Case Digest: Baluran vs. Navarro 79 SCRA 809

Facts:

Spouses Domingo Paraiso and Fidela Q. Paraiso entered into an agreement entitled "Barter" to "barter and exchange" their residential lot with the unirrigated riceland of spouses Avelino and Benilda Baluran with the following conditions: 1) both parties shall enjoy material possession, 2) the spouses Baluran shall return the lot with damages to be incurred should any children of Natividad P. Obencio, daughter of spouses Paraiso, choose to reside in the municipality and build his own house therein, 3) neither party shall encumber, alienate or dispose the property without consent of the owner. In 1975 Antonio Obendencio filed a complaint to recover the residential lot from spouses Baluran claiming to be the rightful owner after Natividad Paraiso Obedencio donated the land in his favor.

Issues:

1) Whether or not the “Barter Agreement” transferred ownership of the residential lot to petitioner Baluran, and 2) whether or not the right to re-barter or re-exchange of respondent Antonio Obedencio had been barred by the statute of limitation

Ruling:

The title of the agreement is not controlling since the stipulations of the contract indicate that the intentions of the parties is not to transfer ownership of respective properties but only the material possession. What was constituted was a usufruct and not barter, which was extinguished by the happening of the resolutory condition, which is when any of the children of Natividad Obedencio shall choose to build his house on the residential lot, it must be consequently returned. Thus, the parties are entitled to a return of their respective property.