Gk No 97822 May 7 1992

MAUkICIC N CACnCLA Sk represented by h|s Attorney|nIact NILC C CACnCLA peLlLloner

vs
nCN CCUk1 CI ALALS AND SS ILDLkICC 8kICNLS and 1kINIDAD LNCINAS respondenLs
lAC1S
1he respondenL spouses lederlco 8rlones and 1rlnldad Lnclnas as Lhe reglsLered owners of a cerLaln real properLy morLgaged
Lhe same Lo 8en[amln Ccampo as a securlLy for a loan of 1300000 lor fallure of Lhe spouses Lo pay Lhe loan Ccampo caused
Lhe foreclosure of Lhe real esLaLe morLgage and Lhe subsequenL sale of Lhe properLy aL publlc aucLlon Ccampo belng Lhe
hlghesL bldder purchased Lhe properLy aL Lhe aucLlon A cerLlflcaLe of sale was execuLed ln hls favor
1he respondenLs were able Lo exerclse Lhelr rlghL of redempLlon wlLhln Lhe oneyear perlod from Lhe aucLlon sale by paylng
1987680 plus accrued lnLeresLs and Laxes 1hls was made posslble Lhrough a loan of 4000000 obLalned from peLlLloner
Lhe laLe Maurlclo Cachola and hls codefendanL ln Clvll Case for annulmenL of deed of sale Angellna Alfaras 1hls second loan
was evldenced by a promlssory noLe execuLed by Lhe spouses 8rlones duly slgned by Lhem daLed buL subscrlbed before a
noLary publlc
1he respondenL spouses falled Lo pay any amounL wlLhln Lhe sLlpulaLed slx monLh perlod and even afLerwards
Cn !anuary 30 1976 peLlLloner execuLed a 8elease of MorLgage for Lhe defendanLs A ueed of AbsoluLe Sale of Lhe properLles
was enLered lnLo by Lhe parLles for 6000000 on Lhe same daLe 1C1 no 72398 ln Lhe name of lederlco 8rlones was cancelled
and 1C1 no 216104 was lssued by Lhe 8eglsLer of ueeds of Cuezon ClLy ln favor of Maurlclo Cachola
lSSuL
WheLher Lhe conLracL lnvolvlng Lhe real properLy ln Lhls case ls one of sale or an equlLable morLgage
PLLu
Conslderlng LhaL Lhe prlce of Lhe deed was noL exLraordlnarlly lnadequaLe LhaL lL was Lhe vendee who pald Lhe realLy Laxes due
on Lhe properLy and LhaL Lhe vendors were noL Lhe lawful possessors Lhereof prlor Lo Lhelr evlcLlon Lhe CourL ls consLralned Lo
uphold Lhe valldlLy of Lhe conLracL of sale ln favor of peLlLloner Maurlclo
ln vlew of Lhe foregolng Lhe CourL holds LhaL none of Lhe clrcumsLances ln ArLlcle 1602 of Lhe Clvll Code whlch would ralse Lhe
presumpLlon of equlLable morLgage ln relaLlon Lo ArLlcle 1604 of Lhe same Code perLalnlng Lo a conLracL purporLlng Lo be an
absoluLe sale exlsLs ln Lhe case aL bar

Gk No 1S1217 September 8 2006
SCUSLS CLSAk k kCMULC and NLNI1A S kCMULC peLlLloners
vs
SCUSLS MCISLS LAUG Ik and ILLISAkIN LAUG respondenLs

lAC1S
eLlLloners obLalned loans from respondenLs beLween 1983 and 1987 whlch remalned unpald up Lo Lhe
Llme of Lhe execuLlon of Lhe assalled ueed of AbsoluLe Sale ls esLabllshed 1haL peLlLloners slgned Lhe
assalled lnsLrumenL ls also noL dlspuLed lndeed Lhey admlLLed havlng slgned sald documenL quallfylng
however LhaL Lhey were forced by respondenLs Lo execuLe Lhe same for Lhe purpose of securlng Lhelr
lndebLedness Lo respondenLs 8espondenLs on Lhe oLher hand lnslsLed LhaL Lhe parLles execuLed Lhe
ueed of AbsoluLe Sale as an honesLLogoodness sales LransacLlon
8espondenLs however admlLLed furLher LhaL ln addlLlon Lo Lhe amounL of 20000000 sLlpulaLed ln Lhe
ueed of AbsoluLe Sale Lhe parLles agreed Lo wrlLe off peLlLloners' loan as conslderaLlon of Lhe sale
alLhough Lhls clause was noL expressed ln Lhe lnsLrumenL
lSSuL
WheLher Lhe parLles lnLended an equlLable morLgage
PLLu
1he clrcumsLances surroundlng Lhe execuLlon of Lhe ueed of AbsoluLe Sale parLlcularly Lhe facL LhaL
respondenLs conLlnued Lo exLend some loans Lo peLlLloners afLer lLs execuLlon prec|udes the Court
from dec|ar|ng that the part|es |ntended the transfer of the property from one to the other by way of
sa|e
1he Court has not hes|tated to dec|are a purported contract of sa|e as an equ|tab|e mortgage even
when on|y one of the enumerated c|rcumstances under Art|c|e 1602 |s proved ln Lhe case aL bar
pet|t|oners rema|ned |n possess|on of the house and |ot even after the execut|on of the Deed of
Abso|ute Sa|e Moreover Lhey remalned ln possesslon of Lhe properLy for more Lhan Lhe reasonable
Llme LhaL would suggesL LhaL peLlLloners were mere lessees Lhereof lor one lL Look respondenLs more
Lhan flve years from Lhe Llme of Lhe execuLlon of Lhe ueed of AbsoluLe Sale and Lhe ConLracL of Lease Lo
flle Lhe acLlon for e[ecLmenL WlLhln Lhls perlod peLlLloners nelLher pald any renLal nor exerclsed Lhe
opLlon Lo buy purporLedly Lhe leased properLy from respondenLs




