G.R. No. L-17193; September 29, 1962
MAXIMO MORALES, petitioner-appellant, vs. MARIA BIAGTAS, JOSE CUISON, BERNABE CUISON and COSME CUISON, respondents-appellees.

FACTS

On July 19, 1949, Martin Cuison sold a parcel of land to Maximo Morales for P2,000 under a deed of sale with a right to repurchase within two years. Neither Martin Cuison nor his heirs exercised this right within the stipulated period. Consequently, Morales executed an affidavit of consolidation of ownership in 1952. The Register of Deeds refused registration without a judicial order, prompting Morales to file a petition in the Court of First Instance of Pangasinan in 1954 to compel registration.
After a hearing in 1959 where the heirs failed to appear, the court issued an order on October 14, 1959, declaring the contract a sale with right to repurchase and directing the Register of Deeds to register the affidavit of consolidation. On November 24, 1959, the heirs filed a motion to repurchase the property, invoking Article 1606 of the New Civil Code, which allows a vendor a 30-day period to repurchase from the time a final judgment is rendered declaring the contract to be a true sale with right to repurchase. The trial court granted the motion, ruling that the 30-day period started from the finality of its October 14 order and that the heirs’ motion was timely filed.

ISSUE

Whether the heirs of the vendor can validly exercise the right to repurchase under Article 1606 of the New Civil Code.

RULING

No. The Supreme Court reversed the trial court’s order. The legal logic is anchored on the principle of non-retroactivity of laws. The contract was executed on July 19, 1949, before the effectivity of the New Civil Code on August 30, 1950. Pursuant to Article 2255 of the New Civil Code, acts and contracts executed before its effectivity are governed by the old law, even if conditions were pending. The right to repurchase is a condition, and under the old Civil Code, there was no statutory 30-day redemption period following a judicial declaration; the period was strictly governed by the parties’ stipulation, subject only to the ten-year legal maximum.
The vendor’s heirs failed to repurchase within the two-year contractual period, thus irrevocably losing that right. Furthermore, even assuming arguendo that the New Civil Code applied, Article 1606 is inapplicable. That article presupposes a civil action where the very nature of the contract (whether it is an equitable mortgage or a true sale with pacto de retro) is the central controversy. Here, the petition filed by Morales was a mere registration proceeding; the nature of the contract was never genuinely in dispute, as the heirs defaulted. Therefore, the judicial order issued did not constitute the “final judgment” contemplated by Article 1606 that would trigger a new redemption period.