Spouses Adolfo B. Velarde v. Diaz

Summary

This case involves a property dispute between heirs of Isagani Velarde and Concepcion Candari over several parcels of land. Concepcion sold the properties to Isagani through a pacto de retro sale in 1978 with a five-year redemption period, which she failed to exercise. She later executed a quitclaim and waiver of rights in 1986. After Isagani's death, his heirs claimed ownership while Concepcion alleged fraud. The Supreme Court reversed the Court of Appeals and ruled in favor of the heirs, holding that ownership automatically vested in Isagani by operation of law when the redemption period expired. The Court emphasized that fraud must be specifically proven and cannot be inferred from mere construction, and that notarized documents enjoy presumption of regularity. The decision clarifies the legal effects of pacto de retro sales and the requirements under Article 1607 of the Civil Code regarding consolidation of ownership.