Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-36821 June 22, 1978 JOSE P. P. DIZON, petitioner, vs. L!REDO G. G"ORRO #Su$%&'&u&e( $) PCIT PCIT DE GUZMN G"ORRO *% Ju('+'* ('n'%&*&'/ o0 &e E%&*&e o0 0e(o G. G*$oo *n( &e DEELOPMENT "N4 O! T5E P5ILIPPINES, respondents.
Leonardo Abola for petitioner. petitioner. Carlos J. Antiporda for respondents. r espondents.
GUERRERO, J.: Petition Petition for revie on certiorari of the decision of the !ourt "ppeals 1 in !"#$.R. No. %&'()#R entitled * Jose P. P. Dizon, Plainti-Appellant, Plainti-Appellant, vs. vs. Alfredo G. Gaborro Gaborro +substituted b Pacita de $u-an $aborro as /udicial "dinistratri0 of the 1state of "lfredo $, $aborro2 trial the Developent 3an4 of the Philippines, Defendants#"ppellees,* Defendants#"ppellees,* a5rin6 ith odi7cation the decision of the !ourt of First Instance of Papan6a, 3ranch II in !ivil !ase No. 89:%. The dispositive dispositive portion of the decision sou6ht sou6ht to be revieed revieed reads; reads; IN VI1< OF T=1 FOR1$OIN$, the >ud6ent appealed therefro is hereb a5red ith odi7cation that the plainti?#appellant has the ri6ht to refund or reiburse reiburse the defendant# appellees he su of P9@9,:@9.'9 ith interest at :A per annu fro October &, 9')' until full paent, said ri6ht to be e0ercised ithin one ear fro the date this >ud6ent becoes 7nal, ith the understandin6 that, if he fails to do so ithin the said period, then he is deeed to have lost his ri6ht over the lands forever.
" suppleentar issue raised is hether or not $aborro or the respondent adinistratri0 of the estate should account for all the fruits produced trial incoe received b the fro the lands entioned trial described in the aforesaid *Deed of Sale ith "ssuption of Mort6a6e.* The antecedent facts established in the record are not disputed. Petitioner /ose P. Di-on as the oner of the three +@2 parcels of land, sub>ect atter of this liti6ation, situated in Mabalacat, Papan6a ith an a66re6ate area of 9@.): hectares, as evidenced b Transfer !erti7cate of Title No. 9)&('. =e constituted a 7rst ort6a6e lien in favor of the Develop. ent 3an4 of the Philippines in order to secure a loan in the su of P@:,. trial a second ort6a6e lien in favor of the Philippine National 3an4 to cure his indebtedness to said ban4 in the aount of P'@,:@9.'9. Petitioner Di-on havin6 defaulted in the paent of his debt, the Developent 3an4 of the Philippines foreclosed the ort6a6e e0tra>udiciall pursuant to the provisions of "ct No. @9@). On Ma 8&, 9')', the hinds ere sold to the D3P for# P@9,%)'.89, hich aount covered the loan, interest trial e0penses, trial the correspondin6 *!erti7cate of Sale,* +10hibit "#8, 10hibit 9b as e0ecuted in favor of the said On Noveber 98, 9')', Di-on hiself e0ecuted the deed of sale +10hibit "l over the properties in favor of the D3P hich deed as recorded in the O5ce of the Re6ister of Deeds on October &, 9'&. Soetie prior to October &, 9')' "lfredo $. $aborro trial /ose P. Di-on et. $aborro becae interested in the lands of Di-on. Di-on ori6inall intended to lease to $aborro the propert hich had been lin6 idle for soe tie. 3ut as the ort6a6e as alread foreclosed b the DP3 trial the ban4 in fact purchased the lands at the foreclosure sale on Ma 8&, 9')', the abandoned the pro>ected lease. The then entered into the folloin6 contract on October &, 9')' captioned trial Cuoted, to it; D11D OF S"E1
9. " parcel of land +Eot No. 9:: of the !adastral Surve of Mabalacat2, ith the iproveents thereon, situated in the Municipalit of Mabalacat, 3ounded on the N1 b Eot No 9:(; on the S1., b Eots Nos. 9:@, 9:', 9'9 trial 9'8L on the S< b Eot No. 9'8 trial on the N< b the uniproved provincial road to Ma6alan6. !ontainin6 an area of T
