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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
July-1996 Jurisprudence                 

  • G.R. No. 116600 July 3, 1996 - PEOPLE OF THE PHIL. v. REYNALDO LANDICHO

  • G.R. No. 119527 July 3, 1996 - EVELYN J. GARCIA v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 121910 July 3, 1996 - NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, ET AL. v. NLRC

  • G.R. Nos. 98121-22 July 5, 1996 - PEOPLE OF THE PHIL. v. ROMEO R. SALAZAR

  • G.R. No. 100629 July 5, 1996 - ENELYN E. PEÑA, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 100699 July 5, 1996 - PEOPLE OF THE PHIL. v. EDGAR C. GUTIERREZ

  • G.R. No. 102377 July 5, 1996 - ALFREDO SAJONAS, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 102998 July 5, 1996 - BA FINANCE CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 105583 July 5, 1996 - PEOPLE OF THE PHIL. v. ELEUTERIO TAMPON

  • G.R. No. 106296 July 5, 1996 - ISABELO T. CRISOSTOMO v. COURT OF APPEALS, ET AL.

  • G.R. No. 106413 July 5, 1996 - REPUBLIC OF THE PHIL. v. TACLOBAN CITY ICE PLANT, ET AL.

  • G.R. No. 107698 July 5, 1996 - GLORIA Z. GARBO v. COURT OF APPEALS, ET AL.

  • G.R. No. 107824 July 5, 1996 - SUPERCLEAN SERVICES CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 109173 July 5, 1996 - CITY OF CEBU v. COURT OF APPEALS, ET AL.

  • G.R. No. 111324 July 5, 1996 - ROMAN CATHOLIC ARCHBISHOP OF MANILA v. COURT OF APPEALS, ET AL.

  • G.R. No. 111549 July 5, 1996 - PEOPLE OF THE PHIL. v. ARTEMIO P. ORTALEZA

  • G.R. Nos. 113178 & 114777 July 5, 1996 - RADIO COMMUNICATIONS OF THE PHIL. v. NLRC, ET AL.

  • G.R. No. 113549 July 5, 1996 - REPUBLIC OF THE PHIL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 113827 July 5, 1996 - PHILIPPINE AIRLINES INC. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 113948 July 5, 1996 - ARMANDO NICOLAS v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 114002 July 5, 1996 - PEOPLE OF THE PHIL. v. ELEUTERIO C. COMPENDIO, JR.

  • G.R. No. 115216 July 5, 1996 - PEOPLE OF THE PHIL. v. DAVID CABILES

  • G.R. No. 115825 July 5, 1996 - FRANKLIN DRILON v. COURT OF APPEALS, ET AL.

  • G.R. No. 116208 July 5, 1996 - PEOPLE OF THE PHIL. v. ESMAEL SALIDO

  • G.R. No. 116693 July 5, 1996 - PURITA DE LA PEÑA, ET AL. v. PEDRO R. DE LA PEÑA, ET AL.

  • G.R. No. 118203 July 5, 1996 - EMILIO A. SALAZAR, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118231 July 5, 1996 - VICTORIA L. BATIQUIN, ET AL. v. COURT OF APPEALS

  • G.R. No. 118284 July 5, 1996 - MAMERTO REFUGIA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118562 July 5, 1996 - ANGLO-KMU v. SAMANA BAY, ET AL.

  • G.R. No. 118691 July 5, 1996 - ALEJANDRO BAYOG, ET AL. v. ANTONIO M. NATINO, ET AL.

  • G.R. Nos. 118712 & 118745 July 5, 1996 - LAND BANK OF THE PHIL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118824 July 5, 1996 - PEOPLE OF THE PHIL. v. ROMEO GARCIA

  • G.R. No. 119069 July 5, 1996 - PEOPLE OF THE PHIL. v. DANILO EXCIJA

  • G.R. No. 119845 July 5, 1996 - ANTONIO M. GARCIA v. COURT OF APPEALS, ET AL.

  • G.R. No. 120949 July 5, 1996 - ARACELI RAMOS FONTANILLA v. PEOPLE OF THE PHIL.

  • G.R. No. 121180 July 5, 1996 - GERARD A. MOSQUERA v. DELIA H. PANGANIBAN, ET AL.

  • G.R. No. 121592 July 5, 1996 - ROLANDO P. DELA TORRE v. COMMISSION ON ELECTIONS, ET AL.

  • G.R. No. 122807 July 5, 1996 - ROGELIO P. MENDIOLA v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. RTJ-91-712 July 9, 1996 - BEN D. MARCES, SR. v. PAUL T. ARCANGEL

  • G.R. No. 88189 July 9, 1996 - PEOPLE OF THE PHIL. v. TIBURCIO ABALOS

  • G.R. No. 103922 July 9, 1996 - SANTIAGO LAND DEVELOPMENT COMPANY v. COURT OF APPEALS, ET AL.

