EMIGDIO UMALE ET AL., PLAINTIFFS AND APPELLEES, VS. ALVARO FERNANDEZ ET AL., DEFENDANTS AND APPELLANTS.

This appeal through a bill of exceptions was raised by counsel for the
defendants from the judgment of June 10, 1912, whereby the Honorable Vicente
Jocson, judge, ordered the latter to execute an instrument of redemption of the
property in question in favor of the plaintiffs for the sum of P816.80, and
directed that the fees of the notary attesting the instrument should be
chargeable to the plaintiffs, and the costs of the suit to the defendants.

On January 19, 1912, the plaintiffs Emigdio Umale, a widower, and Margarita,
Tomasa and Miguel Umale, his children had by his wife. Juana Fernandez, now
deceased, filed through an attorney a complaint against Alvaro Fernandez and
Engracia Lavadia, alleging therein that, on April 13, 1905, the plaintiff
Emigdio Umale and his wife, during her lifetime, sold to the defendant spouses
under pacto de retro or right of repurchase, without fixing any period
for the redemption, a parcel of land planted with about one hundred coconut
trees, its boundaries being specified, situated in the pueblo of Pagsanjan,
Laguna; that, although the price of the sale was in the beginning P600, it was
subsequently increased to P816.80, on account of the plaintiffs’ having received
from the defendants various partial payments as an increase of the price; that,
on June 12, 1909, the defendants, renouncing their right of having irrevocably
acquired the ownership of the property sold under pacto de retro, owing
to the lapse of the legal period of four years, granted to the plaintiffs an
extension of time for its redemption and executed for this purpose the document
in Tagalog, the translation of which is as follows:

“I, Alvaro Fernandez, married, have issued this receipt in favor of Emigdio
Umale as proof of our agreement concerning their coconut land which has been
sold to us under pacto de retro and which they may redeem at any time
they may have money of their own without borrowing it from another person. In
witness whereof, I have signed hereunder, in Pagsanjan, on this date, June 12,
1909.”

That, on or about November 9, 1911, the plaintiffs delivered to the
defendants and the latter accepted the sum of P800, plaintiff Umale’s own money,
on account of the price of the redemption of the said property, and that, on or
about the 11th of the same month, the plaintiffs delivered to the defendants and
the latter accepted, on the same account, the sum of P18.80, plaintiff Umale’s
own money, which second delivery completed the total sum of the price of the
purchase and sale, under right of redemption, of the property in question which
was thereby resold to the plaintiffs who, pursuant to the agreement made, took
possession of the said land so redeemed; and that the defendants not only had
not, up to date, executed the instrument of redemption, but they were disturbing
the plaintiffs in their possession of the redeemed property, by means of a
complaint charging them with usurpation of possession, notwithstanding that the
parties had stipulated the transfer of the possession of the said property to
the plaintiffs, by virtue of the said redemption. The latter, therefore, prayed
that the defendants be ordered to execute in favor of the plaintiffs the
instrument of redemption of the said property, with the costs of the suit
against the defendants.

The demurrer to the complaint was overruled by an order of February 12, 1912,
an exception thereto was taken by the defendants, and the latter’s counsel set
forth in answer to the complaint: that he made a general denial of each and all
of the allegations of the complaint, and, as a special defense, alleged that
Emigdio Umale and his wife, Juana Fernandez, sold and conveyed to the defendants
the disputed parcel of land, without any special stipulation as to the period
for its redemption, and that the vendors did not avail themselves of their right
of repurchase within the term allowed by law, wherefore the property in
question, free of all charge and encumbrance, now belonged to the defendants. He
therefore prayed that his clients be absolved from the complaint, with the costs
against the plaintiffs.

After a hearing of the case and an examination of the parol and documentary
evidence introduced by both parties, the court rendered the judgment
aforementioned, to which counsel for the defendants excepted and asked for a
rehearing and a reopening of the case. This motion was overruled, an exception
was taken by the said counsel and, the proper bill of exceptions having been
presented by him, the same was approved, certified, and forwarded to the clerk
of this court, together with all the documents and other evidence in the
case.

In this suit counsel for the plaintiffs seeks to have the court
order the defendants to execute, in behalf of his clients, an instrument of
resale of the property mentioned in the complaint, with the costs against the
defendants. These latter alleged in their answer that, since the plaintiffs did
not avail themselves of their right of redemption within the period fixed by
law, the property in question now belongs to the defendants, and prayed that
they be absolved from the complaint, with the costs against the plaintiffs.

