[ G.R. No. L-1577. January 31, 1950 ] 85 Phil. 391
EN BANC
[ G.R. No. L-1577. January 31, 1950 ]
ENRIQUE BAUTISTA, PETITIONER, VS. EUSTAQUIO FULE, RESPONDENT. D E C I S I O N
REYES, J.:
This is an appeal from a decision of the Court of Appeals.
The essential facts are not in dispute. Felipe Suarez was the owner of a parcel of unregistered coconut land situated in Alaminos, Laguna. On June 30, 1930, Suarez sold this land to Gregorio Atienza for P1,300 subject to repurchase within ten years. Atienza, in turn, sold it to Valentin Dimaano for P100 subject to redemption within five years. (This last transaction was, however, found by the Court of Appeals to be a mere equitable mortgage and not a pacto de retro sale.) Some four years thereafter the land was levied upon to satisfy a judgment rendered against Gregorio Atienza in a case brought against him by Enrique Bautista and it was, on April 10, 1935, sold at public auction to Bautista for P258.59, the sale being registered seven days later, that is, on April 17, under Act No. 3344. Under the law Atienza had the right to redeem the land within one year from the date of the auction sale. But before the expiration of that period, that is, on January 13, 1936, the land was repurchased from Atienza, redeemed from Di-maano, and then sold outright to Eustaquio Pule by its original owner and vendor a retro, Felipe Suarez. To recover the land from Fule, Bautista instituted the present action in the Court of First Instance of Laguna, contending that the repurchase of the property from Atienza and its sale to Fule were fraudulent and. fictitious and that it was from him (Bautista) and not from Atienza, that Suarez should have made the repurchase. Overruling both contentions, the Court of First Instance dismissed the action, and the dismissal having been affirmed by the Court of Appeals, the case lias been brought to us for review. Accepting, as we must, the finding of fact of the Court of Appeals that the repurchase of the property from Atienza and its sale to Fule were not fraudulent and fictitious, the question for us to determine is whether Fule has, by virtue of those transactions, acquired a right superior to that acquired by Bautista as a purchaser in a prior sale that was duly registered. Section 24, Rule 39, Rules of Court, provides that the purchaser of real property at an execution sale “shall be substituted to and acquire all the right, title, interest, and claim of the judgment debtor thereto,” subject to the right of redemption therein provided. The right acquired by the purchaser is, of course, inchoate and does not become absolute until after the expiration of the redemption period without the right of redemption having been exercised. But inchoate though it be, it is, like any other right, entitled to protection and must be respected until it is extinguished by redemption. In the present case, the right or title acquired by Bautista at the execution sale was never so extinguished, for Atienza, the judgment debtor, failed to exercise his right of redemption. Neither was Bautista’s right or title extinguished by the subsequent repurchase of the property from Atienza by Suarez as vendor a retro. Having been divested of all his right to the property as a result of its sale at execution, Atienza had nothing more to transmit to Suarez except his right to redeem within the statutory period. The sale at execution did not, it is true, foreclose Suarez’ right to repurchase as vendor a retro. But the repurchase should have been made from the holder of the title and not from him who, having been divested thereof in accordance with law, had nothing more to convey except the bare right of redemption accorded to a judgment debtor. And Atienza never made a conveyance of this right. Neither did he exercise it himself. And even supposing that the right passed to Suarez when he repurchased the property, the fact remains that the redemption period of one year passed without the said right having been exercised. Fule may not claim ignorance of the execution sale, for it was registered under Act No. 3344 on April 17, 1935. He must, therefore, be deemed to have constructive notice thereof when, on January 30, 1936, he bought Suarea1 interest and at the same time redeemed the land from Atienza. With such notice Fule is not entitled to the rights of a purchaser in good faith.
In justifying the repurchase of the land from Atienza instead of from Bautista, the lower court cites Article 1510 of the Civil Code which provides:
“The vendor may bring his action against any. possessor who holds under the vendee, even though in the second contract no mention should have been made of the conventional redemption, saving always the provisions of the Mortgage Law with respect to third persons.”
It should be noted, however, that in authorizing the vendor a retro to enforce his right of repurchase against “any possessor who holds under the vendee,” the article has provided a saving clause in favor of the rights of third persons under the provisions of the .Mortgage Law, whose function may, in the case of land not registered either under that law or the Land Registration Act, be deemed to be performed by those of Act No. 3344. If this Act is to have any utility at all, registration thereunder should produce its effects against third persons. It follows from the foregoing that the repurchase of the land from Atienza instead of from Bau-tista did not divest the latter of his right to said land as purchaser at the auction sale, a right which must now be deemed to be absolute in view of the non-redemption of the property by the judgment debtor or any other person entitled thereto within the period prescribed by the Rules. Obviously, Fule’s remedy is against Atienza for the recovery of the sum paid to him in the repurchase. Wherefore, the decision appealed from is reversed, and, as between the appellant and the appellee, the former is declared to be the one entitled to the land in litigation. The appellee shall pay costs.
Moran, C. J., Bengzon, Padilla, Tuason, and Torres, JJ., concur.