  • G.R. No. 104312 July 9, 1996 - PEOPLE OF THE PHIL. v. MARIO CABALLERO

  • G.R. No. 109563 July 9, 1996 - PHILIPPINE NATIONAL BANK v. COURT OF APPEALS, ET AL.

  • G.R. No. 114058 July 10, 1996 - PEOPLE OF THE PHIL. v. ZALDY B. FRANCISCO

  • G.R. No. 74495 July 11, 1996 - DUMEZ COMPANY, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. Nos. 80437-38 July 11, 1996 - PEOPLE OF THE PHIL. v. ROBERTO B. ABORDO

  • G.R. Nos. 94376-77 July 11, 1996 - PEOPLE OF THE PHIL. v. ELMER O. BELGA

  • G.R. No. 103174 July 11, 1996 - AMADO B. TEODORO v. COURT OF APPEALS, ET AL.

  • G.R. No. 103968 July 11, 1996 - PEOPLE OF THE PHIL. v. DIMSON M. GARDE

  • G.R. No. 104860 July 11, 1996 - CITYTRUST BANKING CORPORATION v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 106418 July 11, 1996 - DANIEL L. BORBON II, ET AL. v. SERVICEWIDE SPECIALISTS, INC., ET AL.

  • G.R. No. 109156 July 11, 1996 - STOLT-NIELSEN MARINE SERVICES (PHILS.) INC. v. NLRC, ET AL.

  • G.R. No. 110207 July 11, 1996 - FLORENTINO REYES, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 116221 July 11, 1996 - PEOPLE OF THE PHIL. v. ALEJANDRO G. GABRIS

  • Adm. Matter No. P-93-995 July 12, 1996 - ROBERTO JALBUENA v. EGARDO GELLADA, ET AL.

  • G.R. No. 88126 July 12, 1996 - REPUBLIC OF THE PHIL. v. SANDIGANBAYAN, ET AL.

  • G.R. No. 96795 July 12, 1996 - ANTONIO M. CORRAL v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 108926 July 12, 1996 - REPUBLIC OF THE PHIL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 116128 & 116461 July 12, 1996 - ALLIED BANKING CORP. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 121139 July 12, 1996 - ISIDRO B. GARCIA v. COMMISSION ON ELECTIONS, ET AL.

  • G.R. No. 88822 July 15, 1996 - PEOPLE OF THE PHIL. v. ALEJANDRO M. TUVILLA

  • G.R. No. 117661 July 15, 1996 - DANIEL VILLANUEVA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 83437-38 July 17, 1996 - PEOPLE OF THE PHIL. v. WILFREDO R. GUARIN

  • G.R. No. 98458 July 17, 1996 - COCOLAND DEV. CORP. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 102037 July 17, 1996 - MELANIO IMPERIAL v. COURT OF APPEALS, ET AL.

  • G.R. No. 106977 July 17, 1996 - PEOPLE OF THE PHIL. v. AQUILIO ACABO

  • G.R. Nos. 109396-97 July 17, 1996 - PEOPLE OF THE PHIL. v. ROMEO S. OARGA

  • G.R. No. 114795 July 17, 1996 - LUCITA Q. GARCES v. COURT OF APPEALS, ET AL.

  • G.R. No. 116728 July 17, 1996 - PEOPLE OF THE PHIL. v. RODELIO S. CRUZ

  • G.R. No. 120496 July 17, 1996 - FIVE STAR BUS CO., INC., ET AL. v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. MTJ-96-1088 July 19, 1996 - RODOLFO G. v. HERNANDO C. DOMAGTOY

  • G.R. Nos. 70168-69 July 24, 1996 - RAFAEL T. MOLINA, ET AL. v. PEOPLE OF THE PHIL., ET AL.

  • G.R. No. 95940 July 24, 1996 - PANTRANCO NORTH EXPRESS, INC. v. NLRC, ET AL.

  • G.R. No. 108052 July 24, 1996 - PHILIPPINE NATIONAL BANK v. COURT OF APPEALS, ET AL.

  • G.R. No. 110241 July 24, 1996 - ASIA BREWERY, INC. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. Nos. 115008-09 July 24, 1996 - PEOPLE OF THE PHIL. v. DANIEL C. QUIJADA

  • G.R. No. 120043 July 24, 1996 - AMERICAN HOME ASSURANCE CO., ET AL v. NLRC, ET AL.

  • G.R. No. 120099 July 24, 1996 - EDUARDO T. RODRIGUEZ v. COMMISSION ON ELECTIONS, ET AL.

