VICENTE BAUTISTA, PLAINTIFF AND APPELLANT, VS. LAM PING AND JOSE O. VERA, DEFENDANTS AND APPELEES.

This is an appeal from a judgment of the
Court of First Instance of Baguio, dismissing the complaint filed for
the annulment of a deed of resale on the grounds that it was obtained
by means o£ intimidation and that it was against the Constitution, The
plaintiff appealed.

In the year 1933, the defendant Lam Ping obtained from Silvestre
T. Bautista, father of the plaintiff Vicente Bautista (who brought this
action as assignee of his father), the sum of P30,000.00 for which Lam
Ping executed a deed of sale of the real property herein involved with
the right of repurchase, in favor of Silvestre. This sum was fully paid
by Lam Ping. In 1941, Lam Ping borrowed from the Philippine National
Bank, with the .guaranty of said property, the sum of P35,000 with
which he began the construction of the second building, on the lot in
question. On March 30, 1941, Lam Ping, finding that said amount was
insufficient to finish the building, approached Silvestre for a loan of
P55,000.00 which Bautista granted to him. With part of this money he
paid his indebtedness to the Philippine National Bank and with the
balance he finished the construction of the building. for the said sum
of P55,000, Lam Ping executed a deed of sale of the sane property with
option to repurchase (Exh. A of the plaintiff and Bin. 8 of the
defendant). As Lam Ping know very little English or Spanish, the
languages in which the deed was drafted, he asked his nephew Teodoro
Lam to interpret and explain to him the contents of said deed. Aware of
the contents, Lam Ping asked Silvestre why was the document drafted in
the form of a deed of sale with option to repurchase and not in that of
a mortgage. Silvestre answered that as ho was not a money lender it was
not his practice to accept mortgages and that when Lam Ping borrowed in
the year 1933 the sum of P30,000 he also executed a deed of sale with
right to repurchase and no trouble had arisen as he had got back his
property. Lam Ping then asked Teodoro Lam to compare the two documents
and they were found to be in the same form with the exception, of
course, of the amounts, dates, etc. Silvestre further explained that
Lam Ping could get his property back at any time before the expiration
of the period of eight years specified in the deed, by paying back to
Silvestre the amount mentioned therein. Ma Lam Ping badly needed the
money to pay his indebtedness to the Philippine National Bank and to
continue the construction of the building, he acquiesced in signing the
deed. Silvestre registered the document in the office of the Register
of Deeds of Baguio, and procured the cancellation of the transfer
certificate of title in the name of Lam Ping and the Issuance of another
certificate in Silvestre’s name.

Subsequently, the assessment division of the City Treasurer of
Baguio seat a notice to Lam Ping to the effect that the lot and the
buildings thereon had been sold to Silvestre. After the notice was
interpreted to Lam Ping by his nephew Teodoro Lam, Lam Ping was
alarmed, believing that Silvestre had some sinister purpose with regard
to his property. It should be noted that the former deed of sale with
regard to the loan of P30,000.00 had never been registered and no new
certificate of title had been issued to Silvestre.

Silvestre explained to Lam Ping that the issuance of the new
certificate of title in Silvestre’s name did not make any difference,
because during the eight-year period Lam Ping could repurchase and
reacquire the property.

Lam Ping could net. dismiss his fears and was greatly worried
notwithstanding the explanation given to him. To allay his fears he
tfeld Silvestre that he would forthwith raise the money to redeem the
property.

