BOY VS.

CA

FACTS: In 1984, Lagrimas Boy needed money for her brothers placement fee to go abroad so she borrowed P15k from spouses Ramos. Her property, a parcel of land and a house existing thereon was made the collateral. In 1986, Lagrimas executed a Deed of Absolute Sale with the Ramoses. Subject of the sale was Lagrimas property with the price of P31k. Allegedly, Lagrimas debt is to be deducted, so the Ramoses are to pay P16k more. Lagrimas stayed in the property as the Ramoses were not yet in immediate need thereof. In 1988, Lagrimas went to Erlinda asking that they execute a Kasunduan. The Kasunduan states that the Ramoses still owe P16k to Lagrimas; that interest is to be deducted in favor of the Ramoses so that would leave a balance of P8.5k. The Kasunduan was notarized but upon signing, Erlinda changed her mind. She said she realized that the Kasunduan did not portray the true facts and that they were actually able to pay P31k to Lagrimas when the Deed of Sale was executed. She advised the lawyer to change what she just signed. The lawyer said that the parties need to talk to each other first. Lagrimas promised the lawyer that she will be scrapping the Kasunduan. Later, the need for the Ramoses to occupy the land arose. They demanded Lagrimas to vacate the property but she refused to do so. She invoked the Kasunduan. ISSUE: Whether or not the spouses have a right of material possession over the property. HELD: The spouses have a right of material possession over the property. A review of the Deed shows no indication that there was a balance left to be paid to Lagrimas. The contract is absolute. It has been established that Lagrimas sold the subject property to private respondents for the price of P31k, as evidenced by the Deed of Absolute Sale, the due execution of which was not controverted by Lagrimas. The contract is absolute in nature, without any provision that title to the property is reserved in Lagrimas until full payment of the purchase price. By the contract of sale, Lagrimas, obligated herself to transfer the ownership of, and to deliver, the subject property to the Ramoses after they paid the price of P31k. Under Article 1477 of the Civil Code, the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. In addition, Article 1498 of the Civil Code provides that when the sale is made through a public instrument, as in this case, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. In this case, the Deed of Absolute Sale does not contain any stipulation against the constructive delivery of the property to private respondents. In the absence of stipulation to the contrary, the ownership of the property sold passes to the vendee upon the actual or constructive delivery thereof. The Deed of Absolute Sale, therefore, supports private respondents right of material possession over the subject property.

LUMAYAG VS. HRS. OF JACINTO NEMEO

FACTS: During their lifetime, the spouses Jacinto Nemeo and Dalmacia Dayangco-Nemeo, owned two (2) parcels of coconut land located in Manaca, Ozamiz City. When Dalmacia died, Jacinto, joined by his five (5) children, namely, Meliton, Eleuteria, Timoteo, Justo and Saturnino, conveyed to his daughter Felipa and the latters husband Domingo Lumayag the two lots. The instrument of conveyance is denominated as Deed of Sale with Pacto De Retro. Thereunder, it was stipulated that the consideration for the alleged sale of the two aforementioned lots was P20,000.00 and that the vendors a retro have the right to repurchase the same lots. It was likewise agreed thereunder that in the event no purchase is effected within the said stipulated period of five years conveyance shall become absolute and irrevocable without the necessity of drawing up a new absolute deed of sale, subject to the requirements of law regarding consolidation of ownership of real property. A decade after Jacintos death, a new owner's duplicate copy of one of the lots was issued and delivered to the heirs of Jacinto and Dalmacia. On December 24, 1996, the heirs of Jacinto and Dalmacia, namely, filed against the spouses Lumayag a complaint for Declaration of Contract as Equitable Mortgage, Accounting and Redemption with Damage. The complaint alleged that the subject Deed of Sale with Pacto De Retro was executed only for the purpose of securing the payment of a loan of P20,000.00 obtained from the defendant spouses in connection with the medication and hospitalization of the then ailing Jacinto Nemeo. The spouses Lumayag denied that the contract in question was an equitable mortgage and claimed that the amount of P20,000.00 received by the plaintiff heirs was the consideration for the sale of the two lots and not a loan. Both the RTC and the Court of Appeals found it as an equitable mortgage. Hence, the appeal. ISSUE: Whether or not the Deed of Sale with Pacto De Retro was an equitable mortgage. HELD: The Deed of Sale with Pacto De Retro was an equitable mortgage. The decisions of the two lower courts are recognized binding on the Supreme Court. Article 1602 of the Civil Code enumerates the instances when a contract, regardless of its nomenclature, may be presumed an equitable mortgage. Article 1604 of the Civil Code provides that the provisions of Article 1602 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 repurchase shall be construed as an equitable mortgage. The law requires the presence of any one and not the concurrence of all of the circumstances enumerated under Article 1602, to conclude that the transaction is one of equitable mortgage. Here, the CA correctly found the presence of not merely one but four (4) circumstances indicative of the true nature of the subject transaction as an equitable mortgage, to wit: (a) gross inadequacy of the contract price of P20,000.00 for two (2) parcels of land, the total area of which is almost 5.5 hectares; (b) respondent heirs remained in possession of the subject property even after the execution of the supposedly Deed of Sale with Pacto de Retro; (c) said respondents' payment of realty taxes; and (d) the provision on pactum commissorium.