  • G.R. No. 120303 July 24, 1996 - FEDERICO GEMINIANO, ET AL. v. COURT OF APPEALS, ET Al.

  • Adm. Matter No. RTJ-96-1336 July 25, 1996 - JOCELYN TALENS-DABON v. HERMIN E. ARCEO

  • G.R. No. 95223 July 26, 1996 - ALLIED BANKING CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 105673 July 26, 1996 - PEOPLE OF THE PHIL. v. ANTONIO MAGANA

  • G.R. Nos. 105690-91 July 26, 1996 - PEOPLE OF THE PHIL v. RODOLFO CAGUIOA, SR.

  • G.R. No. 110731 July 26, 1996 - SHOPPERS GAIN SUPERMART, ET AL. v. NLRC, ET AL.

  • G.R. No. 111127 July 26, 1996 - ENGRACIO FABRE, JR., ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 112175 July 26, 1996 - PEOPLE OF THE PHIL. v. RODOLFO DIAZ

  • G.R. Nos. 114280 & 115224 July 26, 1996 - PHILIPPINE AIRLINES, INC. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 115683 July 26, 1996 - DELIA MANUEL v. DAVID ALFECHE, JR., ET AL.

  • G.R. No. 118434 July 26, 1996 - SIXTA C. LIM v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 119225 July 26, 1996 - PEOPLE OF THE PHIL. v. RODRIGO G. ABUTIN

  • G.R. No. 119328 July 26, 1996 - PROVIDENT INT’L. RESOURCES INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. 119673 July 26, 1996 - IGLESIA NI CRISTO (INC.) v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. MTJ-93-783 July 29, 1996 - OFFICE OF THE COURT ADMINISTRATOR v. FILOMENO PASCUAL

  • G.R. Nos. 97556 & 101152 July 29, 1996 - DAMASO S. FLORES v. COURT OF APPEALS, ET AL.

  • G.R. No. 111639 July 29, 1996 - MIDAS TOUCH FOOD CORPORATION v. NLRC, ET AL.

  • G.R. No. 114313 July 29, 1996 - MGG MARINE SERVICES, INC., ET AL. v. NLRC, ET AL.

  • Adm. Matter No. P-95-1148 July 30, 1996 - PEDRO ROQUE, ET AL. v. ZENAIDA GRIMALDO

  • G.R. No. 102557 July 30, 1996 - ALFONSO D. ZAMORA v. COURT OF APPEALS, ET AL.

  • G.R. No. 108028 July 30, 1996 - PEOPLE OF THE PHIL. v. CRISTINA M. HERNANDEZ

  • G.R. No. 116512 July 30, 1996 - PEOPLE OF THE PHIL. v. LEOPOLDO BACANG, ET AL.

  • G.R. No. 116542 July 30, 1996 - HONGKONG AND SHANGHAI BANKING CORP. v. NLRC, ET AL.

  • G.R. No. 118590 July 30, 1996 - D.M. CONSUNJI, INC. v. RAMON S. ESGUERRA, ET AL.

  • G.R. No. 122241 July 30, 1996 - BOARD OF OPTOMETRY, ET AL. v. ANGEL B COLET, ET. AL.

  • G.R. Nos. 111517-19 July 31, 1996 - PEOPLE OF THE PHIL. v. ROGER N. AUSTRIA

  • G.R. No. 112233 July 31, 1996 - COKALIONG SHIPPING LINES v. OMAR U. AMIN

  • G.R. No. 112611 July 31, 1996 - CLARA ATONG VDA. DE PANALIGAN, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 116015 July 31, 1996 - GOVERNMENT SERVICE INSURANCE SYSTEM v. COURT OF APPEALS, ET AL.

  • G.R. No. 119306 July 31, 1996 - PEOPLE OF THE PHIL. v. DANTE BELTRAN

  • G.R. No. 121917 July 31, 1996 - ROBIN CARIÑO PADILLA v. COURT OF APPEALS, ET AL.

  • G.R. No. 122274 July 31, 1996 - SUSAN V. LLENES v. ISAIAS P. DICDICAN, ET AL.

  • G.R. No. 122749 July 31, 1996 - ANTONIO A. S. VALDES v. RTC, BRANCH 102, QUEZON CITY, ET AL.

  •  





     
     

    G.R. No. 102557   July 30, 1996 - ALFONSO D. ZAMORA v. COURT OF APPEALS, ET AL.

     
    PHILIPPINE SUPREME COURT DECISIONS

    THIRD DIVISION

    [G.R. No. 102557. July 30, 1996.]

    ALFONSO D. ZAMORA, Petitioner, v. COURT OF APPEALS and MA. JACINTA D. DE GUZMAN, Respondents.


