Heirs of Reyes vFAMILY TREE OF THE PARTIES INVOLVED (for better appreciation ISSUES:

Reyes of the case)  WON the transaction is an equitable mortgage (YES)

 Antonio Reyes and Leoncia Reyes (Spouses) with 4  WON Heirs of Alejandro are barred from insisting that period
ALERT! THIS children to redeem has already expires (YES)
DIGEST INVOLVES a. Jose Reyes Sr. with 1 child  WON Alejandro can appropriate for himself the subject
LOTS OF 1. Alejandro Reyes married to Amanda Reyes; they property (NO)
EXCUTED DEEDS had 7 children, who became the respondents of  WON the Leoncia and her sons were afforded fresh period of
AND this case redemption by virtue of Magksanib na Salaysay (Yes)
KASUNDUANS, 1.1 Consolacion Reyes  WON the heirs of Alejandro can acquire the subject property
ISSUES, AND 1.2 Eugenia Reyes by prescription (No)
INTERESTED 1.3 Luciana Reyes
HEIRS 1.4 Pedrito Reyes YES. THE TRANSACTION INVOLVED IS AN EQUITTABLE MORTGAGE
1.5 Merlinda Reyes NOT PACTO DE RETRO SALE
1.6 Eduardo Reyes  The transaction involves BADGES OF FRAUD as provided in Art.
1.7 June Reyes 1602 based on the fact that:
b. Teofilo Reyes with 3 children a. Vendors had continued possession of the property even
1. Romeo Reyes after the execution of the agreement
2. Nenita Reyes b. Property had remained declared for taxation purposed
3. Leonora Reyes under Leoncia’s name
c. Jose Reyes Jr. with 6 children, who became the  With the existence of badges of fraud in the transaction, it
petitioners of this case shall be deemed as an EQUITTABLE MORTGAGE
1. Rodrigo Reyes
2. Nenita Reyes THE HEIRS OF ALEJANDRO (THE PETITIONERS) ARE BARRED BY
3. Rodolfo Reyes ESTOPPEL FROM INSISTING THAT THE PERIOD TO REDEEM THE
4. Oscar Reyes PROPERTY HAD ALREADY EXPIRED
5. Gamaliel Reyes  As provided in Articles 1142 and 1144 of the Civil Code, the
6. Magdalena Reyes period to redeem should be 10 years from the execution of
d. Potenciana Reyes with 3 children the contract. Applying such provision in this case, the full
1. Gloria Reyes redemption price should have been paid by JULY 9, 1955, after
2. Maria Reyes that period, Spouses Francia or their heirs SHOULD HAVE
3. Alfredo Reyes foreclosed the mortgage BUT THEY DID NOT DO SO.
 Instead of foreclosing the mortgaged property upon the
PROPERTY INVOLVED: Parcel of residential land in Pulilan, Bulacan expiration of 10- year period of redemption, Spouses Francia
owned by Spouses Antonio Reyes and Leoncia Reyes still accepted the payments of Alejandro until the debt was
fully satisfied
HOW THE CASE STARTED:  Such action constitutes an implied recognition of the
 Leoncia and her 3 sons (Jose Sr., Teofilo, and Jose Jr) continued existence of the equitable mortgage
executed a deed entitled KASULATAN NG BILING  Thus, the conduct of the parties as well as their successors
MABIBILING MULI which provides: manifested that the KASULATAN NG BILING MABIBILING MULI
 That they sold the subject property and its existing
 imprvements to Spouses Francia for 500.00 is an equitable mortgage, not pacto de retro sale
 Such sale is subject to vendors’ right to repurchase for
the same amount “sa oras na sila’y makinabang”
 The heirs of Potenciana did not opposed to the execution ALEJANDRO CANNOT APPROPRIATE FOR HIMSELF THE SUBJECT
of the aforementioned Deed PROPERTY AS HE IS NOT A CO-OWNER THEREOF BUT MERELY AN
 Despite the sale of the subject property, Teofilo and Jose. ASSIGNEE
Jr and their respective families remained in possession of  When Alejandro redeemed the property in 1970, he did not
the property and paid realty taxes thereon become co-owner thereof because his father Jose Sr. was then
 Now, the dispute started when Leoncia and her 3 sons DID still alive
NOT REPAY the amount of 500.00.  Alejandro merely became the assignee of the mortgage, and
 Due to failure to repay, Alejandro Reyes, paid the amount the property is still co-owned by Leoncia and her sons
of 500 in two installments: (1) 265.00; (2) 235.00  Alejandro only became the co-owner of the subject property
when his father died.
