2/3/2020 G.R. No. 143697 | Vda. de Delfin v.

Dellota

FIRST DIVISION

[G.R. No. 143697. January 28, 2008.]

DIONISIA DORADO VDA. DE DELFIN, represented in this

act by her heirs, petitioner, vs. SALVADOR D. DELLOTA,
represented by his heirs, and THE INTESTATE ESTATE OF
THE LATE GUMERSINDO DELEÑA, respondents.

DECISION

SANDOVAL-GUTIERREZ, J : p

For the Court's resolution is the instant petition for review on

certiorari assailing the Decision 1 of the Court of Appeals (Ninth Division)
dated April 11, 2000 in CA-G.R. CV No. 37210.
The facts as found by the appellate court are:
In her lifetime, the late Dionisia Dorado Delfin, herein petitioner,
represented by her heirs, was the registered owner of Lot No. 1213
situated in Panitan, Capiz with an area of 143,935 square meters covered
by Original Certificate of Title No. RP-1124 (14972).
On June 16, 1929, Dionisia executed an "Escritura De Venta Con
Pacto de Retro" over a 50,000-square meter portion of Lot No. 1213 in
favor of spouses Ildefonso Dellota and Patricia Delfin. However, Dionisia
failed to exercise her right of redemption.
On June 9, 1949, Dionisia sold another portion of Lot No. 1213
consisting of 50,000 square meters to Gumersindo Deleña (respondent
herein represented by his estate), as evidenced by a notarized "Deed of
Sale with Right of Redemption," thus, leaving an unsold area of more than
43,000 square meters.
Dionisia never redeemed this 50,000-square meter portion from
Gumersindo. Records show that Salvador Dellota (also a respondent
represented by his heirs) leased this area from Gumersindo.
On October 12, 1956, Dionisia executed a "Deed of Mortgage and
Promise To Sell" in favor of Salvador over a 90,000-square meter portion
of Lot No. 1213, without specifying whether it included the 50,000-square
portion sold (with right of redemption) to Gumersindo.

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On June 8, 1964, Dionisia filed with the then Court of First Instance,
Branch 2, Roxas City, a complaint for recovery of possession and
damages with an application for a writ of preliminary mandatory injunction,
docketed as Civil Case No. V-2760. Impleaded as defendant was
respondent Salvador D. Dellota, represented by his wife Genoveva D.
Dellota and their children.
For his part, Gumersindo filed a motion for intervention.
On April 30, 1991, after the hearing/proceedings lasting for almost
three decades, the trial court rendered its Decision, the dispositive portion
of which reads:
WHEREFORE, judgment is hereby rendered:
1. Ordering defendant Genoveva D. Dellota to allow the plaintiffs
to redeem the 40,000-square meter portion of subject Lot
1213, Panitan Cadastre, after plaintiffs shall have paid the
defendant the amount of P2,000;
2. Declaring the ownership over the 50,000-square meter portion
of the subject lot as consolidated by operation of law to and in
the name of the Interventors and heirs of Gumersindo Delena;
and
3. Ordering the plaintiffs to pay the costs of this suit.
SO ORDERED.
On appeal by Dionisia, the Court of Appeals rendered a Decision
affirming in toto the judgment of the trial court.
Hence, the present petition.
Dionisia's heirs now contend that the Court of Appeals erred in not
holding that the Deed of Sale with Right of Redemption dated June 9, 1949
entered into by Dionisia and Gumersindo is an equitable mortgage under
Article 1602 of the Civil Code. They insist that the price of P5,300.00 for a
five-hectare portion of Lot No. 1213 is grossly inadequate. This readily
shows that the contract is an equitable mortgage, not a sale with right of
redemption. They invoke this Court's ruling in Santos v. Court of Appeals. 2
An equitable mortgage is one which, although lacking in some
formality, or form, or words, or other requisites demanded by a statute,
nevertheless reveals the intention of the parties to charge real property as
security for a debt, and contains nothing impossible or contrary to law. 3
The essential requisites of an equitable mortgage are: (1) the parties enter
into what appears to be a contract of sale, (2) but their intention is to
secure an existing debt by way of mortgage. 4
Article 1602 of the Civil Code provides:
ART. 1602. The contract shall be presumed to be an
equitable mortgage, in any of the following cases:
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(1) When the price of a sale with right to repurchase is

