SPOUSES BUCE VS.

CA properties objects of the "sale', were still paid by the

Plaintiffs were the registered owners of three parcels of
land one of which is situated at Cainta Taytay, Rizal,
and the other two situated at Pandacan, Manila, which
they mortgaged with Monte de Piedad & Savings Bank
to secure a loan of Pl78,953.37. When the loan
matured, plaintiffs could not pay, so, the mortgage was
foreclosed by the Monte de Piedad & Savings Bank.
Plaintiffs sold to the defendants-spouses the afore-
mentioned properties, together with all the
improvements therein for a consideration of
Pl79,000.00, and the transaction is covered by a Deed
of Sale. The consideration of the deed of sale was used
by plaintiffs to repurchase the foreclosed propertiesfrom
the Monte de Piedad & Savings Bank. After the
foreclosed properties were repurchased by the plaintiffs,
they were simultaneously sold and delivered to the
defendants-spouses as previously stated, by virtue of a
deed of sale.
private respondent-apparent vendor.
Art. 1602, in relation to Art.1604 CC finds strong
application in the case at hand in the light of the
following attendant circumstances: 1) the price of the
"sale" was unusually inadequate; 2) the apparent vendor
remained in possession of the properties "sold;" 3) the
vendor continued to pay the taxes on the things 'sold;"
and 4) the vendor paid interest on the supposed
consideration of the "sale."
From these circumstances it may be fairly inferred that
the real intention of the parties was to secure payment
of the P179,000 loan extended by the petitioners to the
respondent.

Plaintiffs filed the case for reformation of the deed of

sale with damages. They alleged that although there is
an absolute deed of sale, it does not reflect or express
the true intention between the parties by reason of fraud
and/or inequitable conduct on the part of the
defendants, citing article 1369 of the Civil Code.That the
amount of P179,000.00, as consideration of the alleged
deed of sale, was only a loan extended by defendants to
plaintiffs, and that the properties described therein were
mortgaged to secure the loan. That the verbal
understanding was for plaintiffs to pay a monthly interest
of P4,000.00, and that defendants actually paid the
amount of P20,000.00 as interest.

TC - dismissed
CA - set aside the trial court's decision, and declared the
subject document, denominated as Deed of Sale, as
one of real estate mortgage.

ISSUE:
WON the contract entered into between the petitioners
and private respondent is one of real estate mortgage?

HELD:
Yes. The consideration of the supposed sale in the
amount of P179,000.00 is inadequate. Thus, the most
logical conclusion that may be derived from the
foregoing is that the P179.000 pesos was, in truth, a
loan by the petitioners to the private respondent to
enable the latter to redeem his property which was
foreclosed by the bank. Besides, had it been the private
respondent's real intention to sell rather than to
mortgage, we believe that he could have easily found
buyers for the properties who would be willing and able
to pay a price considerably higher than P179,000.00.

Furthermore, it has been satisfactorily proven that from

the time of execution of the contract in issue, the realty
taxes, for the years 1980 and 1981, on the three