THIRD DIVISION
G.R. No. 179025, June 17, 2015
CEBU STATE COLLEGE OF SCIENCE AND TECHNOLOGY (CSCST), REPRESENTED BY ITS INCUMBENT PRESIDENT, Petitioner, v. LUIS S. MISTERIO, GABRIEL S. MISTERIO, FRANCIS S. MISTERIO, THELMA S. MISTERIO, AND ESTELA S. MISTERIO-TAGIMACRUZ, Respondent.
D E C I S I O N
PERALTA, J.:
That the Vendee herein, SUDLON AGRICULTURAL HIGH SCHOOL, hereby obligates itself to use the aforementioned Lot No. 1064, for school purposes only, and it is the condition attached to this contract that the aforementioned Vendee obligates itself to give the Vendor herein, the right to repurchase the said lot by paying to the Vendee herein the aforementioned consideration of P9,130.00 only, after the aforementioned SUDLON AGRICULTURAL HIGH SCHOOL shall (have) ceased to exist or shall have transferred its school site elsewhere.3cralawlawlibraryConsequently, on May 22, 1957, TCT No. 13086 was cancelled, and in lieu thereof, TCT No. 15959 was issued in the name of SAHS, with the vendor's right to repurchase annotated at its dorsal portion.
1. That SAHS, at the time of the execution of the deed of sale on December 31, 1956, had no juridical personality. As such, it cannot acquire and possess any property, including the subject parcel of land. Hence, the Deed of Sale is null and void; andOn November 29, 1995, the RTC rendered judgment, the dispositive portion of which reads:chanroblesvirtuallawlibrary
2. That with the enactment of BP Blg. 412, SAHS had ceased to exist. Thus, the right to repurchase the subject property became operative.10cralawlawlibrary
WHEREFORE, in view of all the foregoing considerations, JUDGMENT is hereby rendered in favor of the plaintiffs and against the defendants declaring the Deed of Sale entered into by and between Asuncion Sadaya and Sudlon Agricultural High School as null and void for the latter's lack of juridical personality to acquire real property or to enter into such transaction or having ceased to exist and ordering the Cebu State College of Science and Technology being the actual possessor of the land, Lot 1064, to deliver and reconvey the same to plaintiffs upon payment of the aforementioned purchased price.Petitioner appealed the aforesaid decision to the CA. During the pendency thereof, respondents filed a Manifestation and Motion for Injunction,12 amending their complaint and cause of action to include, petitioner's intent to abandon the subject property and to no longer use the same for school site purposes, to wit:chanroblesvirtuallawlibrary
No pronouncement as to costs. SO ORDERED.11cralawlawlibrary
COME NOW, the appellees x x x.The foregoing Manifestation and Motion for Injunction was acknowledged by the appellate court in its Resolution dated September 13, 1999.13
1. Sometime July 7, 1996, a Motion for Injunction was filed by the undersigned stating that the land in question is being negotiated by the defendants-appellants CSCST to the Provincial Government.
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3. Recently, the provincial government is negotiating with ABS-CBN for an acquisition of the land located in Sudlon, Cebu City. It is not known though if the land in dispute is included in the negotiation.
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4. That appellant CSCST clearly showed an intent to abandon the land in dispute and that it will no longer use it for school purposes and that it will transfer its school site in Barili, Cebu.
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6. That since this fact arises only after the case was filed, this manifestation and information amends the complaint and cause of action of the case, but it is proper that it be consolidated and considered before this Honorable Court, for convenience and expediency.
In the present complaint for redemption, cancellation of title and damages, plaintiffs prayed among others, that they be granted the right to redeem the subject land by paying the PHP9,130.00 as provided for in the Deed of Sale. The record, however, bears out that prior to the filing of this case, plaintiffs had instituted an action for nullity of sale and/or redemption of the same property which was docketed as Civil Case No. CEB-15267, now pending before the Court of Appeals and docketed as CA-G.R. CV No. 53592. From this point, it is also that the present action is barred by litis pendentia where being another case which is pending between the same parties for the same cause.On appeal, however, the CA reversed the decision of the RTC holding that the case is not barred by litis pendentia for while there is an identity of parties and reliefs prayed for between the two complaints filed by respondents, there exists no identity of causes of action, to wit:chanroblesvirtuallawlibrary
Plaintiffs are likewise guilty of forum shopping, there being substantial identity of parties, rights of action and reliefs sought for in the instant case and that in the Civil Case No. CEB-15267 which is still pending as CA-G.R. CV No. 53592.20cralawlawlibrary
It bears stressing that the right to repurchase as stated in the deed of sale can only be exercised on the occurrence of either of the two suspensive conditions, to wit:Hence, the instant petition invoking the following arguments:chanroblesvirtuallawlibrary
1. if SAHS shall have ceased to exists; or
2. if SAHS shall have transferred its school site elsewhere.
In Civil Case No. Ceb-15267, which was appealed to this Court and docketed as CA-G.R. CV No. 53592, the cause of action of herein appellants (appellees therein) was based on the first suspensive condition, the fact that SAHS, by virtue of Batas Pambansa Blg. 412, enacted on June 10, 1983, has ceased to exist. On the other hand, the cause of action, in the instant case is based on the second suspensive condition, the fact that the school site was transferred to another location. Apparently, though the reliefs sought in both cases are the same, they are not founded on the same facts which give rise to two different causes of action.21cralawlawlibrary
Petitioner maintains that since all the elements of litis pendentia were present, the appellate court should have affirmed the trial court's decision in dismissing the instant case. First, the parties involved in the two cases are essentially the same parties representing the same interest. Second, as between the two cases, there is an identity of rights and reliefs sought. According to petitioner, both complaints filed involve the same issue: whether or not the respondents are entitled to repurchase the property from petitioner, the causes of action are both anchored upon the happening of the suspensive condition set forth under the same provision of the same deed of sale, and both complaints compel petitioner to convey the same property to respondents by way of repurchase. Third, there is identity in the two cases such that any judgment that may be rendered in the pending case, regardless of which party is successful, would amount to res judicata in the present case. In view of the finality of this Court's decision on the first case, petitioner adds that res judicata has then taken effect, necessarily barring respondents from pursuing the instant case.I.
THE COURT OF APPEALS ERRED IN REVERSING THE TRIAL COURT'S ORDER DISMISSING THE CASE AND IN REMANDING THE SECOND COMPLAINT TO THE TRIAL COURT FOR FURTHER PROCEEDINGS DESPITE THE CLEAR FACT THAT LITIS PENDENTIA (NOW RES JUDICATA) AND FORUM SHOPPING BARS THE FILING OF THE SECOND COMPLAINT.cralawlawlibraryII.
THE SECOND COMPLAINT FILED BY RESPONDENTS LACKS A CAUSE OF ACTION.
Art. 1606. The right referred to in Article 1601, in the absence of an express agreement, shall last four years from the date of the contract.Thus, depending on whether the parties have agreed upon a specific period within which the vendor a retro may exercise his right to repurchase, the property subject of the sale may be redeemed only within the limits prescribed by the aforequoted provision.
Should there be an agreement, the period cannot exceed ten years.
