529 Phil. 674
CHICO-NAZARIO, J.:
PLAINTIFF'S EXHIBITS:During the trial of the case, petitioner herself took the witness stand and testified[8] that on 10 August 1988, Elpidio sold to her, with a right to repurchase, one-half of a parcel of land located in Limay, Tondo, Manila, which was owned by respondent Domingo. According to her, Elpidio was then authorized by a SPA executed by respondent Domingo to enter into said transaction with her. It was agreed upon that the owner (referring to respondent Domingo) had five months within which he could buy back the property from her. Respondent Domingo, however, failed to exercise his right forcing her to institute the Petition for consolidation of ownership before the court a quo.DEFENDANT'S EXHIBITS:
- Exh. "A" - Transfer Certificate of Title No. 172510 of the Registry of Deeds of Manila – admitted;
- " "B" - Special Power of Attorney – admitted with the qualification that it was revoked later on;
- " "C" - Deed of Sale under Pacto de Retro – not admitted;
- Exh. "1" - Promissory Note dated April 17, 1988, for the amount of P 150,000.00 executed by Elpidio Dizon in favor of Anatalia Ramos – admitted the contents subject to the presentation of the original document;
- " "2" - Promissory Note for P 150,000.00 dated April 17, 1988 executed by Elpidio Dizon, mortgagor – admitted.
- " "3" - Deed of Real Estate Mortgage executed by Elpidio R. Dizon, in favor of Anatalia Ramos, Mortgagee, over the property covered by TCT No. 172510 – admitted;
- " "4" - Deed of Sale under Pacto de Retro, which was previously marked as Exh. "C" for the petitioner – admitted;
- " "4-A" - Second page of Exh. "4"
- " "4-a-1" - Typewritten name of Domingo A. Dizon;
- " "5" - Special Power of Attorney;
- " "5-A" - Second page thereof;
- " "6" - Letter of Revocation of the Special Power of Attorney (Reserved Exhibit);
- " "7" - Transcript of Stenographic Notes in Civil Case No. 90-51838 (Reserved).[7]
PREMISES CONSIDERED, judgment is hereby rendered -Parenthetically, the trial court in Civil Case No. 90-51838 made the following pronouncement with respect to the transaction between petitioner and Elpidio:
1) declaring the contract of sale entered into by and between plaintiff [respondent Domingo] and defendant [Elpidio] over that undivided portion of Lot 27-B-3 in the name of Ricardo Dizon and the building constructed thereon rescinded:
2) ordering defendant to pay plaintiff as follows –a) the sum of P207,000.00 with interest thereon at the legal rate from January 29, 1990 until the same is fully paid;
b) the sum of P350,000.00 with interest thereon at the rate of 3% a month from January 29, 1990 until the same is fully paid; and
c) the sum of P50,000.00 as and by way of attorney's fees and expenses of litigation.
The reliefs prayed for by the Intervenor is hereby denied.
Costs against the defendant.[10]
Plaintiff's evidence, however, which is not controverted by the defendant shows that he has paid defendant the total sum of P207,000.00 in cash. In addition, defendant as attorney-in-fact of plaintiff mortgaged plaintiff's property to Anatalia Ramos for the total sum of P350,000.00 which defendant received and appropriated for his own personal benefit. To secure payment of the same, he sold plaintiff's property to Anatalia Ramos on a pacto de retro arrangement for the aforesaid sum. While the deed evidencing the sale was denominated as a Deed of Sale under Pacto de Retro, in view of the testimony given by the defendant, the court is inclined to believe that the transaction was actually in the nature of an equitable mortgage. Defendant testified that the consideration of the sale is a loan. Interest payment thereon has been agreed upon as 3% per month. The property remained in the possession of defendant as attorney-in-fact of plaintiff.[11]The decision in Civil Case No. 90-51838 was pending appeal at the time Elpidio took the witness stand.[12]
Exhibits "6" - Decision dated March 20, 1992Also, respondent Domingo's counsel was given ten days to submit his formal offer of evidence in writing and petitioner was given the same period of time to file her comment or opposition thereto after which the case would be submitted for resolution.[14]
"6-A" - Dispositive portion thereto
"7" - TCT No. 172510 – entry thereon
"7-A" - Registered owners[13]
As regards the first issue raised, Art. 1602, New Civil Code hereinbelow quoted finds significant application.It was only on 31 January 1995 when respondent Domingo filed his Formal Offer of Exhibits.[16]"Art. [1602]. The contract shall be presumed to be an equitable mortgage, in any of the following case[s]:
(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;
x x x x
(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."
