Title
Supreme Court
Dala vs. Auticio
Case
G.R. No. 205672
Decision Date
Jun 22, 2022
A pacto de retro sale was deemed an equitable mortgage due to inadequate price, continuous possession, and void pactum commissorium, allowing redemption.

Case Digest (G.R. No. 205672)
Expanded Legal Reasoning Model

Facts:

  • Background and Petition
    • On February 21, 2002, Editha A. Auticio filed a Petition to Consolidate Ownership under Article 1607 of the Civil Code for a 1,378 sqm parcel in Brgy. Cabong, Borongan, Eastern Samar, alleging a sale with pacto de retro executed on June 4, 2001 for ₱32,000.00.
    • She prayed for a TRO enjoining transfer, declaration of her absolute ownership, and attorney’s fees of 25%.
  • Deed of Sale Under Pacto de Retro
    • The June 4, 2001 instrument described a “Sale, Transfer, and Conveyance under Pacto de Retro,” reserving the vendor’s right to repurchase within six months at the same price, otherwise the sale becomes absolute.
    • Auticio registered a tax declaration in her name on May 16, 2003.
  • Petitioner’s Counterclaim
    • Froilan Dala countered that the deed was a loan contract: he borrowed ₱20,000 at 10% monthly interest, using the land as collateral, and respondent coerced him into signing the Deed of Sale.
    • He remained in possession, paid taxes, offered to repay ₱32,000, but respondent refused; he sought declaration of an equitable mortgage, damages, fees, and costs.
  • Trial Court Proceedings
    • Witnesses (including petitioner’s sister) corroborated that the land served only as collateral for a loan.
    • By Decision dated July 21, 2008, RTC Branch 1 ruled the contract a true sale with pacto de retro, but—finding doubt on true intent—allowed Dala to repurchase within 30 days upon payment of ₱214,000 (₱32,000 + ₱182,000 interest), otherwise absolute ownership vests in Auticio; attorney’s fees denied.
  • Court of Appeals and Supreme Court
    • CA Decision August 29, 2012 affirmed sale classification, deleted the repurchase option and interest award, and declared Auticio absolute owner.
    • CA denied reconsideration on December 19, 2012.
    • On petition, the SC reversed, holding the deed an equitable mortgage, voiding the pacto de retro sale and pactum commissorium, directing cancellation of the tax declaration, and granting Dala redemption rights upon payment with legal interest.

Issues:

  • Whether the June 4, 2001 Deed of Sale under pacto de retro is in truth an equitable mortgage.
  • Whether petitioner may still repurchase or redeem the property and, if so, under what terms.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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