However, the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase. (Emphasis supplied)
Under the Partidas, as under the Roman Law, no attempt was made to limit the duration of contracts with pacto de retro. Unless limited by the contract of the parties, it was generally held that the right to repurchase was perpetual. By its decision of May 12, 1875, the supreme court of Spain first .attempted to place a restriction upon the length of such contracts by holding that they gave rise to a personal action of prescription in accordance with the law on prescription of actions. (23 Scaevola. 767.) In the recent times, however, practically all those countries where such sales arc recognized have found it advisable to limit the time within which the right of redemption can be exercised. (4 Bond's Com. on the Civil Code, 519.) As stated in Yadao vs. Yadao (20 Phil. Rep., 260): "A pacto de retro is, in a certain aspect, the suspension of the title to the land involved. We are of the opinion that it was the intention of the legislature to limit the continuance of such a condition, with the purpose that the title to the real estate in question should be definitely placed, it being, in the opinion of the legislature, against public policy to permit such an uncertain condition relative to the title to real estate to continue for more than ten years."29cralawlawlibraryConsistent with such view, this Court frowned upon agreements indicating indefinite stipulations for the exercise of the right to repurchase and restricted the redemption period to ten (10) years from the date of the contract of sale, in consonance with the provisions of the Civil Code. Accordingly, when vendors a retro were granted the right to repurchase properties sold "at any time they have the money," "in the month of March of any year," or "at any time after the first year," this Court had not hesitated in imposing the ten (10)-year period, the expiration of which effectively bars redemption of the subject properties.30 Similarly, there have been numerous occasions31 wherein We invalidated stipulations permitting the repurchase of property only after the lapse of at least ten (10) years from the date of the execution of the contract for being in contravention of the limitation mandated by the Civil Code provision. Waivers of such period were likewise held to be void for being against public policy.32
While .the counting of this four-year period shall begin from the execution of the contract, where the right is suspended by agreement until after a certain time, event or condition, the period shall be counted from the time such right could be exercised, but not exceeding ten (10) years from the execution of the contract. Applying the provision to the instant case, the period to repurchase the property must be deemed to be four (4) years from 9 March 1975 or until 9 March 1979.37cralawlawlibraryIn the instant case, while the four (4)-year period was counted from the time the right to repurchase could be exercised or when the SAHS ceased to exist, even beyond ten (10) years from the execution of the deed of sale, one must not nevertheless lose sight of the fundamental spirit and intent of the law which have been upheld in jurisprudence, time and time again, viz.:chanroblesvirtuallawlibrary
The question of the period within which the repurchase may be made is unanimously considered as a question of public interest. It is not a good thing that the title to property should be left for a long period of time subject to indefinite conditions of this nature. For this reason, the intention of the law is restrictive and limitative. (10 Manresa)
A long term for redemption renders the tenure of property uncertain and redounds to its detriment, for neither does the precarious holder cultivate the ground with the same interest as the owner, nor does he properly attend to the preservation of the building, and owing to the fact that his enjoyment of the property is temporary, he endeavours above all to derive the greatest benefit therefrom, economizing to that end even the most essential expenses.38cralawlawlibrary
Hence, while the occurrence of the second suspensive condition may give rise to a separate cause of action, the same must always be taken in conjunction with the periods prescribed by law insofar as they frown upon the uncertainty of titles to real property. Otherwise, vendors may simply impose several resolutory conditions, the happening of each will practically extend the life of the contract beyond the parameters set forth by the Civil Code. This is certainly not in line with the spirit and intent of the law. To permit respondents to exercise their right to repurchase upon the happening of the second resolutory condition, when they utterly failed to timely exercise the same upon the happening of the first, would effectively result in a circumvention of the periods expressly mandated by law.
To repeat, Article 1606 expressly provides that in the absence of an agreement as to the period within which the vendor a retro may exercise his right to repurchase, the same must be done within four (4) years from the execution of the contract. In the event the contract specifies a period, the same cannot exceed ten (10) years. Thus, whether it be for a period of four (4) or ten (10) years, this Court consistently implements the law and limits the period within which the right to repurchase may be exercised, adamantly striking down as illicit stipulations providing for an unlimited right to repurchase. Indubitably, it would be rather absurd to permit respondents to repurchase the subject property upon the occurrence of the second suspensive condition, particularly, the relocation of SAHS on October 3, 1997, the time when petitioner ceded the property to the Province of Cebu, which is nearly forty-one (41) years after the execution of the Deed of Sale on December 31, 1956. This Court must, therefore, place it upon itself to suppress these kinds of attempts in keeping with the fundamentally accepted principles of law.
Indeed, the freedom to contract is not absolute. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.39 When the conditions in a contract manifest an effective circumvention of existing law and jurisprudence, it is incumbent upon the courts to construe the same in accordance with its ultimate spirit and intent.cralawred
WHEREFORE, premises considered, the instant petition is GRANTED. The Decision dated July 25, 2007 of the Court Appeals in CA-G.R. CV No. 77329 is REVERSED and SET ASIDE.
SO ORDERED.chanroblesvirtuallawlibrary
Del Castillo,**Villarama, Jr., Reyes, and Jardeleza, JJ., concur.
Endnotes:
* Per Special Order No. 2059 dated June 17, 2015.
