PERPETUA ABUAN, ET AL., PLAINTIFFS AND APPELLANTS, VS. EUSTAQUIO S. GARCIA, ET AL., DEFENDANTS AND APPELLEES.

Abuan versus Garcia

The Case

This is an action for legal redemption of a parcel of riceland that had been acquired under the homestead provisions of the Public Land Law. The plaintiffs are the legal heirs of the original homestead applicant, Laureano Abuan, and the defendants are the persons to whom the heirs sold the land. The heirs later sought to repurchase it, invoking the five-year right of repurchase that the law gives to the applicant, his widow, or his legal heirs. The case matters because it fixes the precise starting point of that five-year period: it runs from the date of conveyance, meaning the date ownership is transferred, and not from the date the buyer completes payment of the price. It is a staple of bar questions on legal redemption, constructive delivery, and the moment ownership passes in a sale.

Procedural History

The plaintiffs filed their complaint for redemption in the Court of First Instance of Nueva Vizcaya. The defendants moved to dismiss on the ground that the five-year redemption period had already expired. The trial court sustained the motion and dismissed the complaint, fixing the starting date of the period as the date of the compromise agreement between the parties. The plaintiffs appealed to the Court of Appeals, which certified the case to the Supreme Court because only a pure question of law remained to be resolved. The Supreme Court thus decided the appeal on the sole legal issue of when the five-year period began to run.

Facts

Laureano Abuan acquired the riceland under the homestead provisions of the Public Land Law. After his death, the land passed to his legal heirs, the plaintiffs in this case. The original certificate of title in his name was cancelled, and a transfer certificate of title was issued in the names of the heirs.

On August 7, 1953, the heirs sold the land to the defendants by a public instrument entitled Deed of Absolute Sale, and a transfer certificate of title was issued in the names of the defendants. The heirs later sued to recover the land, alleging that the deed of absolute sale had been executed through fraud and without consideration. That case was settled amicably. On February 28, 1955, the parties entered into an Agreement under which the defendants paid five hundred pesos that day as partial payment of the purchase price and promised to pay the balance of one thousand five hundred pesos on or before April 30, 1955, with a grace period of thirty days. The Agreement also stipulated that it would supersede all previous agreements or contracts between the parties involving the same riceland.

Claiming that full payment was made only sometime in May 1955, the plaintiffs instituted the present action for redemption on March 4, 1960. Counted from the execution of the deed of sale in August 1953, or from the compromise Agreement in February 1955, more than five years had clearly elapsed. Counted from full payment in May 1955, the action would have been filed within the period.

Issues

• Whether or not the five-year period of repurchase under the Public Land Law began to run from the execution of the deed of absolute sale on August 7, 1953.
• Whether or not, assuming the deed of sale was null and void, the period began to run at the latest from the compromise Agreement of February 28, 1955.
• Whether or not the full payment of the purchase price in May 1955 was the event that started the running of the redemption period.

Applicable Provisions

Section 119 of the Public Land Law, Commonwealth Act Number 141, provides:

Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, for a period of five years from the date of conveyance.

This is the very provision the plaintiffs invoke, and its phrase "from the date of conveyance" is the language the Court construes.

Article 1477 of the New Civil Code provides:

Ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.

This fixes the rule that ownership passes by delivery, which the Court equates with conveyance.

Article 1496 of the New Civil Code provides:

Ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in articles 1497 to 1501.

This confirms that the vendee becomes owner upon delivery, in any of the modes the law allows.

Article 1498 of the New Civil Code provides:

When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot be clearly inferred.

This is the mode of constructive delivery that operated through the public Deed of Absolute Sale.

Ruling

On the first issue, the Court held that the five-year period ran from the execution of the deed of absolute sale on August 7, 1953. The law speaks of five years from the date of conveyance, and conveyance means the transfer of ownership, the date when title to the land passes from one person to another. Under Article 1498, the execution of a public instrument of sale is equivalent to delivery of the thing sold, so the defendants acquired ownership upon the execution of the deed. The Court stressed that this mode of delivery applies to real as well as personal property.

On the second issue, the Court held that even assuming the deed of sale was null and void, the period would run at the latest from the compromise Agreement of February 28, 1955. That Agreement did not revest ownership in the plaintiffs; it merely superseded the terms of payment. Although it was a private instrument and so could not operate as constructive delivery under Article 1498, Article 1496 allows delivery in any other manner signifying that possession is transferred from vendor to vendee. The intention to give possession and ownership was manifest from the payment of part of the price, the absence of any stipulation that ownership would not vest until full payment, and the plaintiffs' desistance from their reivindicatory action, which left the property in the defendants' hands as owners. This was delivery brevi manu, a handing over by mere agreement, permissible under Articles 1499 and 1501.

On the third issue, the Court rejected the plaintiffs' contention that the period should run from full payment in May 1955. In the absence of an express stipulation to the contrary, payment of the price is not a condition precedent to the transfer of ownership, which passes by delivery of the thing to the buyer. Counted from either the deed of sale or the compromise Agreement, more than five years had elapsed when the action was filed in March 1960.

Doctrine

The five-year period of repurchase under Section 119 of the Public Land Law runs from the date of conveyance, which means the date ownership is transferred to the vendee, not the date the purchase price is fully paid. In a sale through a public instrument, the execution of the deed is equivalent to delivery under Article 1498, and ownership passes to the vendee at that moment. Payment of the price is not a condition precedent to the transfer of ownership unless the parties expressly stipulate otherwise. Even where the public deed is set aside, a later agreement showing an intention to transfer possession and ownership may constitute delivery brevi manu under Articles 1496, 1499, and 1501, and may serve as the starting point of the period.

Disposition

The Supreme Court affirmed the order of the trial court dismissing the complaint, with costs against the plaintiffs.

Remember This

The one line to memorize: the five-year redemption period runs from the date of conveyance, meaning the date ownership passes by delivery, not the date of full payment. Examiners use this case to test constructive delivery through a public instrument and the rule that payment of the price is not a condition precedent to the transfer of ownership.