PROVINCE OF CEBU, petitioner, vs. HEIRS OF RUFINA MORALES, NAMELY: FELOMINA V. PANOPIO, NENITA VILLANUEVA, ERLINDA V.

ADRIANO and CATALINA V. QUESADA, respondents. G.R. No. 170115. February 19, 2008.

Facts: On September 27, 1961, petitioner Province of Cebu leased4 in favor of Rufina Morales a 210square meter lot which formed part of Lot No. 646-A of the Banilad Estate. Subsequently or sometime in 1964, petitioner donated several parcels of land to the City of Cebu. Among those donated was Lot No. 646-A which the City of Cebu divided into sub-lots. The area occupied by Morales was thereafter denominated as Lot No. 646-A-3, for which Transfer Certificate of Title (TCT) No. 308835 was issued in favor of the City of Cebu. On July 19, 1965, the city sold Lot No. 646-A-3 as well as the other donated lots at public auction in order to raise money for infrastructure projects. The highest bidder for Lot No. 646A-3 was Hever Bascon but Morales was allowed to match the highest bid since she had a preferential right to the lot as actual occupant thereof.6 Morales thus paid the required deposit and partial payment for the lot. In the meantime, petitioner filed an action for reversion of donation against the City of Cebu docketed as Civil Case No. 238-BC before Branch 7 of the then Court of First Instance of Cebu. On May 7, 1974, petitioner and the City of Cebu entered into a compromise agreement which the court approved on July 17, 1974. The agreement provided for the return of the donated lots to petitioner except those that have already been utilized by the City of Cebu. Pursuant thereto, Lot No. 646-A-3 was returned to petitioner and registered in its name under TCT No. 104310. Morales died on February 20, 1969 during the pendency of Civil Case No. 238-BC.10 Apart from the deposit and down payment, she was not able to make any other payments on the balance of the purchase price for the lot. On March 11, 1983, one of the nieces of Morales, respondent Catalina V. Quesada, wrote to then Cebu Governor Eduardo R. Gullas asking for the formal conveyance of Lot No. 646-A-3 to Morales surviving heirs, in accordance with the award earlier made by the City of Cebu. This was followed by another letter of the same tenor dated October 10, 1986 addressed to Governor Osmundo G. Rama. The requests remained unheeded thus, Quesada, together with the other nieces of Morales namely, respondents Nenita Villanueva and Erlinda V. Adriano, as well as Morales sister, Felomina V. Panopio, filed an action for specific performance and reconveyance of property against petitioner, which was docketed as Civil Case No. CEB-11140 before Branch 6 of the Regional Trial Court of Cebu City. They also consigned with the court the amount of P13,450.00 representing the balance of the purchase price which petitioner allegedly refused to accept. Panopio died shortly after the complaint was filed. Respondents averred that the award at public auction of the lot to Morales was a valid and binding contract entered into by the City of Cebu and that the lot was inadvertently returned to petitioner under the compromise judgment in Civil Case No. 238-BC. They alleged that they could not pay the balance of the purchase price during the pendency of said case due to confusion as to whom and where payment should be made. They thus prayed that judgment be rendered ordering petitioner to execute a final deed of absolute sale in their favor, and that TCT No. 104310 in the name of petitioner be cancelled.

On March 6, 1996, the trial court rendered judgment, the dispositive part of which reads: WHEREFORE, judgment is rendered in favor of the plaintiffs and against the defendant Province of Cebu, hereby directing the latter to convey Lot 646-A-3 to the plaintiffs as heirs of Rufina Morales, and in this connection, to execute the necessary deed in favor of said plaintiffs. Issue: WON the consignation of the balance of the purchase price before the trial court extinguishes the obligation under the contract of sale? Held: Yes. Article 1592 of the Civil Code pertinently provides: Article 1592. In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by notarial act. After the demand, the court may not grant him a new term. (Italics supplied) Thus, respondents could still tender payment of the full purchase price as no demand for rescission had been made upon them, either judicially or through notarial act. While it is true that it took a long time for respondents to bring suit for specific performance and consign the balance of the purchase price, it is equally true that petitioner or its predecessor did not take any action to have the contract of sale rescinded. Article 1592 allows the vendee to pay as long as no demand for rescission has been made. The consignation of the balance of the purchase price before the trial court thus operated as full payment, which resulted in the extinguishment of respondents obligation under the contract of sale.

