Facts:

On May 27, 1907, Juana Cantos, represented by her husband Jose Alano, filed an amended complaint against Jose Babasa. The complaint alleged that Juana's legitimate father had incurred a debt of P1,030 to Fulgencio Babasa and Maria Cantos, who were the parents of the defendant, Jose Babasa. To secure this debt, Juana's father pledged a parcel of land located in the barrio of Pinamukan, Batangas, with the condition that the creditors would enjoy the usufruct of the land from the date of the contract, which was July 18, 1883. The agreement stipulated that the debtor could redeem the land at any time after seven years by paying off the debt. Following the death of the creditors, Juana's husband sought to redeem the land from Jose Babasa, who was then in possession of the usufruct. Initially, Babasa agreed to allow the redemption but later proposed to sell the land for an increased price of P1,370, which Juana refused. Consequently, Babasa denied her right to redeem th...

Facts:

1. Parties Involved:

   • Plaintiffs: Juana Cantos (assisted by her husband, Jose Alano).
   • Defendant: Jose Babasa.

2. Nature of the Case:

   • The plaintiffs sought to redeem a parcel of land allegedly pledged by Juana Cantos' father, Tomas Cantos, to Fulgencio Babasa (defendant's father) and Maria Cantos in 1883 to secure a debt of P1,030.

3. Terms of the Contract:

   • The land was pledged with the condition that the creditors would enjoy its usufruct for seven years, after which the debtor could redeem it by paying the debt.
   • The plaintiffs claimed that after the seven-year period, they attempted to redeem the land, but the defendant refused and instead offered to purchase it outright for an increased price.

4. Defendant's Claim:

   • The defendant argued that the land was sold with a right of repurchase for P1,000 (of which P300 was his contribution) and that the seven-year redemption period had expired without the plaintiffs exercising their right.

5. Trial Court Decision:

   • The trial court ruled in favor of the defendant, dismissing the plaintiffs' complaint. The plaintiffs appealed, arguing that the decision was contrary to the evidence.

6. Key Evidence:

   • A Tagalog document (translated into Spanish) was presented, showing that the land was sold with a right of repurchase for P1,000, with the stipulation that the sellers could redeem it after seven years.

Issue:

1. Whether the contract between the parties was a loan with a mortgage or a sale with a right of repurchase.
2. Whether the plaintiffs had the right to redeem the land after the expiration of the seven-year period.
3. Whether the plaintiffs' claim was barred by prescription under the Civil Code.

Ruling:

The Supreme Court affirmed the trial court's decision, dismissing the plaintiffs' complaint. The Court held that:

1. The contract was a valid sale with a right of repurchase, not a loan with a mortgage.
2. The plaintiffs' right to redeem the land expired four years after the Civil Code took effect in 1889, as per Article 1508 of the Civil Code.
3. The plaintiffs' claim was barred by prescription, as they failed to exercise their right of redemption within the prescribed period.

Ratio:

1. Nature of the Contract:

   • The Court determined that the contract was a sale with a right of repurchase under Article 1507 of the Civil Code, not a loan with a mortgage. The terms of the contract clearly indicated a sale with a resolutory condition (redemption).

2. Prescription of Redemption Rights:

   • Article 1508 of the Civil Code provides that the right to repurchase must be exercised within four years from the date of the contract if no specific period is agreed upon.
   • Since the Civil Code took effect in 1889, the four-year period for redemption began to run from that date. By the time the plaintiffs filed their complaint in 1907, the right to redeem had already prescribed.

3. Applicability of the Civil Code:

   • Article 1939 of the Civil Code states that prescription which began before the Code's enactment is governed by prior laws, but if the time required under the Civil Code has elapsed after its enactment, the Civil Code's provisions apply.
   • In this case, the four-year period under the Civil Code had expired by the time the plaintiffs filed their claim.

4. No Exception for Minors:

   • The Court rejected the plaintiffs' argument that Juana Cantos' minority suspended the prescription period. Article 1932 of the Civil Code provides that prescription applies to all persons, including minors, and any negligence by legal representatives does not affect the running of prescription.

5. Public Policy Considerations:

   • The Court emphasized that indefinite or prolonged redemption periods are contrary to public policy, as they create uncertainty in property ownership. The Civil Code's limitation on redemption periods ensures stability in property rights.