Yturralde vs.

CA FACTS: Spouses Francisco Yturralde and Margarita de los Reyes, owned a parcel of agricultural land located in Guilinan, Tungawan, Zamboanga del Sur, containing an area of 14.1079 hectares, more or less, and registered in their names under Original Certificate of Title No. 2356 of the Office of the Register of Deeds of Zamboanga del Sur. Sometime in the year 1944, Francisco Yturralde died intestate, survived by his wife, Margarita de los Reyes, and their children who are the petitioners herein, Ernesto, Fortunata, Montano, Zosimo, Ramon, Guadalupe, Luis, Josefina and Rosalia, all surnamed Yturralde. In 1950, Margarita de los Reyes contracted a second marriage with her brother-in-law and uncle of the petitioners herein, Damaso Yturralde . On May 30, 1952, Damaso Yturralde and Margarita de los Reyes executed a deed of sale with right of repurchase in favor of the respondent herein, Isabelo Rebollos, covering the above-mentioned property in consideration of the sum of P1,715.00. The vendors a retro failed to exercise the right to repurchase the property within the three-year period agreed upon, which expired on May 30, 1955. In 1961, Margarita de los Reyes died. On May 3, 1965, the respondent, Isabelo Rebollos, filed a petition for consolidation of ownership with the Court of First Instance of Zamboanga del Sur, docketed as Civil Case No. 436 therein, naming as respondents in the case the petitioners herein and Damaso Yturralde (Annex A, Petition). Summons was then issued, and received on June 17, 1965 by the respondent therein, Damaso,

Ernesto, Fortunata, Montano, Guadalupe, Luis and Rosalia, all surnamed Yturralde (Annexes C and F, Petition). However, summons could not be served on three of the respondents therein, Josefina, Zosima and Ramon Yturralde, as they were no longer residing at their last known addresses (Annexes B, C and F, Petition). The Judge then presiding the Court of First Instance of Zamboanga del Sur, Hon. Dimalanes Buissan, in his order dated October 7, 1965, directed that summons be served upon the said three respondents therein (Annex C, Petition). On November 20, 1965, the Court rendered a decision consolidating the ownership of the subject property in favor of Rebollos, and ordering the Register of Deeds of Zamboanga del Sur to cancel Original Certificate of Title No. 2356 covering said property and, in lieu thereof, to issue a transfer certificate of title in the name of Rebollos (Annex H, Petition). Issue: Whether the requirements for consolidation of ownership by vendee a retro had been complied with? Held: Unlike the old Civil Code, Article 1607 of the new Civil Code of 1950 provides that consolidation of ownership in the vendee a retro of real property by virtue of the failure of the vendor a retro "to comply with the provisions of Article 1616 shall not be recorded in the Registry of Property without a judicial order, after the vendor has been duly heard." In the case of Teodoro vs. Arcenas, 1 this Court, through Mr. Justice Jose B. L. Reyes, ruled that under the aforesaid Article 1607 of the new Civil Code, such consolidation shall be effected through an ordinary civil action, not by a mere

motion, and that the vendor a retro should be made a party defendant, who should be served with summons in accordance with Rule 14 of the Revised Rules of Court; and that the failure on the part of the court to cause the service of summons as prescribed in Rule 14, is sufficient cause for attacking the validity of the judgment and subsequent orders on jurisdictional grounds. 2 The Court in said case stressed that the reason behind the requirement of a judicial order for consolidation as directed by Article 1067 of the new Civil Code is because "experience has demonstrated too often that many sales with right of re-purchase have been devised to circumvent or ignore our usury laws and for this reason, the law looks upon them with disfavor (Report of the Code Commission, pp. 63-64). When, therefore, Article 1607 speaks of a judicial order after the vendor shall have been duly heard, it contemplates none other than a regular court proceeding under the governing Rules of Court, wherein the parties are given full opportunity to lay bare before the court the real covenant. Furthermore, the obvious intent of our Civil Code, in requiring a judicial confirmation of the consolidation in the vendee a retro of the ownership over the property sold, is not only to have all doubts over the true nature of the transaction speedily ascertained, and decided, but also to prevent the interposition of buyers in good faith while such determination is being made. Under the former method of consolidation by a mere extrajudicial affidavit of the buyer a retro, the latter could easily cut off any claims of the seller by disposing of the property, after such consolidation, to strangers in good faith and without notice. The chances of the seller a retro to recover his property would thus be nullified, even if the transaction were really proved to be a mortgage and not a sale."