EUFEMIA ELPA DE BAYQUEN and ESTEFANIA BAYON VDA. DE ELPA, plaintiffs-appellants, vs. EULALIO BALAORO, defendant-appellee. Facts: The records show that on January 16, 1954, appellants sold the land under question to the appellee, reserving their right to repurchase the said land within four (4) years. The plaintiffs-appellants failed to repurchase the land within the four year period. They now assert their right to repurchase the subject property after more than thirteen (13) years, (p. 40, Record.) The trial court ruled that the vendors-appellants have lost their right to repurchase the land under controversy and that by operation of law, ownership of such land had become consolidated in the vendee-appellee. The plaintiffs-appellants appealed the decision of the trial court, alleging several errors, which defendant-appellee disputed together with the corresponding evaluation thereof. Appellants contend that the trial court erred in holding that there is no dispute between the parties regarding the nature of the purported deed of sale with right to repurchase and that actually the transaction is a mortgage. Defendant-appellee refutes this by putting up the claim that the fact that the contract is in truth a deed of sale with right to repurchase has been admitted by appellants and the same has been stipulated upon by the parties. Issue: WON the failure to redeem within the stipulated period extinguishes the contract of sale without prejudice to the vendor? Held: SC resolved this matter in the early case of Rosario vs. Rosario, L-13018. Dec, 29, 1960 (110 Phil. 394) where we thus enunciated: Where the contract between the parties is admitted and which has been stipulated by the parties to be a deed of sale with right to repurchase, there should be no issue or dispute about the effects thereofthat once there is failure to redeem within the stipulated period, ownership thereof becomes vested or consolidated by operation of law on the vendee. Any other interpretation would be violative of the sanctity of the contract between the parties.

SALLY SUENO, petitioner, vs. LAND BANK OF THE PHILIPPINES, respondent.

Facts: On different occasions, Sueno obtained loans from LBP, the total sum of which reached P2,500,000.00, as evidenced by the Contracts of Loan4 executed by the parties on 28 February 1996 and 9 October 1996. The loans were secured by Real Estate Mortgages over two parcels of land (subject properties) covered by Transfer Certificates of Title (TCTs) No. T-299900 and No. T-314839 registered in Suenos name and registered with the Registry of Deeds of Marikina City. Subsequently, Sueno incurred default, which prompted LBP to cause the extrajudicial foreclosure of the mortgage constituted on the subject properties, and the sale of said properties at a public auction. LBP was the highest bidder in the auction sale, as shown in the Certificate of Sale6 dated 6 March 2000 in its favor. Before the expiration on 6 March 2001 of the one-year period for the redemption of the subject properties, Sueno wrote LBP a letter dated 16 February 2001 requesting a six-month extension of her period to redeem. Upon receipt of Suenos letter, LBP informed her that she needed to post an initial amount of P115,000.00, so that LBP would not consolidate the titles to the subject properties in its name. The said amount shall be used to answer for penalties and surcharges that the Registry of Deeds may impose as a result of the failure of LBP to consolidate the titles to the subject properties within the required period. In partial compliance with the aforesaid condition, Sueno issued a check on 23 February 2001 in the amount of P50,000.00 with LBP as the payee. Upon receipt of Suenos partial payment, LBP, in a letter dated 6 March 2001, reiterated its previous condition that Sueno must post the full amount of P115,000.00 for LBP to approve her request for the extension of the redemption period. The LBP further warned Sueno that should she fail to pay the balance of P65,000.00 by 7 March 2001, it would proceed to consolidate the ownership of the subject properties in its name. Despite such warning, Sueno failed to remit the balance of P65,000.00. Thus, in a letter dated 7 March 2001, LBP denied Suenos request for an extension of the period to redeem the subject properties, and proceeded to consolidate ownership of the said properties in its name. Accordingly, TCTs No. 299900 and No. 314839 in Suenos name were cancelled and were replaced by TCTs No. 411101 and 411102, respectively, in the name of LBP. In order to acquire physical possession of the subject properties, LBP filed an Ex Parte Petition/Motion for the Issuance of Writ of Possession9 before the RTC, docketed as LRC Case No. R-2002-551-MK. During the hearing set by the court for the issuance of the writ, Sueno manifested her Opposition thereto on the ground that a novation of the original obligation was already effected by her and LBP, thereby extending the original period for the redemption of the subject properties. Therefore, the right of LBP to consolidate the titles to the subject properties in its name was held in abeyance pending Suenos exercise of her right of redemption within the extended period. In a Decision dated 24 January 2003, the RTC recognized the right of LBP to the possession of the subject properties as the registered owner thereof after having lawfully acquired the same at the auction sale.

Issue: WON there is novation which extinguishes the old contract by a new one? Held: Novation is never presumed, and the animus novandi, whether totally or partially, must appear by express agreement of the parties, or by their acts that are too clear and unmistakable. For this Court to sustain Suenos positionthat the LBP agreed to extend the redemption period upon her payment of an amount substantially less than what it demandedoffends the elementary principle enunciated in our jurisdiction that novation can never be presumed. As elucidated by this Court in Philippine Savings Bank v. Maalac, Jr., 457 SCRA 203 (2005): Novation is never presumed, and the animus novandi, whether totally or partially, must appear by express agreement of the parties, or by their acts that are too clear and unmistakable. The extinguishment of the old obligation by the new one is a necessary element of novation, which may be effected either expressly or impliedly. The term expressly means that the contracting parties incontrovertibly disclose that their object in executing the new contract is to extinguish the old one. Upon the other hand, no specific form is required for an implied novation, and all that is prescribed by law would be an incompatibility between the two contracts. While there is really no hard and fast rule to determine what might constitute to be a sufficient change that can bring about novation, the touchstone for contrariety, however, would be an irreconcilable incompatibility between the old and the new obligations.

XYST CORPORATION, petitioner, vs. DMC URBAN PROPERTIES DEVELOPMENT, INC., respondent.

