G.R. No. 212731 - Spouses Rosario vs. Alvar

In 1989, Agnes Annabelle Dean-Rosario borrowed ₱600,000 from Priscilla Alvar, secured by real estate mortgages over two parcels covered by TCT Nos. 167438 and 167439.
The mortgages were discharged in December 1990.

In March and July 1992, Agnes executed Deeds of Absolute Sale over the two lots in favor of Priscilla’s daughter (Evangeline) for ₱900,000 each; Evangeline later re-sold them to Priscilla at the same prices.
In April 1994, Priscilla demanded possession, prompting spouses Rosario to file Civil Case No. 94-1797 for nullity of sale and cancellation of titles; Priscilla counterclaimed in Civil Case No. 96-135 for recovery of possession.

April 4, 2003 RTC Decision: dismissed spouses Rosario’s nullity suit, granted Priscilla’s recovery of possession.
November 15, 2006 CA Decision: reversed RTC, held the “sales” were equitable mortgages under Art. 1602, reinstated TCTs in Agnes’s name, nullified those in Priscilla’s name. This decision became final and executory.

October 2007: Priscilla demanded payment of ₱1.8 M. Upon non-payment, she filed Judicial Foreclosure (RTC Civil Case No. 07-997).
January 25, 2012 RTC: rendered foreclosure decision awarding ₱1.8 M plus interest, taxes, attorney’s fees, and foreclosure sale upon default.
May 27, 2014 CA: affirmed with modifications—interest at 6% p.a. and attorney’s fees reduced to ₱50,000.
Spouses Rosario filed Rule 45 Petition for Review on Certiorari before the Supreme Court, assailing the CA’s May 27, 2014 Decision.

Whether the CA committed grave abuse of discretion in holding that reformation of the Deeds of Absolute Sale is no longer necessary despite its earlier ruling that reformation was required because:

Whether the CA committed grave abuse of discretion in not holding that reformation of the instruments must precede foreclosure proceedings.