The testimony of petitioner's witness Elpidio R. Dizon readily disclosed that prior to the execution of the Deed of Sale under Pacto de Retro, he had already obtained from Anatalia Ramos the total amount of P350,000.00 evidenced by Promissory Notes and Real Estate Mortgage. It may be fairly inferred therefrom that the real intention of the parties is that the transaction leading to execution of the Deed of Sale under Pacto de Retro shall secure the payment of Elpidio Dizon's indebtedness covered by the Promissory Notes and Real Estate Mortgage executed by in favor of Anatalia Ramos. It is also clearly shown that the price of the sale with right to repurchase is unusually inadequate because the improvements erected on the lot belonging to Domingo Dizon was even offered to the latter for sale by Elpidio Dizon for P550,000.00. Moreover, the possession of the subject property has remained with the representative/agent of the owner Domingo Dizon even long after the right of redemption has expired. Under these circumstances, the court cannot but conclude that the deed in question is in reality a mortgage. With this conclusion, the court, therefore, holds the petition as being improper and is dismissed.[15]
WHEREFORE, finding no reversible error in the judgment appealed from, the same is hereby AFFIRMED. With costs against the appellant.[18]Petitioner's Motion for Reconsideration was likewise resolved in favor of herein respondents.[19] Hence, this Petition raising the following issues for our consideration:
The Petition mainly raises the questions of (1) whether the Court of Appeals erred in applying the rule enunciated in the case of Vda. De Oñate v. Court of Appeals[21] pertaining to the admission and consideration of evidence not formally offered, and (2) whether the Court of Appeals erred in sustaining the trial court's ruling that the contract between petitioner and Elpidio was actually one of equitable mortgage and not a pacto de retro sale.
- AFFIRMING THE DECISION OF THE TRIAL COURT IN DISMISSING THE PETITION ALTHOUGH THE (SPOUSES) DIZON DID NOT PRESENT ANY EVIDENCE.
- AFFIRMING THE TRIAL COURT WHEN IT TOOK COGNIZANCE OF THE SPOUSES DIZON'S EVIDENCE WHICH WAS NOT FORMALLY OFFERED.
- APPLYING THE RELAXED RULE ENUNCIATED IN VDA. DE ONATE vs. COURT OF APPEALS CONSIDERING THAT THE QUESTIONED EXHIBITS WERE NOT PROPERLY IDENTIFIED AND WITHOUT ANY EXPLANATION OR RECITAL OF THE CONTENTS THEREOF NOR ANY OPPORTUNITY AFFORDED RAMOS TO CROSS-EXAMINE THE "WITNESS" IDENTIFYING THE SAME.
- AFFIRMING THE DECISION OF THE TRIAL COURT WHEN IT TOOK COGNIZANCE OF THE SPOUSES DIZON'S EVIDENCE WITHOUT, HOWEVER, ALLOWING RAMOS TO FILE HER COMMENT/OPPOSITION THERETO.
- AFFIRMING THE DECISION OF THE TRIAL COURT THAT ELPIDIO DIZON ADMITTED HAVING SPENT FOR HIS OWN PERSONAL ADVANTAGE AND BENEFIT THE AMOUNT OF P150,000.00.
- COROLLARY THERETO, FAILING TO RULE ON THE ISSUE AS TO THE VALIDITY OF THE SPA IN FAVOR OF ELPIDIO DIZON.
- HOLDING THAT EXHIBITS "3" AND "4" REVEAL THE REAL INTENT OF THE PARTIES WAS TO HAVE THE PROPERTY STAND AS SECURITY FOR THE DEBT, NOT OF THE OWNER DOMINGO DIZO, BUT HIS NEPHEW AND ATTORNEY-IN-FACT , ELPIDIO DIZON.
