G.R. No. 209691 - Diclas vs. Bugnay, Sr.

On May 13, 1887, the plaintiff owed Petronila Espino a debt of P2,705.
To secure part of this debt, the plaintiff executed and delivered to the defendant two contracts:

A special mortgage (Exhibit A) on certain parcels of land (designated as numbers 4, 5, 6, and 7 in paragraph 4 of the complaint) for the payment of P745 with an interest rate of 25%.
A contrato de “venta con pacto de retro” on another set of properties (designated as numbers 1, 2, 3, 8, and 9 in paragraph 4 of the complaint) for the payment of P1,960.

On July 20, 1894, a settlement of accounts revealed the plaintiff still owed P2,000.
On the same day, the plaintiff executed another contract (Exhibit 1) wherein he acknowledged the remaining indebtedness of P2,000 and promised to repay it over four years as follows:

P500 of the principal, plus P200 interest each June for the years 1895, 1896, 1897, and 1898.
The contract provided that if the debt was not fully paid within the four-year period, the amounts paid would be treated as damages, and the mortgage on the properties articulated in Exhibits A and B would be executed. Additionally, the plaintiff promised to forfeit his participation in any improvements made on the land and a mill, except for one mill which had already been sold with its price acknowledged by Petronila Espino.

On August 15, 1898, due to non-payment of the total debt, the plaintiff delivered another contract where:

He conveyed to the defendant all the property subject to the previous agreements except a portion of personal property referenced in paragraph 2 of the contract.
The conveyed property included several land parcels with detailed descriptions and boundaries, an iron mill, and livestock (including ten carabaos, two bulls, and additional accessories needed for the mill).
It was agreed that the remaining items (the carts and additional livestock) would be delivered once the animals recovered from sickness and the carts were repaired.

Petronila Espino later died, and Domingo Marin was appointed as the administrator of her estate.
On July 8, 1905, the plaintiff filed an action in the Court of First Instance of Iloilo City against the administrator, seeking recovery of the property delivered under the August 15, 1898 contract, while offering to pay the P2,000 debt.
On December 6, 1905, the defendant responded, affirming that, as per the August 15, 1898 contract, the delivery of the property (from Exhibits A and B) extinguished the debt, except for the undelivered items (carts and a bull) which were valued at P95.
The lower court rendered judgment in favor of the defendant for P95 plus costs, based on findings regarding delivery of property and partial performance under the contract.

Whether the lower court erred in admitting exhibits (Exhibits A and B) as evidence after the prior admission of Exhibits 1 and 2.

Whether the plaintiff’s delivery under the August 15, 1898 contract truly constituted full payment of his indebtedness as intended by the parties.

Whether the plaintiff should be condemned to pay the value of P95 for the undistributed carts and bull, representing the value of the remaining property not delivered.

Validity of the Special Mortgage and Sale with Right of Repurchase Contracts

Whether the lower court erred in failing to declare the two contracts (Exhibits A and B) null or in waiving the defendant’s rights under them.