erred in holding that plaintiff-appellant and defendants-appellees Julio Cruz and Zenaida Montes are
not co-owners of the parcel of land embraced in Transfer Certificate of Title No. 10680 of the Office of the Register of
Deeds for Pasay City.

2. The trial court erred in concluding that plaintiff is not entitled to the right of pre-emption or legal redemption.
 3. The trial court erred in awarding damages in the amount of P2,000.00 in favor of defendants-appellees Julio Cruz
and Zenaida Montes, and another P2,000.00 in favor of their co-defendant-appellee Alfonso Miranda.

4. The trial court finally erred in ordering plaintiff-appellant to pay defendants-appellees the sum of P3,000.00 as
attorney's fees.

Appellant's theory, under his first two assignments of error, is that after he bought from the spouses Julio Cruz and Zenaida Montes the
northern half of the parcel of land embraced by Transfer Certificate of Title No. 10680, he and the spouses became co-owners of the said
parcel of land, "the plaintiff owning one-half (½) (northern part) and defendants Julio Cruz and Zenaida Montes owning the remaining one-
half (1/2) portion (southern part)"; or that, "considering the situation or location of the parts being owned by plaintiff and defendants Julio Cruz
and Zenaida Montes, respectively, ... the parts are adjacent to each other, and consequently, plaintiff and defendants Julio Cruz and Zenaida
Montes are adjacent owners", such that plaintiff has the right of pre-emption or legal redemption over the portion that was subsequently sold
to Alfonso Miranda (Quoted portions taken from appellant's brief, pages 3-4).

The foregoing theory is untenable. Tested against the concept of co-ownership, as authoritatively expressed by the commentators, appellant
is not a co-owner of the registered parcel of land, taken as a unit or subject of co-ownership, since he and the spouses do not "have a
spiritual part of a thing which is not physically divided" (3 Sanchez Roman 162), nor is each of them an "owner of the whole, and over the
whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract ..." (3 Manresa 405). The
portions of appellant-plaintiff and of the defendant spouses are concretely determined and identifiable, for to the former belongs the northern
half, and to the latter belongs the remaining southern half, of the land. That their respective portions are not technically described, or that
said portions are still embraced in one and the same certificate of title, does not make said portions less determinable or identifiable or
distinguishable, one from the other, nor that dominion over each portion less exclusive, in their respective owners. Hence, no right of
redemption among co-owners exists.

Nor is plaintiff-appellant entitled, as an adjoining owner, to the right of pre-emption or redemption over the southern portion of the parcel of
land because he had not alleged in his complaint and has not proved (since the case was submitted for decision on the pleadings) that said
portion is so small and so situated that a major portion thereof cannot be used for any practical purpose within a reasonable time, having
been bought merely for speculation (Article 1622, Civil Code; Soriente vs. CA, L-1734), 31 August 1963, 62 O.G. 7013, 8 SCRA 750).

The third assignment of error is concerned with the defendants' counterclaim. The court a quo awarded damages of P2,000.00 to the
spouses Cruz and another P2,000.00 to their co-defendant Alfonso Miranda because the court considered the allegations on two (2) causes
of action in the counterclaim as not specifically denied by the plaintiff-appellant and, therefore, deemed to have admitted said allegations.
The first cause of action, in brief, alleges that plaintiff had failed to cause the preparation and subdivision plan that would serve as a basis for
the issuance of separate titles for the northern and southern parts of the land, contrary to their agreement, and for the inaction and delay on
the part of plaintiff had caused damages in the amount of P5,000.00 to the counterclaimants. The second cause of action, in turn, alleges
that the plaintiff had refused to surrender the certificate of title, despite demands, to the Register of Deeds, for annotation of a release of
mortgage that said plaintiff had himself executed, thus preventing the dealing with the land, sans the encumbrance, with third persons and
prejudicing the counterclaimants in the sum of P5,000.00. Appellant's argument that the court erred in awarding damages without proof of the
amount of actual damage is well-taken, for even though the rule is that failure to deny specifically the material allegations in the complaint (or
counterclaim) is deemed an admission of the said allegations, an exception is provided therefor, which is "other than those as to the amount
of damage" (Section 1, Rule 9, Revised Rules of Court).

... Under Section 8, Rule 9 [Sec. 1, Rule 9 of the Revised Rules of Court], however, allegations regarding the amount of
damages are not deemed admitted even if not specifically denied, and so must be duly proved. Appellants did not offer
to present evidence to prove their damages but merely asked for judgment on the pleadings. Hence, they must be
considered to have waived or renounced their claim for damages ... (Rili, et al. vs. Chunaco, et al., L-6630, 29 February
1956, 98 Phil. 505, 507).

