Lichauco V Berenguer

Lichauco v Berenguer
Facts:
Crisanto Lichauco, on his own behalf, and his brothers, Faustino, Zacarias, Galo, and his
sister, Timotea Lichauco, his co-heirs, applied for the registration, in the new property
registry, of two rural estates situated in the pueblo of Arayat, Province of Pampanga,
one of which, in the barrio of Batasan, has an area of 204 hectares, 33 ares, and
38.795 centares, and the other, in the sitio of Panantaglay, barrio of Calumpang, 120
hectares, 69 ares, and 58 centares. The boundaries and other particulars relating to
these lands are specified in the application, which for the purpose of this opinion, are
taken to be true.
With respect to both the said properties, the applicants allege that they obtained them
by inheritance from their grandmother, Cornelia Laochangco, and that the latter, in
turn, had acquired them from Macario Berenguer, through purchase with an agreement
that the vendor should have the right to redeem them. Jose Berenguer, the son of
Macario Berenguer and the administrator of his estate, opposed the registration of the
first of the aforementioned properties, and acquiesced in that of the second. The trial
was had with respect to the first tract of land above referred to, documentary and oral
evidence was adduced by the parties.
Court of Land Registration: Denied the registration of the first parcel of land
(Batasan)
They allege against the said judgment the following assignments of error:
1. The finding that the contract executed between Cornelia Laochangco and
Macario Berenguer was not a sale with right of repurchase, as it appears to be in
the instrument, but a real loan.
That under condition of right to repurchase (pacto de retro) he sells the said properties
to the aforementioned Doña Cornelia Laochangco for P4,000 and upon the following
conditions: First, the ale stipulated shall be for the period of two years, counting from
this date, within which time the deponent shall be entitled to repurchase the land sold
upon payment of this price
ISSUE: w/o the contract of sale is under the condition of right to repurchase
HELD:
In the present case, unlike others heard by this court, there is no proof that the sale
with right of repurchase, made by Berenguer in favor of Laochangco is rather a
mortgage to secure a loan.
The account current between Berenguer and Laochangco appears to be nothing but the
beginning of some business transaction in sugar, which gave rise to the contract of
purchase and sale under pacto de retracto, and the continuation of the same
transactions which maintained the contract beyond the period fixed for the redemption.
When, on October 5 1889, Berenguer's debt amounted to 3,720.23 pesos, Cornelia
Laochangco gave him 1,000 pesos more; so that she increased his debt to 4,720.23
pesos. The trial record offer no explanation of this conduct on the part of his creditor
other than that derived from the fact that two days afterwards, on the 7th of the same
month of October, 1889, Berenguer executed the instrument of sale under pacto de
retracto, of two parcels of land, one of 204 hectares and the other of 120, for the price
of 4,000 pesos "which Berenguer acknowledges that he has received the vendee,
already paid and in the legal tender currency of this country."
Among other fundamental reason, the one just above mentioned is enough to establish
the close relation between the account current and the contract of purchase and sale,
under pacto de retracto, of the two parcels of land which are the subject of this case;
and this explains how it came to be covenanted in the said instrument of October 7,
1889, that " all the fruits of the said lands shall be deposited in the sugar depository of
the vendee, situated in the district of Quiapo of this city, and the value of which shall
be applied on account of the price of this sale."
The term of two years, stipulated in the instrument for the exercise of the right of
redemption, depended on such covenant, by the express will of the vendee, and,
likewise by her express will, the term fixed for the redemption was extended until at
least the year 1896, during which time it appears that Berenguer continued to deposit
"the fruits of the said lands in the sugar depository of the vendee," as payments on
account of the price of the sale.
Until 1896, at least, there is no reason why the sale of the two parcels of land may be
considered to have been consummated; until then the vendee, on account of and as
the price of the repurchase, had continued to receive quantities of sugar, whereby it
appears that the said vendee admitted, as late as 1896, the exercise of the right of
repurchase on the part of the vendor who had been paying the price in sugar.\
And up to the present time the right to exercise of the privilege of redemption still
subsists, more than one-half of the repurchase price having already been paid
(excepting in such wise that is owing as rentals on the lease); and in this state of affairs
it is utterly impossible to consider the right of repurchase as lapsed by considering the
sale of the two said parcels of land as consummated, at any intermediate time or until a
settlement shall have been made with respect to the value of the sugar turned in, in
relation to the amount or price of the sale, and until the status of the right of
redemption, as already exercised by means of partial payments of the price of the sale,
shall have been determined.
The right of redemption, in the present case, began to be exercised from the year
following that of the sale and continued, during seven years, until 1896, in such wise
that already in August 1890 the price which the vendor must reimburse to the vendee
had been reduced to 3,888.61 pesos, and the reduction was continued by the deposits
of sugar intended to cancel the debt. This was done by the express will of both parties,
who believed that by so doing they best served their interests, and in that manner they
covenanted and acted one towards the other, without the least contradiction or
complaint. The exercise of the right of redemption having been commenced and such
advancement having already been made up to 1896 in the way of reimbursement of the
price of the repurchase, by the amount of sugar which the vendee had received from
the vendor for the purpose of reimbursing the price of the sale, it is in no manner
permissible, at the will of the heirs of the vendee, to consider had begun and continued
by mutual agreement of both contracting parties.\
The terms of two years stipulated for the redemption expired; but in the contract itself
there is the additional covenant that the vendor shall deposit under the control of the
vendeed all the fruits of the lands leased for the purpose of repaying the price of the
sale. After the expiration of that term of two years, the vendee continued receiving in
subsequent years fruits of the leased lands, under that additional agreement that they
all should be placed in his control in order to cancel the price of the sale. These are
facts absolutely incompatible with the term stipulated and with the idea of the vendee
becoming the owner of the lands merely by the expiration of the two years.
The vendee, who has been reimbursed by the vendor for a part of the repurchase price,
is bound to fulfill the obligation to sell back, derived from the sale with right to
repurchase, or must show reason why he may keep this part of the price and,
notwithstanding his so doing, be considered released from effecting the resale. He may
be entitled to require the completion of the price, or that he be paid other expenses
before he returns the thing which he had purchased under such a condition
subsequent; but the exercise of the right of redemption having been begun and
admitted, the irrevocability of the ownership in such manner acquired is in all respects
incompatible with these acts so performed.\
For this reason, this court does not consider it necessary to come to any conclusion
relative to the testimony of the opponent, Jose Berenguer, in so far as he testified that
the agreement with right to repurchase was already cancelled by the conveyance, in
payment (which his father, during the latter's lifetime, had made to one of the heirs of
the vendee) of the 120 hectare tract of land in Panantaglay, nor relative to the fact, an
act at present consummated, of the applicants already being the owners, both of a part
of the repurchase price and of one of the parcels of land which was the subject matter
of the redemption.]
It is sufficient for the purposes of the appeal to find, as we hereby do find, that the
right of redemption has not lapsed-lapse which was the ground for the application for
registration that was based on the consolidation of the ownership of the two parcels of
land, in the vendee, from whom the applicants derive their right. Nor had that right
lapsed, with respect to the Panantaglay land; but as this land was, with the assent of
the opponent, adjudicated in the judgment appealed from , the adjudication by such
assent is effective.

Lichauco V Berenguer

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