FELIPE VS. ALDON

FACTS: During the marriage of Maximo Aldon and Gimena Almorasa, they bought several pieces of land. The lands were divided into three lots. Subsequently, Gimena sold the lots to the spouses Eduardo Felipe and Hermogena Felipe through a Deed of Purchase and Sale, but without the consent of her husband. Maximo died. Afterwhich, his heirs, namely Gimena and their children Sofia and Salvador filed a complaint against the Felipes alleging that they are the owners of the lots. The Felipes asserted that they had acquired the lots from the plaintiffs by purchase and subsequent delivery to them. The trial court sustained the claim of the defendants. The CA reversed the decision of the trial court. ISSUE: Who has a better right over the subject properties? HELD: The Supreme Court held that the heirs of Maximo, Sofia and Salvador, have a better right over the properties. The sale made by Gemina is a defective contract, that is, a voidable contract. According to Art. 1390 of the Civil Code, among the voidable contracts are "[T]hose where one of the parties is incapable of giving consent to the contract." In the instant case, Gimena had no capacity to give consent to the contract of sale. The capacity to give consent belonged not even to the husband alone but to both spouses. This view is also supported by the legal provision that contracts entered by the husband without the consent of the wife when such consent is required, are annullable at her instance during the marriage and within ten years from the transaction questioned. (Art. 173, Civil Code.) The voidable contract of Gimena was subject to annulment by her husband only during the marriage because he was the victim who had an interest in the contract. Gimena, who was the party responsible for the defect, could not ask for its annulment. Their children could not likewise seek the annulment of the contract while the marriage subsisted because they merely had an inchoate right to the lands sold. The case of Sofia and Salvador Aldon is different. After the death of Maximo they acquired the right to question the defective contract insofar as it deprived them of their hereditary rights in their father's share in the lands. The father's share is one-half (1/2) of the lands and their share is two-thirds (2/3) thereof, one-third (1/3) pertaining to the widow.

GABRIEL VS. MABANTA

FACTS: On October 25, 1975 spouses Mabanta mortgaged 2 parcels of land with the DBP as collateral for a P14,000 loan. In 1980, they sold the lots to Susana Soriano with the right to repurchase the property within 2 years. They failed to do repurchase. In 1984, they convinced petitioner Alejandro Gabriel to purchase the lot from Soriano. DBP had to restructure the loan making Gabriel as the mortgagor. However, when Gabriel, who was already cultivating the lots, was ready to pay the entire loan with DBP, they found that spouses Benito and Pura Tan had paid it and that the mortgage was already cancelled. It turned out that it was spouses Tans daughter, Zenaida Tan-Reyes who bought one of the lots from spouses Mabanta. As a result, the petitioners filed for damages, and specific performance which the trial court ruled in their favor holding that the sale between the spouses Mabanta and Tan-Reyes null and void. Reyes claims that she is a purchaser in good faith, and sought refuge in her certificate of title. ISSUE: Whether or not the second sale to Tan-Reyes is valid. HELD: The second sale to Tan-Reyes is not valid. In Art. 1544 of the Civil Code, Where it is an immovable property that is the subject of a double sale, ownership shall be transferred, (1) to the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title, provided there is good faith.The requirement of the law then is two-fold: acquisition in good faith and registration in good faith. In the case at bar, certain pieces of evidence, put together, would prove that respondent Reyes is not a buyer in good faith. The records show that on spouses Mabanta offered to her for sale the disputed lot. They told her it was mortgaged with respondent DBP and that she had to pay the loan if she wanted to buy it. As to her claim that she is a The Supreme Court consistently held that "in cases of double sale of immovables, what finds relevance and materiality is not whether or not the second buyer was a buyer in good faith but whether or not said second buyer registers such second sale in good faith, that is, without knowledge of any defect in the title of the property sold." Mere registration of title is not enough, good faith must concur with the registration. To be entitled to priority, the second purchaser must not only establish prior recording of his deed, but must have acted in good faith, without knowledge of the existence of another alienation by the vendor to the other. For this reason in accordance with the same Article 1544, the land shall pertain to the person who in good faith was first in possession. There is no question that it is the Gabriels who are in possession of the land.