On his last assignment of error, appellant contests the award of attorney's fees on the ground that such fees do not accrue merely because
of an adverse decision. On the other hand, he does not claim that the court below had abused its discretion in giving the award, which is a
matter that is discretionary with it under Article 2208, Civil Code of the Philippines, specially since the action was clearly unfounded (Heirs of
Justiva, et al. vs. Gustilo, et al., L-16396, 31 January 1963, 7 SCRA 72; Lopez, et al. vs. Gonzaga, et al.,
L-18788, 31 January 1964, 10 SCRA 167).

FOR THE FOREGOING REASONS, the appealed decision is hereby affirmed, except insofar as it awarded damages to the appellees, which
is hereby reversed. No pronouncement as to costs.

Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee and Villamor, JJ., concur.

Barredo, J., took no part.

 [G.R. No. L-15312. November 29, 1960.]

In re: Petition for Consolidation of Ownership in Pacto de Retro Sale of a House. JUAN
TACDORO, petitioner and appellee, v. JESUS ARCENAS, oppositor and Appellant.

Desquitado & Acurantes for Appellant.

Armando V. Cortez for Appellee.

SYLLABUS

1. SALES; SALE WITH RIGHT OF REPURCHASE; PETITION TO CONSOLIDATE

OWNERSHIP; WHAT RULES GOVERN. — The petition to consolidate ownership under
Article 1607 of the Civil Code is not merely an incident to an action or a special proceeding
(Sec. 1, Rule 26, Rules of Court; 60 C.J.S. 7), but is an ordinary civil should be governed by the
rules established for summons found in Rule 7 of the Rules of Court, stating, among other things,
that upon the "filing of the complaint, the clerk of court shall forthwith issue the corresponding
summons to the defendant" (Sec. 1). The defendant would then be entitled to a period of fifteen
(15) days from service of such summons within which to file either a motion to dismiss the
petition (Sec. 1, Rule 8) or an answer (Sec. 1, Rule 9). The failure of the Court to properly
observe these rules is sufficient cause for validly attacking its consequent judgments and/or
orders even on jurisdictional grounds (See Salmon & Pacific Commercial Co. v. Tan Cueco, Et
Al., 36 Phil. 556).

2. ID.; ID; PURPOSE OF LAW IN REQUIRING JUDICIAL CONFIRMATION OF THE

CONSOLIDATION IN THE VENDEE A RETRO. — The obvious intent of the Civil Code in
requiring a judicial confirmation of the consolidation in the vendee a retro of the ownership over
the property sold, is not only to have all doubts over the true nature of the transaction speedily
ascertained and decided, but also to prevent the interposition of buyers in good faith while such
determination is being made. Under the former method of consolidation by a mere extra-judicial
affidavit of the buyer a retro, the latter could easily cut off any claims of the seller by disposing
of the property, after such consolidation, to strangers in good faith and without notice. The
chances of the seller a retro to recover his property would thus be nullified, even if the
transaction were really proved to be a mortgage and not a sale.

DECISION

REYES, J. B. L., J.:

On December 22, 1958, petitioner-appellee Juan Tacdoro filed in the Court of First Instance of
Davao a petition (docketed as Misc. Case No. 374) alleging, among other things, that appellant
Jesus Arcenas had sold to the petitioner, con pacto de retro, a residential house situated at Bolton
Street, Davao City, and covered under Tax Declaration No. R-1452; that February 16, 1957 was
the original expiry dated fixed by the parties for the repurchase, but, upon subsequent agreement,
the period was extended for another year counted from the aforesaid date; and that the term of
the repurchase had expired without the right of repurchase having been exercised by the vendor.
Accordingly, petitioner prayed that the court order a judicial consolidation of ownership over the
property sold pursuant to the provisions of Article 1607 of the Civil Code.

The petition was heard on December 24, 1958, the date set by the petitioner. Appellant was
served a copy of the said petition two days previously, or on December 22, 1958; but no
summons was served by the court.

On January 6, 1959, the court a quo entered an order consolidating ownership of the property in
question in favor of the petitioner. On January 10, 1959, appellant filed a motion for
reconsideration, contending that the lower court had no jurisdiction to consider the petition of the
appellee for lack of summons, and that the denominated pacto de retro sale was in fact an
equitable mortgage. This motion was denied by the court in its order of January 21, 1959.

