G.R. No. 106822. December 21, 1993
FLORDELIZ L. BELLIDO AND VILLAMOR H. BELLIDO, PETITIONERS, VS. THE HON. COURT OF APPEALS, AND SPOUSES MAMERTO P. DEL RIO AND ESTELITA L. DEL RIO, RESPONDENTS.
PADILLA, J.:
In this petition for
review, petitioner-spouses Flordeliz and Villamor Bellido seek to set aside the
decision* of public respondent Court of Appeals in CA-G.R. CV No. 32461 dated 24
August 1992.
Petitioner-spouses had
filed a complaint in the Regional Trial Court of Quezon City for annulment of
the deed of absolute sale covering a house and lot located in Don Antonio
Heights, University District, Payatas, Quezon City. The lot was formerly covered by TCT No. 277097 in the name of the
petitioner Flordeliz L. Bellido.
The evidence adduced by
the parties is summarized by the Court of Appeals as follows:
“Briefly,
plaintiffs’ evidence sought to prove that: being financially distressed in
October or November 1986, plaintiffs offered to defendants the subject property
valued at P900,000.00 as collateral for a loan of P300,000.00; an advance of
P85,284.39 (in PNB Check No. 131229) was given by defendant husband to
plaintiffs who used said amount to pay the balance of their loan with the
Central Bank Provident Fund Office; before the balance of the loan was given to
plaintiffs, defendants demanded the execution of a deed of absolute sale and the
surrender of the title to the land, and assured plaintiffs that the deed of
sale and title would be merely collateral to the loan; plaintiffs executed the
deed of absolute sale on March 5, 1987 but they received only a total of
P240,000.00 including the advance of P85,284.39; of the loan of P300,000.00,
P60,000.00 was immediately deducted by defendants as interest for one year;
and, sometime in April – May, 1987, defendants tried to evict Joel de Leon,
plaintiffs’ caretaker from the disputed house and lot.
“Defendants’
evidence, on the other hand, tended to establish that: thru an aunt of
defendants, plaintiffs secured from the latter a loan in the amount of
P85,284.39, the exact amount needed to redeem plaintiffs’ property from the
Central Bank; defendant husband granted said loan on plaintiffs’ promise that
they would pay the loan within three (3) months, otherwise, if plaintiffs
would fail to settle within said period, plaintiffs would sell the subject
property to defendants for P300,000.00 including the amount of P85,284.39;
plaintiffs failed to pay within the stipulated three (3) month grace period and
even after another one (1) month extension granted by defendants; plaintiffs
then voluntarily appeared in the office of defendants’ counsel to execute the
assailed deed of absolute sale; defendants had the disputed property titled
under their names after paying all the back taxes thereon since 1982; and,
defendants informed the caretaker of plaintiffs that they are now the owners of
the subject property and after the latter moved out of the premises, defendants
occupied the same up to the present.”[1]
After trial, the Regional Trial Court, Branch 90, Quezon City
rendered a decision* dated 15 March 1991 dismissing
herein petitioner-spouses’ complaint and upholding the deed of absolute sale.
On appeal, the Court of Appeals affirmed the trial court decision
deleting however the awards of moral damages and attorney’s fees in favor of
the private respondents.
The petitioner-spouses raise the following issues to this Court:
“I. THE COURT OF APPEALS ERRED IN OVERLOOKING
THIS VITAL EVIDENCE ON RECORD: THAT P85,284.00 OF THE AMOUNT GIVEN BY PRIVATE
RESPONDENTS WAS USED TO REDEEM THE SUBJECT PROPERTY FROM THE CB PROVIDENT FUND;
IF THE PROPERTY WAS INDEED “SOLD” BY PETITIONERS, WHY SHOULD THEY INVEST
THE PROCEEDS OF THE “SALE” ON THE PROPERTY WHICH NO LONGER BELONGED
TO THEM?
“II. THE
COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 1602, NO. 6 OF THE CIVIL CODE,
TO THE CASE AT BAR.”[2]
Once again, this Court is asked to decide whether a “Deed of
Absolute Sale” should be treated as an equitable mortgage.
Article 1602 of the Civil Code provides that a contract shall be
resumed to be an equitable mortgage, in any of the following cases.
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 executed.
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.
Article 1604 of the Civil Code makes the aforementioned Article
1602 applicable to a contract purporting to be an absolute sale.