Lam Ping applied for a loan to the Pilipinas Compania de
Seguros, but as the war broke out the matter was dropped. However, on
November 2, 1943, through the help of Juan F. Zarate, Lam Ping obtained
a loan of P57,000 from the defendant Jose 0. Vera. Although the deed of
mortgage had already been signed by Lam Ping in favor of Vera for said
sum of P57,000, the latter did not want to deliver said sum until
Silvestre had signed the deed of repurchase in favor of Lam Ping. After
the signing by Silvestre of said deed, Lam Ping, accompanied by Jose
Perez, son-in-law of Vera, brought the sum of P55,000 in buri
sacks to be delivered to Silvestre, but the latter refused saying that
thetsmoney was too bulky and that he would prefer a check. Lam Ping and
Jose Perez deposited the amount with the Philippine National Bank and
obtained a check for the amount which they delivered to Silvestre.
Silvestre received the check smiling, without making any protest or
comment.

Silvestre, through his son Vicente Bautista, the herein plaintiff,
deposited the check In his current account in the Bagulo branch of the
Philippine National Bank, which cashed the check and credited the
amount to the depositor Silvestre. Silvestre had at that time a balance
in his favor of P40,000.00. He afterwards made withdrawals, the total
amount of which did not reach the sum of P40,000.00.

We agree with the conclusion of the trial court that, although the
transaction between Silvestre and Lam Ping was in the form of a sale
with the right to repurchase, yet from the circumstances of the case
there is no doubt that it was an equitable mortgage. To mention a few
of these circumstances: Lam Ping did not in any way intend to sell his
lot and building; he was even greatly alarmed when Silvestre registered
the deed and had a new title issued in his name, of which Lam Ping
became aware when he was notified by the City Assessor of Baguio that
the property had been transferred to the name of Silvestre. The money
that he borrowed was used partly to pay his indebtedness to the
Philippine National Bank and the rest to finish the construction of the
second building. It would have been utterly unreasonable for Lam Ping
to finish the construction of the building if he had already sold the
property in question; he would have used the balance for other
purposes, which would have benefited him and not the purchaser. He made
a strong remonstrance to Silvestre when the document was explained to
him by his interpreter, but Silvestre assuaged him with the assurance
that it made no difference as he could get back his property within the
eight-year period if he had the money. The result from this transaction
is that when Lam Ping, a Chinese national, redeemed his property, he
did not violate the provision of the Constitution which prohibits the
sale of real estate to a foreigner.

But even supposing that the transaction was that of a sale with the
right to repurchase, the redemption made by Lam Ping of the real estate
did not constitute a sale, transfer, or assignment, within the meaning
of the constitutional prohibition.

With regard to the contention that Silvestre accepted the payment
through Intimidation, it has no foundation In fact. The appellant
testified that the broker Zarate accused Silvestre before the Japanese
authorities of refusing to accept in payment Japanese Military Notes.
This complaint referred not to the transaction between Silvestre and
Lam Ping, but to the sale of another piece of land which Silvestre had
promised to sell to Zarate, Sivestre refusing to accept in payment
Japanese Military Notes. With reference to this transaction, Silvestre
was brave enough to stand firm In his refusal, notwithstanding the
complaint, causing the negotiation to fall through. This would show
that the accusation was not sufficient to intimidate him.

When Lam Ping and Jose Perez brought and tendered to Silvestre the
sum of P55,000 in Japanese Military Notes, the only objection of
Silvestre was that the amount was too bulky and he asked that he be
given a check for the same amount. If he had any objection he could
have refused to accept any payment either in cash or in check, both of
which represented Japanese Military Notes. He deposited the check in
his current account and Issued checks against his total balance as
increased by said check. The fact that his withdrawals did not amount
to more than P40,000 which was the balance before the deposit of the
check, does not mean that the P55,000 was not at his disposal) for he
could have drawn checks at any time against the total balance of his
current account. Furthermore, the withdrawals that he made cannot be
said to have been taken from the original balance of P40,000 and not
from the additional amount of P55,000, inasmuch as the original balance
was not earmarked.

In view of the foregoing, the judgment appealed from is hereby affirmed, with costs against the appellant. It is so ordered.

Paras, C.J., Feria, Pablo, Bengzon, Padilla, Tuason, Reyes and Bautista Angelo, JJ., concur.