From the two orders aforesaid, Jesus Arcenas appealed to us on points of law.

The appeal is well taken. Article 1607 of the Civil Code states: jgc:chanrobles.com.ph

"In case of real property, the consolidation of ownership in the vendee by virtue of the failure of
the vendor to comply with the provisions of article 1616 shall not be recorded in the Registry of
Property without a judicial order, after the vendor has been duly heard." (Italics supplied)

The code did not provide for any specific procedure to be observed in securing the judicial order
above-mentioned. Accordingly, we should fall back on the ordinary rules of procedure
applicable. As correctly pointed out by the appellant, the petition to consolidate ownership under
the article aforequoted does not partake of the nature of a motion, 1 it not being merely an
incident to an action or a special proceeding (see Sec. 1, Rule 26, Rules of Court; 60 C.J.S. 7),
but is an ordinary civil action cognizable by the Court of First Instance. As such ordinary action,
it should be governed by the rules established for summons found in Rule 7 of the Rules of
Court, stating, among other things, that upon the "filing of the complaint, the clerk of court shall
forthwith issue the corresponding summons to the defendant" (Sec. 1). The defendant would then
be entitled to a period of fifteen (15) days from service of such summons within which to file
either a motion to dismiss the petition (Sec. 1, Rule 8) or an answer (Sec. 1, Rule 9). The failure
of the court to properly observe these rules is sufficient cause for validly attacking its consequent
judgments and or orders even on jurisdictional grounds (See Salmon & Pacific Commercial Co.
v. Tan Cueco, Et Al., 36 Phil., 556).

That the vendor or retro should be made a party-defendant to the proceedings and, therefore, be
entitled to notice of the same, is clearly inferable from the codal provision that the judicial order
consolidating ownership in the vendee a retro shall not issue unless "after the vendor has been
duly heard" (Art. 1607, Civil Code, supra); which statement would also imply that the
proceedings therein to be taken are in no way to be construed as merely summary in nature. This
conclusion is further fortified by other provisions of the new Civil code such as articles 1602,
1603, 1604, 1605 and 1606, which are all indicated of the legislative intent to accord the vendor
a retro the maximum safeguards for the protection of his legal rights under the true agreement of
the parties. Experience has demonstrated too often that many sales with right of repurchase have
been devised only to circumvent or ignore our usury laws and for this reason, the law looks upon
them with disfavor (Report of the Code Commission, pp. 63-64). When, therefore, Article 1607
speaks of a judicial order after the vendor shall have been duly heard, it contemplates none other
than a regular court proceeding under the governing Rules of Court, wherein the parties are given
full opportunity to lay bare before the court their real covenant. Furthermore, the obvious intent
of our Civil Code, in requiring a judicial confirmation of the consolidation in the vendee a retro
of the ownership over the property sold, is not only to have all doubts over the true nature of the
transaction speedily ascertained and decided, but also to prevent the interposition of buyers in
good faith while such determination is being made. Under the former method of consolidation by
a mere extra-judicial affidavit of the buyer a retro, the latter could easily cut off any claims of the
seller by disposing of the property, after such consolidation, to strangers in good faith and
without notice. The chances of the seller a retro to recover his property would thus be nullified,
even if the transaction were really proved to be a mortgage and not a sale.

The Court below, therefor, erred in considering that judicial consolidation of ownership under
Article 1607 of the new Civil Code can be had by a mere motion with three days’ notice, instead
of requiring an independent proceeding, for which docket fees are chargeable. As aforesaid, a
motion could only exist as an incident to a principal suit or proceeding.

It is still premature to decide here and now whether the agreement in question is a true pacto de
retro sale or in reality a mere equitable mortgage. Upon the other hand, the arguments advanced
by the appellant convince us that his exceptions to the orders appealed from were not taken
merely for frivolous reasons.

Wherefore, the orders appealed from are set aside; and appellant Jesus Arcenas is hereby given a
period of 15 days from the finality of this judgment within which to file in the court below his
answer to the petition. The case is ordered remanded to the lower court for further proceedings in
accordance with this opinion. Costs in this instance against petitioner-appellee Juan Tacdoro.

Paras, C.J., Bengzon, Bautista Angelo, Labrador, Concepcion, Barrera, Gutierrez David, Paredes
and Dizon, JJ., concur.
REYES vs ROSALES

25 Phil. 495

TRENT, J.:

This is an appeal from a judgment sustaining a demurrer to the complaint on the ground that it
does not state facts sufficient to constitute a cause of action.