Gk No L793 Apr|| 27 1949
ILLISA k AL2 L1 AL plalnLlffsappellanLs
vs
IkANCISCC MAGNC defendanLappellee
lAC1S
On October 1943, plaintiIIs and appellants borrowed Irom deIendant and appellee P4,000 in
Japanese Military notes, with the promise to pay within a period oI Iive years. As a security, a
parcel oI land was mortgaged in Iavor oI the creditor. On September 1944, payment oI this debt
was oIIered and tendered, but was rejected by the creditor. For that reason, an action was Iiled on
November 18, 1945 asking that the obligation be declared as already paid and the deed oI
mortgage be cancelled. DeIendant Iiled a motion to dismiss upon the ground that plaintiIIs have
no cause oI action, there being no cause oI action, there being no allegation that the thing due
was consigned in court, as provided by law.
ISSUE:
Whether consignation is necessary.
HELD:
The order oI dismissal is correct. Civil Code provides that "iI a creditor to whom tender oI
payment has been made should reIuse without reason to accept it, the debtor may relieve himselI
oI the liability by the depositor (consignacion) oI the thing due." "in order that the deposit
(consignacion) oI the thing due may release the obligor, previous notice thereoI must be given to
the persons interested in the perIormance oI the obligation." And the consignation shall be made,
"by delivery to a judicial authority oI the things due, accompanied by prooI oI tender, when
required, and oI notice oI the depositor in other cases."
True that consignation oI the redemption price is not necessary in order that the vendor may
compel the vendee to allow the repurchase within the time provided by the contract. It was held
that in such cases a mere tender oI payment is enough, iI made on time, as a basis Ior action
against the vendee to compel him to resell. But that tender does not in itselI relieve the vendor
Irom his obligation to pay the price when redemption is allowed by the court. In other words,
tender oI payment is suIIicient to compel redemption but is not in itselI a payment that relieves
the vendor Irom his liability to pay the redemption price.



