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SPS. CIPRIANO VASQUEZ v. CA

FACTS:

The plaintiffs, spouses Vallejera, filed a case against the defendants, spouses Vasquez, seeking to redeem a lot that they previously sold to the defendants. The lot was originally registered in the name of the plaintiffs and was leased to the defendants. On the same day as the sale, the plaintiffs executed a separate instrument called the Right to Repurchase, which granted them the right to repurchase the lot within 10 years. The defendants later sold the lot to another person, but the sale was cancelled when the defendants paid the repurchase price to the new buyer. The defendants resisted the action for redemption, arguing that the Right to Repurchase was just an option to buy and not binding upon them. The lower court ruled in favor of the plaintiffs and ordered the defendants to resell the lot to the plaintiffs for the repurchase price. The defendants appealed the decision.

ISSUES:

  1. Whether the right to repurchase was supported by a consideration distinct from the price.

  2. Whether the private respondents accepted the right to repurchase.

  3. Whether the transaction between the petitioners and private respondents is a sale with the right to repurchase or an option to buy.

  4. Whether the private respondents can avail of conventional redemption under Article 1601 of the Civil Code.

RULING:

  1. The right to repurchase was not supported by a consideration distinct from the price. The private respondents failed to prove the existence of such consideration.

  2. The private respondents did not accept the right to repurchase. The annotation and registration of the right to repurchase on the certificate of title, as well as the signature of the petitioners, does not signify acceptance. The private respondents' filing of a complaint and demands for resale prior to filing the complaint also do not constitute acceptance.

  3. The transaction between the petitioners and private respondents is not a sale with the right to repurchase, but rather an option to buy. The option to repurchase, which was executed in a separate document but on the same date as the deed of sale, was considered by the court as a mere promise on the part of the vendee to resell the property to the vendor.

  4. Since the transaction was not a sale with the right to repurchase, the private respondents cannot avail of conventional redemption under Article 1601 of the Civil Code.

PRINCIPLES:

  • An option is unilateral and becomes a bilateral contract of sale when the promisee accepts the option before the promisor withdraws it.

  • The burden of proving consideration for a right to repurchase lies on the promisee.

  • Annotation and registration of a right to repurchase on the certificate of title serves as notice but does not signify acceptance.

  • Acceptance of a right to repurchase should be made by the promisee, not the promisor.

  • Mere sending of letters expressing the desire to repurchase without tendering the redemption price or making a judicial consignation falls short of the requirements of law.

  • Conventional redemption takes 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 agreed upon (Article 1601, Civil Code).

  • The right of repurchase is a right reserved by the vendor in the same instrument of sale, and once the instrument of absolute sale is executed, the vendor can no longer reserve the right to repurchase. Any right thereafter granted the vendor by the vendee in a separate instrument is not a right of repurchase but some other right, like an option to buy (Villarica v. Court of Appeals, 26 SCRA 189).

  • The transaction between the parties must be examined to determine whether it is a sale with the right to repurchase or an option to buy. The execution of a separate document on the same day as the deed of sale does not automatically make the transaction an option to buy.