G.R. No. L-19101. February 29, 1964
EMILIANO DALANDAN, AND MARIA DALANDAN, ASSISTED BY HER HUSBAND JULIAN SILVERIO, PLAINTIFFS AND APPELLANTS, VS. VICTORIA JULIO, ELEUTERIO SANTOS AND FRANCISCA ECHIPARI, AS NATURA…
BARRERA, J.:
Pasay City) dismissing their complaint (Civil Case No. 317-R) against
defendants Victoria Julio, Eleuterio Santos, and Francisca Echipari (as
natural guardian ad litem of the minors Dolores, Ponciano,
Lorenzo and Nolasco Santos), plaintiffs Emiliano Dalandan and Maria
Dalandan (assisted by her husband Julian Silverio), interposed the
present appeal.
The pertinent averments of the complaint that initiated this case
filed on December 20, 1960 and amended on January 23, 1961, read as
follows:
“7. That sometime in September 24, 1932, during the
lifetime of Clemente Dalandan and Victorina Dalandan (widower and widow
respectively), they executed a notarial document whereby said Clemente
Dalandan sold, ceded, and transferred by way of pacto de retro
sale to Victorina Dalandan( fifty (50) plots or ‘salt beds’ (banigan),
which form part of the one hundred and fifty two (152) plots or
‘banigan’ found on six (6) parcels of registered land, situated at Las
Piñas, Rizal and which is specifically described under Tax Declaration
Nob. 7480, 7481, 7482, 7483, 774 and 7919 of Las Piñas, Rizal, subject
to the right of Clemente Dalandan to repurchase the said fifty (50)
plots or ‘banigan’ for the same amount of Four Thousand Pesos
(P4,000.00) within ten (10) years from September 24, 1932 the date of
said pacto de retro sale:“8. That before the expiration of the ten (10) years period stipulated in the said pacto de retro
sale above-referred to, the said Clemente Dalandan and Victorina
Dalandan executed another notarial document on May 14, 1940, which
expressly modified and amended the said pacto de retro sale, in that Victorina Dalandan expressly waived the ten (10) years period of redemption or repurchase, provided for in said pacto de retro
sale, and granted to Clemente Dalandan the right to redeem or pay the
price of P4,000.00 at any time, without any limitation us to the period
of redemption or repurchase, provided, that Victorina Dalandan shall
enjoy and be entitled to receive the products of the said fifty (50)
plots or ‘banigan’ during the period that said P4,000.00 has not been
returned to her (Victorina Dalandan) by Clemente Dalandan, and which
notarial document dated May 14, 1940, a copy is hereto attached and
said part hereof as Annex ‘A’.“9. That in the aforesaid
notarial document (Annex ‘A’ hereof), it was also expressly provided
that in the event of death of Victorina Dalandan, the redemption price
of P4,000.00 shall be paid to Engracio Santos and Eleuterio Santos
(both grandsons of Victorina Dalandan) at P1,500.00 each, and to
Victoria Julio (daughter of Victorina Dalandan), the amount of
P1,000.00.“10. That the document executed by the deceased
Clemente Dalandan in favor of the deceased Victorina Dalandan over the
said fifty (50) plots or ‘banigan’ as alleged in paragraphs 5, 6, and 7
hereof, are in truth an equitable mortgage, for:(a)
The document executed on May 14, 1940 (Annex ‘A’ hereof) expressly
modified and amended the said document of September 24, 1932, as
Victorina Dalandan expressly waived the ten (10) years period of
redemption or repurchase therein and extending and/or granting a new
period which is indefinite for Clemente Dalandan to redeem or
repurchase those fifty (50) plots or ‘banigan’.(b) It may
be fairly inferred from the context of said Annex ‘A’ that the real
intention of the parties therein was that the transaction was only a
security for the payment of a debt in the amount of P4,000.00, because
of the use or employment of the words ‘redemption’ and ‘redemption
price’ therein found.(c) The defendants, as well as their
predecessor-in-interest, had never taken steps to consolidate ownership
over the said fifty (50) plots or ‘banigan’, as required under Article
1607 of the new Civil Code, in spite of the lapse of over twenty (20)
years, since they executed Annex ‘A’ ‘hereof, which inaction on the
part of the defendants and their predecessor-in-interest strongly
indicates that the transaction between Victorina Dalandan and Clemente
Dulandan was really one of mortgage.(d) Even assuming- the
contract (Annex ‘A’) was a true sale with right of repurchase, although
it is merely a mortgage, still under the last paragraph of Article 1606
of the new Civil Code, the plaintiffs herein have still thirty (30)
days to repurchase from the time final judgment is rendered in &
civil action to consolidate ownership, and which civil action has never
been filed by the defendants nor their predecessor-in- interest.(d)
During the period from 1932 up to the present, the plaintiffs and their
predecessor-in-interest were the ones paying the real estate taxes over
the said lots, and that the defendants nor their predecessor-in
-interest never paid any real estate taxes over the same.(f)
The provision in the contract, to the effect that Victorina Dalandan
shall enjoy and be entitled to receive the products of the said fifty
(50) plots during the period that the amount of P4,000.00 is not
returned to her, is against the nature of a sale with pacto de retro,
and is incompatible or inconsistent with such kind of contract, and is
more in consonant with and justify the fact that said contract was
really one of mortgage or equitable mortgage.“11.
