Facts:

In the case of Juan Aguinaldo, substituted by Marina and Primitivo Aguinaldo vs. Jose Esteban and Francisca Sarmiento, G.R. No. L-27289, decided on April 15, 1985, the dispute arose from a contract entitled "Sanglaan ng Isang Lupa na Patuluyan Ipaaari." The case originated in Civil Case No. 6977 at the Court of First Instance of Rizal, where the lower court declared the contract a valid and binding contract of sale, dismissing the complaint and counterclaim with costs against the plaintiff. The plaintiff, Juan Aguinaldo, alleged that on June 23, 1958, the defendants fraudulently procured the thumbmark of his father, Jose Aguinaldo, to be affixed to the contract through deceit and undue pressure. He claimed that the defendants caused the cancellation of Tax Declaration No. 4004 in the name of Jose Aguinaldo and issued a new declaration in their names. The plaintiff contended that the thumbmark on the document was a forgery and that the contract contained terms rese...

Facts:

Background of the Case

• The case involves a dispute over a contract titled "Sanglaan ng Isang Lupa na Patuluyan Ipaaari" (Mortgage of a Cane Land with Absolute Transfer of Ownership).
• Plaintiff Juan Aguinaldo, substituted by his heirs Marina and Primitivo Aguinaldo after his death, alleged that the contract was procured through fraud, deceit, and undue influence by defendants Jose Esteban and Francisca Sarmiento.
• The contract was executed on June 23, 1958, and involved a parcel of land owned by Jose Aguinaldo, the father of Juan Aguinaldo.

Allegations of the Plaintiff

• The plaintiff claimed that Jose Aguinaldo, who was illiterate and of low intelligence, was misled into affixing his thumbmark on the contract.
• The defendants allegedly caused the cancellation of Tax Declaration No. 4004 (1948) in Jose Aguinaldo’s name and replaced it with Tax Declaration No. 10725 in their names.
• The plaintiff argued that the contract contained terms akin to "pacto comisario," which is prohibited under Philippine law, and that it did not specify a period for repayment or the duration of the mortgage.
• The plaintiff sought to recover the property, claiming that the defendants had no right to possess it and had deprived him of its fruits.

Defendants' Position

• The defendants contended that the contract was a valid sale, not a mortgage, and that they became the absolute owners of the property upon Jose Aguinaldo’s death in October 1960.

Key Terms of the Contract

• The contract stated that Jose Aguinaldo received ₱540.00 and was to be provided daily sustenance by the defendants until his death.
• Upon his death, the defendants would become the absolute owners of the property.
• The contract was written in Tagalog and used the term "isinasangla" (mortgaged) and "patuluyan ipaaari" (absolutely transferred).

Procedural History

• The trial court ruled in favor of the defendants, declaring the contract a valid sale and dismissing the plaintiff’s complaint.
• The plaintiff appealed, and the case was elevated to the Supreme Court on a question of law.

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Issue:

1. Whether the contract in question is a valid sale or a mortgage.
2. Whether the contract contains stipulations that are void for being akin to "pacto comisario."
3. Whether the contract was procured through fraud, deceit, and undue influence.

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Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Conclusion:

The Supreme Court ruled in favor of the plaintiffs, declaring the contract null and void and restoring ownership of the property to Juan Aguinaldo’s heirs. The decision emphasized the importance of protecting vulnerable parties from fraudulent and oppressive contracts.