After a careful examination of the issues raised in this suit by the
litigating parties, all the Justices of this court unanimously agree that the
judgment appealed from should be affirmed, with the costs against the
appellants.

The majority of this court accept the findings of the trial court, as well as
the findings that the plaintiffs¦¦ are entitled to redeem the property sold to
the defendants under right of redemption and that the repurchase of the property
in question was effected on the 9th and 11th of November, 1911, through the
delivery by the plaintiffs to the defendants of the sum of P816.80 as the price
of the redemption and of the property redeemed by the plaintiffs from the
defendants.

Although the period of four years fixed, by law for the resale of the
property in dispute had already expired on April 14, 1909, as the sale under
right of repurchase was effected without stipulating any period for the
redemption, wherefore, after the lapse of the four years prescribed by article
1508 of the Civil Code, the defendant-vendees irrevocably acquired the ownership
of the property sold, pursuant to the provisions of the succeeding article,
1509, of the same code, for the reason that the vendors had not returned to the
vendee the price of the sale or made the other payments specified in article
1518 of the said code; yet inasmuch as the said spouses, the vendees, had
renounced their right and one of them, the husband Alvaro Fernandez, had granted
to the plaintiff-vendors the privilege of redeeming the property at any time, as
appears from the document executed and signed by the said Fernandez on June 12,
1909, Exhibit B inserted in the complaint, through the renewal of the period for
redemption or the extension of the same, it must be held that the said period
for redemption was still running, and that the vendors were entitled to redeem
the property sold. It was under these premises that Emigdio Umale and his two
children, Margarita and Miguel, the successors of their deceased mother, Juana
Fernandez, delivered to Fernandez’ wife the redemption price, P816.80, and, a
few days afterwards, took charge and entered into the possession of the redeemed
property, in accordance with the agreement made with her.

It is held that the granting of a new period, or the extension of that
prescribed in article 1508 of the Civil Code, is valid and effective, as it is
not contrary to any provision of law and because it sprang from the
disinterestedness of the vendees and the desire to benefit the vendors, the
redemptioners, for the reason that the deceased Juana Fernandez, Umale’s wife
and the other plaintiffs’ mother, was a niece of the defendant Alvaro
Fernandez.

In the absence of an express stipulation with regard to the period of
redemption the purchaser, in the exercise of the freedom to make contracts that
is possessed by all, has the power to extend the period allowed by law, provided
that the new period stipulated does not exceed the ten years fixed by article
1508 of the code. For nothing in this article prohibits an extension, by
agreement, of the four years, which is the period prescribed by law in cases
where, in sales with right of repurchase, no period for redemption has been
fixed by the parties.

For the foregoing reasons, whereby the errors assigned to the judgment
appealed from are deemed to have been refuted, the said judgment should be, as
it is hereby, affirmed, with the costs against the appellants.

Arellano, C. J., Johnson and Araullo, JJ., concur.

Carson and Moreland, JJ., concur in the result.

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TORRES, J.

The undersigned concurs in the dispositive part of the preceding decision;
but, with due respect for the opinion of the majority of his colleagues believes
that this decision affirming the judgment appealed from should be rendered upon
the following grounds:

Owing to the lapse of considerably more than the four years fixed by article
1508 of the Civil Code for the redemption of the land referred to in the
complaint, which was sold under a pacto de retro, wherein no period was
stipulated between the parties for its repurchase, the ownership of the
defendant-vendees became in fact consolidated by operation of law and as the
absolute owners of the property they were enabled freely to dispose of the same
in the lawful exercise of their right; in consequence, the plaintiff vendors
were in no wise entitled to redeem the land sold, inasmuch as their right to
demand the resale by virtue of the contract of April 13,1905, which fixed no
period for such resale, expired on April 14, 1909.

This being the case the vendee and absolute owner of the land, Alvaro
Fernandez, two months afterwards, to wit, on June 12th of the said year, made a
new agreement with the plaintiff-vendor, Emigdio Umale, empowering him to
repurchase the said land at any time, provided he should do so with money of his
own and not borrowed from another, and for this purpose the document Exhibit B
was executed, which was written in Tagalog and was inserted in the complaint,
followed by its translation in Spanish.

When the defendant Fernandez executed this document on June 12, 1909, there
had already elapsed considerably more than the four years fixed by the
aforecited article 1508 of the code as being the period where none is stipulated
by the contracting parties; therefore, at the time the agreement was made, no
contract whatever under right of repurchase existed, nor did the vendors, who
were the owners of the land, have any right at all to redeem it; that right had
expired and the property sold had already passed into the absolute ownership of
Alvaro Fernandez.

