Title
Cardenas vs. Heirs of Spouses Aguilar
Case
G.R. No. 191079
Decision Date
Mar 2, 2016
Alcantara obtained a loan secured by a property sale with right to repurchase. After her death, her son sought redemption, but the lenders refused. The RTC ruled the contract an equitable mortgage, ordering release upon payment. Despite the lenders' deaths, the Supreme Court upheld execution, as their heir participated, making formal substitution unnecessary.

Case Summary (G.R. No. 191079)

Facts of the Case

Elinaida L. Alcantara borrowed P3,000,000.00 from the Spouses Maximo and Simplicia Aguilar on November 8, 2000, with a fixed interest of P720,000.00. To secure this loan, Alcantara executed a Venta con Pacto de Retro (Sale with Right to Repurchase) on a parcel of land registered under her name. The agreed term for repurchase was one year, with a grace period of six months. Alcantara failed to repurchase the property within the stipulated period and sought to extend her right to repurchase, which was granted informally. However, when her son Joel Cardenas attempted to redeem the property by offering to pay the loan, the Spouses Aguilar refused. This led Alcantara to file a complaint for reformation of the instrument and specific performance, seeking a declaration that the agreement constituted an equitable mortgage rather than a sale.

Procedural History

Upon Alcantara's death, Cardenas was substituted as the plaintiff and later filed an Amended Complaint. The original defendants, including the deceased spouses, had previously filed an answer insisting that the transaction was a sale. After a trial, the Regional Trial Court (RTC) rendered a decision on February 27, 2009, declaring the contract to be an equitable mortgage and ordering the release of the mortgage upon receipt of the loan amount. The defendants sought execution of this decision, but Cardenas objected, citing the lack of proper substitution of parties following the death of the Spouses Aguilar.

Main Issues

The petition raised two primary legal issues:

  1. Whether a motion for execution could be filed by counsel when the judgment obligees had already died, without any proper substitution of parties or appointment of an executor or administrator.
  2. Whether the court had jurisdiction to grant a motion for execution under the same circumstances.

Court's Ruling

The court emphasized the importance of procedural adherence regarding substitution upon the death of parties. It ruled that despite the procedural deficiencies surrounding the death of Simplicia P. Aguilar, the existing involvement of Melba A. Clavo de Comer, the daughter of the deceased, as a co-defendant rendered the proceedings valid under the princ

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