339 Phil. 298
HERMOSISIMA, JR., J.:
Thus, the petitioners contend that the transaction between Raymundo Dapiton and the private respondent was one of loan of P400.00 to be paid within one years (sic) time with the property subject of the question deed as security for the payment of the said loan.”[6]Private respondent, however, maintains that the transaction between him and the deceased Dapiton was one of absolute sale. Private respondent’s version of the antecedent facts in the instant case, is as follows:
“The case has its source in the execution of the Deed of Absolute Sale xxx by the xxx [deceased Dapiton] as vendor and xxx [private respondent] as vendee on May 6, 1967. Two days later, or on May 8, 1967, xxx [private respondent] at the instant of the xxx [deceased Dapiton], and without any consideration, made an annotation on the left-hand margin and at the back of the Deed of Absolute Sale to the effect that the xxx [deceased Dapiton] was given an option to repurchase the land within one (1) year from the date of the notations. This is the source of the controversy. xxx [Petitioners claim] that the true intention of the parties was one of venta con pacto de rectro while the xxx [private respondent] claims that their true intention was one of absolute sale and that the annotation was void for lack of consideration and, more importantly, because from the beginning the parties did not intend it to be complied with but only to appease the children of xxx [deceased Dapiton] who objected to the sale of the land by xxx [their late father].”[7]
1. The deed of sale subject of the case involves both the house and lot of deceased Dapiton, said deed having stated that the sale of the lot included all improvements thereon.The court a quo, confronted with all the aforementioned facts and herein parties’ respective claims, rendered judgment in favor of private respondent and accordingly dismissed the complaint for annulment of deed of sale filed by Dapiton, petitioners’ deceased father. The court a quo mainly found that the price of P400.00 was adequate and conscionable and that the deed of sale in question is one of an absolute nature. At any rate, the court a quo postulated that the redemption made by Dapiton was undertaken out of time and without compliance with Articles 1601 and 1616 of the Civil Code.
2. The purchase price of the house and lot, as indicated in the deed of sale, is P400.00.
3. Dapiton, now deceased, turned over to private respondent Tax Declaration No. 2555 covering the subject house and lot as well as Official Receipt No. 211444 dated May 7, 1953, and Official Receipt No. 559150 dated May 30, 1952 involving tax payments made by Dapiton.
4. Private respondents caused the cancellation of Tax Declaration No. 2555 in the name of Dapiton and obtained Tax Declaration No. 4101 in his name.
5. Private respondent paid realty taxes on the subject house and lot as evidenced by Official Receipt No. 155719 dated May 8, 1968 and Official Receipt No. 2041208 dated October 1, 1969, both receipts of which are in the name of private respondent.
6. Dapiton sent a letter dated May 3, 1968 to private respondent and enclosed therewith two (2) money orders worth P400.00 as final and full satisfaction and/or redemption of the subject house and lot.
7. Private respondent’s wife, Lolita de la Peña, received the aforesaid letter and money orders on May 4, 1968.
8. In a letter dated May 9, 1968, private respondent rejected the redemption of Dapiton of the subject house and lot on the ground that the sale they executed was an absolute sale.
9. Dapiton had also entered into similar transactions in the past involving the same house and lot with one Leodegario Alabarca in 1962 and one Manuel delos Reyes in 1964. On each of the two occasions, Dapiton was given P400.00.
10. On April 7, 1968, Dapiton again entered into the same arrangement involving his house and lot. This time, it was with one Sinforosa Jaguros, but the amount involved remained the same, i.e., P400.00.
11. The deceased Dapiton, up to the time of his death, occupied the property. His heirs, herein petitioners, remain in possession up to the present.
“CONFORMABLY TO THE FOREGOING, the decision appealed from is hereby REVERSED AND SET ASIDE, and a new one is rendered in lieu thereof, ordering defendant-appellee to accept the P400.00 deposited by plaintiff-appellant with the Municipal Court of Almeria, Leyte, and to execute a deed of sale of the subject parcel of land in favor of plaintiffs-appellants.With that, petitioners thought that they had finally won back their land. Their triumph, however, was short-lived. Private respondent filed his Motion for Reconsideration on April 15, 1992. Respondent Court of Appeals found merit in private respondent’s Motion for Reconsideration and granted the same. Thus, respondent appellate court rendered an Amended Decision in favor of private respondent the entirety of which reads:
No pronouncement as to costs.
