Case Summary (G.R. No. 14106)

Parole Evidence in Property Transactions

• The court reaffirmed the doctrine that parole evidence is admissible to support claims that a written instrument, which appears to transfer absolute title to property, was actually intended as security for a loan.
• This principle allows for the introduction of evidence that contradicts the apparent nature of the written agreement, thereby providing a means to establish the true intent of the parties involved.

Acceptance of Partial Payments and Ownership Rights

• The court reiterated that acceptance of partial payments by a purchaser from a vendor, who retains a right to repurchase, undermines the irrevocability of the purchaser's ownership title.
• This principle is grounded in the idea that such payments indicate an ongoing relationship and obligations between the parties, suggesting that the original agreement may not have been fully executed as a sale.

Case Background and Financial Transactions

• The case involved Guillerma Cuyugan receiving a loan of P3,500 from Isidoro Santos, documented as a sale with a right of repurchase for four parcels of land.
• Over the years, Cuyugan made various payments, including a significant payment of P1,000, which became central to the dispute regarding the nature of the transaction.

Legal Proceedings and Demurrer

• Cuyugan's attempt to cancel the deed and recover her payments led to a demurrer from Santos, claiming that the written document could not be altered by parole evidence.
• The trial court initially upheld this demurrer, but upon appeal, the Supreme Court found that the demurrer should have been overruled based on the admissibility of parole evidence and the implications of the payments made.

Implications of the P1,000 Payment

• The court highlighted that the acceptance of the P1,000 payment by Santos indicated a potential recharacterization of the transaction from a sale with a right of repurchase to a mortgage.
• The reduction in annual payments following this transaction further supported the argument that the original loan amount had been effectively reduced.

Trial Court Findings and Witness Testimony

• The trial court found that the P1,000 payment was indeed made, despite conflicting testimonies from Cuyugan's family and Santos.
• The court's analysis of rental payments over the years provided additional evidence that both parties recognized a reduction in the loan amount, reinforcing the conclusion that the transaction was a mortgage.

Equitable Considerations and Legal Conclusions

• The court emphasized the inequity of allowing Santos to retain both the property and the paymen...continue reading