Facts:
Spouses
Rogelio Buce and Anita Buce (petitioners) were the registered owners of three parcels of land in Rizal and Manila, which they mortgaged with
Monte de Piedad & Savings Bank for a loan of
P178,953.37. When the loan matured, the mortgage was foreclosed, and the properties were repurchased by the plaintiffs; thereafter, in July
1979, the plaintiffs executed a
Deed of Sale dated
September 30, 1979 in favor of
Ramon de los Reyes, who acted in his own behalf and on behalf of
Rhodora de los Reyes Berish (respondents), for
P179,000.00.
After the execution of the deed, the plaintiffs sued for reformation, claiming the document was a mortgage in disguise due to fraud and inequitable conduct, and that the
P179,000.00 was merely a loan bearing interest, with payments made as interest; the
Regional Trial Court dismissed the complaint. On appeal, the
Intermediate Appellate Court reversed and declared the instrument to be a
real estate mortgage, ordered the execution of the formal deed of real estate mortgage, and directed cancellation and reinstatement of the relevant titles.
Issues:
- Whether the parties’ agreement embodied in the Deed of Sale was an absolute sale or a real estate mortgage.
- Whether the evidence supported reformation of the instrument as an equitable mortgage under the Civil Code.
Ruling:
Ratio:
Doctrine: