ELIAS L. PENACO, PLAINTIFF-APPELLEE, VS. ZOILO H. RUAYA AND FELICITAS E. RUAYA, DEFENDANTS-APPELLANTS.

Appeal from the decision of the Court of First Instance of
Misamis Occidental in Civil Case No. OZ-110, entitled: “Elias L. Penaco,
plaintiff, versus Zoilo H. Ruaya and Felicitas E.
Ruaya, defendants,” the dispositive portion of which reads, as follows:

“WHEREFORE, judgement is hereby rendered in favor of the
plaintiff and against the defendants, ordering the latter to convey, relinquish
and transfer all their rights, interests and participation over a portion of Lot No. 373, Misamis Cadastre, on which the building
mentioned in the pacto de retro sale dated January 14,
1957 (Doc. No. 4, Page 75, Book VI, series of 1957, Notary Public
Valeriano S. Kaamino) is constructed in favor of the plaintiff. If thirty days after the finality of this
decision, the defendants fail or neglect to convey and relinquish said rights,
they shall be considered as having so relinquished, conveyed and transferred
said rights to the plaintiff. The
defendants are further­more ordered to pay to the plaintiff the sum of P200.00
as attorney’s fees, and to pay the costs.”^[1]

There is no question as
to the facts. On January 14, 1957, the
defendants, spouses Zoilo H. Ruaya and Felicitas E. Ruaya, executed a document
donominated: “PACTO DE RETRO SALE OF
RESIDENTIAL BUILDING WITH GUARANTY TO RELINQUISH RIGHTS AS PUBLIC LAND
APPLICANT ON THE LOT ON WHICH CONSTRUCTED,” the terms and conditions of
which are as follows:

“That we, ZOILO H.
RUAYA and FELICITAS E. RUAYA,
husband and wife, both 41 years old, Filipinos and re­sidents of the City of Ozamis
for and in consideration of the sum of One Thousand Pesos (P1,000.00), Philip­pine
Currency, receipt whereof in full is hereby acknowledge and to us paid by PERSHING
TAN QUETO, 44 years old, married to Cristina Yap Siok Tin, Filipino citi­zen
and resident of the City of Ozamis, do by these presents hereby sell, cede and
convey by way of PACTO DE RETRO unto the said Pershing Tan Queto, his heirs, successors and assigns, one
(1) two-story residential building of 88 square meters floor area declared for
taxation purposes under Tax Dec. No. 36964 in the name of Zoilo H. Ruaya and therein assessed at
P1,500.00 and erected on a public land along the road to the wharf, City of
Ozamis, claimed by herein vendors with a right as actual claimant-applicant
given standing and recognition by the Bureau of Lands in B.L. Claim No. 181
(N), Portion of Lot 373 of the Misamis Cadastre, as per the decision of the
Director of Lands dated June 8, 1954, certified true copy of which is hereto
attached as Annex ‘A’ and made an integral part of the document; and which
residential building we are the absolute owners with a perfect right to convey
the same and that it is free of all liens, charges and encumbrances and we
hereby warrant to defend the rights of the herein vendee against the lawful
claims of any persons whomsoever on the same.

“IT IS A CONDITION OF THIS SALE that we hereby reserve unto
ourselves, our heirs, successors and assigns the right to repurchase the herein
conveyed building by paying back and returning to the vendee, Pershing Tan
Queto, his heirs, successors and assigns the agreed purchase price of P1,000.00
within the period of one (1) year after the lapse of one (1) year from the date
of the execution hereof; and that upon our failure to exercise the right of repurchase
within the period herein stipulated, title to the building shall pass to and become vested unto the
vendee, his heirs, successors and assigns, as in the law made and provided; and in the event of consoli­dation of
title to the building unto the vendee, we hereby promise, covenant and
guarantee to relinquish and effect canplete legal transfer of all our rights,
interests and participation in and to the lot on which the building is
constructed, as public land claimants thereof by virtue of the decision of the
Bureau of Lands hereto attached as Annex
‘A’.”^[2]

The vendors a retro failed to
exercise their right to repurchase
within the stipulated period so that the vendee a retro filed an action with the Court of
First Instance of Misamis Occidental, docketed therein as Civil Case No. 2263,
for consolidation of title. On
September 30, 1960, the trial court rendered judgment declaring that the title
of the building sold a retro is consolidated in the vendee a retro, Pershing Tan Queto. On
April 18, 1961, Pershing Tan Queto assigned his rights and interests over the
property in favor of the herein plaintiff Elias L. Penaco, in consideration of
the amount of P2,800.00.^[3]
Thereafter, Elias L. Penaco demanded that the defendants relinquish and effect
complete legal transfer of all their rights, interests and participation over
the land on which the residential land sold a
retro is constructed, and when the
defendants refused, this action for specific performance was filed with the Court of First Instance of Misamis
Occidental on November 3, 1965. The
defendants answered that the condition in the contract of sale with pacto de retro whereby they promised, covenanted and guaranteed to relinquish
and transfer all their rights, interests and participation in the lot on which
the building sold a retro is constructed
upon the consolidation of title in the vendee a retro is void and unenforceable for want of
consideration, there being no price mentioned therein.^[4] On
June 20, 1967, the Court of First In­stance of Misamis Occidental rendered the
decision adverted to. Hence, the
present recourse wherein the defendants maintain that the promise to relinquish
rights and interests over the land on which the building sold a retro is constructed is null and void for
want of consideration; and that the parcel of land which is sought to be
transferred has not been identified.