    D E C I S I O N


    PANGANIBAN, J.:


    In dispute is the nature of the contract entered into by the parties in 1988 — whether the same is an absolute sale or an equitable mortgage.

    Challenged in this petition under Rule 45 is the Decision 1 of the Court of Appeals 2 in CA-G.R. CV No. 27319 promulgated on August 19, 1991, affirming the judgment of the trial court which ruled that the contract in question was an equitable mortgage and not a deed of absolute sale, and respondent Court’s subsequent Resolution 3 promulgated on October 25, 1991, denying reconsideration.

    The Facts


    Some material facts are not disputed. The petition 4 self reproduced the respondent Court’s narration thereof as follows: 5

    "Plaintiff is one of five (5) brothers and sisters who own in common a parcel of land together with improvements thereon located at E. Rodriguez Avenue, Quezon City. The property with an area of 1,539 square meters, more or less, is covered by TCT No. 81503 issued by the Register of Deeds of Quezon City.

    Starting January 8, 1973, the property in question had been leased to and occupied by the defendant for a period of fifteen (15) years at monthly rental of P5,000.00.

    On January 16, 1987, plaintiff executed a real estate mortgage over her share and interest in the subject property in favor of the defendant as a security for her loan of indebtedness to the latter in the sum of P140,000.00. This contract (Exh. A or Exh. 7) provided inter alia that the loan was payable within one (1) year with the interest at 18% per annum, and constituted the defendant (mortgagee) as plaintiff’s attorney-in-fact to choose the sheriff in case of extrajudicial foreclosure.

    Plaintiff failed to pay the loan within the stipulated period of one (1) year. But no foreclosure took place because plaintiff asked for and was extended more loans on five different occasions, evidenced by temporary receipts marked Exhs. 8 to 12 inclusive. These additional loans, upon agreement of plaintiff and defendant, were made subject to the security provided by the same real estate mortgage. Plaintiff failed to pay the loans which now totalled P272,356.00 (including interest). On March 1, 1988 plaintiff as vendor executed a document known as "Absolute Sale of Undivided Share of Land" in favor of defendant, for a total consideration of P450,000.00. This Deed of Conveyance (Exh. E or Exh. 5) which appears to be unilaterally executed covered plaintiff’s individual share and interest consisting of approximately 300 square meters undivided share and participation in the same property described in and covered by TCT No. 81503. The balance of P177,644.00 (P450,000 minus the loan) was duly paid by defendant to the plaintiff within one week after plaintiff signed the document of sale in the presence of Celia Zamora, defendant’s spouse.

    Defendant caused the registration of the "Absolute Sale of Undivided Share of Land" with the Register of Deeds and obtained a new title TCT No. 378689 (Exh. 6 or Exh. G), wherein defendant is now named as one of the registered owners of the property together with the brothers and sister of plaintiff. Soon after defendant obtained a copy of TCT No. 378689, his wife, Celia, delivered the same to plaintiff.

    Subsequently, the Office of the Register of Deeds of Quezon City was gutted by fire. When Celia Zamora asked plaintiff as to who would work for the reconstitution of the title, the latter indicated that the defendant should do it and the title was given by plaintiff to Celia for the purpose of reconstitution. On August 2, 1988 defendant applied for administrative reconstitution of the title on August 22, 1988 (sic). After the same was accomplished, the title was again returned to the plaintiff.

    Plaintiff, well-known by her nickname Maja, has been regarded and looked up to as the head of the family consisting of two sisters and three brothers. She is a graduate of Fine Arts from the College of the Holy Spirit in Quezon City."cralaw virtua1aw library

    The foregoing are the facts admitted by both parties. Petitioner alleges that the "following are other important facts which have substantial bearing to the instant controversy but which are conspicuously absent in the foregoing summary by the Court of Appeals" :jgc:chanrobles.com.ph

    "2. When the petitioner paid the balance of P177,644.00 to private respondent within one (1) week after execution of the Absolute Sale of Undivided Share of Land (Exh. "5"), the latter (private respondent) signed a receipt dated March 3, 1988 (Exh. "3") wherein she stated:chanrob1es virtual 1aw library

    ‘March 3, 1988

    ‘Received from Alfonso D. Zamora the amount of ONE HUNDRED SEVENTY THOUSAND SIX HUNDRED FORTY FOUR PESOS (P177,644.00) Philippine currency. as the final payment, making the total amount of P450,000.00 as embodied in the Absolute Sale of Undivided Share of Land, of the sale of share and rights and interest as executed in the said Sale of Undivided Share of Land.

