Case Summary (G.R. No. 251792)
Factual Background
Spouses Solis, the registered owners of the subject properties, executed a real estate mortgage in favor of Cando on February 27, 2012, to guarantee a loan of PHP 15,000,000.00. They mistakenly believed this document was a mere mortgage agreement; however, Cando later produced a deed of absolute sale, claiming ownership of the properties, leading to a demand for their eviction.
Legal Claims by Respondents
Claiming that the last portion of the mortgage document was misleading, Spouses Solis filed a complaint for annulment of the deed of absolute sale and reformation of the mortgage in the Regional Trial Court (RTC). They argued that although they signed the mortgage, the intent was not to sell the properties but to merely secure their debt.
Cando's Defense
In response, Cando contended that Spouses Solis had indeed sold the properties to her through the deed of absolute sale. She disputed claims of deception, asserting the Solis were financially literate individuals who voluntarily executed the documents. Cando also argued that having already sold the properties to her, the complaint against her should be dismissed based on legal principles such as prescription and waiver.
RTC Ruling
The RTC ruled in favor of Spouses Solis, annulling the deed of absolute sale on February 28, 2017. The court concluded the intention was to create a mortgage, not a sale, given the inadequacy of the sale price in relation to the properties' actual value and the Solis's continued possession of the properties.
CA Ruling
Cando appealed the RTC's decision to the Court of Appeals (CA), which upheld the RTC's ruling on January 29, 2020, emphasizing that the agreement constituted an equitable mortgage due to various circumstances, such as the low sale price and possession remaining with Spouses Solis.
Grounds of Appeal by Cando
In her petition before the Supreme Court, Cando argued that Spouses Solis failed to contest the basic validity of the mortgage and that their signing of the deed of sale indicated a clear and distinct intent to transfer title to her. She further argued that previous rulings regarding the lack of a pactum commissorium were unchallenged.
Respondents’ Counterarguments
Respondents countered that the courts below rightly determined that the deed of sale was executed under misrepresentation, asserting that the significant undervaluation of the properties and Spouses Solis’s possession lashed against the premise of a genuine sale. They criticized Cando's claims regarding the notarization of the deed of sale as unsubstantiated, asserting it was executed fraudulently during a time when Jose was hospital-bound.
Supreme Court’s Assessment
The Supreme Court dismissed Cando’s appeal, reaffirming the finding
...continue readingCase Syllabus (G.R. No. 251792)
Case Information
- Court: Supreme Court of the Philippines
- Division: Third Division
- G.R. No.: 251792
- Date: February 27, 2023
- Petitioner: Lourdes N. Cando
- Respondents: Flocerfida de Guzman Solis, Joan Solis, Michelle Solis
Procedural History
- The case arises from an appeal by certiorari under Rule 45 of the Rules of Court against the Decision dated January 29, 2020, of the Court of Appeals (CA) in CA-G.R. CV No. 111032.
- The CA affirmed the Decision dated February 28, 2017, of the Regional Trial Court (RTC), Quezon City, in Civil Case No. Q-1372786, which granted the complaint for annulment of a deed of absolute sale filed by the Spouses Solis against petitioner Cando and the Registry of Deeds of Quezon City.
Antecedents
Ownership and Mortgage:
- Spouses Jose Guyala Solis and Flocerfida de Guzman Solis owned two parcels of land in Quezon City, covered by Transfer Certificates of Title (TCT) Nos. N-313735 and N-313736.
- On February 27, 2012, they borrowed P15,000,000.00 from Cando, secured by a real estate mortgage over the properties.
Demand and Allegations:
- Cando's counsel sent a demand letter on January 29, 2013, claiming that the properties had been sold to Cando, which the Spouses Solis disputed, alleging they signed the document under the mistaken belief it was a mortgage.
- They filed a complaint for annulment of sale, claiming the transaction was misrepresented as a sale instead of a mortgage.
Claims of Spouses Solis
Legal Grounds:
- They contended that the deed of mortgage was misrepresented, asserting it was a mere mortgage and not a sale.
- They argued that the transaction did not disclose their true intent and was null and void due to inadequate consideration (P15,000,000.00 vs. actual value of P60,000,000.00).
Relief Sought:
- The Spouses Solis sought to reform the deed