G.R. No. L-1170, September 17, 1903
VICENTE CRUZ, ET AL., plaintiffs-appellants, vs. MAXIMO JOAQUIN, defendant-appellee.

FACTS:
In November 1898, the plaintiffs, Vicente Cruz and others, leased two fisheries to the defendant, Maximo Joaquin, for a term of three years. Upon the expiration of the lease, the plaintiffs filed an action for ejectment before a justice of the peace to recover possession of the fisheries. Both the justice of the peace and the Court of First Instance, on appeal, ruled in favor of the defendant. The plaintiffs elevated the case via bill of exceptions.

The core of the dispute involves a deed executed in February 1900 (referred to in the decision as November 1901), wherein plaintiff Vicente Cruz and his co-owner son, for a price of $10,000, assigned and transferred to the defendant “the right of redemption and all other rights, actions, and obligations” they had in the estates. The defendant retained $4,500 from the purchase price, purportedly to repurchase the lands from another plaintiff, Doña Josefa. The defendant asserted that this deed vested in him full legal title to the fisheries, making the ejectment action by his former landlords untenable.

The plaintiffs, particularly Doña Josefa, based their claim on a prior partnership contract with Vicente Cruz dated December 1897. Under this contract, Doña Josefa advanced $4,500 to Cruz as a loan, a condition precedent to forming the partnership to operate the fisheries. The contract stipulated that title deeds would remain with Doña Josefa, granted her a right of first refusal if Cruz disposed of the property, and required Cruz to repay the $4,500 upon the partnership’s dissolution after eight years.

ISSUE:
Whether the defendant-appellee, Maximo Joaquin, has acquired ownership of the fisheries by virtue of the 1900 deed of assignment from plaintiff Vicente Cruz, thereby barring the plaintiffs’ action for ejectment.

RULING:
The Supreme Court affirmed the judgment of the Court of First Instance, ruling in favor of the defendant-appellee.

1. The 1897 Contract was a Partnership, Not a Sale with Right to Repurchase: The Court held that the 1897 agreement between Doña Josefa and Vicente Cruz did not constitute a contract of sale with pacto de retro (right of repurchase) under Article 1507 of the Civil Code. The transaction was explicitly termed a “simple loan.” The contract did not contain words transferring title to Doña Josefa; the mere custody of title deeds did not effect such transfer. Furthermore, Cruz retained the right to sell or encumber the property during the partnership, a right inconsistent with a vendor under a pacto de retro. Therefore, Doña Josefa acquired no real right or ownership interest in the lands themselvesonly personal rights against Cruz for the repayment of the loan and potential damages for breach of contract.

3. Defendant’s Ownership is a Complete Defense to Ejectment: Since the defendant became the owner of the property, his former landlords (the plaintiffs) could no longer eject him. Any claims Doña Josefa had for the $4,500 loan against Cruz, or any claim the plaintiffs might have against the defendant for the $4,500 he retained, were deemed purely personal obligations that did not affect the title to the land or the outcome of the possessory action.

4. Findings of Fact are Conclusive: The Court noted the absence of a motion for a new trial in the lower court. Therefore, the review was limited to whether the judgment was supported by the findings of fact. The trial court found as a fact that the fisheries leased were the same ones the defendant bought from Vicente Cruz. This finding was conclusive on appeal.

The judgment dismissing the ejectment suit was affirmed.