    Payment breakdown as follows:chanrob1es virtual 1aw library

    March 1, 1988 MPSB MC

    No. 007246 P30,000.00

    March 1, 1988 SBTC Check

    No. 048207 5,000.00

    March 2, 1988 MPSB MC

    No. 007247 117,644.00

    March 2. 1988 BO MC

    No. 002635 25,000.00

    —————

    Total P177,644.00

    Received by:chanrob1es virtual 1aw library

    (Sgd.)

    Maria Jacinta de Guzman’

    (Emphasis ours)

    3. The Absolute Sale of Undivided Share of Land (Exh. "5") was notarized on March 9, 1988 and a new title (TCT No. 378689) was issued to petitioner as co-owner on March 22, 1988 (Exh. "6") (p. 7. Court of Appeals’ Decision);

    4. Notwithstanding the execution of such deed of absolute sale of undivided share of land (Exh. "5") on March 9, 1988, petitioner still paid the full P5,000.00 rental, at P1,000.00 per co-owner/lessor for the whole month of March thru a bank deposit as a gesture of goodwill as gleaned from his letter (Exh. "I") addressed to private respondent and her brothers as (sic) sisters dated March 29, 1988;

    5. Beginning the month of April 1988, petitioner started to deduct the amount of P1,000.00 from his monthly rental of P5,000.00 as said amount (P1,000.00) corresponded to the one-fifth (1/5) undivided share now owned by him in the property by virtue of the cited deed of absolute sale (Exh. "5");

    6. On May 1, 1988, petitioner wrote private respondent a letter (Exh. "F") giving the latter the option to repurchase her share, which option was however verbally withdrawn by petitioner on the very next day (May 2). The verbal withdrawal was subsequently confirmed by petitioner’s written notice (Exh. "1") dated May 3, 1988 wherein petitioner informed private respondent that he had "reconsidered" his offer (p. 8, Decision of the Court of Appeals; p. 6, Decision of the Regional Trial of Court);

    7. On May 5, 1988, private respondent, through counsel, sent a letter (Exh. "H") to petitioner informing the latter of her desire to repurchase her share. The aforesaid letter (Exh. "H") was received by petitioner on May 6, 1988 (ibid.);

    8. On May 9, 1988, petitioner wrote a letter-reply (Exh. "2") to private respondent’s counsel intimating that petitioner’s reason for withdrawing/reconsidering his earlier offer (for the repurchase of the one-fifth (1/5) share) was due to "certain new developments" (ibid.);

    9. On September 12, 1988, private respondent instituted the instant action below to decide as null, void and ineffectual the Absolute Sale of Undivided Share of Land (Exh. "5") and to cancel TCT No. 378689. In addition, private respondent asked for reconveyance of her one-fifth (1/5) share in the subject property and prayed for damages;

    10. On May 22, 1990, the trial court rendered judgment in favor of private respondent declaring the contract of absolute conveyance between the parties as instead one of equitable mortgage and directing inter alia the reconveyance of the subject one-fifth (1/5) undivided share unto private respondent;"

    The decretal portion 6 of the trial court’s decision dated May 22, 1990 which respondent Court affirmed in toto, is as follows:jgc:chanrobles.com.ph

    "WHEREFORE, the contract between the parties is hereby declared to be one of equitable mortgage and the defendant is ordered to reconvey to the plaintiff the latter’s undivided 1/5 interest in the subject property, upon the latter’s payment of the sum of P450,000.00 plus interest at 18% per annum from March 14, 1988, the date of the instrument, up to the date of such payment.

    The Register of Deeds of this City is directed to cancel TCT No. 378689 and re-issue a new one in the names of the plaintiff as well as Francisco de Guzman, Bernardina de Guzman, Placido de Guzman III, Joseph Gerard de Guzman, represented by their guardian, Esmeraldo Dimatulac, upon proof of compliance by the plaintiff of the above undertaking within 30 days from receipt hereof.

    The prayers for damages and attorney’s fees are hereby DENIED.

    The defendant’s counterclaim is DISMISSED.

    SO ORDERED."cralaw virtua1aw library

    In affirming the trial court, the Court of Appeals summarized "the extant factors in the case at bar that preponderantly Justify the consideration of the questioned ‘Absolute Sale’ as an equitable mortgage" as follows: 7

    "1. Plaintiff obtained a series of loans from the defendant in a long period of time with interest at 18% per annum;

    2. Time come (sic) when the loans reached an aggregate amount of P272,356.00, and plaintiff was unable to pay the same, plaintiff finding herself in a really bad fix acceded to sign a contract prepared by defendant for the sale of her one-fifth (1/5) share and interest in the property for the price of P450,000.00;

    3. As agreed upon, the document of sale was not intended to be registered, let alone the issuance of a new title thereto wherein defendant would be named as one of the co-owners of the property, but the registration and titling were accomplished by defendant contrary to their mutual understanding;

