EUSEBIO CABIGAO, PLAINTIFF AND APPELLEE, VS. IGNACIO VALENCIA, DEFENDANT AND APPELLANT.

Ignacio Valencia appeals from the judgment of the Court of First
Instance of Bulacan in not ordering the plaintiff-appellee to refund to
him the sum of P159.70, paid by him as land tax, as a condition
precedent to the repurchase of the land in question, in accordance with
the provisions of article 1518 of the Civil Code.

In support of his appeal, the appellant assigns the following alleged errors committed by the lower court in its judgment:

“1. The lower court erred in holding that the (owner) vendor in a sale with pacto de retro
of a parcel of land is not under obligation to refund or reimburse the
vendee therein the sum paid by the latter as land tax during the
pendency of the contract, in accordance with article 1518 of the Civil
Code.

“2. The lower court erred in overruling the demurrer
interposed by the defendant to the complaint.” The pertinent part of
article 1518 of the Civil Code provides as follows:

“ART.
1518. The vendor cannot exercise the right of redemption without
returning to the vendee the price of the sale, and furthermore:

* * * * * * *

“2. The useful and necessary expenditures incurred upon the thing sold.”

It will be seen that what the law requires is that before the vendor
may exercise the right of conventional redemption, he must return to
the vendee, among other things, the useful and necessary expenditures
incurred upon the thing sold. The payment of the land tax is far from
being: an expenditure incurred upon the thing sold. The land tax is a
charge against the owners of urban and rural property to help in the
expenditures of the Government in maintaining order and in protecting
the rights of said property owners. According to article 1511 of the
Civil Code, the vendee as subrogated to all the rights and actions of
the vendor in sales with pacto de retro; in other words, the
vendee becomes the owner of the thing sold while the vendor has not
repurchased it. If the vendee is, therefore, the owner of the thing1
sold while the period of redemption lasts, and he is the one who takes
advantage thereof and of its fruits; and if the object of the land tax
is to contribute to the expenses of the Government in the protection of
his rights, it is but just that he should bear said charge.

In this connection, Manresa, in volume IV, page 258 of his
Commentaries on the Civil Code, commenting on the contrary doctrine
laid down by the Supreme Court of Spain in its decision of May 29,
1882, says the following:

“IS THE PAYMENT OF THE LAND TAX A NECESSARY
EXPENDITURE?—This question is generally solved on the assumption that
the land tax is an incumbrance upon, or charge against, the net income
of the property and not against the property itself, for which reason
by the strict law of equity, the same must be paid by the one receiving
its fruits.

“The decision of May 29, 1882, held that the payment of the taxes upon property in one’s possession is a necessary expenditure.

“We do not agree with this doctrine nor with its ground.

“The
payment of the tax is necessary; but not in the sense that the law
defines necessary expenditures. The thing itself is neither impaired
nor destroyed by the nonpayment of this expenditure. If the possessor
does not make any quarterly payments, the property may be attached and
sold at public auction. The possessor may lose it and cease from its
possession, but the property will neither be lost nor impaired. The
possessor who pays complies with his duty, thereby assuring his
possession; but with this payment the property is not altered in the
least. Nor can it be said that it refers to the lawful defense of the
thing, and that in this sense there exists a necessary expenditure.
Nobody questions the right of the possessor, and if he is deprived of
the thing, it is he, on the contrary, who questions the legal right of
the State to require all persons under its care and protection to pay
taxes.

“The Code agrees with this doctrine: the payment of
the land tax is neither necessary nor useful, nor purely for
ostentation or pleasure; it is a charge against the property and as
such must be considered included in the second paragraph of article
452. It would be absurd to require the payment of that charge of a
person who does not derive any benefit from the property.

“The
property is in reality subject to the payment of the tax; there is a
legal mortgage on it; it is immaterial that for the imposition of the
charge the benefit derived is taken into consideration. Carefully
considered, that same benefit is what is taken as a basis for the
assessment, although the annuity affects the property. The essential
thing is that this expenditure is not incurred for the conservation of
the thing itself.”

For the foregoing considerations, we are of the opinion and so hold,
that the necessary and useful expenditures incurred upon the thing sold
mentioned in the second paragraph of article 1518 of the Civil Code do
not include the payment of the land tax.

Wherefore, finding no error in the judgment appealed from, the same
is hereby affirmed in all its parts, with costs against the appellant.
So ordered.

Avanceña, C. J., Johnson, Street, Villamor, Johns, and Romualdez, JJ., concur.