REAMICO, KRIZIA MAE P.

OBLICON

OLIMPIA FERNANDEZ Vda. De ZULUETA (Substituted by JOSEFINA, LIBERTY and GREGORIO all surnamed ZULUETA) vs. ISAURO B. OCTAVIANO and AURELIO B. OCTAVIANO G.R. No. L-55350 March 28, 1983 PAYMENT BY CESSION (Article 1255) FACTS In November 1952, Olimpia, the registered owner of 5.5 hectares of rice land, sold the lot to Private Respondent Aurelio, for P8, 600.00. The subject property was then mortgaged to Maximo Gumayan of Leganes, Iloilo in representation of the Olimpias debt to the same. It was stipulated by both the Olimpia and Aurelio that upon the execution of the instrument, Olimpia, her heirs, assigns, executors and administrators, have no more rights, interests or participations over the parcel of land aforementioned. Respondent Aurelio then took possession of the land after the sale. Sometime in May, 1953, Respondent tried to get the certificate of title of the land from Olimpia, for the purpose of registering the deed of absolute sale, but was told that the same was in the possession of Gumayan, who, in turn, informed him that the title had been deposited with the Philippine National Bank. Gumayan continually refused to release the certificate of title until Aurelio would first pay him the pagare receipts representing the debt of Olimpia from the former which amounts were not included in the mortgage obligation of Olimpia, assumed by Aurelio. Relying on the express consent of Olimpia to sell the land and believing that she had renounced the option granted her to repurchase the same, Aurelio negotiated with his own brother, respondent Isauro, for the sale of the property sometime in 1954. Isauro agreed to buy the property, and paid Aurelio P10, 500.00.Olimpia, through her lawyer, desired to "repurchase" the land and wrote Isauro a letter asking him if he was willing to resell the land as she had the money already to buy it back. Respondents refused the offer. Olimpia contends that since 1958, she was looking for Aurelio to tell him of her desire to "repurchase" the property but that Aurelio could nowhere be found. Hence, this suit for recovery of ownership and possession of the land against the Octaviano brothers. ISSUE Whether or not Olimpia may recover ownership and possession of the subject property. HELD NO. The nature of the transaction between Olimpia and Aurelio, from the context of the deed of sale is not a sale with right to repurchase. In this case, there was no reservation made by the vendor, Olimpia. The "option to repurchase" was contained in a subsequent document and was made by the vendee, Aurelio. Thus, it was more of an option to buy or a mere promise on the

part of the vendee, Aurelio, to resell the property to the vendor, Olimpia. From the provisions of the deed of sale, there is nothing therein from which it could be inferred that the property was being utilized as security for a debt. The document was labeled as deed of absolute and definite sale with the vendee Aurelio assuming the payment of the mortgage obligations owing by Olimpia to Maximino Gumayan, and specifically stipulating that upon payment of that indebtedness, the transaction became a deed of definite sale. Inasmuch as the contract was neither a sale with right of repurchase, nor an equitable mortgage, neither can itbe successfully alleged that it partook of a "pactum commissorium" and was, therefore, void. "Pactum commissorium "is a stipulation for automatic vesting of title over the security in the creditor in case of the debtor's default. It bears reiterating, however, that Olimpia was not a debtor, but a vendor. She was so described in the document; Olimpia owed nothing to Aurelio, and offered nothing to him as security for payment for any indebtedness.