On July 29, 1902, Rivera sold a parcel of land to Reyes and Ordoveza for 800 pesos under pacto
de recto, on the condition, however, that the repurchase could not be made until after three years
from the date of the contract of sale. In this document Rivera states that he was of age. On May
29, 1903, Rivera sold his right to repurchase to Rosales for 1,075 pesos. In the document
evidencing this sale, Rivera states that he is 23 years of age. Rosales, who is the plaintiff in
this case, alleges that in January, 1908, he tendered 800 pesos to Reyes and Ordoveza with the
request that the land be surrendered to him in accordance with the contract entered into between
them and Rivera in 1902, but that they refused to accept the money and comply with his request.

1. The first objection to the complaint is that it is inconsistent because plaintiff asks that the
contract in question be annulled on the ground that Rivera was a minor when he entered into it in
1902, and then asks that the defendants be required to deliver the land to him upon payment to
them of 800 pesos, as per its terms. There is no basis for this objection for the reason that the
inconsistency alleged appears in the prayer for relief. As stated in 1 Sutherland on Code
Pleading (sec. 186) :
"The demand in the complaint is no part of the statement of the cause of action, and does not
give it character. The facts alleged do this, and the plaintiff is entitled to as much relief as they
warrant."
See also Philips on Code Pleading (sec. 205), where it is said: "The prayer for relief, though part
of the complaint, is no part of the cause of action. A single right of action may entitle
the plaintiff to several kinds of relief, and several rights of action may authorize but a single
relief."

The contract of 1902 cannot be annuled, however, for the reason that Rivera ratified it by
entering into the contract with Rosales in 1903, wherein he stated he was 23 years of age, thus
making applicable the provisions of article 1311 (Civil Code), which provides: "It shall be
understood that there is an implied confirmation when, being aware of the cause of the nullity
and such cause having ceased to exist, the person who may have a right to invoke should execute
an act which necessarily implies his wish to renounce such a right."

2. The next objection to the complaint is that the right to repurchase had expired before Rosales
attempted to exercise it. This is based upon the first paragraph of article 1508 of the Civil Code,
which reads: "The right (to repurchase) * * * in the absence of an express agreement, shall
last four years counted from the date of the contract."

The contract of 1902 provided that the right to repurchase could not be exercised within three
years from the date of the contract.
The second paragraph of article 1508 reads: "Should there be an agreement, the period shall not
exceed ten years."

Under the Partidas, as under the Roman Law, no attempt was made to limit the duration of
contracts with pacto de retro. Unless limited by the contract of the parties, it was generally held
that the right to repurchase was perpetual. By its decision of May 12, 1875, the supreme court of
Spain first attempted to place a restriction upon the length of such contracts by holding that they
gave rise to a personal action of prescription in accordance with the law on prescription of
actions. (23 Scaevola, 767.) In recent times, however, practically all those countries where such
sales are recognized have found it advisable to limit the time within which the right of
redemption can be exercised. (4 Bonel's Com. on the Civil Code, 519.) As stated in Yadao vs.
Yadao (20 Phil. Rep., 260) : "A pacto de retro is, in a certain aspect, the suspension of the title
to the land involved. We are of the opinion that it was the intention of the legislature to limit the
continuance of such a condition, with the purpose that the title to the real estate in question
should be definitely placed, it being, in the opinion of the legislature, against public policy to
permit such an uncertain condition relative to the title to real estate to continue for more than ten
years."

It might be added that there are many characteristics of these sales with pacto de retro which
stamp them as being in the nature of usurious loans. The property is usually sold for a much
smaller sum than it is actually worth, as witness the present case, where Rivera sold the property
to the defendants for eight hundred pesos, and then sold his right to repurchase for a considerably
larger amount. During the time the right to repurchase lasts the purchaser either
takes possession of the property and receives the fruits thereof, or the vendor becomes his tenant
and pays him rent for the use of the property. The chief inducement for purchasing property
under such conditions is either the hope that the vendor will not be able to raise the amount of
the redemption price within the time allowed, or else the prospect of enjoying the products of a
property acquired at less than its market value. Doubtful conditions in such a contract should not
therefore be construed too harshly against the vendor.