Facts:
DMC Urban Properties Development, Inc. and Citibank N.A. entered into an agreement whereby they agreed to take part in the construction of the Citibank Tower, an office condominium building located at Villar corner Valero Streets, Makati City. In said agreement, DMC was allocated the 18th floor of the Citibank Tower subject to the condition that DMC shall not transfer any portion of its allocated floor or rights or interests thereto prior to the completion of the building without the written consent of Citibank N.A. Subsequently, DMC gave authority to sell to several brokers, one of which is herein intervenor, Fe Aurora Castro. Through her effort, Castro found a prospective buyer, Saint Agen Et Fils Limited (SAEFL for brevity), a foreign corporation represented by William Seitz. Notwithstanding the fact that the construction of the Citibank Tower was not yet completed, DMC negotiated with Seitz for the sale of its allocated floor to SAEFL. On September 16, 1994,4 SAEFL, knowing that the consent of Citibank N.A. must first be obtained, sent another letter obliging DMC to cause Citibank N.A. to enter into a Contract to Sell with SAEFL as an additional condition to the payment of the P1,000,000.00 reservation fee. Soon after, Seitz was informed that the 18th floor is not available for foreign acquisition, so Seitz told DMC that he would instead use XYST Corporation, a domestic corporation of which he is a director and shareholder, to purchase the subject property. XYST then paid the reservation fee. However, DMC advised XYST that the signing of the formal document will not take place since Citibank N.A. opted to exercise its right of first refusal. Hence, the parties agreed that should Citibank N.A. fail to purchase the 18th floor on the agreed date, the same should be sold to XYST. Eventually, Citibank N.A. did not exercise its right of first refusal, but it reminded DMC that should the sale of the floor to any party materialize, it should be consistent with the documents adopted by the co-founders of the project. Hence, a copy of a pro-forma Contract to Sell was given to DMC, a copy of which was then forwarded to XYST. DMC then undertook to obtain the conformity of Citibank N.A. to the intended sale but DMC encountered problems getting Citibank N.A. to accept the amendments that XYST wanted on the proforma contract. For such failure, DMC allowed XYST and Citibank N.A. to negotiate directly with one another to facilitate the transaction, but to no avail. Citibank N.A. refused to concur with the amendments imposed by XYST on the pro-forma contract. Hence, DMC decided to call off the deal and return the reservation fee of P1,000,000.00 to XYST. A complaint for specific performance with damages was then filed by XYST against DMC. Trial ensued and on September 26, 2005, the RTC dismissed XYSTs complaint. XYST argues that there exists a perfected contract of sale between the parties. This was perfected from the moment there was a meeting of the minds upon the thing which is object of the contract and upon the price as manifested by the September 14, 1994 letter. Hence, upon the perfection of the contract, the parties may reciprocally demand performance. Further, XYST avers that the P1,000,000.00 reservation fee it paid is actually in the nature of earnest money or down payment and shall be considered as part of the price and as proof of the perfection of the contract. Conversely, DMC insists that a contract to sell was entered into by the parties. It avers that in the contract to sell, the element of consent is lacking, and since the acceptance made by XYST is not absolute, no contract of sale existed between the parties. It claims that the terms, conditions and amendments which XYST tried

to impose upon DMC and Citibank N.A. were proof that indeed XYST had qualifiedly accepted DMCs offer. Issue: WON contract of sale really exist subject to the extinguishment upon the fulfillment of the terms agreed thereof?

Held:
It is a fundamental rule that, being consensual, a contract is perfected by mere consent. From the moment of a meeting of the offer and the acceptance upon the object and the cause that would constitute the contract, consent arises. The essence of consent is the conformity of the parties on the terms of the contract, that is, the acceptance by one of the offer made by the other. However, the acceptance must be absolute; otherwise, the same constitutes a counter-offer and has the effect of rejecting the offer. Equally important are the three stages of a contract: (1) preparation or negotiation, (2) perfection, and (3) consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. The perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. The last stage is the consummation of the contract wherein the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. XYST and DMC were still in the negotiation stage of the contract when the latter called off the deal. The facts show that DMC as agreed undertook to obtain the conformity of Citibank N.A. However, Citibank N.A.s consent to the intended sale cannot be obtained since it does not conform to the amendments made by XYST on the pro-forma Contract to Sell. By introducing amendments to the contract, XYST presented a counter-offer to which DMC did not agree. Clearly, there was only an offer and a counteroffer that did not sum up to any final arrangement containing the elements of a contract. No meeting of the minds was established. The rule on the concurrence of the offer and its acceptance did not apply because other matters or detailsin addition to the subject matter and the considerationwould still be stipulated and agreed upon by the parties. Therefore, since the element of consent is absent, there is no contract to speak of. Where the parties merely exchanged offers and counter-offers, no agreement or contract is perfected.

OSCAR C. FERNANDEZ, GIL C. FERNANDEZ and ARMANDO C. FERNANDEZ, petitioners, vs. Spouses CARLOS and NARCISA TARUN, respondents.