After Alejandro has settled the debt, Spouses Francia executed a
deed entitled PAGSASA-AYOS NG PAG-AARI AT PAGSASALIN THE MAGKASANIB NA SALAYSAY EFFECTIVELY AFFORDED LEONCIA
which provides: AND HER SONS A FRESH PERIOD TO PAY REDEMPTION PRICE OF
 That they transferred and conveyed to Alejandro all their 500.00
rights and interests in the property for 500.00  The RTC and CA were wrong in ruling that the period to
redeem cannot be extended since the agreement to extend
Meanwhile, Alejandro executed a KASULATAN NG PAGMEME-ARI took place after the expiration of period to redeem.
which provides  As provided in Art. 1602, the law allows a NEW PERIOD of
 That he had acquired all the rights and interest of the heirs redemption to be agreed upon or granted even after the
of Francia, expiration of the equitable mortgagor’s right to repurchase
 Had acquired ownership of Leoncia and her 3 sons over the  Such grant of extension is an indication that the true
subject property after they have failed to repurchase it agreement between the parties is an equitable mortgage
within the given period
HEIRS OF ALEJANDRO CANNOT ACQUIRE THE MORTGAGED
On October 1970, Alejando, Leoncia (lola nya), and Jose Sr (his PROPERTY BY PRESCRIPTION
father) executed a MAGKAKALAKIP NA SALAYSAY which provides:  Alejandro did not have an ADVERSE AND EXCLUSIVE
 Alejandro acknowledged the right of Leoncia, Jose Jr. and POSSESSION of the property as manifested by the fact that
Jose Sr. to repurchase the property at any time for the other co-owners like Teofilo and Jose Jr were also occupying
same amount of 500.00 the some portions of the subject property
 The sole fact of declaring the subject property in the name of
DEMAND TO VACATE THE SUBJECT PROPERTY one co-owner(Alejandro) and paying land taxes on it does not
 A year after Alejandro died, his wife, Amanda Reyes, asked constitute an act of repudiation amounting to an ouster of
the heirs of Teofilo and Jose Jr to vacate the property other co-owners
because her children already needed it  Alejandro’s act of executing an affidavit of consolidation of
 The heirs of Teofilo and Jose Jr. refused to comply with the ownership and subsequent execution of joint affidavit DID
said demand which prompted Amanda Reyes to initiate a NOT MANIFEST his desire to repudiate the co-ownership
 suit for QUIETING OF TITLE and RECONVEYANCE  The only unequivocal act of repudiation was done is when an
action for quieting of title was filed in 1994. However,
ARGUMENTS OF RESPONDENTS considering their act of repudiation was not coupled with
 That their predecessor, Alejandro had acquired ownership exclusive possession of property, it could not ripen into
of the subject property by virtue of the deed PAGSASA- ownership
AYOS NG PAG-AARI AT PAGSASALIN
 The ownership of Alejandro had consolidated his POSSIBLE RECOURSE OF THE RESPONDENTS
ownership of the property via KASULATAN NG PAGMEME-  Heirs of Alejadro can only demand from Heirs of Jose the
ARI and through the failure of Leoncia and her sons to partition of the co-owned property
repurchase the property  They can likewise seek for reimbursement from the co-owners
ARGUMENTS OF PETITIONERS of the amount advanced by Alejandro to repay the obligation
 The KASULATAN NG BILING MABIBILING MULI was an  They can also seek from their co-owners the proportional
equitable mortgage and not pacto de retro reimbursement of the realty taxes paid for the property
 Alejandro’s right was only to seek reimbursement of pursuant to Art. 488 of the Civil Code
500.00 he had paid from Leoncia and her sons
 Alejandro cannot validly consolidate ownership through
the KASULATAN NG PAGMEME-ARI because it could only
be effected via a court order
RULING OF RTC: In favor of Respondents
 Alejandro had acquired ownership of the property by
operation of law upon failure of Leoncia and her sons to
repurchase the property
 The Joint Affidavit executed by Leoncia and her sons was
inefficacious, because there was no more period to extend
due to the redemption period having long lapsed by the
time of its execution
 Ordering the heirs of Teofilo and Jose Jr to vacate the
subject property
RULING OF CA:
 Transaction involves was not a pacto de retro sale but an
EQUITTABLE MORTGAGE based on the fact that the
families of the vendor remained in the possession of the
property
 CA agreed with RTC that the period to repurchase the
property was not extended because the period to
repurchase had long lapsed when the parties agreed to
extend it