The first contention is clearly without merit. It is based upon the premise that there were
two (2) contracts entered into by and between the appellants and Pershing Tan
Queto, viz: (1) a pacto de retro sale of a residential building; and
(2) a promise, covenant and guarantee to relinquish and transfer to the vendee a retro, all the rights and interests the appellants have on the lot on
which the building sold a retro is constructed, which is false because there was only one (1)
contract entered into by and between the appellants and Pershing Tan Queto and
which is a sale of a residen­tial building for P1,000.00 with the conditions
that: (1) the ven­dors may repurchase the same within the period of one (1)
year after the lapse of one (1) year from the execution of sale, by paying back
and returning to the vendee the amount of P1,000.00; (2) upon the failure of
the vendors to exercise their right to repurchase within the stipulated period,
title to the building shall pass and become vested in the vendee; and (3) in
the event of consolidation of title in the vendee, the vendors shall transfer,
relinquish and effect legal transfer of all their rights over the lot on which
the building is constructed to the vendee or his assigns. In reciprocal contracts, like the one in
question, the obligation or promise of each party is the consideration for that
of the other. In the language of
Article 1350 of the Civil Code, “in onerous contracts the cause is
understood to be, for each contracting party, the pres­tation or promise of a
thing or service by the other.” Besides, under Article 1354 of the Civil
Code, it is presumed that considera­tion exists and is lawful, unless the
debtor proves the contrary. In the
instant case, the appellants failed to present evidence to disprove the
presumption.

The appellants, nevertheless, contend that the consideration is
for the house only since the lot on which it is constructed is public land
which they cannot sell, and in view of the inadequancy of the price, the
building alone having an assessed value of P1,500.00, and the land is too cheap
for P5,000.00

Indeed, the lot on which the building sold a retro is con­structed is public land and
the appellants have no right to sell it. What is sought to be transferred and ceded, however, is not the
ownership of the land, but the rights, interests and participation of the
appellants “as public land claimants thereof by virtue of the decision of
the Bureau of Lands,” which rights could be waived, transferred or
alienated. By their contract, the
appellants have undertaken to effect legal transfer of all their rights over
the lot to the vendee a retro and his assigns upon the consolidation of
the title over the building in the vendee, and whether or not the herein
appellee is qualified to acquire that land of the public domain claimed by the
appellants depends upon the Director of Lands who has executive control over
the concession and disposition of the lands of the public domain. For this reason, the question of the
qualification of the appellee to acquire the land should be raised in the administrative proceedings.

The inadequacy of the price is not sufficient proof that the
consideration of P1,000.00 was for the house alone. The vendee a retro could not have possibly bought the
house alone without securing from the vendors a retro a specific
and fixed arrangement regard­ing the lot on which the house is built, otherwise,
he could be ejected therefrom at the will of the vendors a retro. Besides, “a
valuable consideration, however small or nominal, if given or stipulated in good faith is, in the absence of
fraud, sufficient. A stipulation in
consideration of one dollar is just as effectual and valuable a consideration
as a larger sum stipulated for or paid.”^[5]

The second contention that the parcel of land on which the
building sold a retro is constructed
has not been identified is likewise without merit. The terms and language of the contract are clear and explicit and
leave no doubt as to the intention of the parties that the vendors a retro are obligated to transfer to the vendee a retro and his assigns all their rights,
interests and participation, as public land claimants, in and to the lot on
which the building sold a retro is constructed, after the vendee a retro, has consolidated his title over the building sold a retro. In
the contract of pacto de retro sale, the appellants described the land
on which the building is constructed as “a public land along the road to
the wharf, City of Ozamis, claimed by herein vendors with a right as actual
claimant-applicant given standing and recognition by the Bureau of Lands to
B.L. Claim No. 181(N), Portion of Lot
373 of the Misamis Cadastre, as per the decision of the Director of Lands dated
June 8, 1954, certified true copy of which is hereto attached as Annex ‘A’ and
made an integral part of the document.” Such descrip­tion is sufficient,
as reference to the decision of the Director of Lands of June 8, 1954, adverted
to, which in all probability had delineated the parcel of land applied for by
the appellants in metes and bounds would pinpoint the lot in question.

WHEREFORE, there being no error committed in the judgment
appealed from, the said judgment should be, as it is hereby, AFFIRMED. With costs against the appellants.

SO ORDERED.

Barredo, (Chairman), Aquino, Abad Santos, De Castro, Ericta, and Escolin, JJ., concur.

^[1]
Record on Appeal, p. 40.

^[2]
Id., pp. 5-7

^[3]
Id., pp. 8-11.

^[4]
Id., pp. 11-15.

^[5]
Lawrence vs. McCalmont, 2 How
126, 11 P2d 326.