SOCO VS. MILITANTE FACTS: Soco and Francisco entered into a contract of lease on January 17, 1973, whereby Soco leased her commercial building and lot situated at Manalili Street, Cebu City, to Francisco for a monthly rental of P 800.00. Claiming that paragraph 11 of the Contract of Lease was in fact not part of the contract because it was cancelled, Soco filed Civil Case No. R-16261 in the Court of First Instance of Cebu seeking the annulment and/or reformation of the Contract of Lease. Sometime before the filing of Civil Case No. R-16261 Francisco noticed that Soco did not anymore send her collector for the payment of rentals and at times there were payments made but no receipts were issued. This situation prompted Francisco to send his payment for rentals by checks issued by the Commercial Bank and Trust Company. The factual background setting of this case clearly indicates that soon after Soco learned that Francisco subleased a portion of the building to NACIDA, at a monthly rental of more than P3,000.00 which is definitely very much higher than what Francisco was paying to Soco under the Contract of Lease, the latter felt that she was on the losing end of the lease agreement so she tried to look for ways and means to terminate the contract. In view of this alleged non-payment of rental of the leased premises beginning May, 1977, Soco through her lawyer sent a letter dated November 23, 1978 to Francisco serving notice to the latter to vacate the premises leased. In answer to this letter, Francisco through his lawyer informed Soco and her lawyer that all payments of rental due her were in fact paid by Commercial Bank and Trust Company through the Clerk of Court of the City Court of Cebu. Despite this explanation, Soco filed this instant case of Illegal Detainer. ISSUE: Whether or not there was a valid consignation of payment of the rentals. HELD: In order that consignation may be effective, the debtor must first comply with certain requirements prescribed by law. The debtor must show (1) that there was a debt due; (2) that the consignation of the obligation had been made because the creditor to whom tender of payment was made refused to accept it, or because he was absent or incapacitated, or because several persons claimed to be entitled to receive the amount due (Art. 1176, Civil Code); (3) that previous notice of the consignation had been given to the person interested in the performance of the obligation (Art. 1177, Civil Code); (4) that the amount due was placed at the disposal of the court (Art. 1178, Civil Code); and (5) that after the consignation had been made the person interested was notified thereof (Art. 1178, Civil Code). Failure in any of these requirements is enough ground to render a consignation ineffective. The Court held that the respondent lessee has utterly failed to prove the following requisites of a valid consignation: First, tender of payment of the monthly rentals to the lessor. Second, respondent lessee also failed to prove the first notice to the lessor prior to consignation. It was the lessees duty to send someone to get the cashiers check from the bank and logically, the lessee has the obligation to make and tender the check to the lessor. This the lessee failed to do, which is fatal to his defense. Third, respondent lessee likewise failed to prove the second notice, that is after consignation has been made, to the lessor. And the fourth requisite that respondent lessee failed to prove is the actual deposit or consignation of the monthly rentals except the two cashiers checks referred to in Exhibit 12. As indicated earlier, not a single copy of the official receipts issued by the Clerk of Court was presented at the trial of the case to prove the actual deposit or consignation. The evidence is clear, competent and convincing showing that the lessee has violated the terms of the lease contract and he may, therefore, be judicially ejected.

