Case Summary (G.R. No. 173002)
Procedural History
This case arose from a petition for review on certiorari filed by Benjamin Bautista against Shirley G. Unangst and other unknown individuals. The Court of Appeals had reversed a decision from the Regional Trial Court (RTC) concerning specific performance, recovery of possession, and damages relating to a property transaction executed under a purported sale with a right to repurchase.
Facts of the Case
On November 15, 1996, Hamilton Salak rented a vehicle from Bautista's car rental service but failed to return it promptly, which led to legal action for theft. After their arrest, Salak and his common-law wife, Unangst, proposed to settle their ordeal by selling a house owned by Unangst to Bautista. A written agreement was reached including a sale with a right to repurchase, with conditions such as the repayment of debts. Unangst later failed to repurchase the property, prompting Bautista to file a complaint in June 1998 for recovery of possession and damages against the respondents.
RTC Decision
The RTC ruled in favor of Bautista, finding that the agreement constituted a genuine sale and ordered Unangst and others to vacate the property and pay damages, including rental fees and taxes. The court validated the sale's execution and consolidated ownership in Bautista's name.
Appeal to the Court of Appeals
Unangst filed a petition for relief after the RTC decision, claiming she didn't learn of the judgment until it was too late to appeal. Despite an insufficient initial payment of docket fees, the RTC granted her petition, enabling the appeal to proceed. The CA ultimately overturned the RTC's decision, classifying the agreement as an equitable mortgage due to several factors, including the inadequate consideration and the context of signing under duress.
Legal Principles Involved
The CA's interpretation relied on Articles 1602 and 1603 of the Civil Code, which establish guidelines for determining whether a transaction is a genuine sale or an equitable mortgage. An equitable mortgage may be presumed when the sale price is inadequate, the vendor remains in possession, or other indications show that the real intent was to secure a debt rather than complete a sale.
Ruling of the Supreme Court
The Supreme Court upheld the CA's ruling, stating that the deed of sale with a right to repurchase was an equitable mortgage. It was determined that the pressing circumstances under which Unangst signed—specifically financial duress and immediate need for money—led to coercive consent. The Court reinforced the
...continue readingCase Syllabus (G.R. No. 173002)
Case Citation
- 579 Phil. 528
- G.R. No. 173002
- Third Division, July 04, 2008
Background of the Case
- This case revolves around a petition for review on certiorari filed by Benjamin Bautista, challenging the decision of the Court of Appeals (CA) which reversed the ruling of the Regional Trial Court (RTC).
- The RTC had initially ruled in favor of Bautista in a specific performance action related to a deed of sale with a right to repurchase involving a residential property owned by respondent Shirley G. Unangst.
Factual Context
- On November 15, 1996, Hamilton Salak rented a vehicle from Bautista's car rental shop, GAB Rent-A-Car, for three days at a rate of ₱1,000.00 per day but failed to return it.
- Salak and Unangst were arrested on February 2, 1997, while in possession of the rented vehicle, leading Bautista to demand substantial payment for various fees.
- Unable to pay, Salak proposed to sell Unangst's house and lot to Bautista, which Bautista accepted after consulting with his wife, Cynthia.
- They executed a written agreement stipulating the sale of the property for ₱527,372.00, intended to cover Bautista’s claims against Salak.
Legal Instruments Executed
- A separate deed of sale with right to repurchase was executed, detailing:
- Unangst's obligation to pay taxes and utility bills.
- Conditions for repurchase within 30 days, failing which possession would revert to Bautista without a court order.
Procedural History
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