Facts:
The Petition for Review on Certiorari before us challenges the July 7, 2000 Decision of the Court of Appeals (CA) in CA-GR CV No. 55264, which reversed the Regional Trial Court (RTC) of Dagupan City (Branch 44) in Civil Case No. D-3815. An 8,209-square meter fishpond situated at Arellano-Bani, Dagupan City is disputed by [Respondents] Carlos Tarun and Narcisa Zareno, and [Petitioners] Corazon Cabal vda. de Fernandez and her children Oscar, Gil and Armando, all surnamed Fernandez. The property is known as Lot No. 2991 of the Cadastral Survey of Dagupan. It was originally covered by OCT No. 43099, subsequently cancelled by TCT No. 24440. The brothers Antonio, Santiago, Demetria and Angel Fernandez, together with their uncle Armando, co-owned this property to the extent of 1/6 thereof.4 It was subsequently increased to 1/5 on account of the 1/6 share of Armando, who died single and without issue, which accrued in favor of the five remaining co-owners. On June 4, 1967, Antonio Fernandez sold his share of about 547.27 square meters to *the Spouses+ Tarun (Exh. I).5 On June 18, 1967, Demetria Fernandez, also sold her share on the same fishpond consisting of 547.27 square meters to [respondents]. Thus, the total area sold to [respondents] is 1094.54 square meters, more or less. The two sales were registered and annotated on OCT No. 43099. On November 14, 1969, the co-owners of the subject fishpond and another fishpond covered by TCT No. 10944 executed a Deed of Extrajudicial Partition of two parcels of registered land with exchange of shares. Among the parties to the deed are Antonio, Santiago, Demetria and Angel, all surnamed Fernandez. It was stipulated in the deed that the parties recognize and respect the sale of a portion of Lot 2991 consisting of 1094.54 square meters previously sold by Antonio and Demetria Fernandez in favor of [respondents]. This portion was excluded in the partition. Likewise, by virtue of the Deed of Extrajudicial Partition, Angel B. Fernandez exchanged his share on the other fishpond covered by TCT No. 10944 to the shares of his co-owners on the remaining portion of [L]ot No. 2991 covered by TCT No. 10945, making Angel B. Fernandez and [respondents] as co-owners of Lot No. 2991. When Angel B. Fernandez was still alive, [respondents] sought the partition of the property and their share of its income. Angel Fernandez refused to heed their demand. After the death of Angel Fernandez, [respondents] wrote [petitioners] of their desire for partition but this was rejected by [petitioners]. Hence, this suit for partition and damages. On August 1, 1996, the RTC rendered judgment in favor of petitioners, ruling that, under Articles 1620 and 1621 of the Civil Code, they were entitled to redeem the property that they had sold to respondents. It further held that the sale was highly iniquitous and void for respondents failure to comply with Article 1623 of the same code. Reversing the RTC, the CA held that petitioners were not entitled to redeem the controversial property for several reasons. First, it was Angel Fernandez who was its co-owner at the time of the sale; hence, he was the one entitled to receive notice and to redeem the property, but he did not choose to exercise that right. Second, the execution of the Deed of Extrajudicial Partition was a substantial compliance with the notice requirement under the law. Finally, it was too late in the day to

declare the exchange highly iniquitous, when Angel Fernandez had not complained about it. As his successors-in-interest, petitioners were bound by the terms of the agreement.

Issue: WON there exist a right of redemption on a mere lease and if the purchaser is a tenant which would result to the extinguishment of sale upon the performance thereof? Held:
The right of redemption may be availed of by a co-owner, only when the shares of the other owners are sold to a third person; There is no legal redemption, either in case of a mere lease and if the purchaser is also a tenant.In Basa v. Aguilar, this Court has unequivocally ruled that the right of redemption may be availed of by a co-owner, only when the shares of the other owners are sold to a third person. Legal redemption is in the nature of a privilege created by law partly for reasons of public policy and partly for the benefit and convenience of the redemptioner, to afford him a way out of what might be a disagreeable or [an] inconvenient association into which he has been thrust. (10 Manresa, 4th. Ed., 317.) It is intended to minimize coownership. The law grants a co-owner the exercise of the said right of redemption when the shares of the other owners are sold to a third person. There is no legal redemption, either in case of a mere lease and if the purchaser is also a tenant. Equally unavailing is petitioners contention that the sale was void, because the vendor had not sent any notice in writing to the other co-owners as required under Article 1625 of the Code. Indeed, the Code merely provides that a deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit that a written notice has been given to all possible redemptioners. However, it does not state that, by reason of such lack of notice, the sale shall become void.