- HOLDING THAT THE CONSIDERATION OF THE "SALE" TO RAMOS WAS UNUSUALLY INADEQUATE RESULTING IN THE CONCLUSION THAT THE TRANSACTION BETWEEN THE PARTIES WAS AN EQUITABLE MORTGAGE.[20]
It is instructive at this point to make a distinction between identification of documentary evidence and its formal offer as an exhibit. The first is done in the course of the trial and is accompanied by the marking of the evidence as an exhibit. The second is done only when the party rests its case and not before. The mere fact that a particular document is identified and marked as an exhibit does not mean it will be or has been offered as part of the evidence of the party. The party may decide to formally offer it if it believes this will advance its cause, and then again it may decide not to do so at all. In the latter event, the trial court is, under Rule 132, Section 35 (sic) not authorized to consider it.Similarly, relied upon by petitioner was our holding in Chua v. Court of Appeals[24] where we declared that:
The offer of evidence is necessary because it is the duty of the judge to rest his findings of facts and his judgment only and strictly upon the evidence offered by the parties at the trial. Such offer may be made orally or in writing sufficient to show that the party is ready and willing to submit the evidence to the court.Petitioner also assails the Court of Appeals for its alleged improper application of rule enunciated in Vda. De Oñate, as the requirements laid out in said case, relative to the admission of evidence which was not formally offered, were not observed in the present case. Petitioner insists she was deprived of due process as she no opportunity to file her objection to or comment on respondent Domingo's exhibits. Moreover, she was denied the occasion to cross examine the witness regarding their exhibits.
SEC. 34. Offer of evidence. – The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified.The case of Vda. De Oñate, which was relied upon by the Court of Appeals, reiterated our previous rulings in People v. Napat-a[25] and People v. Mate[26] relative to the admission and consideration of exhibits which were not formally offered during the trial. We declared in Vda. De Oñate[27] that –
From the foregoing provision, it is clear that for evidence to be considered, the same must be formally offered. Corollarily, the mere fact that a particular document to identified and marked as an exhibit does not mean that is has already been offered as part of the evidence of a party. In Interpacific Transit, Inc. v. Aviles [186 SCRA 385], we had the occasion to make a distinction between identification of documentary evidence and its formal offer as an exhibit. We said that the first is done in the course of the trial and is accompanied by the marking of the evidence as an exhibit while the second is done only when the party rests its case and not before. A party, therefore, may opt to formally offer his evidence if he believes that it will advance his cause or not to do so at all. In the event he chooses to do the latter, the trial court is not authorized by the Rules to consider the same.In this case, we find and so rule that these requirements have been satisfied. The exhibits in question were presented and marked during the pre-trial of the case thus, they have been incorporated into the records. Further, Elpidio himself explained the contents of these exhibits when he was interrogated by respondents' counsel as follows:
However, in People v. Napat-a [179 SCRA 403] citing People v. Mate [103 SCRA 404], we relaxed the foregoing rule and allowed evidence not formally offered to be admitted and considered by the trial court provided the following requirements are present, viz: first, the same must have been duly identified by testimony duly recorded and, second, the same must have been incorporated in the records of the case. (Underscoring supplied.)
There has been no showing and respondent spouses do not claim that "palpable mistake" had intervened here, in respect of the formulation of the facts stipulated by the parties at the pre-trial conference. Absent any such showing, that stipulation of facts is incontrovertible, and may be relied upon by the courts. Respondent spouses are estopped from raising as an issue in this case the existence and admissibility in evidence of both the first and second Memoranda of Agreement which, having been marked as exhibits during pre-trial, properly form part of the record of this case, event though not formally offered in evidence after trial. (Emphasis supplied.)
