FLORES VS SO

Facts:

On February 27, 1950 GALLANO allegedly sold to Flores a parcel of coconut and rice land with right of repurchase within four (4) years from the date of the sale, for a price of P2,550.00. , Valentin Gallano sold in an absolute manner the same land to Johnson So on February 26, 1958 for the price of P5,000.00.So alleged that  that the Pacto de Retro Sale the transaction only a mere mortgage to secure a loan and not a pacto de retro which prompted him to file an action praying to hold the contract as mortgage and not pacto de retro. On September 24, 1960, the lower court ruled that, on the issue of the nature of the contract in question, it is a contract of sale of a parcel of land with the reservation in favor of the vendor a retro of the right to repurchase it within a period of four (4) years from execution thereof, that the execution of the affidavit of consolidation of ownership by Flores on March 6, 1958 and its subsequent registration in the Office of the Register of Deeds of Sorsogon did not make his ownership over the land in question absolute and indefeasible because of non-compliance with Articles 1606 and 1607 of the New Civil Code, which require a judicial order for consolidation of the title of vendee a retro; and that the right of redemption belonging to Valentin Gallano was, ipso facto, acquired by Johnson So when he brought the land in question. .

Issue:

whether or not the execution of the affidavit of consolidation of ownership by Alfonso Flores and its subsequent registration in the Office of the Register of Deeds of Sorsogon made his ownership over the land in question absolute and indefeasible.

Held:

The pacto de retro sale between Gallano and Flores was executed when the Civil Code of Spain was still in effect. It is provided in Article 1509 thereof that if the vendor does not comply with the provisions of Article 1518, (i.e. to return the price, plus expenses) the vendee shall acquire irrevocably the ownership of the thing sold.

Under the old Civil Code, the ownership was consolidated in the vendee a retro by operation of law. Accordingly, upon the failure of Valentin Gallano, as the vendor a retro, to redeem the property subject of the pacto de retro sale within the period agreed upon, the vendee a retro, Alfonso Flores, became the absolute owner of the subject property.

This right of ownership which had already vested in Alfonso Flores way back in 1954 upon Gallano's failure to redeem within the stipulated period cannot be defeated by the application of Articles 1606 and 1607 of the New Civil Code which requires registration of the consolidation of ownership in the vendee a retro only by judicial order. Article 2252 on Transitional Provisions in the New Civil Code provides that:

Art. 2252. — Changes made and new provisions and rules laid down by this Code which may prejudice or impair vested or acquired rights in accordance with the old legislation shall have no retroactive effect ...

Furthermore, Article 2255 thereof states that:

Art. 2255.— The former laws shall regulate acts and contracts with a condition or period which were executed or entered into before the effectivity of this Code, even though the condition or period may still be pending at the time this body of laws goes into effect.

In view of the foregoing, the decision appealed from is reversed and defendant-appellant Alfonso Flores is hereby declared the absolute owner of the land subject of the controversy. Plaintiff- appellee Johnson So is hereby ordered to pay the defendant-appellant the sum of P500.00 as attorney's fees Plus costs of suit pursuant to their agreement.