That on December 12, 1960, the defendants were notified in writing that
the plaintiffs are now ready to pay the amount of P4,000.00 to them, in
the manner and amount provided in Annex ‘A’ hereof, and requesting the
defendants to name the place and time where they desire to accept the
said amount as payment of the debt of the plaintiff’s
predcessor-in-Jnterest, but the defendants inspite of the fact that
they received the said notice in writing) refused to accept or receive
the said amount from the plaintiffs; and until the filing of this
complaint, the defendants Eleuterio Santos and Francisco Echipari did
not even honor to answer the said offer of payment of the plaintiffs,
except the defendant Victoria Julio who answered the plaintiffs’ letter
by refusing to accept payment tendered to her, and instead claims that
she is the exclusive owner of the said (50) plots or ‘banigan’ by
inheritance from her deceased mother, Victorina Dalandan, to the
exclusion of Engracio Santos and Eleuterio Santos, and winch letters
tendering payment and the answer thereto are hereto attached and made
part hereof as Annexes B, C, D and E respectively.“12. That
in the aforesaid letters (Annexes B, C, and D) the defendants were
notified that their refusal to accept the amount of P4,000.00 from the
plaintiffs will force the latter to consign the same in court, and to
institute the proper action against them.“13. That due to
the refusal of the defendants to accept the payment of P4,000.00 as
alleged in the preceding paragraph for the redemption of the said fifty
plots or ‘banigan’ mentioned in the preceding paragraphs, the
plaintiffs are forced to consign or deposit the amount of P4,000.00 in
court, as per Official Receipt No. F-55425.17, dated December 20, 1960,
and which amount is now at the disposal of this Honorable Court,“14.
That the plaintiffs, herein, having duly consigned the said amount of
P4,00.00, with due notice to the defendants, the plaintiffs, therefore,
are entitled as of right under Article 1260 of the new Civil Code, to
seek the cancellation of their aforesaid obligation and hereby prays
the Court to order the cancellation, release, and discharge of those
fifty (50) plots or ‘banigan’ from the equitable mortgage embodied in
Annex ‘A’ hereof, as well as that notarial document dated September 24,
1932, executed and ratified by Clemente Dalandan and Victorina Dalandan
before Notary Public Juan Ortega and entered as Doc. No. 604, Page 19,
Book 7, Series of 1932 of the said Notary Public;”
Against this complaint, defendants filed a motion to dismiss, on the
grounds that (1) the complaint states no cause of action; and (2)
granting that it states a cause of action, it is already barred by the
Statute of Limitations and/or laches, because:
(a) The stipulation that the subject matter of the
sale may be redeemed at any time without limitation is null and void
and after the expiration of ten (10) years from the execution of the
document, title to the property is consolidated ipso facto to the vendee a retro.(b)
The plaintiffs cited only one circumstance, namely, the alleged
extension of the period of redemption, as to why the document in
question is merely an equitable mortgage, the rest of the circumstances
alleged in the complaint being either insufficient or mere conclusion
of law, and under the doctyino laid down by the Supreme Court m the
case of Siopongco vs. Castro (L-12167, April 29, 1959), for documents
executed before 1950, there must be a combination of several
circumstances enumerated in Article 1602 of the new Civil Code before
courts may be justified in concluding that parties intended the written
document of pacto de retro to be a mere security for the
payment of debt and, under the same decision, Article 1606 of the new
Civil Code is not applicable, because ownership has vested in the
defendants before the approval of said Code.(c) Under the old Civil Code, it is not necessary for the vendee a retro
to consolidate ownership, because the same takes place upon failure to
exercise the right of redemption under Article 1518 of the same Code.
