Cuyugan vs. Santos

FACTS:

            A deed of sale was executed as a security for loan that Guillerma have with Santos. In the deed of sale, Guillerma shall continue to have possession of the land and pay the loaned amount. Cuyagan offered to pay the balance of the amount that his mother owed to Santos but the latter refused. Santos filed an action alleging that the period of the right to repurchase has expired. Cuyugan contended that the sale was only a security of the loan or mortgage.

ISSUE:

WON the transaction is a sale or mortgage?

HELD:

MORTGAGE. Under the law, the intention of the parties shall be given force not the provisions of the instrument on its face. In the case at bar, what was intended by the parties was for the deed of sale to be a consideration for a loan or mortgage. Therefore, the transaction was mortgage.

Digest Credit: Kelly Espera