    4. Defendant in a letter assured plaintiff that she could repurchase the property for the same amount of P450,000.00 but when the latter decided to exercise her right, defendant refused;

    5. Copy of the title was in the possession of plaintiff even after a new one was issued wherein defendant was already named as one of the co-owners;

    6. After the conflagration that destroyed the records of the Register of Deeds of Quezon City, the title to the subject property was reconstituted at the instance of defendant but thereafter the title was again returned to plaintiff for safekeeping;

    7. The court a quo considered the price of P450,000.00 for the share of plaintiff consisting of 300 square meters of prime land located at E. Rodriguez Avenue, Quezon City, as grossly inadequate and inequitous (sic). We agree with this finding, having in mind that in 1988 business was already booming and the prices of real estate in the metropolis were on the gallop. Business abruptly came to a standstill and the price indices only fell after the aborted coup in December 1989."cralaw virtua1aw library

    The Issues


    Petitioner now assigns the following errors 8 allegedly committed by the appellate court:chanrob1es virtual 1aw library

    "I


    The Court of Appeals gravely erred and abused its discretion in ruling that the absolute sale of undivided share of land (Exh.’5’) is in reality an equitable mortgage notwithstanding the presence of incontrovertible circumstances in the case at bar clearly showing that the real intention of the parties was to enter into a contract of absolute conveyance.

    II


    The Court of Appeals gravely erred and abused its discretion in ruling that the purchase price of P1,500.00 per sq. meter of the subject property in 1988 is grossly inadequate.

    III


    The Court of Appeals gravely erred and abused its discretion in affirming the judgment of the trial court which dismissed petitioner’s counterclaim against private Respondent."cralaw virtua1aw library

    In fine, the threshold issue in this case may simply be stated thus: Is the contract entered into between the parties one of absolute sale or equitable mortgage?

    The Court’s Ruling


    In determining the nature of a contract, courts are not bound by the title or name given by the parties. The decisive factor in evaluating such agreement is the intention of the parties, as shown not necessarily by the terminology used in the contract but by their conduct, words, actions and deeds prior to, during and immediately after executing the agreement. As such therefore, documentary and parol evidence may be submitted and admitted to prove such intention. 9

    Art. 1602 of the Civil Code enumerates the instances when a contract, regardless of its nomenclature, may be presumed to be an equitable mortgage, as follows:jgc:chanrobles.com.ph

    "Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases:chanrob1es virtual 1aw library

    (1) When the price of a sale with right to repurchase is unusually inadequate;

    (2) When the vendor remains in possession as lessee or otherwise;

    (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;

    (4) When the purchaser retains for himself a part of the purchase price;

    (5) When the vendor binds himself to pay the taxes on the thing sold;

    (6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.

    In any of the foregoing case, any money, fruits or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the usury laws."cralaw virtua1aw library

    By the terms of Art. 1604, the foregoing provisions "shall also apply to a contract purporting to be an absolute sale." And in case of doubt, a contract purporting to be a sale with right to purchase shall be construed as an equitable mortgage. 10

    Applying the foregoing principles and legal provisions, we hold that the contract intended by the parties was an equitable mortgage, for the following reasons:chanrob1es virtual 1aw library

    (1) For this appeal to succeed, this Court would have to reverse the findings of fact of both the respondent Court and the trial court, which both ruled convincingly that the parties intended to enter into a mortgage and not a sale. It is doctrinal that the appellate jurisdiction of this Court is limited only to a review of errors of law, and not of facts. 11 We realize there are exceptions 12 to this rule, but our examination of the factual environment of this case belies the presence of any. In fact, such examination only confirms the application of the general rule, as the records of the case disclose the utmost care and attention that both lower courts exercised in arriving at their findings. The "extant factors" summarized by the respondent Court 13 are finding s of facts that clearly demonstrate the true intention of the parties to have been merely to provide security for a debt and not to transfer ownership over the property. In fine, the trial court’s evaluation of the credibility of the witnesses leaned in favor of private respondent, whose testimony was consistent, straight-forward and guileless.

    (2) While the purported deed of sale was dated March 1, 1988, 14 the petitioner still unquestionably recognized the private respondent, along with her brothers and sisters, as owners of the property and considered himself still a lessee. This is shown by Exh. "I", which is quoted in full as follows:jgc:chanrobles.com.ph

    "1872 E. Rodriguez St.