RONALDO P. ABILLA and GERALDA A. DIZON, petitioners, vs. CARLOS ANG GOBONSENG, JR. and THERESITA MIMIE ONG, respondents. Facts: Petitioner spouses instituted against respondents an action for specific performance, recovery of sum of money and damages, docketed as Civil Case No. 8148 of the Regional Trial Court of Dumaguete City, Branch XLII, seeking the reimbursement of the expenses they incurred in connection with the preparation and registration of two public instruments, namely a Deed of Sale and an Option to Buy. In their answer, respondents raised the defense that the transaction covered by the Deed of Sale and Option to Buy, which appears to be a Deed of Sale with Right of Repurchase, was in truth, in fact, in law, and in legal construction, a mortgage. On October 29, 1990, the trial court ruled in favor of petitioners and declared that the transaction between the parties was not an equitable mortgage. Citing Villarica v. Court of Appeals, it ratiocinated that neither was the said transaction embodied in the Deed of Sale and Option to Buy a pacto de retro sale, but a sale giving respondents until August 31, 1983 within which to buy back the seventeen lots subject of the controversy. On appeal by respondents, the Court of Appeals ruled that the transaction between the parties was a pacto de retro sale, and not an equitable mortgage. On November 10, 1997, the Court of Appeals denied the motion for reconsideration of the foregoing decision. Respondents filed a petition for review with this Court which was docketed as G.R. No. 131358; however, the same was dismissed on February 11, 1998, for having been filed out of time. Undaunted, respondents filed a second motion for reconsideration, claiming that since the transaction subject of the controversy was declared a pacto de retro sale by the Court of Appeals, they can therefore repurchase the property pursuant to the third paragraph of Article 1606 of the Civil Code. The issue of the applicability of Article 1606 of the Civil Code was raised by the respondents only in their motion for clarification with the Court of Appeals, and not before the trial court and on appeal to the Court of Appeals. Thus, respondents second motion for reconsideration was denied. The denial became final and executory on February 8, 1999. On February 23, 1999, respondents filed with the trial court in Civil Case No. 8148 an urgent motion to repurchase the lots in question with tender of payment. The motion was, however, denied on November 10, 1999 by Judge Ibarra B. Jaculbe, Jr., who subsequently inhibited himself from the case. On January 14, 2001, Branch 41 of the Regional Trial Court of Dumaguete City, to which the case was reraffled, set aside the November 10, 1999 order and granted respondents motion to repurchase.

Issue: WON the vendors in a sale judicially declared as a pacto de retro exercise the right of repurchase under Article 1606, third paragraph, of the Civil Code, after they have taken the position that the same was an equitable mortgage?

Held: Following the theory of the respondents which was sustained by the trial court, the scenario would be that although respondents failed in their effort to prove that the contract was an equitable mortgage, they could nonetheless still repurchase the property within 30 days from the finality of the judgment declaring the contract to be truly a pacto de retro sale. However, under the undisputed facts of the case at bar, this cannot be allowed. In the parallel case of Vda. de Macoy v. Court of Appeals, the petitioners therein raised the defense that the contract was not a sale with right to repurchase but an equitable mortgage. They further argued as an alternative defense that even assuming the transaction to be a pacto de retro sale, they can nevertheless repurchase the property by virtue of Article 1606, third paragraph of the Civil Code. It was held that the said provision was inapplicable, thus: The application of the third paragraph of Article 1606 is predicated upon the bona fides of the vendor a retro. It must appear that there was a belief on his part, founded on facts attendant upon the execution of the sale with pacto de retro, honestly and sincerely entertained, that the agreement was in reality a mortgage, one not intended to affect the title to the property ostensibly sold, but merely to give it as security for a loan or other obligation. In that event, if the matter of the real nature of the contract is submitted for judicial resolution, the application of the rule is meet and proper; that the vendor a retro be allowed to repurchase the property sold within 30 days from rendition of final judgment declaring the contract to be a true sale with right to repurchase. Conversely, if it should appear that the parties agreement was really one of saletransferring ownership to the vendee, but accompanied by a reservation to the vendor of the right to repurchase the propertyand there are no circumstances that may reasonably be accepted as generating some honest doubt as to the parties intention, the proviso is inapplicable. The reason is quite obvious. If the rule were otherwise, it would be within the power of every vendor a retro to set at naught a pacto de retro, or resurrect an expired right of repurchase, by simply instituting an action to reform the contractknown to him to be in truth a sale with pacto de retrointo an equitable mortgage.

ERLINDA O. CABRERA, petitioner, vs. VICTORIANA E. VILLANUEVA and INTERMEDIATE APPELLATE COURT, respondents.

Facts:
Petitioner is a co-owner of a real property situated in Manila, originally covered by TCT No. 64950 of the Registry of Deeds of Manila. On March 12,1968, by way of a Deed of Absolute Sale, Feliciano Oropesa and Antonio Oropesa, co-owners of said property, sold their shares of 14/112 each pro indiviso or 28/112 share, for and in consideration of the sum of P6,000.00 each or a total of P12,000.00 to Victoriana E. Villanueva (private respondent herein). The following year, in 1969, by reason of said sale TCT No. 64950 was cancelled and in lieu thereof, TCT No. 96437, was issued by the Registry of Deeds of Manila wherein the buyer was constituted as a co-owner pro indiviso of the entire parcel, to the extent of the 28/112 share. This was after the former owners Feliciano and Antonio, both surnamed Oropesa, had executed a Joint Affidavit dated April 1, 1968 attesting to the fact that they had notified in writing the coowners of the property in question and said co-owners did not and could not offer any objection thereto. Several years after, the buyer Victoriana E. Villanueva as the new co-owner, sent a letter dated September 23, 1980 thru her counsel, to Erlinda O. Cabrera, the other co-owner, proposing to her the partition of the property in question. The latter did not agree to such proposal; instead, in her letter, dated October 30, 1980, addressed to Villanueva, she offered to redeem the 28/112 share of the latter in the property. Villanueva refused such proposal, hence the filing of an action for legal redemption by the former. Both parties admitted the aforementioned facts by stating them in their Stipulation of Facts submitted to the trial court. After due trial, the lower court rendered judgment in favor of plaintiff. Defendant appealed from said decision to the respondent appellate court assigning the following errors: I. The trial court committed grave and reversible error in holding that there was no written notice to the co-owners regarding the sale of the subject property to herein defendant-appellant; II. The trial court committed an error in holding that plaintiffappellee has tendered redemption within the reglementary period. Ruling on these issues, the respondent appellate court held that the plaintiff-appellee was duly notifed in writing of the sale to defendant-appellant and that the former failed to exercise this right of redemption within the period provided by law as its basis in reversing the judgment of the lower court and in entering a new judgment declaring defendant-appellant the lawful co-owner of the 28/112 share of the property in question barring any right of the plaintiff appellee to redeem.