After carefully going over the records of this case, we are
convinced that the agreement between the petitioner-spouses and the private
respondents is an equitable mortgage.
It is true that the Deed of Absolute Sale executed by the
petitioner-spouses is dated 5 March 1987 but the Court finds it hard to believe
that the private respondents had earlier loaned a little over Eighty-Five
Thousand Pesos (P85,000.00) to herein petitioners without getting any type of
security for the loan, not even a promissory note.
On the other hand, the version of the petitioners is much more
consistent with the presumption that a person takes ordinary care of his
concerns.
According to the petitioners, private respondents required them
to surrender their transfer certificate of title over the lot and further
required that they execute a Deed of Absolute Sale over the said lot before
they could obtain the balance of the Three Hundred Thousand Pesos (P300,000.00)
less the advance of P85,284.39 which was used to pay the petitioners’ loan with
the Central Bank Provident Fund to release the mortgage over the lot, and less
the pre-deducted amount of P60,000.00 representing advance interest on the
loan. The transfer certificate of title
and the unnotarized Deed of Absolute Sale thus served as the security for the
loan extended to the petitioner-spouses.
The Court had previously
ruled:
“That a transaction was really one of loan with security, and
therefore a mortgage, may be
shown by the aid of surrounding circumstances, and parol evidence is competent
in that respect. This rule has been
accepted for many generations. The
difficulty lies in its application, for many factors are to be considered, none
of them conclusive in itself, but each to be considered in its company.”[3]
In the case at bench,
several factors are present which support the existence of an equitable
mortgage, namely:
1.
Petitioners lost no time in filing the complaint upon
discovering that the private respondents had caused the cancellation of their
(petitioners’) title to the land.
2.
Petitioners were financially distressed at the time of the
transaction. This is admitted by the
private respondents.[4]
3.
Even if the petitioners’ evidence consisting of an appraisal
report of an independent real estate appraisal company[5] is inadmissible
and unsupported, this report stating that the total market value of the
property subject of this case was about One Million Four Hundred Twenty One
Thousand Pesos (P1,421.000.00) as of 29 January 1987 and the testimony of
petitioner Villamor Bellido that the value of the property in 1986 was about
Nine Hundred Fifty Thousand Pesos (P950,000.00)[6]
cannot be completely ignored by this Court.
In Vallangca v. Court
of Appeals[7], this Court took judicial notice of the fact
that real estate usually commands a market value much higher than its assessed
value. In the case before us, while the
alleged purchase price of Three Hundred Thousand Pesos (P300,000.00) may
be a bit more than the market value reflected in the owner’s copy of the
Declaration of Real Property[8]
totalling about Two Hundred Eighty Six Thousand Pesos (P286,000.00) only, the
presence of other circumstances hereinabove discussed give rise to a conclusion
that the stated purchase price (P300,000.00) was intentionally fixed to
carefully or skillfully prevent the application of Articles 1602 and 1604 of
the Civil Code.
WHEREFORE, premises
considered, the decision sought to be reviewed is hereby SET ASIDE. The
transaction entered into by petitioners Flordeliz L. Bellido and Villamor H.
Bellido and private respondents Mamerto P. del Rio and Estelita L. del Rio is
declared to be an equitable mortgage. The deed of absolute sale dated 5 March 1987 between petitioners and
private respondents is declared NULL and
VOID and, consequently, the
Register of Deeds of Quezon City is ordered to cancel Transfer Certificate of Title No. 357776 for being void ab initio. Transfer
Certificate of Title No. 277097 in the name of petitioner Flordeliz
Lucindo-Bellido is ordered reinstated with all force and effect as though it had not been cancelled.
Costs against the private
respondents.
SO ORDERED.
Narvasa, C.J., (Chairman), Regalado, Nocon, and Puno, JJ., concur.
* Penned by Justice Luis L. Victor
with the concurrence of Justices Ricardo L. Pronove, Jr. and Eduardo G.
Montenegro
[1]
Rollo, pp. 25-26
* Penned by Judge Abraham P. Vera
[2]
Rollo, p. 14
[3]
Serrano v. Court of Appeals, G.R. No. L-46307, 9 October 1985, 139 SCRA
179
[4]
Rollo, p. 48
[5]
Exhibit “B” – Rebuttal
[6]
TSN, 27 March 1990, pp. 4-5
[7]
G.R. No. 55336, 4 May 1989, 173 SCRA 42
[8]
Exhibit “4”