SO ORDERED.”[8]
“On December 10, 1991, a decision was rendered by this Division in Civil Case No. 23256, reversing and setting aside the decision of Branch 16, Regional Trial Court of Biliran, Leyte, which decision dismissed the complaint and counterclaims. In reversing the trial court’s decision and deciding in favor of the xxx [petitioner] We quote the pertinent portion of the decision:‘What We thus have is a contract of absolute sale between the parties. We need not look at extraneous circumstances, such as xxx [Dapiton's] motive into entering a contract of conveyance, as the terms and conditions thereof are clear and explicit, and leave no doubt upon the intention of the contracting parties. Therefore, the literal meaning of its stipulations should control (Article 1370, Civil Code of the Philippines). xxx [Petitioner's] cannot deny the ‘Deed of Absolute Sale’ executed by xxx [Dapiton] in favor of private respondent on May 6, 1967.
In the light of the above holding We feel constrained to reconsider Our conclusion that 'the subject annotation is a contract to buy and sell' and 'is not an accepted unilateral promise to sell' for the following reasons:‘A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.
1) There is no allegation or proof that xxx [Dapiton] promised to buy or repurchase the land subject of this suit, for a specific price; neither is there proof that the xxx [private respondent] promise [sic] to sell the same at a specific price agreed upon.
2) The agreement between the parties which was entered into on May 8, 1967 was not a 'promise to sell for a certain price' but a mere option given to xxx [Dapiton] to repurchase the property within one year. It was clearly a mere option for xxx [Dapiton] to buy back the property, subject to (1) an exercise by the xxx [Dapiton] of the option; and (2) subject also to an agreement as to the price. The option maybe withdrawn by the xxx [private respondent] in case of disagreement as to the price and?/or failure of the xxx [Dapiton] to exercise the option. There was no clear indication of the xxx [Dapiton's] promise to buy or accept the option to repurchase. This was clearly indicated when xxx [private respondent] wrote xxx [Dapiton] a letter on May 9, 1968 refusing xxx [his] offer to buy. Article 1479 of the Civil Code provisions that 'a promise to buy and sell a determinate thing for a price certain is reciprocally demandable' is not applicable because there was no agreement as to price so that the price was not certain and refusal by xxx [private respondent] is a clear manifestation of this fact.
There is nothing on record to show that the parties had agreed on a consideration distinct from the price of the sale, which is construed as a separate consideration to support the unilateral promise to sell.Essentially, respondent appellate court declared that the transaction entered into by Dapiton and private respondent was an absolute sale of the former’s house and lot to the latter, and that the two annotations regarding Dapiton’s right to repurchase the subject house and lot, constituted a mere promise to sell which is null and void, because there was no determinate purchase pri ce indicated and there was no consideration therefor.
For reasons above stated and in the light of the applicable law and jurisprudence on the matter, the Motion for Reconsideration is GRANTED. Our decision dated December 10, 1991 is reversed and set aside and the judgment of the trial court is AFFIRMED, without pronouncement as to costs.
SO ORDERED.”[9]
"Article 1602 – The contract shall be presumed to be an equitable mortgage, in any of the following cases:(1) When the price of a sale with right to repurchase is usually inadequate;
In any of the foregoing cases, any money, fruits or other benefit to be received by the vendee as rent or otherwise shall be considered as the interest which shall be subject to the usury law.”Closely examining the facts of this case, we find that, contrary to the findings of the Court of Appeals, there are numerous indications that the contract effected between the parties is actually an equitable mortgage and not an absolute deed of sale.
Lastly, Article 1603 of the New Civil Code provides:In the case at bar, the true nature of the contract between Dapiton and dela Peña is the crux of the issues raised in this petition. Considering the circumstances of this case, we resolved the doubt in favor of the petitioner. The actuations of the private respondent are highly suspect, if not downright dishonorable. AS A JUDGE and member of the bar, he is charged with the duty to act fairly and equitably. He has not been fair, nor has been forthright in his dealings with Raymundo Dapiton.
“Article 1603. In case of doubt , a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage.”