Fausto Rosales v. Vicente Reyes

Summary

This landmark case establishes crucial precedents for pacto de retro sales in Philippine jurisprudence. Rivera sold land to defendants under pacto de retro in 1902, then transferred his repurchase right to plaintiff Rosales in 1903. When Rosales attempted to redeem in 1908, defendants refused. The Supreme Court resolved three key issues: (1) contracts by minors can be ratified by subsequent acts showing intent to confirm; (2) when repurchase rights are suspended for a period, the four-year limitation runs from when the right becomes exercisable, not from the original contract date; and (3) judicial deposit is unnecessary when redemption payment is refused - a bona fide tender suffices to preserve the vendor's rights. The decision protects vendors' redemption rights while providing legal certainty for pacto de retro transactions, recognizing their quasi-usurious nature and the need for balanced interpretation favoring the typically disadvantaged vendor.