Case Digest (G.R. No. 128759)
Facts:
Raymundo Tolentino and Lorenza Rono, substituted by their heirs, represented by Emmanuela Rono, v. Court of Appeals, Josefina F. Leticia, Cresente De Guzman, and others, G.R. No. 128759, July 12, 2004, Supreme Court Second Division, Quisumbing, J., writing for the Court.Spouses Pedro and Josefina De Guzman were registered owners of a parcel of land (TCT No. 20248 T-105). They executed a mortgage to the Rehabilitation Finance Corporation (RFC, now DBP) which was foreclosed when they failed to pay. Before the redemption period expired, the De Guzmans obtained an P18,000 loan from petitioners Raymundo Tolentino and Lorenza Rono to redeem the property; repayment was agreed at P150 monthly over ten years beginning February 1963.
On December 14, 1962, the RFC obligation was paid and the mortgage cancelled. Petitioners, representing they needed security, had the De Guzmans execute a Deed of Promise to Sell and, shortly thereafter, a Deed of Absolute Sale (February 1963), allegedly by misrepresentation; petitioners caused cancellation of TCT No. 20248 and had TCT No. 69164 issued in their names. Pedro De Guzman died on June 9, 1971. Josefina and the children attempted to settle the remaining loan balance; petitioners then demanded reconveyance only upon payment of the property's 1971 market value, and the De Guzmans discovered title was in petitioners' names.
The De Guzmans filed in the Regional Trial Court (Pasig City, Branch 162) a complaint for declaration that the sale was in truth an equitable mortgage and for reconveyance with damages. On March 21, 1988, the RTC ruled for the plaintiffs (the De Guzmans), declaring the transactions to be an equitable mortgage and ordering reconveyance, payment of the unpaid loan balance (ordered plaintiffs to pay defendants the unpaid balance of P3,750 with interest), and attorneys' fees. The Court of Appeals, in CA-G.R. CV No. 21005, affirmed the RTC decision on December 13, 1996; its resolution denying reconsideration was dated March 31, 1997. Petitioners brought the present petition for review to the Supreme Court seeking reversal of the Court of Appeals' dec...(Pro-only)
Issues:
- Did the Court of Appeals err in applying Article 1602 (and Article 1604) of the Civil Code to declare the sale an equitable mortgage despite the existence of express, written instruments?
- Was the action for declaration of sale as equitable mortgage and reconveyance the improper remedy such that Article 1605 (reformation of instrument) required a...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)