And, even under the new Civil Code, ownership is consolidated by
operation of law and the requirement of judicial order in Article 1607
of the same Code is merely for purposes of registering the
consolidation of title (Rosario vs. Rosario 110 Phil., 394).(d)
Plaintiffs should have filed an action for reformation of instrument
within the statutory period which under the doctrine laid down in the
case of Conde vs. Cuenca (L-9405, July 31, 1956) must be within ten
(10) years from the time the right of action accrued.(f) The
allegation of usury is a mere conclusion of law and the ultimate facts
to sustain the same clearly shows that the alleged income of P480.00 a
year does not exceed 12% of the purchase price of P4,000.00. Resides,
there could be no usury, because the transaction in question is one of
true sale.(g) The mere fact that taxes were allegedly paid
by plaintiffs on the property in question is not one of these
circumstances mentioned under Article 1602 of the new Civil Code but an
agreement where the vendor binds himself to pay the taxes on the land allegedly sold, which is not alleged in the complaint.
To this motion to dismiss, plaintiffs duly filed an opposition, to
which defendants filed a reply. On April 29, 1961, the court dismissed
the complaint, in an order, which reads:
“ORDER”
“This is a motion to dismiss the amended complaint
filed on January 27, 1961, on the following grounds: (1) That the
complaint states no cause of action; (2) That even if we concede arguendo that the complaint states a cause of action, the same is already barred by the Statute of Limitations and/or laches.“After
a careful consideration of the allegations of the amended complaint,
and taking into account the document, Annex (A) thereof, which serves
as the main basis of the complaint, it is our sense that plaintiffs had
already lost their rights to redeem the lands in question within the
period of ten years from the date of the execution of said document.
The stipulation in the contract that the parties thereto hereby waive
the 10-year period for redemption or repurchase provided for therein
and instead, the party of the First Part, Clemente Dalandan, is hereby
granted the right by the party of the Second Part, Victorina Dalandan,
to make the redemption or pay the purchase price of Four Thousand Pesos
(P4,000.00) to the latter, his heirs, or assigns, at any time without
any limitation as to the period of redemption or repurchase,
whatsoever’, offends against the provisions of Article 1508 of the old
Civil Code in so providing that the right to repurchase may be
exercised at anytime, that is even after the 10 year period shall have
elapsed. Such stipulation is, consequently, illicit and could, not he
given force and effect by this Court, for it runs counter1 to the pro-
visions of the law on the matter.“Let it not be said,
because of the allegation in Paragraph 10 of the amended complaint,
that the document, Annex ‘A’, in question is in truth an equitable
mortgage, the motion to dismiss could not be sustained, because it
hypothetically admits the truth thereof. Such allegations of ‘equitable
mortgage’ in the complaint is, to our mind, but a mere conclusion of
plaintiffs, and not a material allegation, so that the same can not be
deemed admitted by the defendants who filed the motion to dismiss.
“Considering that the document, Annex ‘A’, has the earmarks of a sale
with right to repurchase and, as the plaintiffs failed to exercise
their rights to redeem the same within the statutory period fixed by
the old Civil Code which is applicable to the case at bar, we hereby
hold that the plaintiffs had already lost whatever rights they had over
the property.“WHEREFORE, the amended complaint is hereby dismissed without costs.
“SO ORDERED.”
Their motion for reconsideration of said order, having been denied, plaintiffs directly appealed to us.
The only issue to be resolved in this case is whether the trial court correctly dismissed plaintiff’s complaint.