Gk No L33182 December 18 1987
LDkC A ILLICLN Sk (Deceased) subst|tuted by h|s w|dow 8LA1kI2 LANULVC and h|s ch||dren LLLU1LkIC
LDkC Ik CLAkI1A ILkNANDC and ICSL MAkIA a|| surnamed ILLICLN peLlLloners
vs
SLVLkINC CkIAS MILAGkCS CkIAS DL LIM and the CCUk1 CI ALALS respondenLs
lAC1S
under a ueed of Sale WlLh 8lghL Lo 8epurchase" Lhe spouses Severlno Crlas and Mllagros C Llm (prlvaLe
respondenLs hereln) sold Lo edro A lellcen Sr (peLlLloner) a parcel of land ln Lhe MunlclpallLy of Salcedo
rovlnce of Samar wlLh an area of 78 hecLares aL Lhe prlce of 300000 1he deed expressly reserved Lo Lhe
vendors Lhe rlghL Lo redeem wlLhln Lwo (2) years 1haL perlod explred wlLhouL any offer havlng been made by Lhe
vendors a tetto Lo repurchase Lhe land
Some elghL (8) years afLerwards" Lhe vendors a tetto flled sulL ln Lhe CourL of llrsL lnsLance agalnsL Lhe vendees Lo
compel Lhe laLLer Lo resell and reconvey Lhe properLy Lo Lhem AfLer due proceedlngs Lhe 1rlal CourL rendered
[udgmenL flndlng LhaL Lhe conLracL beLween Lhe parLles was ln LruLh one of sale wlLh pocto Je tetto and LhaL Lhe
perlod sLlpulaLed for Lhe repurchase had already explred buL Lhls noLwlLhsLandlng Lhe vendors o tetto sLlll had Lhe
rlghL Lo repurchase Lhe properLy wlLhln LhlrLy (30) days from Lhe Llme Lhe [udgmenL becomes flnal ln accordance
wlLh Lhe Lhlrd paragraph of ArLlcle 1606 of Lhe Clvll Code by complylng wlLh Lhe requlremenLs of ArLlcle 1616
lSSuL
WheLher Lhe conLracL beLween Lhe parLles ls of sale wlLh pacLo de reLro
PLLu
1he agreemenL was ln reallLy a morLgage one noL lnLended Lo affecL Lhe LlLle Lo Lhe properLy osLenslbly sold buL
merely Lo glve lL as securlLy for a loan or oLher obllgaLlon ln LhaL evenL lf Lhe maLLer of Lhe real naLure of Lhe
conLracL ls submlLLed for [udlclal resoluLlon Lhe appllcaLlon of Lhe rule ls meeL and proper LhaL Lhe vendor o tetto
be allowed Lo repurchase Lhe properLy sold wlLhln 30 days from rendlLlon of flnal [udgmenL declarlng Lhe conLracL
Lo be a Lrue sale wlLh rlghL Lo repurchase Conversely lf lL should appear LhaL Lhe parLles agreemenL was really
one of sale Lransferrlng ownershlp Lo Lhe vendee buL accompanled by a reservaLlon Lo Lhe vendor of Lhe rlghL
Lo repurchase Lhe properLy and Lhere are no clrcumsLances LhaL may reasonably be accepLed as generaLlng
some honesL doubL as Lo Lhe parLles lnLenLlon Lhe provlso ls lnappllcable 1he reason ls qulLe obvlous lf Lhe rule
were oLherwlse lL would be wlLhln Lhe power of every vendor o tetto Lo seL aL naughL a pacLo de reLro or
resurrecL an explred rlghL of repurchase by slmply lnsLlLuLlng an acLlon Lo reform Lhe conLracL known Lo hlm Lo
be ln LruLh a sale wlLh pocto Je tetto lnLo an equlLable morLgage As posLulaLed by Lhe peLlLloner Lo allow
hereln prlvaLe respondenLs Lo repurchase Lhe properLy by applylng sald paragraph Lo Lhe case aL bar desplLe Lhe
facL LhaL Lhe sLlpulaLed redempLlon perlod had already long explred when Lhey lnsLlLuLed Lhe presenL acLlon
would ln effecL alLer or modlfy Lhe sLlpulaLlon ln Lhe conLracL as Lo Lhe deflnlLe and speclflc llmlLaLlon of Lhe perlod
for repurchase (2 years from daLe of sale) Lhereby noL slmply lncreaslng buL ln reallLy resusclLaLlng Lhe explred
rlghL Lo repurchase and llkewlse Lhe already LermlnaLed and exLlngulshed obllgaLlon Lo resell by hereln peLlLloner
1he rule would Lhus be a made a Lool Lo spawn proLecLs and even reward fraud and bad falLh a slLuaLlon surely
never conLemplaLed or lnLended by Lhe law


Gk No 9S871 Iebruary 13 1992
nLIkS CI DCMINGA 1A8CkA VDA DL MACC represented by GLNLkCSC MACC peLlLloners
vs
nCN CCUk1 CI ALALS ILSUS I kLDILLAS AND ANA1ALIA LLCN respondenLs
lAC1S
vda de Macoy was Lhe owner of a rlce land wlLh an area of 30082 hecLares locaLed aL 8agasbas uaeL Camarlnes
norLe Per ownershlp Lhereof was evldenced by 1C1 no 17320 of Lhe 8eglsLer of ueeds of Camarlnes She
acqulred Lhe land from spouses aLroclnlo and ablo Serrano on !anuary 27 1964 for a conslderaLlon of
1100000 Cn uecember 28 1970 she execuLed a documenL whlch ls domlnaLed ablllhang MablblllMull or
sa|e w|th a r|ght to repurchase ln favor of prlvaLe respondenLs spouses !esus l 8edlllas and AnaLalla Llon for Lhe
sum of 600000 over Lhe land Among oLher Lhlngs lL was provlded Lhereln LhaL Lhe perlod of repurchase ls
beLween uecember 29 1973 and uecember 29 1973
Alleglng fallure of peLlLloners Lo repurchase Lhe land prlvaLe respondenL !esus l 8edlllas execuLed an AffldavlL of
ConsolldaLlon of Cwnershlp on May 31 1977
1hey alleged LhaL Lhe documenL execuLed by Lhe laLe uomlnga 1abora vda de Macoy was noL a sale wlLh a rlghL Lo
repurchase buL an equlLable morLgage or a conLracL of anLlchresls 1he peLlLloners alleged furLher LhaL even
assumlng lL Lo be a sale wlLh a rlghL Lo repurchase Lhem neverLheless had LhlrLy (30) days from flnal [udgmenL
lSSuL
WheLher Lhe conLenLlon of Lhe peLlLloners merlLorlous
PLLu
LvldenL manlfesLaLlons of a genulne sale wlLh rlghL Lo repurchase exlsL lnasmuch as Lhe documenL ls plalnly a
pocto Je tetto sale lL cannoL be consldered a loan wlLh morLgage lL ls relLeraLed LhaL Lhe conLracL ls Lhe law
beLween Lhe parLles When Lhe words of a conLracL are clear and readlly undersLandable Lhere ls no room for
consLrucLlon 1he freedom of conLracL musL be malnLalned and respecLed