Paredes v. Espino, 22 SCRA 1000 FACTS: Paredes had filed an action to compel defendant-appellee Espino to execute a deed of sale and to pay damages. The complaint alleged that the defendant "had entered into the sale" to plaintiff of a lot; that the deal had been "closed by letter and telegram" but the actual execution of the deed of sale and payment of the price were deferred to the arrival of defendant at Puerto Princesa; that defendant upon arrival had refused to execute the deed of sale although plaintiff was able and willing to pay the price, and continued to refuse despite written demands of plaintiff ISSUE: Whether or not it is barred by Statute of Frauds? HELD: The letter showing all the essential elements of a contract of sale was an adequate memorandum of the transaction to remove it from the operation of the Statute of Frauds. The case was remanded to the lower court for decision.

Laperal vs. Rogers Facts: Roberto Laperal sold his property to the Japanese Military Controlled Republic of the Philippines for the sum of P.500,000 in Japanese Military War notes. When Japanese occupation was over, Laperal filed an action for recovery of hisproperty with the alien property custodian alleging that the sale took place during the

Japanese regime amd was madeunder duress and the consideration was grossly inadequate. The trial court ruled in favor of Laperal. Laperals contention: The main allegations of the complaint were that appellee executed the deed of sale of April 12, 1944 in favor of theoccupation Republic of the Philippines under duress and due to the threats employed by the representatives of theJapanese Military Administration, and that the consideration of P500,000.00 in Japanese Military notes wasgrossly inadequate. Respondents contention: The Philippine Alien Property Administrator denied, for lack of knowledge and information, plaintiffs allegationsconcerning the circumstances under which the sale of the property was allegedly made. The Register of Deeds of Manila was declared in default due to his failure to answer the complaint within the reglementary period. Issue: Was the deed of sale executed under duress that the contract can be nullified? Held: With respect to the first issue, the lower court found on the basis of the evidence before it, that the sale was executedunder duress.(1) It is of common knowledge that, during the second world war, the Japanese army of occupation in the Philippines, didoccupy and take private properties in the City of Manila and elsewhere in the

country without the consent of theirrespective owners, for their use in the prosecution of the war, resorting in some cases to the expedient of making theowners execute deeds of sale or contracts of lease;(2) It is not denied that appellee, before the war and at the time of the execution of the questioned sale, was a very richman with extensive real state holdings principally in Manila. The record discloses in this connection, that from 1914 up tothe date of the sale, he had not disposed of a single property by sale. The record further shows that at the time of the sale,he was in possession of a considerable amount of money, both in genuine Philippine currency and in Japanese military notes. Highly solvent as he was at the time, it was improbable to say the least that he would dispose of such valuableproperty as the one in question. If he had been in need of money at all, he would probably have sold some other much lessdesirable property. One may believe that the sale in question was voluntary only by assuming that Laperal sold theproperty involved to collaborate in the attainment of the ends pursued by the Japanese army of occupation anassumption completely unjustified in this case in view of the absolute absence of evidence, direct or indirect, that Laperalcollaborated or had ever intended to collaborate with the enemy.(3) The consideration paid for the property, namely the sum of P500,000.00 in Japanese military notes, was grossly inadequate. It has been agreed, for the purpose of this case, that at the time of the sale (April 1944), a pre- war Philippine peso was worth fourteen Japanese military pesos. On the other hand, the evidence of record shows that thepre-war assessed value of the property in question was P92,995.00 which, if reduced to its equivalent value in terms of Japanese military notes as of April 1944, would have amounted to

around P1,300.000.00 (Japanese military notes). Wemust also consider the fact that the pre-war assessed value of the property did not represent its real or actual value whichcould easily be around P200,000.00. Reduced to its equivalent in Japanese military notes, this would havemeant around P2,800,000.00. Instead, he was merely paid P500,000.00 in Japanese military notes, orthe equivalent of something around P35,000.00, Philippine currency, at the time.