A stipulation in the contract providing that the right to repurchase is suspended for a certain time
is undoubtedly a benefit to both the vendor and the purchaser. To the latter it affords a basis
upon which he may plan his management and use of the property with some accuracy during the
time it is in his possession, as he is in no danger of being suddenly ousted by the vendor's
confronting him with the redemption price and demanding the surrender of the property. And for
the security thus afforded to the purchaser in the enjoyment of the property he will be more
inclined to pay a greater sum for it than he would in the absence of such a provision, thereby
benefiting the vendor.

In the present case, the only stipulation of the parties with reference to the right to repurchase
was that it could not be exercised within three years from the date of the sale. Had it not been for
this condition, it is evident that that right would have expired four years from the date of the
sale. But if it were held that, regardless of such a provision, the redemption right expires within
four years from the date of the contract unless there is a special provision as to how long this
right, once effective, shall continue, many otherwise perfectly valid contracts can be conceived
in which the redemption privilege would be unenforceable; For instance, if the stipulation in
question had provided that the right to redeem could not be exercised within five years from the
date of the contract, it is quite apparent that, according to the argument advanced by the
defendants, the vendor could not have redeemed the property at all, for the right to do so would
have expired one year previously.

In such a case the question arises, Upon what basis must the duration of the right to repurchase
be calculated? Any such contract must necessarily be terminated ten years from the date of its
execution, but should the vendor have the privilege to exercise this right for the balance of the
ten years, or should he be allowed only four years on the ground that there was no express
agreement of the parties upon this point? In all such cases it would seem that the vendor should
be allowed four years from the expiration of the time within which the right to redeem could not
be exercised, or in the event that four years would extend the life of the contract beyond ten
years, the balance of the ten-year period, on the ground that vendors, where the right to redeem is
not thus suspended and no express agreement as to the length of time during which it may be
exercised is made, are also allowed four years. This construction, it must be conceded, is the
most logical and just.
"When a statute or instrument is equally susceptible of two interpretations, one in favor of
natural right and the other against it, the former is to be adopted." (Sec. 294, Code Civ. Proc.)
The provisions of article 1508 are strictly analogous to the statute of limitations upon
actions. As the date on which a right of action expires is determined by the date it accrues and
not by some prior event which might be considered as its inchoate beginning, so the right to
repurchase is to be calculated from the day upon which that right may be freely exercised by the
vendor, subject, of course, to the ten-year limitation of the law. Manresa (vol. 10, p. 303)
touches upon this question:
"The starting point for calculating it (the redemption period) we understand is always the date of
the contract, since, although the Code only so states in the first of the two said cases, in the
second it is expressly prohibited that the period shall exist more than ten years, and it is clear that
it would last longer if it were agreed, for example, that it would not begin to run until a certain
time had elapsed after the date of the contract. This agreement, in so far as it might imply an
extension of ten years, we believe would be null as being contrary to the manifest spirit of the
law."
We are of the opinion that the effect of the express stipulation or agreement in the contract which
we have been discussing was to extend the life of the contract to seven years from the date of its
execution.

3. The next point raised is that the complaint is defective in that it does not allege that the
redemption price was judicially deposited upon the refusal of the defendants to surrender the
property. In support of this contention counsel for the defendants rely upon the case of Angao
vs. Clavano (17 Phil. Rep., 152); 10 Manresa 337, 338; and a decision of the supreme court of
Spain of October 16, 1906, cited by Manresa.

Manresa and the supreme court of Spain in its decision of October 16, 1906, rely chiefly upon
the second paragraph of article 1618 of the Spanish Code of Civil Procedure, wherein it is
provided that in order to perfect a right of action for the recovery of things sold with the right of
redemption, the redemption price must be deposited or, in the event that the price cannot be
ascertained, a bond for its payment be executed. This is a matter of procedure only, and the
provisions of that code are no longer in effect in this country.

An analogy might be drawn from the provisions of section 465 of Act No. 190, which
reads: "The judgment debtor, or redemptioner, may redeem the property from the purchaser, at
any time within twelve months after the sale, on paying to the purchaser the amount of his
purchase, * * *."

This language is fully as strong as the language of article 1518 of the Civil Code, which provides
that the "vendor cannot exercise the right of redemption without returning to the vendee the price
of the sale." Neither section 465 nor article 1518 makes any provision for cases where the
possessor of the property refuses to accept the redemption price and surrender the property. This
court, in Brusas vs. Infante (13 Phil. Rep., 217), where a judgment debtor sought to redeem
property sold under execution and the purchaser refused to accept the price paid for it and
surrender the property, held that the offer having been proven, it was not necessary for the
judgment debtor to deposit the redemption price.