The records show that on September 24, 1932, Clemente Dalandan,[1]
for and in consideration of the sum of P4,000.00, executed a contract
of sale of 50 salt beds (banigan) located at Sitio Lakura, Las Piñas,
Rizal, in favor of Victorirta Dalandan,[2]
with right to repurchase the same within 10 years from the date of the
execution of the contract, by paying back and returning to the latter
the purchase price of P4,000.00, with all the expenses incident to the
preparation of said contract and, upon failure of Clemente Dalandan to
exercise said right of repurchase within said period title thereto
shall pass to and become vested, absolutely and without reservation, to
Victorina Dalandan, her heirs, and assigns. On May 14, 1940, however,
or prior to the expiration of the period of repurchase agreed upon, the
parties executed another contract (Annex “A”), pertinent portion of
which reads:
“That the parties hereto have decided and agreed by
these presents to modify the conditions and agreements stated in the
above-mentioned document of pacto de retro sale, in the sense
that they hereby waive the 10-year period for redemption or repurchase
provided for therein and, instead, the Party of the First Part,
Clemente Dalandan, is hereby granted the right by the Party of the
Second Part, Victorina Dalandan, to make the redemption or pay the
purchase price of Four Thousand Pesos (P4,000.00) to the latter, his
heirs, or assigns, at any time, with out any limitation as to the
period of redemption or repurchase, whatsoever: Provided, however, That
during the time or period that the said purchase price of Pour Thousand
Pesos is not paid, the Party of the Second Part or Victorina Dalandan
shall enjoy and be entitled to receive the products from the said fifty
(50) plots or ‘banigan’ stated above; and Provided, further, that upon
the death of the Party of the Second Part, in the event that redemption
price of P4,000.00 has not been paid, the same should be paid by the
Party of the First Part, his heirs or assigns, to the persons as
follows:****
Note that the above stipulation:, whereby the parties waived the
original 10-year period for redemption or repurchase of the property
subject of the sale a retro, granting to the vendor a retro.
Clemente Dalandan the ‘ right to make the repurchase “at any time,
without any limitation as to the period of redemption or repurchase,
whatsoever”, is violative of Article 1508 of the old Civil Code,
applicable to the instant case, which reads:
“Art. 1508. The right referred to in the next,
preceding- article, in default of an express agreement, shall endure
four years, counted from the date of the contract.“Should there be an agreement, the period shall not exceed ten years.”
In the case of Yadao vs. Yadao (20 Phil. 260), where the contract contained a stipulation that the vendor a retro
could repurchase the land any time he had the money, this Court held
that under the provision of the Civil Code (old), the life of a pacto de retro
or agreement could not exceed ten years, and if the property subject of
the contract was not redeemed within that period, the title then passed
irrevocably to the vendee.
In line with this ruling, the aforementioned stipulation of May 14,
1940, insofar as it gave the vendor right to repurchase beyond the ten
year period, is illicit and, therefore, null and void and cannot be
given force and effect. The vendor a retro Clemente Dalandan
should have exercised his right to repurchase the property in question
at any time prior to the expiration of 10 years from September 24,
1932, the date of execution of the sale a retro. Having failed to do so, title to said proproperty had been consolidated, ipso facto, in the vendee a retro Victorina Dalandan, on September 24, 1942, (Alojado vs. Lim Siongco, 51 Phil. 339, 342).
But appellants contend that if the said stipulation of May 14, 1940,
wherein the parties waived the 10-year repurchase period originally
agreed upon in the contract of September 24, 1932, was null and void,
then the vendee a retro Victorina Dalandan became the absolute owner of
the property, even prior to the expiration of the 10- year repurchase
period. Hence, they urge that, as a consequence, such a waiver amounted
to a promise to sell the property sold a retro, on the part of the vendee a retro
to the vendor a retro Clemente Dalandan for an indefinite period and,
therefore, did not violate the aforequoted provision of Article 1508 of
the old Civil Code.
The claim is untenable. The waiver of the time limit to exercise the
right of repurchase did not destroy or extinguish the right itself, but
only modified its exercise. Therefore the contract remained to be a
sale subject to repurchase, and did not become an absolute sale. Nor is
such a stipulation (waiver of the period of redemption) a promise to
sell, an independent contract. The right to repurchase for an
indefinite period granted in the agreement of May 14, 1940 is the same
right to repurchase within ten years provided in the September 24, 1932
contract. An agreement to repurchase becomes a promise to sell when
made after an absolute sale, or after title has been consolidated in
the vendee a retro, because where the sale is made without such
an agreement or where the period of repurchase has already expired, the
purchaser acquires the thing sold absolutely. If he afterwards grants
the vendor the right to repurchase, it is a new contract and is
equivalent to a promise to sell (Ramos vs. Icasiano, 51 Phil. 343,
346). The case of Madamba vs. Tumaneng (88 Phil., 333) cited by
appellants is not in point, for there, the promise to sell the 2
parcels of land sold a retro was made after the vendee a retro had
become absolute owners thereof, and therefore was an independent
undertaking binding on the latter. (See Ramos vs. Icasiano, supra).