Issue: WON laches would attach to the right of redemption resulting to the extinguishment of contract of sale?

Held:
Furthermore, on April 21, 1969, T.C.T. No. 96437 was issued by the Registry of Deeds of Manila. In said title it is already reflected that private respondent Victoriana Villanueva is a co-owner (to the extent of a 28/112 portion) of the property in question. It can be safely assumed that copy of the title reflecting private respondent as a co-owner was also issued to petitioner in 1969. Moreover Section 50 of the LRC expressly provides that the registration of the deed is the only operational act to bind or affect the property. From that time on, petitioner was already in full and actual knowledge of the fact that private respondent had acquired the shares of Antonio and Feliciano Oropesa. For more than ten years, petitioner remained unperturbed by the fact that private respondent was already registered as a co-owner and her uncles were no longer co-owners. It was only several years later when the value of the property considerably increased that petitioner asserted her claim on the right to redeem under Art. 1623. Petitioner has thus slept on her rights and is now estopped from questioning the validity of the sale. We may even regard the receipt of a copy of the transfer certificate of title, indicating private respondent as one of the co-owners, as service of the written notice required by Art. 1623. Clearly, petitioners right to redeem expired a long time ago.

PADALIA B. FRANCISCO, petitioner, vs. ZENAIDA F. BOISER, respondent. Facts: Petitioner Adalia B. Francisco and three of her sisters, Ester, Elizabeth and Adeluisa, were coowners of four parcels of registered lands on which stands the Ten Commandments Building at 689 Rizal Avenue Extension, Caloocan City. On August 6, 1979, they sold 1/5 of their undivided share in the subject parcels of land to their mother, Adela Bias, for P10,000.00, thus making the latter a co-owner of said real property to the extent of the share sold. On August 8, 1986, without the knowledge of the other co-owners, Adela Bias sold her 1/5 share for P10,000.00 to respondent Zenaida Boiser who is another sister of petitioner. On August 5, 1992, petitioner received summons, with a copy of the complaint in Civil Case No. 15510, filed by respondent demanding her share in the rentals being collected by petitioner from the tenants of the building. Petitioner then informed respondent that she was exercising her right of redemption as a co-owner of the subject property. On August 12, 1992, she deposited the amount of P10,000.00 as redemption price with the Clerk of Court. This move to redeem the property was interposed as a permissive counterclaim in Civil Case No. 15510. However, said case was dismissed after respondent was declared non-suited with the result that petitioners counterclaim was likewise dismissed. On September 14, 1995, petitioner instituted Civil Case No. C-17055 before the Regional Trial Court in Caloocan City. She alleged that the 30-day period for redemption under Art. 1623 of the Civil Code had not begun to run against her since the vendor, Adela Bias, never informed her and the other owners about the sale to respondent. She learned about the sale only on August 5, 1992, after she received the summons in Civil Case No. 15510, together with the complaint. Respondent, on the other hand, contended that petitioner knew about the sale as early as May 30, 1992, because, on that date, she wrote petitioner a letter informing the latter about the sale, with a demand that the rentals corresponding to her 1/5 share of the subject property be remitted to her. Said letter was sent with a copy of the Deed of Sale between respondent and Adela Bias. On the same date, letters were likewise sent by respondent to the tenants of the building, namely, Seiko Service Center and Glitters Corporation, informing them of the sale and requesting that, thenceforth, they pay 1/5 of the monthly rentals to respondent. That petitioner received these letters is proved by the fact that on June 8, 1992, she wrote5 the buildings tenants advising them to disregard respondents request and continue paying full rentals directly to her. On August 19, 1996, the trial court dismissed petitioners complaint for legal redemption. It ruled that Art. 1623 does not prescribe any particular form of notifying co-owners about a sale of property owned in common to enable them to exercise their right of legal redemption. However, petitioner failed to redeem the property within the prescribed period. Petitioner brought the matter to the Court of Appeals, which, on October 26, 1998, affirmed the decision of the Regional Trial Court. She moved for reconsideration, but her motion was denied by the appellate court on February 16, 1999.