    Quezon City

    March 29, 1988

    Mr. Francisco de Guzman

    Ms. Ma. Jacinta D. de Guzman

    Ms. Bernardita D. de Guzman

    Mr. Placido D. De Guzman

    Mr. Joseph Gerald D. De Guzman

    c/o Ms. Ma. Jacinta D. De Guzman

    172 P. Paterno Street

    San Juan, Metro Manila

    Dear Maja:chanrob1es virtual 1aw library

    Please be informed that for your convenience and ease of collection, I have opened a (sic) Saving (sic) Account No. 6220-0084-94 in Security Bank and Trust Company, under your name, your brothers and sister’s name (sic), located at 677 Aurora Boulevard Ext., Quezon City (near your store), I have deposited the amount of P5,000.00 as my rental payment for the lot under my lease and every month thereon, I shall deposit P5,000.00 until the expiration of my new lease. Please come and get your passbook.

    Be guided accordingly.

    Sincerely yours,

    (Sgd.) ALFONSO D. ZAMORA

    Lessee"

    The foregoing letter (Exh "I") was formally "admitted" by the petitioner during the pre-trial conference and was included without any objection or exception by the petitioner as item 8 of the pre-trial order dated January 4, 1989 issued by the trial court.

    Petitioner’s contention that "beginning the month of April 1988, petitioner started to started to deduct the amount of P1,000.00 from his monthly rental of P5,000.00 as said amount corresponded to the one fifth (1/5) undivided share now owned by him in the property . . ." is obviously an after-thought concocted to bolster his claim of sale. Exh. "I" was unsolicited and is clearly consistent with private respondent’s contention that the contract was really intended only as a mortgage and the amount of P450,000.00 was received only by way of a loan. For if petitioner believed himself to be truly an OWNER, why would he open a new savings account to which he volunteered to "deposit P5,000.00 (monthly) until the expiration of my new lease" ? Petitioner’s testimony that he paid the P5,000.00 for the month of March, even while he was already the alleged owner of the disputed share, only as "gesture of goodwill and generosity" is totally unbelievable. As the trial court aptly noted, "he had no explanation why he wrote . . .’and every month thereon, I shall deposit P5,000.00 until the expiration of my new lease . . .’"

    (3) On May 1, 1988, petitioner again wrote private respondent a letter (Exh. "F") giving her the right to repurchase the property subject of the deed. This letter bears private respondent’s conformity. Again, as correctly pointed out by the trial court," (i)f the parties really intended the contract to be an absolute sale, there was no reason for the (petitioner) to give the (private respondent) any chance to repurchase her share." Petitioner contends that he wrote Exh. "F" only to accommodate private respondent’s alleged request supposedly to save her from humiliation and embarrassment in selling her share. Again, this is unworthy of credence because, other than petitioner’s bare assertion itself, there is no evidence to support the same. On the contrary, his letter dated May 3, 1988 withdrawing said offer made no mention of any such "accommodation" ; instead, it lamely stated that he merely "reconsidered" his offer.

    (4) Upon the other hand, private respondent’s counsel wrote a letter dated May 5, 1988 (Exh. "H"), which was received by petitioner the following day, clearly showing her desire to repurchase the property. This letter, the genuineness and receipt of which are not disputed, corroborates the consistent testimony of said respondent that indeed the contract was intended only as security for the loan extended to her.

    (5) It is not contested that during all the time material to this controversy when private respondent received money from petitioner, she was in dire financial need. She explained in her testimony 15 that Mrs. Zamora, petitioner’s wife, assured her that the deed was merely for security and that she signed it in order to satisfy her extreme financial need, thus:jgc:chanrobles.com.ph

    "Q Let me show to you Ms. de Guzman a copy of a document. This consists of two pages document styled Absolute Sale of Undivided Share of Land earlier marked as plaintiff’s Exhibit "E" the genuineness of which is admitted by the defendant. Please go over the same and tell us whether this is the Deed of Sale which according to you the wife of the defendant brought to you for your signature?

    A Yes, this is exactly what I signed. The wife assuring me that these were just a formality for them to have security. That I have not to be worried because this is just for formality sake that I have to sign this so that it was a large amount of money for them to be securing themselves. We have been dealing with them for several years. In my case even as they say the same goes if you’re down below ‘kahit sa patalim kakapit ka. So I signed this. The assurance and the understanding that the wife . . . she gave me the assurance that there is nothing to be worried about and she told me that is just for us to be . . ."cralaw virtua1aw library

    The question may be asked, why is it that a lettered and intelligent person like respondent de Guzman agreed to sign a document which by its terms is a contract of sale when the intention was only a mortgage? Should she not have demanded a re-writing (reformation) of the agreement to reflect the parties’ true intention? In hindsight, it is clinically easy to heap blame on respondent de Guzman but as we observed in an earlier case:16

    ". . . In Jayme, Et. Al. v. Salvador, Et Al., 1930, this Court upheld a judgment of the Court of First Instance of Iloilo which found the transaction between the parties to be a loan instead of a sale of real property notwithstanding the terminology used in the document, after taking into account the surrounding circumstances of the transaction. The Court through Justice Norberto Romualdez stated that while it was true that plaintiffs were aware of the contents of the contracts, the preponderance of the evidence showed however that they signed knowing that said contracts did not express their real intention, and if they did so notwithstanding this, it was due to the urgent necessity of obtaining funds.’Necessitous men are not, truly speaking, free men; but to answer present emergency will submit to any terms that the crafty may impose upon them.’"