ALVARO VS. TERNIDA

FACTS: Spouses Ternida mortgaged a parcel of Riceland Salvador de Vera and Juanita Orinion. Julita was made to sign a Deed of Pacto de Retro Sale with Salvador who explained to her that what she signed was a mortgage document, giving her three years from the date of the execution of the document to repurchase the land. After a year, Salvador executed a Deed of Transfer of Mortgage in favor of the spouses Jose Calpito and Zoraida Valelo. Thereafter, Julita requested from the latter for an additional amount of P3,000.00, at which point, she was asked to sign a Deed of Sale with Right to Repurchase. On May 22, 1990, Julita again asked for an additional amount of P1,000.00 but she was informed by Jose Calpito that they have transferred the mortgage to the spouses Alvaro. Julita thus went to the petitioners who gave her the additional amount of P1,000.00. Julita claimed that petitioners asked her to sign a document that she believed was a mortgage document but later on turned out to be a Deed of Absolute Sale over the contested property. When Julita tried to redeem the property from the petitioners, the latter refused and claimed that they had purchased the property and were in fact issued Tax Declaration No. 2747. Consequently, respondents filed a complaint for Annulment of Deed of Sale Documents and Tax Declaration No. 2747. ISSUE: Whether or not the transaction between the parties is an equitable mortgage. HELD: The transaction between the parties is an equitable mortgage. For the presumption of an equitable mortgage to arise, two requisites must concur: (1) that the parties entered into a contract denominated as a sale; and (2) that their intention was to secure an existing debt by way of a mortgage. Consequently, the nonpayment of the debt when due gives the mortgagee the right to foreclose the mortgage, sell the property and apply the proceeds of the sale to the satisfaction of the loan obligation. We find no merit in petitioners contention that in the Deed of Absolute Sale executed between them and Julita, the latter totally conveyed her ownership over the disputed property. It is an established rule that the presence of even one of the circumstances set forth in Article 1602 is sufficient to declare a contract of sale with right to repurchase an equitable mortgage. In this case, Art 1602 sets forth, 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 decisive factor in determining the nature of the contract is the intention of the parties to the contract. The Court finds that the true intention of the parties in the execution of the Deed of Absolute Sale was never to convey the ownership of the disputed property but merely to secure the loan obtained by Julita. Verily, the conduct of Julita before, during and after the mortgage of the disputed property negates petitioners allegation that she intended to sell the land in their favor. Otherwise, she would have not exerted earnest efforts to redeem the same.

BALURAN VS. NAVARRO

FACTS: Spouses Paraiso were the owners of a residential lot. The Paraisos executed an agreement entitled "BARTER" whereby as party of the first part they agreed to "barter and exchange" with spouses Balurans their residential lot with the latter's unirrigated riceland, of approximately 223 square meters without any permanent improvements with the condition that: That both the Party of the First Part and the Party of the Second Part shall enjoy the material possession of their respective properties; the Party of the First Part shall reap the fruits of the unirrigated riceland and the Party of the Second Part shall have a right to build his own house in the residential lot.

The contract also prohibited them from alienating the properties of the other and contained a stipulation that should the heirs of Paraiso desire to re-possess the residential lot, Baluran is obliged to return the lot. Indeed, years after, Obedencio (grandchild of Paraiso) acquired the ownership of the residential lot from his mother and demanded that Baluran, who was in possession, vacate. Baluran now counters that the barter already transferred ownership. ISSUE: Whether or not Obedencio is entitled to recover possession of the property. HELD: Obedencio is entitled to recover possession of the property. The contract was not a barter, but a usufructuary. The use of the, term "barter" in describing the agreement is not controlling. The stipulations in said document are clear enough to indicate that there was no intention at all on the part of the signatories thereto to convey the ownership of their respective properties; all that was intended, and it was so provided in the agreement, was to transfer the material possession thereof. In fact, under condition No. 3 of the agreement, the parties retained the right to alienate their respective properties which right is an element of ownership. With the material possession being the only one transferred, all that the parties acquired was the right of usufruct which in essence is the right to enjoy the property of another. The right of "material possession" granted in the agreement of February 2, 1964, ends if and when any of the children of Natividad Paraiso, Obedencio (daughter of spouses Paraiso, Party of the First Part) would reside in the municipality and build his house on the property. In view of our ruling that the "barter agreement" did not transfer the ownership of the respective properties mentioned therein, it follows that petitioner Baluran remains the owner of the unirrigated riceland and is now entitled to its possession. With the happening of the resolutory condition provided for in the agreement, the right of usufruct of the parties is extinguished and each is entitled to a return of his property. Inasmuch as reciprocal rights and obligations have arisen between the parties to the so-called "barter agreement", the parties and their successors-in-interest are duty bound to effect a simultaneous transfer of the respective properties if substance at justice is to be effected.