Case Digest (G.R. No. L-6389)
Case Digest (G.R. No. L-6389)
Facts:
Pastor Amigo and Justino Amigo v. Serafin Teves, G.R. No. L-6389. November 29, 1954, the Supreme Court En Banc, Bautista Angelo, J., writing for the Court.Petitioners are Pastor Amigo and Justino Amigo; respondent is Serafin Teves. The action arose from a deed executed by Marcelino Amigo, as attorney‑in‑fact for his parents Macario Amigo and Anacleta Gagalitan. On August 11, 1937 the parents gave Marcelino a broad power of attorney authorizing him, among other things, “to lease, let, bargain, transfer, convey and sell, remise, release, mortgage and hypothecate * * * upon such terms and conditions, and under such covenants as he shall think fit.”
On October 30, 1938 Marcelino, acting under that power, executed a deed of sale (expressly containing a pacto de retro) conveying a parcel of land to Serafin Teves for P3,000, reserving to the vendors the right to repurchase within 18 months. The same instrument provided that the vendors would remain in possession as lessees for 18 months, pay P80 every six months as rent, that the lease would terminate April 30, 1940, and contained a clause that failure to pay any rental would automatically terminate the lease and consolidate ownership in the vendee; it also contained a P100 attorney’s‑fees clause for litigation.
On July 20, 1939 Macario and Anacleta donated to their sons (petitioners) several parcels, including the right to repurchase the land sold; the donation was in public instrument and registered. The vendors paid the first semester’s rent but defaulted thereafter. On January 8, 1940 Teves executed and registered an “Affidavit of Consolidation of Title” for the land and on January 28, 1940 the Register of Deeds issued a transfer certificate of title to Teves.
On March 9, 1940 petitioners (as donees of the right to repurchase) tendered the redemption price, but Teves refused, claiming his ownership had consolidated. Before the 18‑month period expired, on April 26, 1940 petitioners filed suit in the Court of First Instance of Negros Oriental seeking (a) declaration that the October 30, 1938 instrument was a mortgage not a sale; (b) in the alternative, declaration that their offer to repurchase was within the agreed period; (c) reconveyance; and (d) P2,500 damages.
The Court of Appeals reviewed the case and rejected petitioners’ contentions: it held the power of attorney broad enough to authorize the deed (including the lease covenant), treated the lease as germane to the pacto de retro (constitutum possessorium), and upheld the penal clause accelerating consolidation upon nonpayment; it further found the sale price not so unconscionable as to warrant nullification. The Court of Appeals modified the court of origin insofar as the plaintiffs should not be made to pay P100 as attorney’s fees. Petitioners filed a petition for review to the Supreme Court of that Court of Appeals decision.
Issues:
- Did Marcelino Amigo act ultra vires in inserting a lease covenant in the deed of sale with pacto de retro, i.e., was the lease covenant beyond the power conferred by the power of attorney?
- Is the penal clause in the lease covenant that automatically terminates the redemption period and consolidates ownership upon nonpayment of rent void as contrary to law, morals, or public order?
- Should petitioners be allowed to repurchase on equitable grounds because the purchase price was unconscionably low compared to the market value at the time the redemption period expired?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)