Issue: WON notice should be given by the vendor of an undivided interest to his co-owners to effectuate a valid sale subject to its extinguishment? Held: Art. 1623 of the Civil Code, unlike Art. 1524 of the former Civil Code, is clear in requiring that the written notification in a co-ownership should come from the vendor or prospective vendor, not from any other person; Effect must be given to changes in statutory language.There was thus a return to the doctrine laid down in Butte. That ruling is sound. In the first place, reversion to the ruling in Butte is proper. Art. 1623 of the Civil Code is clear in requiring that the written notification should come from the vendor or prospective vendor, not from any other person. There is, therefore, no room for construction. Indeed, the principal difference between Art. 1524 of the former Civil Code and Art. 1623 of the present one is that the former did not specify who must give the notice, whereas the present one expressly says the notice must be given by the vendor. Effect must be given to this change in statutory language. In the second place, it makes sense to require that the notice required in Art. 1623 be given by the vendor and by nobody else. As explained by this Court through Justice J.B.L. Reyes in Butte, the vendor of an undivided interest is in the best position to know who are his co-owners who under the law must be notified of the sale. It is likewise the notification from the seller, not from anyone else, which can remove all doubts as to the fact of the sale, its perfection, and its validity, for in a contract of sale, the seller is in the best position to confirm whether consent to the essential obligation of selling the property and transferring ownership thereof to the vendee has been given.

SOFIA MAGTIRA, petitioner, vs. THE HONORABLE COURT OF APPEALS and ZACARIAS PANGAN, respondents. Facts: The parcel of riceland in controversy, situated in Barrio San to Rosario, Paombong, Bulacan, measuring approximately 3,412 square meters, belonged to ISIDORO Magtira who died intestate in 1953 leaving petitioner, SOFIA Magtira, as his sole heir. On February 8, 1926, ISIDORO Magtira, for and in consideration of the amount of Seven Hundred and Twenty-Five (P725.00) Pesos, which he obtained from herein private respondent ZACARIAS Pangan, had entered into an agreement with the latter involving the aforesaid parcel of land evidenced by a public instrument.It should be noted that while the document is entitled Kasulatang Sanglaan the body thereof contains a statement that inilipat ipinagbili nang biling mabibiling muli.ZACARIAS took possession of the property beginning February 8, 1926 and paid taxes thereon pursuant to the aforequoted agreement.In an undated private instrument signed by SOFIA and ZACARIAS, quoted hereunder, the Magtiras asked for and were given an extension of five years, or up to April 30, 1935, within which to redeem.Petitioner maintains that on three occasions, she orally sought the redemption of the property by offering to ZACARIAS the sum of P1,000.00: the first was sometime before April 30, 1935; the second was shortly before the outbreak of the Second World War; and the third was immediately after the Japanese occupation, but in all these instances, ZACARIAS pleaded for more time to remain in possession.On August 23, 1945, or ten (10) years and four (4) months after the extended period up to April 30, 1935, ZACARIAS filed with the Register of Deeds of Bulacan an Affidavit for Consolidation of Ownership. That by public instrument dated February 8, 1926, executed and ratified before the Notary Public, Honorio Briones, Sr. of Paombong, Bulacan, bearing his Notarial Protocol as Document No. 27, Page 98, series of 1926, Isidoro Magtira in representation of his daughter, Sofia Magtira, sold to me by way of conditional sale (Pacto de Retro) a certain parcel of riceland consisting of 3,412 square meters, more or less, situated in the Sitio of Gusi, Paombong, Bulacan, for the sum of P725.00 repurchaseable on or before April 30, 1930. Isidoro Magtira died intestate in 1953 leaving as his sole compulsory heir, the petitioner SOFIA. It is SOFIAS submission that it was only sometime in 1955 during the cadastral survey in Paombong, Bulacan, that she came to know that ZACARIAS was claiming ownership of the land which the latter wanted to be surveyed in his name. On June 18, 1956, SOFIA commenced this action against ZACARIAS for accounting, cancellation of real estate mortgage and for recovery of ownership in the Court of First In stance of Bulacan, Branch II, docketed therein as Civil Case No. 1318. The Amended Complaint alleged mainly that the amount of P725.00 obtained by ISIDORO from ZACARIAS was a loan secured by a real estate mortgage over the subject land, evidenced by a public instrument (Annex A); that while a phrase in said document speaks of a contract of sale with right of repurchase, the whole agreement and the only intention of the parties was in reality one of loan with equitable mortgage. In his Answer to the Amended Complaint, ZACARIAS insisted that the sum of P725.00 which ISIDORO had obtained from him was not a loan secured by a real estate mortgage but the consideration paid by ISIDORO by virtue of a sale with pacto de retro of the property being litigated; that the additional amounts secured from him represented an additional consideration for the sale with right to repurchase; that in the interpretation of contracts, the title of the instrument is not controlling but only the recitals thereof; that during the