** Designated Acting Member in lieu of Associate Justice Presbitero J. Velasco, Jr., per Special Order No. 2060 dated June 17, 2015.
1 Penned by Associate Justice Francisco P. Acosta, with Associate Justices Pampio A. Abarintos and Stephen C. Cruz concurring; rollo, pp. 79-93.
2 Penned by Judge Generosa G. Labra; id. at 360-361.
3Rollo, p. 80.
4Misterio v. Cebu Slate College of Science and Technology (CSCST), duly represented by its President, Dr. Jose Sal Tan, 499 Phil. 733, 735-736 (2005).
5Rollo, p. 81.
6Misterio v. Cebu State College of Science and Technology (CSCST), duly represented by its President, Dr. Jose Sal Tan, supra note 4, at 736.
7Rollo, p. 81.
8Misterio v. Cebu State College of Science and Technology (CSCST), duly represented by its President, Dr. Jose Sal Tan, supra note 4, at 736-737.
9Rollo, pp. 97-102.
10Id. at 81.
11Id. at 128.
12Id. at 196-197.
13Id. at 83.
14Misterio v. Cebu State College of Science and Technology (CSCST), duly represented by its President, Dr. Jose Sal Tan, supra note 4, at 742.
15 Art. 1606. The right referred to in Article 1601, in the absence of an express agreement, shall last four years from the date of the contract.
Should there be an agreement, the period cannot exceed ten years.
However, the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase.
16Misterio v. Cebu State College of Science and Technology (CSCST), duly represented by its President, Dr. Jose Sal Tan, supra note 4, at 746.
17Rollo, pp. 265-272.
18Id. at 273-291.
19Id. at 86.
20Id. at 360.
21Id. at 90.
22Spouses Marasigan v. Chevron Phils., Inc., et. al., G.R. No. 184015, February 8, 2012, 665 SCRA 499, 511.
23Id.
24Genova v. De Castro, 454 Phil. 662, 675 (2003), citing Gallardo-Corro v. Gallardo, 403 Phil. 498, 507 (2001); Republic v. CA, 381 Phil. 558 (2000); Ayala Land, Inc. v. Valisno, 381 Phil. 518, 528 (2000); Bachrach Corporation v. CA, 357 Phil. 483 (1998); Alejandrino v. CA, 356 Phil. 851, 868 (1998).
25Id. at 675, citing PeƱalosa v. Tuason, 22 Phil. 303, 322 (1912).
26Rollo, p. 90.
27 Article 1601 of the New Civil Code provides:
Art. 1601. Conventional redemption shall take place when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and other stipulations which may have been agreed upon.
28Misterio v. Cebu State College of Science and Technology (CSCST), duly represented by its President, Dr. Jose Sal Tan, supra note 4, at 745.
29Rosales v. Reyes, 25 Phil. 495, 497 (1913). (Emphasis supplied)
30Yadao v. Yadao, 20 Phil. 260 (1911); Alojadov. Lim, 5 Phil. 339 (1927); Bandong v. Austria, 31 Phil. 479 (1915); Soriano v. Abalos, 84 Phil. 206 (1949); Tumaneng v. Abad, 92 Phil. 18 (1952).
31Anchuelo v. Intermediate Appellate Court, 231 Phil. 385 (1987); Baluyot, et al. v., 130 Phil. 455 (1968); Santos v. Heirs of Crisostomo and Tiongson, 41 Phil. 342 (1921); Tayao v. Dulay, et. al., 121 Phil. 734 (1965).
32Dalandan, et al. v. Julio, et al., G.R. No. L-19101, February 29, 1964, 10 SCRA 400.
33Supra note 29
34Id.
35 28 Phil. 89 (1914).
36 G.R. No. 57630, March 13, 1992, 283 SCRA.
37Id. (Emphasis ours)
38 Hector S. De Leon and Hector M. De Leon, Jr., Comments and Cases on Sales and Lease, (2014), Eighth Edition, p. 257. (Emphasis ours)
39Morla v. Belmonte, G.R. No. 171146, December 7, 2011 661 SCR A 717 730 citing Article 1306 of the New Civil Code.