Roberts V Papio - G.R. No. 166714 February 9, 2007 - Callejo, J. - by Jasper Facts

Roberts v Papio| G.R. No.
166714 February 9, 2007 | a statute, nevertheless reveals the

Callejo, J. || by Jasper intention of the parties to change a real
property as security for a debt and contain
FACTS: nothing impossible or contrary to law.
● Sps. Martin and Lucina Papio – owner 274sqm lot in c. A contract between the parties is an
Makati. They mortgaged the same lot to Amparo equitable mortgage if the following
investments for Php59K. They failed to pay, and the requisites are present:
co. filed a pet for extrajudicial foreclosure. i. the parties entered into a
● To prevent the extrajudicial foreclosure they contract denominated as a
executed a “Deed of Absolute Sale” April 13, 1982 contract of sale; and
in favor of Martin Papio’s cousin, Amelia Roberts. ii. the intention was to secure an
For Php.85K (Php59K was paid to Amparao, Php26K existing debt by way of mortgage.
kept by the Sps.Papio). The loan with Amparo was iii. The decisive factor is the
settled. intention of the parties.
● They then executed a 2year contract of lease, d. Equitable Mortgage
subject to renewal. With monthly rentals at 800. i. the mortgagor retains ownership
● TCT was issued in the name of Amelia Roberts over the property but subject to
● Papio paid rentals May1,1982 to May 1,1984 and foreclosure and sale at public
thereafter for another year. auction upon failure of the
○ He then failed to pay further rentals but he mortgagor to pay his obligation.
remained in possession for almost e. Pacto de Retro
13years. i. ownership of the property sold is
● Amelia Roberts sent a letter to Papio reminding him immediately transferred to the
to pay. Demand vacate if not settled in 15 days but vendee a retro subject only to the
Papio refused to leave thus she filed an unlawful right of the vendor a retro to
detainer and damages against Papio MeTC Makati. repurchase the property upon
○ Roberts argues that she bought the land. compliance with legal
Appended Deed of Abs Sale and Lease requirements for the repurchase.
Contract The failure of the vendor a retro
○ Papio: He had Right to to exercise the right to
Repurcahse/Equitable Mortgage. He asked repurchase within the agreed
Roberts to let him reacquire property, she time vests upon the vendee a
agreed, only then did he sign Deed of retro, by operation of law,
absolute sale. Pursuant to that right, he absolute title over the property.
repurchased land for Php250K which he f. Respondent is, thus, estopped from
gave to Perlita Ventura, Robert’s asserting that the contract under the deed
representative in Phil. Since Roberts was of absolute sale is an equitable mortgage
already in the US. i. right to repurchase presupposes
○ Robert’s Reply: She did not know about a valid contract of sale between
the Php250K given to Ventura. She offered the same parties.
to sell property to Papio in 1984 for US 1. By insisting that he had
$15K, but he refused. repurchased the
● MeTC: property, respondent
○ Odered Papio to vacate premises. Roberts thereby admitted that
merely tolerated the stay of Papio after the deed of absolute
the expiration of the contract. Right to sale in fact and in law, a
repurchase was not reserved by Papio deed of absolute sale
when he signed the Deed and not an equitable
● RTC affirmed mortgage; hence, he had
● CA reversed. acquired ownership
○ It was an equitable mortgage because he over the property based
retained ownership and its peaceful on said deed.
possession. g. Villarica et al v. CA - The right of
ISSUES/RATIO: repurchase must be reserved by vendor in
1. WN the deed was an equitable mortgage? NO the same instrument of sale as one of the
a. Papio in his affidavits and position papers, stipulations of the contract.
said that petitioner granted him the right i. This right was not reserved in the
to repurchase and which he did in fact Deed
exercise. This claim is antithetical to an h. NO documentary evidence showing that
equitable mortgage. Ventura was authorized to sell/resell land
b. An equitable mortgage is one that, at Php250K/receive said amount as
although lacking in some formality, form purchase price of the property thus
or words, or other requisites demanded by payment to Ventura was void.
RULING: IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The assailed Decision of the Court of Appeals in
CA-G.R. CV No. 69034 is REVERSED and SET ASIDE. The
Decision of the Metropolitan Trial Court, affirmed with
modification by the Regional Trial Court, is AFFIRMED.

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Roberts v Papio| G.R. No.

166714 February 9, 2007 | a statute, nevertheless reveals the

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