G.R. No. 179205 , July 30, 2014
Topics:
Contract to Sell, Equitable Mortgage
Doctrines:
If the terms of the contract are clear and leave no doubt upon the intention of the parties, the literal meaning of its stipulations shall control
Summary:
The De la Rosa siblings shared ownership of a piece of land. Guillermo Batongbacal was given the property to be sold by Reynaldo dela Rosa, and Guillermo agreed to buy it for 10,000 PHP. to deliver the Special Power of Attorney allowing Reynaldo to sell the property. He was told that the agreement between him and the Batongbacals was an equitable mortgage and that the latter would loan him $31,500.00, which would be due once he received his share of the proceeds from the sale of the land registered under TCT No. T-107449. The RTC’s ruling was upheld on appeal.
Facts:
The De la Rosa siblings shared ownership of a piece of land. Guillermo Batongbacal was given the property to be sold by Reynaldo dela Rosa, and Guillermo agreed to buy it for 10,000 PHP and to deliver the Special Power of Attorney allowing Reynaldo to sell the property. A certain Mario and Guillermo personally took the initiative to survey the property while the SPA was still pending. Both made many demands of Reynaldo to carry out the sale deal, but they were ignored. So, before RTC Bulacan, a claim for specific performance, rescission, and damages was made. Following the filing of Civil Case No. 215-M-90, Mario and Guillermo registered their claim on the full property’s certificate of title by filing a Notice of Lis Pendens. In his response, Reynaldo argued that the alleged Contract to Sell was invalid because he had never authorized it. Reynaldo failed to persuade the court a quo that the contract he entered into with Mario was an equitable mortgage. He was told that the agreement between him and the Batongbacals was an equitable mortgage and that the latter would loan him $31,500.00, which would be due once he received his share of the proceeds from the sale of the land registered under TCT No. T-107449. The RTC’s ruling was upheld on appeal.
Issue:
Is the contract entered into by Reynaldo and Guillermo a contract to sell or an equitable mortgage?
Ruling:
Reynaldo and Guillermo entered into a contract of sale, in which the parties’ intentions can be inferred from the tone of the “resibo” they signed. Additionally, the contract does not fall within Article 1602 of the civil code’s clauses that are deemed to be equitable mortgages.