Again, in the Chattel Mortgage Law, Act No. 1508, a chattel mortgage is defined as a conditional
sale, "the condition being that the sale shall be void upon the seller paying to the purchaser a sum
of money or doing some other act named. If the condition is performed according to its terms,
the mortgage and sale immediately become void and the mortgagee is thereby divested of
his title." (Sec. 3.)

Section 8 provides: "If the mortgagee * * * after performance of the condition before or
after the breach thereof, or after tender of the performance of the condition * * *."

A chattel mortgage, it will be observed, is in many respects similar to a sale under pacto de retro,
and under section 8 of the Chattel Mortgage Law, a tender of performance is sufficient.

But the settled rule in this jurisdiction upon the precise question involved in this case is that an
offer of the money, where the sum required is fixed and certain, is sufficient, and that it is
unnecessary to deposit it.

In Lafont vs. Pascasio (5 Phil. Rep., 391), the right to repurchase expired on April 30, On April
25 the vendor caused a notary public to deliver a letter to his vendee requesting that she deliver
the original document of sale to the notary in order that he might draw up the contract of
repurchase. This she refused to do, and the next day the vendor sent her another letter by the
same notary, advising her that the latter had in his possession the necessary money to redeem the
property, and requesting that she accept the same and execute the proper contract of
repurchase. This proposition was also refused, and on April 30, the vendor deposited the amount
of the redemption price with the Court of First Instance. This court said:
"The question remains whether the plaintiff did all that he was required by law to do in order to
preserve the right secured to him by the contract.

* * * * * * *
"In regard to the payment of the money, the plaintiff did all that the law required him to do. He
offered to pay it to the defendant and deposited it in the hands of a notary for her.

"It is not necessary to decide the question as to whether the six months mentioned in the contract
expired on the 30th day of April as claimed by the plaintiff or on the 28th day of April as
claimed by the defendant, for the plaintiff, on the 25th and 26th of April, did all that the law
required him to do to preserve his right to repurchase the property."
In Villegas vs. Capistrano (9 Phil. Rep., 416), the right to repurchase expired on May 13. The
vendor, on that date, sent an agent to the residence of the vendee with the necessary money, who
found only his wife at home. She told him that she had no authority to act for her husband, but
that she would inform him on his return of what had taken place. The money was offered to the
defendant himself on May 15, but was refused on the ground that the agent had no authority to
act for the vendor. Between this time and June 25 various attempts were made to pay the money
but without avail, and on the latter day the agent deposited the redemption price with the Court
of First Instance. The court, after quoting extensively from Lafont vs. Pascasio, supra, said:
"That case is decisive of this. When the plaintiff, on the 13th of May, by his duly authorized
agent, presented himself at the residence of the defendant and offered to deliver the money, he
did all that the law required him to do to preserve his rights to repurchase. The subsequent
deposit of the amount with the clerk of the court was simply additional security for the
defendant, but was not a necessary act to be performed by the plaintiff."
In Fructo vs. Fuentes (15 Phil. Rep., 362), the right to repurchase expired on September 16. On
that day an agent of the vendor called at the vendee's residence and remained there all
day awaiting the latter, who was not at home. The agent offered the money to the vendee's wife,
but she refused to accept it, telling him to await her husband's return. On the following day, the
agent again called at the vendee's residence but could not find him at home. On the following
day the agent was successful in finding the vendee at home, but the latter refused to recognize
him as an agent of the vendor and declined to accept the money. On the 20th of September the
vendor personally offered his vendee the redemption price, but the latter refused to accept it. In
disposing of this case it was said:
"Under these findings of fact it is clearly shown that the plaintiff, not only on the day when the
contract fell due made an effort to pay the amount due for the purpose of repurchasing the land in
question, but on several consecutive days was this effort made. Without intending to hold that
the vendor of land under a pacto de retro does not lose his right to repurchase the same on the
day of the maturity of the contract, yet where, as in the present case, at the time of the maturity
of the contract, he makes a diligent effort to repurchase, as was done in the present case, and fails
by reason of circumstances over which he has no control, we are of the opinion and so hold that
he does not lose his right to repurchase his land, by reason of his failure to repurchase on the day
of maturity."
In Retes vs. Suelto (20 Phil. Rep., 394), the above three cases were cited and affirmed upon the
following state of facts. The right to redeem expired on March 16, and on February 24 the
vendor tendered the amount due, but the vendee refused to accept it. On March 5 the vendor
cited his vendee to appear before a justice of the peace and made a judicial offer to pay the
amount of the redemption price, which the purchaser again refused to accept. The money was
then deposited to the credit of the purchaser with the municipal president. This court said:
"From the record it appears that the plaintiff had done all that he was required to do for the
purpose of securing the return of the possession of the land in question and was entitled to the
possession of the same from and after the date on which he made a legal offer to pay the amount
of the indebtedness due the defendant. (Lafont vs. Pascasio, 5 Phil. Rep., 391.) When a person
having the right under a contract of pacto de retro makes a bona fide offer to repurchase, in
accordance with the agreement and tenders the necessary amount of money, he has done all the
law requires of him to preserve his right and to entitle him to the possession of the
property. (Villegas vs. Capistrano, 9 Phil. Rep., 416; Fructo vs. Fuentes, 15 Phil. Rep., 362.)"
In the case of Angao vs. Clavano (17 Phil. Rep., 152), the facts were these: Plaintiff entered into
a contract with the defendant on September 25, 1900, whereby a parcel of land owned by him
was sold to Clavano with the right to repurchase, to be exercised within one year after the
marriage of the vendor. The vendor married on September 8, 1903, and did not offer to
repurchase the property until August, 1906. In this case no motion was made for a new trial
under section 497 of the Code of Civil Procedure, so the findings of fact were not before this
court. It was said:

