Kiwas-Baludda, Carmel Grace C.
JD 1B, Legal Research
G.R. No. 162365. January 15, 2014.
ROBERTO R. DAVID, Petitioner,
vs.
EDUARDO C. DAVID, Respondent.
Proceso M. Nacino for petitioner.
Nestor P. Mondok for respondent.
Facts:
Eduardo C. David and Roberto R. David are first cousins and former
business partners. On July 7, 1995, Eduardo and his brother Edwin C.
David sold their inherited properties to Roberto, a parcel of land, two units
International CO 9670 Truck Tractor with two Mi-Bed Trailers. However,
in April 1997, Eduardo and Edwin executed Deed of Absolute Sale in favor
of the Spouses Go for the same property. Roberto gave Eduardo
₱2,800,000.00 and returned to him one of the truck tractors and trailers
subject of the deed of sale. Eduardo demanded for the return of the other
truck tractor and trailer, but Roberto refused to heed the demand. Thus,
Eduardo initiated this replevin suit against Roberto.
In his answer, Roberto denied that Eduardo could repurchase the
properties in question; and insisted that the MOA had extinguished their
deed of sale by novation.
The RTC ruled in favor of Eduardo, holding that the stipulation
giving Eduardo the right to repurchase had made the deed of sale a
conditional sale that Eduardo had fulfilled the conditions for the exercise of
the right to repurchase and that Roberto’s defense of novation had no
merit. The CA affirmed the decision of the trial court, stating that the sum
of all the relevant circumstances indicated that there was an exercise of the
right to repurchase pursuant to the deed of sale. Hence, this petition for
review on certiorari.
Issues:
1. Whether the CA erred in holding that the respondent has exercised
their right to repurchase.
2. Whether the CA erred in holding that there was no novation of the
deed of sale with assumption of mortgage when the parties executed
a memorandum of agreement for the sale of the subject house and lot
and, thereafter sold the said property to third persons.
3. Whether the CA erred in resolving the instant case in favor of
respondent.
Ruling:
No. The petition for review has no merit.
A sale with right to repurchase is governed by Article 1601 of the
Civil Code, which provides that: "Conventional redemption shall take
place when the vendor reserves the right to repurchase the thing sold, with
the obligation to comply with the provisions of Article 1616 and other
stipulations which may have been agreed upon." Conformably with Article
1616, the seller given the right to repurchase may exercise his right of
redemption by paying the buyer: (a) the price of the sale, (b) the expenses
of the contract, (c) legitimate payments made by reason of the sale, and (d)
the necessary and useful expenses made on the thing sold.
The deed of sale entered into by Eduardo and Roberto contained the
following stipulation on the right to repurchase, to wit:
x x x the Vendors are given the right to repurchase the aforesaid described
real property, together with the improvements thereon, and the two (2)
motor vehicles, together with their respective trailers from the Vendee within
a period of three (3) years from the execution of this document on the
purchase price agreed upon by the parties after considering the amount
previously paid to the Vendors in the amount of TWO MILLION PESOS
(₱2,000,000.00), Philippine Currency, with an interest of twelve percent
(12%) per annum and the amount paid with the Development Bank of the
Philippines with an interest of twelve percent (12%) per annum.
The CA and the RTC both found and held that Eduardo had
complied with the conditions stipulated in the deed of sale and prescribed
by Article 1616 of the Civil Code. Pertinently, the CA stated:
It should be noted that the alleged repurchase was exercised within the
stipulated period of three (3) years from the time the Deed of Sale with
Assumption of Mortgage was executed. The only question now, therefore,
which remains to be resolved is whether or not the conditions set forth in the
Deed of Sale with Assumption of Mortgage, i.e. the tender of the purchase
price previously agreed upon, which is Php2.0 Million, plus 12% interest
per annum, and the amount paid by the defendant to DBP, had been
satisfied.
From the testimony of the defendant himself, these preconditions for
the exercise of plaintiff's right to repurchase were adequately satisfied by
the latter. Thus, as stated, from the Php10 Million purchase price which
was directly paid to the defendant, the latter deducted his expenses plus
interests and the loan, and the remaining amount he turned over to the
plaintiff. This testimony is an unequivocal acknowledgement from
defendant that plaintiff and his co-heirs exercised their right to repurchase
the property within the agreed period by satisfying all the conditions
stipulated in the Deed of Sale with Assumption of Mortgage. Moreover,
defendant returned to plaintiff the amount of Php2.8 Million from the total
purchase price of Php10.0 Million. This only means that this is the excess
amount pertaining to plaintiff and co-heirs after the defendant deducted
the repurchase price of Php2.0 Million plus interests and his expenses. Add
to that is the fact that defendant returned one of the trucks and trailers
subject of the Deed of Sale with Assumption of Mortgage to the plaintiff.
This is, at best, a tacit acknowledgement of the defendant that plaintiff and
his co-heirs had in fact exercised their right to repurchase.
The Court affirms the judgment of the CA upholding Eduardo’s
exercise of the right of repurchase. Roberto could no longer assail the
factual findings because his petition for review on certiorari was limited to
the review and determination of questions of law only.
On the other hand, the Court dismisses as devoid of merit Roberto’s
insistence that the MOA had extinguished the obligations established
under the deed of sale by novation.
The issue of novation involves a question of fact, as it necessarily
requires the factual determination of the existence of the various requisites
of novation, namely: (a) there must be a previous valid obligation; (b) the
parties concerned must agree to a new contract; (c) the old contract must be
extinguished; and (d) there must be a valid new contract. With both the
RTC and the CA concluding that the MOA was consistent with the deed of
sale, novation whereby the deed of sale was extinguished did not occur. In
that regard, it is worth repeating that the factual findings of the lower
courts are binding on the Court.
In sales with the right to repurchase, the title and ownership of the
property sold are immediately vested in the vendee, subject to the
resolutory condition of repurchase by the vendor within the stipulated
period. Accordingly, the ownership of the affected properties reverted to
Eduardo once he complied with the condition for the repurchase, thereby
entitling him to the possession of the other motor vehicle with trailer.
