G.R. No. 142474 - R.N. Symaco Trading Corp. vs. Santos

Rosario Vda. De Andrade was the registered owner of four parcels of land (Lots 17, 18, 19, and 20) located in Cebu City.
These subject properties were initially mortgaged to Simon Diu and later foreclosed.

As the redemption period neared its expiration, Rosario sought assistance from Bobby Tan, who agreed to redeem the subject properties.
Immediately thereafter, Rosario executed a Deed of Absolute Sale dated April 29, 1983, selling the properties to Bobby Tan and her son, Proceso Andrade, Jr., for P100,000.00.
On July 26, 1983, Proceso, Jr. executed a Deed of Assignment, thereby ceding his rights and interests in the subject properties to Bobby Tan in consideration of P50,000.00.
Bobby Tan subsequently extended an Option to Buy in favor of Proceso, Jr. with the condition that the subject properties be purchased for P310,000.00 by 7:00 PM on July 31, 1984.
Proceso, Jr. failed to exercise his option, leading to Bobby Tan consolidating his ownership over the properties, with Transfer Certificates of Title subsequently issued in his name.

Rosario’s children (Grace, Proceso, Jr., Henry, Andrew, Glory, Miriam Rose, Joseph Andrade, along with Jasmin Blaza and Charity A. Santiago) filed a complaint for reconveyance and annulment of the deeds of conveyance in Civil Case No. CEB 20969.
They contended that:

The transaction between Rosario and Bobby was not a bona fide sale but essentially an equitable mortgage, intended to secure Rosario’s indebtedness to Bobby.
The subject properties were conjugal in nature, having been inherited from their late father, Proceso Andrade, Sr., thus they were co-owners with Rosario and, by extension, should not be disposed of without their consent.

The Andrades further alleged that despite the issuance of TCTs in Bobby’s name, they maintained an undivided interest in the properties.

The RTC rendered a Judgment on April 6, 2001, dismissing the Andrades’ complaint.
It determined that:

The subject transaction was a bona fide sale as evidenced by its terms and the uncontested execution of the Deed of Absolute Sale at the time of its execution.
Proceso, Jr.’s failure to exercise his option confirmed the validity of the sale and the subsequent issuance of TCTs in Bobby Tan’s name.
The subject properties appeared to be the exclusive properties of Rosario.
The Andrades’ claim was barred by prescription and laches, given the long delay in asserting their rights.

The CA recognized the Deed of Absolute Sale as a bona fide contract but denied the Andrades’ characterization of the transaction as an equitable mortgage due to lack of supporting evidence.
Despite acknowledging the bona fide nature of the sale, the CA found that the subject properties were conjugal in nature—implying that the sale was only valid with respect to Rosario’s pro-indiviso share.
Consequently, a resulting trust was said to have been created between Bobby Tan and the Andrades, leaving the door open for the latter’s claim.

The Andrades sought to recharacterize the transaction as an equitable mortgage.
Bobby Tan argued that the sale should have encompassed the entire subject properties.

In G.R. No. 172017, the Andrades challenged the CA’s ruling on the nature of the transaction.
In G.R. No. 171904, Bobby Tan contested the CA’s characterization of the subject properties as conjugal.

The Supreme Court was tasked with reviewing these contentions in light of the factual findings of the RTC and the CA.

Whether the subject transaction between Rosario and Bobby Tan should be characterized as a bona fide sale or as an equitable mortgage.

The Andrades argued that the transaction was an equitable mortgage meant to secure Rosario’s indebtedness.
Bobby Tan maintained that the transaction was a bona fide sale, as evidenced by the deposited documentary evidence and uncontested execution at the time.

Whether the subject properties are the exclusive property of Rosario Vda. De Andrade or part of the conjugal partnership between Rosario and her late husband, Proceso Andrade, Sr.

The Andrades contended that the properties were conjugal, inherited from their late father, and that Rosario did not have the right to dispose of these without their consent.
Bobby Tan argued that the deeds and subsequent issuance of TCTs in Rosario’s name established her exclusive ownership, further evidenced by the absence of proof regarding acquisition during the marriage.