"On September 9, 1904, the year immediately following the date of defendant's marriage had
already fully elapsed and, up to the 8th of September of the said year, that being the last day of
the year following his marriage, he had not yet repurchased the property, therefore, from the said
date, September 9, defendant's right had already lapsed, for the year had passed and this last date
arrived without his having repurchased the land."

The further remarks of the court to the effect that if the vendee refuses to accept the amount of
the price when offered it must be placed on deposit in order to prevent title vesting absolutely in
the vendee were purely obiter. Such a rule has certainly never been adopted in this
jurisdiction. On the contrary, the settled rule, as evidenced by the four decisions discussed above
is that a bona fide offer of the redemption price, where that is certain and fixed, is sufficient to
preserve the vendor's right of action in cases where the offer is refused. These four decisions
dealing, as they do, with a rule of property, and extending over a period of years, cannot be
lightly disregarded. They must be held to have crystallized the rule which must obtain in this
jurisdiction.

For the above reasons, we are of the opinion that the complaint alleges sufficient facts to
constitute a cause of action. The judgment appealed from is reversed, and the cause remanded,
with instructions to require the defendants to answer, without costs.

Arellano, C. J., Johnson and Carson, JJ., concur.

FELIX ONGOCO and BELEN CONSUNJI, petitioners,
vs.
THE HON. JUDGE OF THE COURT OF FIRST INSTANCE OF BATAAN, THE
REGISTER OF DEEDS OF BATAAN, APOLONIO SORIANO and CIRILA MINA,
respondents.

Tañada, Teehankee & Carreon for petitioners.

Bienvenido L. Bascara for respondent Register of Deeds.
Filemon S. Trinidad for respondents Apolonio Soriano and Cirila Mina.

BENGZON,. J.P., J.:

Felix Ongoco and Belen Consunji, spouses, were owners of a parcel of land, 695 square meters
in area, at Abucay, Bataan, covered by Transfer Certificate of Title No. T-8185 in their names.

On May 2, 1959 the aforesaid spouses sold their land to Apolonio Soriano and Cirila Mina, for
P1,500.00, with right to repurchase within three years from said date.

No repurchase was made within the agreed period. On August 29, 1962, Apolonio Soriano and
Cirila Mina filed in the Court of First Instance of Bataan a "petition" for an order declaring them
the absolute owners of the land and transferring the certificate of title to their names.

Although the petition was docketed as "Special Civil Case No. 2827" the respondents-vendors
were not served with summons but only sent a copy of the petition by registered mail.

The petitioners asked that the case be set for hearing on September 11, 1962 at 8:00 a.m. On
September 4, 1962, however, respondents-vendors moved for postponement of the
hearing.1awphîl.nèt

On September 11, 1962 , the date set for hearing, respondents-vendors were not present in court
when the case was called. The Court of First Instance denied their motion for postponement and
thereupon rendered judgment declaring the petitioners-vendees absolute owners of the land and
ordering registration thereof in their names.

Respondents-vendors moved, on October 4, 1962, to set aside the judgment but on October 25,
1962 the motion was denied. Subsequently, on February 26, 1963, the respondents-vendors in
said case filed the present suit herein for certiorari.