    (6) Considering that the property is commercial in nature and located along a busy thoroughfare (E. Rodriguez Avenue) in Quezon City, the alleged purchase price of P450,000.00 is unusually inadequate as it translates to only P1,500.00 per square meter. Agreeing with the trial court, the respondent appellate tribunal noted that at the time the transaction took place, "in 1988, business was already booming and prices of real estate in the metropolis were on the gallop." In his memorandum, petitioner vigorously assailed this finding of fact, arguing that the zonal valuation of the Bureau of Internal Revenue for the area where the property is located was P1,500.00 per square meter. We are not prepared to disturb the contrary finding of the trial court, for as private respondent avers, "there simply is nothing in the records of the trial that decisively proves one way or another the true valuation of the property in question’’. 17 Besides, it is common knowledge borne out by experience that in nearly all cases, the Bureau’s zonal valuations hardly approximate the fair market values of real property.

    At any rate, even disregarding the valuation of the property in question, we are fully convinced and so hold that the Court of Appeals made no reversible error in treating the contract as an equitable mortgage.

    Petitioner’s unequivocal recognition of the private respondent as owner and lessor of the latter’s share of the property, even after the alleged sale had been executed, and his clear offer to sell back the property to her thereafter, plus the consistent and credible testimony of respondent de Guzman [who was then admittedly in grave financial crisis, which petitioner took undue advantage of] are more than enough indicia of the true intentions of the parties. The lower courts were undoubtedly correct in invoking the Civil Code 18 and ordering a reformation of the assailed document.

    WHEREFORE, the instant petition is hereby DENIED, no reversible error having been committed by respondent Court. The assailed Decision is AFFIRMED. Costs against petitioner.

    SO ORDERED.

    Narvasa, C.J., Davide, Jr., Melo and Franciso, JJ., concur.

    Endnotes:



    1. Rollo, pp. 36-50.

    2. Third Division, composed of J. Segundino G. Chua, ponente and JJ. Santiago M. Kapunan (now a member of this Court), chairman, and Luis L. Victor, member.

    3. Rollo, p. 51.

    4. Petition, pp. 3-4; rollo. pp. 10-11; Court of Appeals’ Decision, pp. 5-6.

    5. The "plaintiff" referred to in the narration is the private respondent herein while the "defendant" is the petitioner.

    6. Rollo, pp. 36-37.

    7. CA Decision, pp. 14-15; rollo, pp. 49-50.

    8. Petition, p. 9; rollo, p. 16.

    9. Cf. Tolentino, Civil Code of the Philippines, Vol. V, 1992 ed., p. 157.

    10. Cf. Art. 1603, Civil Code.

    11. Margolles v. Court of Appeals, 230 SCRA 97 (February 14, 1994); Dee v. Court of Appeals, 238 SCRA 254 (November 21, 1994); First Phil. International Bank v. Court of Appeals, G.R. No. 115849 (January 24, 1996), citing among others, Andres v. Manufacturers Hanover & Trust Corporation, 177 SCRA 618 (September 15, 1989), and Bernardo v. Court of Appeals, 216 SCRA 224 (December 7, 1992).

    12. Cf. Chua Tiong Tay v. Court of Appeals and Goldrock Construction and Development Corp., 243 SCRA 183 (March 31, 1995), and South Sea Surety and Insurance Company, Inc. v. Hon. Court of Appeals, Et Al., 244 SCRA 744 (June 2, 1995), cited in First Phil. International Bank v. Court of Appeals, supra.

    13. Supra.

    14. A new certificate of title was issued on March 22, 1988.

    15. TSN, June 15, 1989, pp. 6-7.

    16. Labasan v. Lacuesta, 86 SCRA 16, 22 (October 30, 1978). Italics in the original text; Emphasis supplied.

    17. Comment, p. 10; rollo, p. 79.

    18. Art. 1365 of the Civil Code provides: "If two parties agree upon the mortgage or pledge of real or personal property, but the instrument states that the property is sold absolutely or with a right of repurchase, reformation of the instrument is proper."

    G.R. No. 102557   July 30, 1996 - ALFONSO D. ZAMORA v. COURT OF APPEALS, ET AL.


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