Q: The initial amount you secured from Anatalia Ramos was in the amount of P150,000.00 covered by this Promissory Note executed by you, is it not? A: I cannot recall this Promissory Note but I was able to get a loan from her in the amount of P150,000.00. COURT: You examine the Promissory Note?x x x x ATTY. RUIZ: May we ask that original copy be shown to the witness, Your Honor. ATTY. DAVID Your Honor, this was the subject of the stipulation during the pre-trial conference.x x x x ATTY. DAVID: Q: Is it correct that even before August 10, 1988 you have already obtained from Anatalia Ramos the total amount of P350,000.00 covered by Promissory Notes and the Real Estate Mortgage, is it not? WITNESS: A: Yes, sir.x x x x ATTY. DAVID: Q: Is it correct, therefore, Mr. Dizon, that the total amount of P350,000.00 that you received all in all from Anatalia Ramos as of May 4, 1988 as evidenced by this document Exhibit "3-A" is the same amount of P350,000.00 reflected in the Pacto de Retro Sale dated August 10, 1988? WITNESS: A: Yes, sir. Q: Is it not also a fact, Mr. Dizon, that the property subject of this case, is likewise the subject of another case in Civil Case No. 90-51838 which is a complaint for Specific Performance and/or Rescission filed by Domingo Dizon against you?x x x x WITNESS: A: It's on appeal. COURT: Yes, there is a pending case but it's now on appeal? WITNESS: Yes, Your Honor. [28]
(1) When the price of a sale with right to repurchase is unusually inadequate;In the case at bar, it was disclosed by Elpidio that up to the time when he took the witness stand on 20 September 1994, he still maintained possession of the two-door apartment and that he was still collecting rent from the tenant occupying one of the units. This despite the lapse of a considerable length of time from 7 January 1989 – the date when the five-month repurchase period stipulated in the pacto de retro sale was supposed to have lapsed. Had the agreement between petitioner and Elpidio been a pacto de retro sale, we fail to see any logic in her allowing Elpidio's continued possession of the structure and collection of the rent payments therefrom over such a long period of time. As the essence of a pacto de retro sale is that title and ownership of the property sold are immediately bestowed upon the vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the agreed period,[31] petitioner should have immediately enforced her right to the rental payments. Failure on her part to do so casts doubt as to the true nature of the transaction she entered into with Elpidio.
(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 things 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.
[2] Rollo, pp. 46-47.
[3] Penned by Judge Benito C. Se, Jr.; Id. at 23-25.
[4] Id. at 40-43.
[5] Id. at 11-12.
[6] Records, p. 97.
[7] Id. at 100.
[8] TSN, 18 July 1994, pp. 3-12.
[9] Id. at 19.
[10] Penned by Judge Domingo D. Panis; Records, p. 165.
[11] Records, pp. 163-164.
[12] TSN, September 20, 1994, p. 14.
[13] Records, p. 137.
[14] Id.
[15] Id. at 140-141.
[16] Id. at 143-145.
[17] Id. at 170.
[18] Rollo, p. 36.
[19] Id. at 46-47.
[20] Rollo, pp. 6-7.
[21] G.R. No. 116149, 23 November 1995, 250 SCRA 283.
[22] Citing RULES OF COURT, Rule 132, Section 34.
[23] G.R. No. 86062, 6 June 1990, 186 SCRA 385, 388-389.
[24] G.R. No. 88383, 19 February 1992, 206 SCRA 339, 346 citing Llaban v. Catalan v. Court of Appeals, G.R. No. 63226, 20 December 1991, 204 SCRA 887; United States v. Solaña, 33 Phil. 582 (1916); Dayrit v. Gonzalez, 7 Phil. 182 (1906).
[25] G.R. No. 84951, 14 November 1989, 179 SCRA 403.
[26] G.R. No. L-34754, 27 March 1981, 103 SCRA 484.
[27] Vda. de Oñote v. Court of Appeals, supra note 21 at 286-287.
[28] TSN, 20 September 1994, pp. 8-13.
[29] G.R. No. L-79734, 8 December 1988, 168 SCRA 373, 379-380.
[30] Antonio Lim Tanhu v. Ramolete, G.R. No. L-40098, 29 August 1975, 66 SCRA 425, 469.
[31] De Guzman, Jr. v. Court of Appeals, G.R. No. L-46935, 21 December 1987, 156 SCRA 701, 711.