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UP Law F2021 Misterio vs Cebu State College

Sales 4-Year Prescription Period for 2005 Callejo, Sr.

Redemption when there is no
Period Specified (Art. 1606)


Misterio vs Cebu State is a case in contract law. Misterio sold to Sudlon Agricultural High School a parcel of land but,
in the same contract, reserved the right to repurchase the property. It was stipulated in the contract that Misterio
could only exercise the right to repurchase in the event that the High School had ceased to exist. The High School by
merger with another entity then became an extension of Cebu State. Misterio claimed that the condition was fulfilled
and sought to repurchase the property. However, the Court ruled that the condition was indeed fulfilled but that the
period of redemption had prescribed, thus, in effect, ruling to deny Misterio’s petition.

 Subject property:
o Denominated: Lot No. 1064 of the Banilad Friar Lands Estate
o Area: 4,563 square meters
o Location: Lahug, Cebu City
 Date of Sale: May 22, 1957
 Condition as it appears in the Contract:

That the Vendee herein, the SUDLON AGRICULTURAL HIGH SCHOOL, hereby obligates itself to use the
aforementioned Lot No. 1064 for school purposes only, and it is a condition attached to this contract that the
aforementioned vendee obligates itself to give the Vendor herein, the right to repurchase the said lot by paying to
the Vendee herein the aforementioned consideration of P9,130.00 only, after the aforementioned SUDLON
AGRICULTURAL HIGH SCHOOL shall ceased (sic) to exist or shall have transferred its school site elsewhere.

 Date of Fulfillment of Condition: June 10, 1983

Batas Pambansa (B.P.) Blg. 412, entitled "An Act Converting the Cebu School of Arts and Trades in Cebu City into a
Chartered College to be Known as the Cebu State College of Science and Technology, Expanding its Jurisdiction and
Curricular Programs" took effect. The law incorporated and consolidated as one school system certain vocational
schools in the province of Cebu, including the SAHS, and which became an extension of the Cebu State College of
Science and Technology (CSCST)
At what point did the prescription period for the right of repurchase begin to run?

At the Date of Fulfillment of the Condition on June 1983. (Effect: It was long ago on June 1987 that Misterio lost the right to
repurchase the property.) The first paragraph of Art 1606 is controlling:

The right referred to in Article 1601, in the absence of an express agreement, shall last four years from the date of
the contract.
Objections of petitioner Misterio:

(1) Prescription was set to run only after resolution of the issue on whether the Condition was fulfilled.
The Court answered, The four-year period for Misterio to repurchase the property was not suspended merely and solely
because there was a divergence of opinion between Misterio and Cebu State. Moreover, it was actually Misterio’s
position that the Condition was fulfilled on June 1983. (Note that Cebu State’s theory was that the condition had never
been fulfilled and that the High School never ceased to exist because its facilities were never physically destroyed. It was
their theory that the effect of the Merger was a mere change of name and that the High School continued to exist albeit
under a new name.1)
(2) The Right to Repurchase was annotated on the Title. Therefore, the Right was imprescriptible.
The Court answered, the annotation of the Right of Redemption on the Title had no relation whatsoever to the issue as to
when such right had prescribed. The annotation was only for the purpose of notifying third parties of the petitioners'
right to repurchase the property under the terms of the deed of sale, and the law. (In short, it would appear that
Misterio’s argument had no basis in law.)

FALLO IN LIGHT OF ALL THE FOREGOING, the petition is DENIED DUE COURSE. Costs against the petitioners. SO ORDERED.

Section 80 of the Corporation Code is controlling: “The separate existence of the constituent corporations shall cease, except that of
the surviving or the consolidated corporation.” Thus, High School ceased to exist with Cebu State as the surviving corporation.