period for repurchase the Magtiras evidenced no intention to repurchase the property, nor had they made any tender of payment, nor did they file the necessary action for the protection of their rights; that he has been in possession of the property for exactly 30 years, 4 months and ten days computed from February 28, 1926 to the date of the filing of the Complaint on June 18, 1956, so that he has acquired absolute ownership by extraordinary acquisitive prescription and plaintiffs right to recover the same had been extinguished by prescription; and finally, the property having been sold by pacto de retro, he is under no obligation to render an accounting of the fruits thereof. On February 23, 1959, the trial Court rendered its Decision dismissing the Complaint reasoning that from the documentary evidence it is shown that ISIDORO intended to sell his property by means of a pacto de retro sale for a term of 4 years, which was later extended to 5 years, and he failed to take any step to recover said property notwithstanding the lapse of a considerable length of time; and that whatever doubt there may be as to the exact nature of their agreement has lost significance because ZACARIAS Pangan has become owner of the property by acquisitive prescription. Issue: WON laches would attach against herein petitioner? Held: The actuations of both parties after entering into the agreement show that ZACARIAS immediately entered into the possession of subject land, paid taxes thereon, and enjoyed its fruits. In fact, Exhibit A made specific mention of ZACARIAS obligation to pay taxes, a burden attached to ownership of property. Thus, the documents, Exhibit A, cannot even be presumed as one of equitable mortgage considering that the conveyance does not fall within the purview of any of the cases mentioned in Article 1602 of the New Civil Code, a provision which may be applied retroactively since it is remedial in nature. Nor did respondent Court err in holding ZACARIAS possession for exactly 30 years, 4 months and 10 days from February 8, 1926, the date the first agreement (Exhibit A) was entered into, up to the time of the filing of the complaint on June 18, 1956. Further, SOFIA showed inexcusable negligence in effectively asserting and protecting her rights as the alleged mortgagee by her failure to either seek a reformation of their agreement, or to make proper consignation of the repurchase price, or to file the action for redemption and cancellation of the alleged mortgage as early as after the Japanese occupation when for the third time her alleged offer to redeem was refused by ZACARIAS. SOFIAS contention that the consolidation of ownership in ZACARIAS name in 1945 was kept a secret from her and that ZACARIAS had done nothing else to her knowledge which indicated that he was claiming the land as his own, does not negate the presence of laches. It is a general rule that actual knowledge on the part of the plaintiff of the existence of a cause of action against the defendant, is not necessary or essential, but that it is enough if such knowledge may be imputed to plaintiff by reason of the existence of opportunity on his part to acquire such knowledge, or because of circumstances of which he was cognizant. Respondent Court, therefore, correctly considered petitioner guilty of laches.

FIDELA C. LEGASPI, petitioner, vs. COURT OF APPEALS, ROMANA YAP VDA. DE AGUILAR, substituted by her heirs, namely: DOMINADOR JR., FELICIANO, EVANGELINA, ADORACION, TERESITA, OFELIA and MANUEL, all surnamed AGUILAR, CLARO PESTEJO, MARIA PESTEJO and ANTONIO PESTEJO, respondents. Facts: Petition for review on certiorari of the decision of the Court of Appeals in its C.A.-G.R. No. 52907-R, reversing the judgment of the Court of First Instance of Cavite, Branch III. On December 14, 1971, petitioner instituted a civil suit against the private respondents herein, for legal redemption and damages. On January 3, 1972, respondents moved to dismiss the civil complaint for alleged lack of cause of action. Petitioner opposed the said motion to dismiss on January 11, 1972, averring therein that petitioner, having been denied her right of pre-emption, is resorting to legal redemption under Article 1622 of the New Civil Code, claiming that she has a better use and utility of Lot No. 268 as her house occupies a portion thereof. The trial court issued an order dated January 11, 1972, postponing the resolution of the motion to dismiss until after the evidence of the parties shall have been actually presented. The real question here now is who among the adjoining owners has a better right to buy this small piece of land measuring 59 square meters, where by admission of parties part of the house of the plaintiff is standing. Should it be the plaintiff who has part of her house standing on the same lot or the other three adjoining owners including the buyer now co-defendant, Romana Yap Vda. de Aguilar, who has no improvement standing on the lot? This being the case it is clear that it is evidentiary in nature rather than argumentative that should control the validity of the motion to dismiss. The Court is of the opinion and so holds that the resolution of this motion to dismiss should be postponed up to the time when enough evidence shall have been presented to have the Court decide as to the real issues involved, factual and legal. Respondents thereafter filed their Answer With Counterclaim denying the material allegations of the complaint and alleging that notice to adjacent owners of the sale is not necessary; that by reason of the frivolous and unfounded action by the plaintiff, they stand to suffer actual damages and the amount of P1,000.00 as attorneys fees. In answer to the counterclaim, petitioner denies the same and avers that her suit is supported by law and anchored on equity. Not satisfied with the judgment of the trial court, respondents appealed to the respondent Court of Appeals which rendered judgment on November 11, 1974.

Issue: Who has the preferred right of preemption or redemption among co-owners of adjoining land?

Held: The provision of law governing the parties is Article 1622 of the New Civil Code, a new provision introduced in the present Civil Code covering specifically the rights of pre-emption and redemption of adjoining owners of urban land, more specially the third paragraph thereof which provides that when two or more owners of adjoining lands wish to exercise the right of preemption or redemption, the owner whose intended use of the land in question appears best justified shall be preferred. The determinative factor should be that provided for in paragraph 3 of Article 1622 of the Civil Codethe intended use that appears best justifiedand not whether the said lot was acquired for speculative purposes. Under the facts and circumstances of the instant case the petitioner has the preferential right of pre-emption and/or redemption over Lot 268 as against the private respondent. To uphold the dismissal of the instant case under the circumstances above set forth by sustaining the respondent courts decision would be sanctioning something iniquitous to the petitioner.