Petitioners contend that respondent Judge gravely abused his discretion and/or acted without or
in excess of jurisdiction in rendering the judgment aforementioned.

Article 1607 of the New Civil Code provides:

 ART. 1607. In case of real property, the consolidation of ownership in the vendee by
virtue of the failure of the vendor to comply with the provisions of article 1616 shall not
be recorded in the Registry of Property without a judicial order, after the vendor has been
duly heard.

Speaking through Mr. Justice J.B.L. Reyes, this Court has already ruled that the foregoing article
requires the filing of an ordinary civil action and, consequently, service of summons on parties-
defendants as well as opportunity to answer or move to dismiss within 15 days therefrom. We
quote from Tacdoro vs. Arcenas, L-15812, November 29, 1960:

The code did not provide for any specific procedure to be observed in securing the
judicial order above-mentioned. Accordingly, we should fall back on the ordinary rules of
procedure applicable. As correctly pointed out by the appellant, the petition to
consolidate ownership under the article aforequoted does not partake of the nature of a
motion, it not being merely an incident to an action or a special proceeding (see Sec. 1,
Rule 26, Rules of Court; 60 C.J. S. 7), but is an ordinary civil action cognizable by the
Court of First Instance. As such ordinary action, it should be governed by the rules
established for summons found in Rule 7 of the Rules of Court, stating, among other
things, that upon the "filing of the complaint, the clerk of court shall forthwith issue the
corresponding summons to the defendant" (Sec. 1). The defendant would then be entitled
to a period of fifteen (15) days from service of such summons within which to file either
a motion to dismiss the petition (See. 1, Rule 8) or an answer (Sec. 1, Rule 9). The failure
of the court to properly observe these rules is sufficient cause for validly attacking its
consequent judgments and/or orders even on jurisdictional grounds (See Salmon &
Pacific Commercial Co. vs. Tan Cueco, et al., 36 Phil. 556).

That the vendor a retro should be made a party-defendant to the proceedings and,
therefore, be entitled to notice of the same, is clearly inferable from the codal provision
that the judicial order consolidating ownership in the vendee a retro shall not issue unless
"after the vendor has been duly heard" (Art. 1607, Civil Code, supra); which statement
would also imply that the proceedings therein to be taken are in no way to be construed
as merely summary in nature. This conclusion is further fortified by other provisions of
the new Civil Code such as articles 1602, 1603, 1604, 1605 and 1606, which are all
indicative of the legislative intent to accord to the vendor a retro the maximum
safeguards for the protection of his legal rights under the true agreement of the parties.
Experience has demonstrated too often that many sales with right of repurchase have
been devised only to circumvent or ignore our usury laws and for this reason, the law
looks upon them with disfavor (Report of the Code Commission, pp. 63-64). When,
therefore, Article 1607 speaks of a judicial order after the vendor shall have been duly
heard, it contemplates none other than a regular court proceeding under the governing
Rules of Court, wherein the parties are given full opportunity to lay bare before the court
their real covenant. Furthermore, the obvious intent of our Civil Code, in requiring a
judicial confirmation of the consolidation in the vendee a retro of the ownership over the
property sold, is not only to have all doubts over the true nature of the transaction
speedily ascertained and decided, but also to prevent the interposition of buyers in good
faith while such determination is being made. Under the former method of consolidation
 by a mere extra-judicial affidavit of the buyer a retro, the latter could easily cut off any
claims of the seller by disposing of the property, after such consolidation, to strangers in
good faith and without notice. The chances of the seller a retro to recover his property
would thus be nullified, even if the transaction were really proved to be a mortgage and
not a sale.

From the facts of this case it is clear that the requisite of an ordinary civil action has not been
followed. For, as stated, no summons was served on the respondents-vendors. Assuming that
respondents-vendors' motion to postpone may be taken as voluntary submission to the lower
court's jurisdiction — producing the effect or service of summons — still, they should have been
given 15 days therefrom to file an answer. The Court of First Instance instead forthwith rendered
judgment, so that respondents-vendors were deprived of their right to be heard, in violation of
Article 1607 of the New Civil Code.

WHEREFORE, the writ of certiorari is granted, the judgment in question is set aside, and
respondent Judge is ordered to allow herein petitioners to file, within 15 days from notice, their
answer in Special Civil Case No. 2827. No costs. So ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Makalintal and Zaldivar, JJ., concur.