unusually inadequate;
(2) When the vendor remains in possession as lessee or
otherwise;
(3) When upon or after the expiration of the right to
repurchase, another instrument extending the period of
redemption or granting a new period is extended;
(4) When the purchaser retains for himself a part of the
purchase price;
(5) When the vendor binds himself to pay the taxes on the
thing sold;
(6) In any other case where it may be fairly inferred that
the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance
of any other obligation.
In any of the foregoing cases, any money, fruits, or other
benefit to be received by the vendee as rent or otherwise shall be
considered as interest which shall be subject to the usury laws.
Jurisprudence recognizes that there is no conclusive test to
determine whether a deed purporting to be a sale on its face is really a
simple loan accommodation secured by a mortgage. 5 However, our case
law consistently shows that the presence of even one of the circumstances
enumerated in Article 1602 suffices to convert a purported contract of sale
into an equitable mortgage. 6 In this case, what should be determined is
whether the consideration of P5,300.00 paid by Gumersindo to Dionisa for
a five-hectare portion of Lot No. 1213 on June 9, 1949 is "unusually
inadequate."
In Aguilar v. Ribato * and Gonzales Vila, 7 this Court ruled that there
is gross inadequacy in price if a reasonable man will not agree to dispose
of his property.
In de Ocampo and Custodio v. Lim, 8 this Court held that in sales
denominated as pacto de retro, the price agreed upon should not
generally be considered as the just value of the thing sold, absent
other corroborative evidence. This is because, on the part of the vendor,
the right to repurchase the land makes it immaterial to him whether or not
the price of the sale is the just value thereof. As for the vendee, the price
does not induce him to enter into the contract as he does not acquire the
thing irrevocably, but subject to repurchase at the stated period. Rather,
the vendee pins his hope on the expectancy that he will acquire the thing
absolutely at a favorable price should the vendor fail to redeem the thing

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sold. Subsequently, in Buenaventura v. Court of Appeals, 9 this Court ruled

that there is no requirement in sales that the price be equal to the exact
value of the thing subject matter of the sale.
Following de Ocampo and Buenaventura, this Court finds no cogent
reason to conclude that the 1949 price of P5,300.00 as agreed upon by the
parties was unreasonable or unusually inadequate. Moreover, under the
rules of evidence, it is presumed that a person takes ordinary care of his
concerns. 10 In the present case, there is no evidence herein whatsoever to
show that Dionisia did not understand the ramifications of her signing the
"Deed of Sale with Right of Redemption." Nor is there any showing that
she was threatened, forced or defrauded into affixing her signature on the
said contract.
If the terms of the pacto de retro sale were unfavorable to Dionisia,
this Court has no business extricating her from that bad bargain. Courts
are not guardians of persons who are not legally incompetent, 11 like
Dionisia.
Also, Dionisia failed to prove before the trial court that the price
agreed upon by the parties in 1949 was grossly inadequate.
Even assuming that the contract of sale with right to repurchase
executed by Dionisia and Gumersindo in 1949 is an equitable mortgage,
the fact remains that from 1949 up to the filing of the complaint in 1964, or
a period of 15 years, she failed to redeem the property. Her heirs claim that
since Dionisia had been paying the realty taxes follows that she owns the
property, not Gumersindo. Settled is the rule that tax receipts per se are
not conclusive evidence of land ownership absent other corroborative
evidence. 12 Moreover, we agree with the Court of Appeals that the timing
of the payment of realty taxes raises some questions. We note that the real
estate taxes corresponding to the period from 1955 to 1963 were paid only
on December 27, 1963 or barely six (6) months before Dionisia filed Civil
Case No. V-2760 on June 8, 1964. The inescapable conclusion is that she
paid the taxes in preparation for the filing of Civil Case No. V-2760.
WHEREFORE, we DENY the petition. The Decision of the Court of
Appeals (Ninth Division) dated April 11, 2000 in CA-G.R. CV No. 37210 is
AFFIRMED. Costs against the heirs of Dionisia.
SO ORDERED.
Puno, C.J., Corona, Azcuna and Leonardo-de Castro, JJ., concur.

Footnotes

1. Rollo, pp. 203-223. Penned by Associate Justice Jose L. Sabio, Jr., with
Associate Justice Ramon Mabutas, Jr. (retired) and Associate Justice
Demetrio G. Demetria (left the service) concurring.

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2. G.R. No. 83664, November 13, 1989, 179 SCRA 363.

3. Go v. Bacaron, G.R. No. 159048, October 11, 2005, 472 SCRA 339,
347.
4. Ramos v. Sarao, G.R. No. 149756, February 11, 2005, 451 SCRA 103,
113, citing Ceballos v. Mercado, 430 SCRA 230 (2004); Matanguihan v.
Court of Appeals, 341 Phil. 379 (1997); Santos v. Court of Appeals, supra,
footnote 2.
5. Ching Sen Ben v. Court of Appeals, 373 Phil. 544, 551 (1999); Lapat v.
Rosario, 371 Phil. 456, 465 (1999).
6. San Pedro v. Lee, G.R. No. 156522, May 28, 2004, 430 SCRA 338;
Lustan v. Court of Appeals, 334 Phil. 609 (1887); Olea v. Court of Appeals,
317 Phil. 338 (1995).
7. 40 Phil. 570 (1919).
8. 38 Phil. 579 (1918).
9. G.R. No. 126376, November 20, 2003, 416 SCRA 263.
10. Sec. 3 (d), Rule 131, Revised Rules of Court.
11. Pelayo v. Perez, G.R. No. 141323, June 8, 2005, 459 SCRA 475, citing
Buenaventura v. Court of Appeals, supra footnote 9.
12. Republic v. Court of Appeals, G.R. No. 74930, July 5, 1993, 224 SCRA
285; Director of Lands v. Intermediate Appellate Court, G.R. No. 73246,
March 2, 1993, 219 SCRA 339; Sapu-An v. Court of Appeals, G.R. No.
91869, October 19, 1992, 214 SCRA 701.

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