The latter, however, wished to return, convey, or resell the said land to its
former owners, and his intention so to do is very evidently expressed in the
document aforementioned. Indeed, Fernandez’ wife, on the 9th and 11th of
November, 1911, two years and some months after the execution of said document,
received in two payments the sum of P816.80, the price of the land resold to the
plaintiffs. Several days afterwards she delivered the land to them, and on the
13th of November of the same year the defendant Fernandez forwarded from Manila
to the plaintiff Emigdio Umale, residing in Pagsanjan, Laguna, a rough draft of
the instrument for the purpose of execution and attestation thereof before a
notary.

These acts, the acceptance of the price of the land, the sending of a rough
draft of the instrument to be executed for the purpose of the resale, and the
delivery of the price of the property to the new purchasers, its previous
owners, evidently and unquestionably show that the positive intention of Alvaro
Fernandez and his wife was to restore or resell the said land to its former
owners, who, through the lapse of the legal period allowed for its redemption,
had lost their right of ownership therein.

If afterwards the instrument, the rough draft of which had been made by
Alvaro Fernandez, was not signed by the contracting parties, it was due to the
fact that these latter could not agree upon the terms in which the instrument
was to be drawn up, for Fernandez noted the absence therefrom of certain
conditions contained in the rough draft, which were unacceptable to Emigdio
Umale and his children, and, as Fernandez and his wife refused to sign the
proposed instrument, it was afterwards returned, unsigned, to the plaintiffs,
who appeared before the same notary and declared that they annulled the said
notarial document and revoked the concessions therein made in behalf of the
defendants, Alvaro Fernandez and Engracia Lavadia. (Exhibit C.)

Besides the foregoing, the best proof that it was the intention of the
contracting parties to resell or sell anew the said land to those who were its
owners, is certain clauses of the said instrument, the rough draft of which, as
before stated, was made by the defendant Fernandez, which clauses set forth,
among other things, that record is made of the fact that, as the plaintiffs had
failed to redeem the land from 1906 to 1911, they were no longer entitled to do
so, since the period fixed by law had expired; although, through steps taken by
the plaintiffs, they had induced the spouses Alvaro Fernandez and Engracia
Lavadia to return or resell to them the said land at the same price, but subject
to the encumbrances and conditions therein contained.

These statements set forth in the said proposed instrument agree with the
facts that the price of the sale was received by the wife of the defendant
Fernandez and delivery of the land was made to the plaintiffs. It is therefore
unquestionable that it was the intention of the defendants to return by means of
a new sale the land acquired by the previous sale, and the words or phrases
contained in the document Exhibit B which relate to the previous sale and to the
right of redemption should be understood as omitted and they cannot in any wise
affect the force and validity of the new contract for the redemption of the land
by plaintiffs, on account of their being contrary to the explicit provisions of
articles 1508 and 1509 of the Civil Code.

After the lapse of the period of four years fixed in article 1508, in default
of an express stipulation relative to the said period, which began to run from
the date of the contract, the contracting parties, who did not see fit to
stipulate any definite date for the redemption, have no fight to extend the
legal period that has already elapsed, nor to fix a new period for the exercise
of the right of redemption which had already expired by operation of law and the
failure of the vendors to comply with the obligation of refunding to the vendees
the price of the sale, for the latter consequently irrevocably acquired the
ownership of the land sold. If the vendees afterwards alienated and returned the
property, they did so by virtue of another new contract of sale, independent and
distinct from the previous one already terminated.

The intention of the contracting parties, with respect to the new sale
covenanted between them, is evident and therefore should prevail over the words
that seem to contradict it. Moreover, in order to judge the intention of the
contracting parties, attention must principally be paid to their acts,
contemporaneous and subsequent to the contract the contract should be construed
in the sense most suitable to give it effect, and when it involves a valuable
consideration any doubt should be decided in favor of the greatest reciprocity
of interests. These rules of interpretation are found in the provisions
contained in articles 1281, 1282, 1284, and 1289 of the Civil Code. The contract
of new sale, covenanted, consummated, and executed by the parties thereto,
should, therefore, be upheld and the defendants should be compelled to execute
the instrument demanded by the plaintiffs.

For the foregoing reasons, whereby some of the errors assigned to the
judgment appealed from are deemed to have been refuted, the said judgment should
be affirmed, with the costs against the appellants, it being understood that the
instrument to be executed is one of sale.