Case Summary (G.R. No. 125233)
Key Individuals and Context
• Petitioners: Spouses Alexander and Adelaida Cruz (vendees “a retro”)
• Private Respondents: Heirs of Adriano Leis and Gertrudes Isidro—Eleuterio Leis, Raymundo Leis, Anastacio L. Lagdano, Loreta L. Cayonda, and Teresita Mandocdoc
• Subject Property: 100 sqm lot in Bo. Sto. Niño, Marikina, Rizal; originally under TCT No. 42245, later TCT No. 43100, and finally TCT No. 130584
Petitioner’s Transactions and Title Consolidation
• 5 Feb 1985: Gertrudes obtained P15,000 loan from petitioners, secured by mortgage on TCT No. 43100
• 11 Mar 1986: Gertrudes executed both a pacto de retro (“Kasunduan”) and an absolute deed of sale for P39,083 in favor of Alexander Cruz
• 21 Apr 1987: Upon failure to repurchase, ownership consolidated in Cruz; TCT No. 43100 cancelled and TCT No. 130584 issued
• 9 Jun 1987: Death of Gertrudes; her heirs received ejectment demands and filed suit in RTC
Proceedings Below and Ultimate Rulings
• RTC (Pasig) – Held the lot conjugal property (Art. 160, Civil Code); found no fraud; ruled pacto de retro superseded absolute sale; declared absolute sale void for non-compliance with Art. 1607; reinstated TCT No. 43100; awarded damages and attorney’s fees
• Court of Appeals – Affirmed on the same grounds, emphasizing the presumption of conjugal property and failure to secure judicial order under Art. 1607
Issues on Appeal
- Whether the property was paraphernal, vested exclusively in Gertrudes as described in the DANR deed and TCT No. 43100
- If conjugal, whether Gertrudes’s 1983 redemption of a 1979 mortgage vested exclusive ownership
Conjugal Presumption and Co-ownership
• Under Art. 160, Civil Code, property acquired during marriage is presumed conjugal; upon Adriano’s death, one-half vested in Gertrudes and one-half devolved to his heirs, creating co-ownership (Arts. 175, 185, 777, 996)
• Redemption of a prior mortgage does not terminate co-ownership or vest exclusive title in one co-owner (Arts. 488, 493)
Pacto de Retro Sale and Article 1607
• A pacto de retro vests immediate legal title in the vendee a retro, subject to the condition of repurchase within the stipulated period (Art. 1612–1613)
• Failure to repurchase operates as a resolutory condition, vesting absolute title in the vendee by operation of law; registration under Art. 1607 (requiring judicial order) affects only the method of recording, not the substantive transfer of ownership
Torrens Doctrine and Bona Fide Purchaser
• Since TCT No. 43100 listed Gertrudes as sole owner, petitioners—relying on the re
Case Syllabus (G.R. No. 125233)
Procedural History
- Private respondents, heirs of Adriano Leis and Gertrudes Isidro, filed before the RTC of Pasig to nullify two contracts of sale executed by Gertrudes in favor of petitioners, and to annul the subsequent title in petitioners’ name.
- The RTC rendered judgment in favor of private respondents, declaring the outright sale null and void, ruling the property conjugal, and ordering reinstatement of title in Gertrudes’ name, among other reliefs.
- Petitioners appealed to the Court of Appeals, which affirmed the RTC’s decision.
- Petitioners brought the case to the Supreme Court via petition for review on certiorari.
Facts
- Adriano Leis and Gertrudes Isidro married on April 19, 1923.
- On April 27, 1955, Gertrudes acquired a 100-sqm lot in Marikina from DANR, described as “widow” in both the Deed of Sale and TCT No. 43100 issued March 2, 1956.
- Adriano died on December 2, 1973, without a will.
- On February 5, 1985, Gertrudes obtained a ₱15,000 loan from petitioners, secured by a mortgage over TCT No. 43100, due February 5, 1986, which she failed to pay.
- On March 11, 1986, Gertrudes executed two contracts in favor of Alexander Cruz:
- A “Kasunduan” (pacto de retro) granting her a one-year right to repurchase.
- A “Kasunduan ng Tuwirang Bilihan” (absolute sale) for ₱39,083.00.
- Upon failure to repurchase, ownership consolidated in Alexander Cruz and TCT No. 130584 issued April 21, 1987.
- Gertrudes died June 9, 1987. Heirs received demands to vacate and filed the annulment suit.
RTC Decision
- Held that the lot was conjugal property: Adriano contributed funds, and it was acquired during marriage.
- Ruled no fraud in contract execution despite Gertrudes’ illiteracy and age.
- Determined the pacto de retro superseded the absolute sale, not treating it as an equitable mortgage.
- Found petitioners failed to comply with Civil Code Article 1607 (judicial order for consolidation).
- Disposed:
- Declared the absolute sale and title null and void.
- Declared the property conjugal.
- Ordered reinstatement of Gertrudes’ title.
- Directed pet