In the instant ease, the promise (if at all) to resell was made prior
to the expiration of the repurchase period and before the vendee a retro
had become absolute owner of the property, and as such, was not a new
contract but a mere modification in the exercise of the same right of
repurchase already reserved in the original contract of September 24,
1932.
Appellants also argue that by filing a motion to dismiss, appellees
thereby admitted the allegation of “equitable mortgage” found in
Paragraph 10 of the amended complaint. ‘
The argument is not sound. As the trial court correctly pointed out,
“such allegation of ‘equitable mortgage’ in the complaint is a mere conclusion
of plain tiff is (appellants), and not a material allegation, so that
the same cannot be deemed admitted by defendants (appellees) who filed
the motion to dismiss”. As a rule, the complaint should contain
allegation of ultimate facts constituting the plaintiff’s cause of
action.
“Neither is it proper to allege in a pleading
inferences of fact from facts not stated, or incorrect inferences from
facts stated, for they are not the ultimate facts required by law to be
pleaded. Legal conclusions need not be pleaded, because so far as they
are correct they are useless, and when erroneous, worse than useless.”
(I Moran, Comments on the Rules of Court [1957 Ed.] 109.)
And, to determine the sufficiency of the cause of action, only the
facts alleged in the complaint and no other should be considered.
“The allegation of nullify of a judgment in a
complaint, being a conclusion and not a material allegation, is not
deemed admitted by the party who files a motion to dismiss.” (Quiambao
vs. Peralta, 102 Phil., 899)
The additional allegation in the amended complaint that from 1932 up
to the present, appellants and their predecessor-in-interest were the
ones paying the real estate taxes on the property subject of the sale a retro
is of no moment, because it is not the fact of alleged payment of taxes
that gives rise to the disputable presumption (of equitable mortgage)
under Article 1602 of the new Civil Code, but an agreement whereby the vendor & retro binds .himself to pay the taxes on the property sold a retro
(Par. 5). There is absolutely no allegation in appellants’ complaint of
such an agreement. Moreover, as the transaction in question took place
before the effectivity of the new Civil Code, this circumstance (paying
taxes) alone is not sufficient to justify the conclusion that said
transaction is a mere equitable mortgage and not a sale a retro. As we held in Siopongco vs. Castro (G.E. No. L-12167, April 29, 1959) :
“Before 1950, the principle obtained here, that a
combination of several such circumstances (stated in Article 1602 new
Civil Code) might justify the courts in concluding that the parties
intended the written documents of pacto de retro to be a mere security for the payment of a debt. One was not enough. So that Article 1602 (providing one only of such circumstances as enough to give rise to the presumption) in effect enunciates a new rule of law . As such, we do not think it could affect contracts – like this – entered into before 1950,”
Lastly, we note that the provision in the contract of May 14, 1940 entitling the vendee a retro Victorina Dalandan to enjoy and receive the products of the property sold a retro is not incompatible with a contract of sale a retro. In the case of Claridad vs. Novella (105 Phil., 756), we already ruled that:
“The fact that the vendee a retro was given
the right to enjoy the usufruct of the land during the period of
redemption, far from being a factor favoring an equitable mortgage, is
an argument in favor of appellee’s theory (that the contract was a sale
a retro), for usufruct is an element of ownership which is involved in a contract of sale.”
For all the foregoing, we find and so hold, that appellants’
amended, complaint, on its face, states no cause of action and,
therefore, the trial court correctly dismissed the same.
Wherefore, the order appealed from is hereby affirmed, with costs against the appellants. It is so ordered.
Bengzon, C. J., Padilla, Labrador, Reyes, J. B. L., Dizon, Regala and Makalintal, JJ., concur.
[1] Predecessor-in-interest of plaintiffs-appellants.
[2] Predecessor-in-interest of defendants-appellees.