Gerardino, Sr. vs. CFI Capiz Br. III, 80 SCRA 646

FACTS:On July 12, 1966, Jovito Gloria, instituted against Rosario Artuz Civil Case No. M-79 in the Court of First Instance of Capiz for consolidation of ownership of a parcel of land.The complaint stated that on October 10, 1964 Rosario Artuz executed in favor of Jovito Gloria a deed of sale with right to repurchase within a period of one (1) year of a parcel of residential land located in Poblacion, Tapaz, Capiz; that the defendant allegedly failed to exercise her right to repurchase within the stipulated period; that the plaintiff had been in possession of the property immediately after the execution of the document; and that said plaintiff had been paying the taxes thereon.In her answer the defendant Rosario Artuz admitted the existence of the deed of sale with right to repurchase but denied the legality and genuineness thereof and alleged as affirmative defenses that the document in question was an equitable mortgage, the real intention of the parties being merely to secure the payment of a loan in the amount of P2.025.00; that the defendant, who was then deaf. totally blind and senile, did not understand English and was made to affix her thumbmark on the alleged deed of sale with right to repurchase upon representation of the plaintiff that the same was a mere equitable mortgage; that the defendant had remained in possession of the property in question and had been paying the taxes thereon that a tender of payment was made by defendant to the plaintiff on or before October 10, 1965 to repurchase the property but plaintiff refused to accept the amount of P2,025.00 because he was asking for a much bigger amount of P6,000.00; that by reason of such refusal, the defendant consigned the amount of P2,025.00 with the court; and that the actual amount of the loan received by the defendant from the plaintiff was only P1,525.00 inasmuch as the amount of P500.00 was retained by plaintiff as interest on the transaction.The original defendant Rosario Artuz died. Hence the complaint was amended to substitute the deceased defendant with her surviving heirs.

ISSUE: Whether or not the defendants appeal on repurchase the consolidated land after a month from the judgment of the court is meritorious.

HELD: The court ruled that the appeal has merit.The nature of the document in question was squarely placed in issue. The defendants contend that the document was only an equitable mortgage The third paragraph of Article 1606 of the Civil Code of the Philippines provides that “the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase.” Hence even if after a new trial it is found that the document in question is a true sale with right of repurchase, the defendants may still exercise the right to repurchase the land in question within thirty days from the time final judgment is rendered.

Digest Credit:  Irvin Henson S. Ilog

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