Doromal vs. Court of Appeals

The 30-day period for legal redemption under Art. 1623 requires a written notice of the actual execution of the deed of sale, and a redemptioner is only bound to pay the price stipulated in the deed of sale, not the actual higher price paid, when the parties understated the price to evade taxes.

A property was held in co-ownership among seven heirs. The majority co-owners decided to sell their shares to third-party buyers. To minimize taxes and registration fees, the sellers and buyers agreed to state a significantly lower purchase price in the public deed of sale compared to the actual money exchanged. The minority co-owner sought to exercise her right of legal redemption based on the price stated in the public document.

• Original Filing: CFI of Iloilo (Action for redemption filed by Javellana on June 11, 1968)
• Lower Court Decision: CFI dismissed Javellana's complaint, ruling she was notified of the sale earlier and was trying to enrich herself at her relatives' expense; ordered her to pay attorney's fees and damages.
• Appeal: CA-G.R. No. 47945-R
• CA Decision: Reversed the CFI; held Javellana was never notified in writing of the actual execution of the deed, so her right to redeem had not expired; held the redemption price is the P30,000 stated in the deed, not the actual P115,250 paid.
• SC Action: Petition for Review by Doromals assailing the CA decision.

• The Co-ownership: Lot 3504 in Iloilo was originally titled under Justice Antonio Horilleno. Upon his death, it was held pro-indiviso by 7 heirs, including Filomena Javellana (substituting her mother Esperanza), each owning 1/7.
• The Proposed Sale: Early 1967, the other co-owners wanted to sell. They hired an agent who found buyers in Ramon Doromal Sr. and Jr. The co-owners executed powers of attorney in favor of Mary H. Jimenez to facilitate the sale.
• Negotiations with Javellana: Carlos Horilleno sent Javellana a power of attorney and letters (Nov 5, 1967 and Jan 18, 1968) informing her of the intended sale and asking her to join. The letters showed fluctuating prices (P5.00/sqm in Nov, P4.00/sqm in Jan). Javellana refused to sign.
• Execution of the Sale and Understated Price: On Jan 15, 1968, Jimenez signed the deed of sale for the 6/7 share. The deed stated the price as P30,000. However, the Doromals actually paid P115,250 (P5,000 earnest money, P97,000 check, P18,250 cash). The price was understated to minimize registration fees, stamps, and sales tax. On April 29, 1968, a new title was issued in the Doromals' names for 6/7 and Javellana for 1/7.
• Demand to Redeem: On June 10, 1968, Javellana's lawyer went to the Doromals' residence, delivering a letter offering to repurchase the 6/7 share for P30,000 and tendering the cash. The Doromals refused. The next day, Javellana filed the redemption case.

• The letters sent by Carlos Horilleno to Javellana in Nov 1967 and Jan 1968 constituted the written notice required by Art. 1623, starting the 30-day redemption period.
• The registration of the sale in the Registry of Property serves as notice to third persons, including possible redemptioners.
• Assuming Javellana has the right to redeem, the redemption price should be the actual price paid (P115,250), not the falsified price in the deed (P30,000).

• Javellana has the right of legal redemption under Art. 1620 of the Civil Code.
• She was never notified in writing of the actual execution and registration of the deed of sale; thus, her right to redeem had not expired when she made her offer.
• The redemption price should be the P30,000 stated in the deed of sale; extrinsic evidence should not be admitted to contradict the public document.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether preliminary letters regarding a proposed sale constitute the written notice required by Art. 1623 to start the 30-day redemption period.
  • Whether the registration of the sale serves as the notice required by Art. 1623.
  • Whether the redemption price should be the actual price paid by the buyers or the price stipulated in the deed of sale when the parties understated the price to evade taxes.

• Procedural: N/A
• Substantive:
  • The letters did not constitute valid written notice. Notice under Art. 1623 must be of a perfected sale and the actual execution/delivery of the deed of sale. The letters only indicated preliminary negotiations; the price was not even definite, and powers of attorney were still being secured. The 30-day period starts only from written notice of the executed deed.
  • Registration alone does not substitute for the written notice by the vendor required by Art. 1623. The affidavit required before registration is meant to give a clear guide to the redemptioner on the price and terms.
  • The redemption price is the price stipulated in the deed of sale (P30,000). The parties are in pari delicto for tax evasion. Courts will not aid parties who falsify the consideration to evade taxes by allowing them to demand the actual higher price from an innocent redemptioner. The redemptioner's right is legal, subrogating her under the terms stipulated in the contract (Art. 1619). The law intends the affidavit/notice to state the truth; if parties state an untruth, they bear the consequences and are estopped from claiming the actual price.

• Notice of Sale for Legal Redemption (Art. 1623) — The 30-day period to exercise the right of legal redemption starts from the receipt of a written notice of the actual execution and delivery of the deed of sale, not merely from notice of a proposed or perfected sale.
• In Pari Delicto — When parties to a contract falsify the purchase price to evade taxes, they are in pari delicto and cannot seek court aid to enforce the actual (but unstated) price against a legal redemptioner. The redemptioner is bound only by the terms stipulated in the public document.
• Equitable Estoppel in Legal Redemption — Vendors and vendees who understate the price in the deed of sale and the required affidavit are estopped from claiming the actual higher price from the redemptioner, who has the right to rely on the representations in the public document.

• Article 1620, Civil Code — Grants a co-owner the right of legal redemption when the shares of other co-owners are sold to a third person. Applied to affirm Javellana's right to redeem the 6/7 share sold to the Doromals.
• Article 1623, Civil Code — Requires that the right of legal redemption be exercised within 30 days from notice in writing by the vendor, and requires an affidavit of notice before registration. Applied to rule that notice must be of the executed deed, and the period had not expired because no such notice was given.
• Article 1619, Civil Code — Defines legal redemption as the right to be subrogated upon the same terms and conditions stipulated in the contract. Applied to rule that the redemptioner is bound only by the price stipulated in the contract (P30,000), not the actual price paid.
• Article 1482, Civil Code — Discusses earnest money. Distinguished; the SC held the P5,000 given early on was not earnest money signifying perfection of the sale because there was no definite agreement on the price yet.