obli6ations ith the Developent 3an4 of the Philippines trial the Philippine National 3an4 aforeentioned. The V1NDOR does hereb arrant title, onership trial possession over the properties herein sold trial conveed, trial binds hiself to defend the sae fro an trial all claiants. That the V1ND11, does b these presents, assue as he has assued, under the sae ters trial conditions of the ort6a6e contracts dated ... and ... of the ort6a6e indebtedness of the V1NDOR in favor of the Developent 3an4 of the Philippines trial the Philippine National 3an4, respectivel, as if the aforesaid docuents ere personall e0ecuted b the V1ND11 trial states trial reiterates all the ters trial conditions stipulated in said both docuents, a4in6 the to all intent trial purposes, parts hereof b reference. IN
@. " parcel of land +Eot No. )&: of the !adastral Surve of Mabalacat, Papan6a containin6 an area of +9),'892, ore or less. hich I acCuired fro the said /ose P. Di-on b purchase b virtue of that docuent entitled *Deed of Sale ith "ssuption of Mort6a6e* dated October &, 9')', ac4noled6ed b both of us before Notar Public of Manila $R1$ORIO SM3IEIO as DO!. No. @%8, Pa6e No. (, Re6. No. VII Series of 9')'. Said option shall be valid trial e?ective ithin the period coprises fro /anuar, 9'&) to Deceber @9, 9'(, inclusive, upon paent of the aount of ON1 =NDR1D T=IRTH ON1 T=OS"ND 1I$=T =NDR1D T=IRTH ON1 P1SOS '99 +9@9,:@9.'92, Philippine !urrenc, plus an interest of ei6ht per centu +:A2 thereof, per annu. This is ithout pre>udice at an tie to the paent b Mr. Di-on of an partial aount to be applied to the principal obli6ation, ithout an a disturbin6 the possession andor onership of the above properties since onl full paent can e?ect the necessar chan6e. In the event that Mr. /ose P. Di-on a be able to 7nd a purchaser for# the fore6oin6 properties on or the 7fth ear fro the date the e0ecution of this docuent, the $R"NT11, Mr. /OS1 P. DIJON, a do so provided that the a66re6ate aount hich as Paid to Developent 3an4 of the Philippines trial to the Philippine National 3an4 to6ether ith the interests thereon at the rate of :A shall be refunded to the undersi6ned. Furtherore, in case Mr. /ose P. Di-on shall be able to 7nd a purchaser for# the said properties, it shall be his dut to 7rst notif the undersi6ned of the conteplated sale, nain6 the price trial the purchaser therefor, trial aardin6 the 7rst preference in the sale hereof to the undersi6ned. IN
This is ith reference to our ort6a6e lien of P@:,. ore or less over the properties ore particularl described in T!T No. 9)&(' of the land records of Papan6a in the nae of /ose P. Di-on. In this connection, e have the honor to infor ou that pursuant to a Deed of Sale ith "ssuption of Mort6a6e e0ecuted on October &, 9')' b /ose P. Di-on in favor, cop of hich is hereto attached, the onership of the sae has been transferred to e sub>ect of course to our conforit to the assuption of ort6a6e. "s a conseCuence of the fore6oin6 docuent, the obli6ation therefore of pain6 our 6oodselves the total aount of indebtedness has shifted to e !onsiderin6 that these a6ricultural properties have not been under cultivation for# Cuite a lon6 tie, I ould therefore reCuest that, on the preise that the assuption of ort6a6e ould be a6reeable to ou, that I be alloed to pa the outstandin6 obli6ation, under the sae ters trial conditions as ebodied in the ori6inal contract of ort6a6e ithin ten +92 ears to be divided in 9 eCual annual aorti-ations. I a enclosin6 hereith a chec4 in the aount of P@,&'.') representin6 9A of the indebtedness of /ose P. Di-on to sho honest intention in assuin6 the ort6a6e obli6ation to ou ... The 3oard of $overnors of the D3P, in its Resolution No. (&& dated October 89, 9')' approved the o?er of $aborro but said 3oard reCuired hi to pa 8A of the purchase price as initial paent, +10h. D2 "ccordin6l, on /ul 99, 9'&, the D3P trial $aborro e0ecuted a conditional sale of the properties in consideration of the su of P@&,'.') +10h. !2 paable 8A don trial the balance in 9 ears in the earl aorti-ation plan at :A per annu. On /anuar (, 9'&, Di-on assi6ned his ri6ht of redeption Eo $aborro in an instruent +10h. '2 entitled;
ASSIGNMN! "# $IG%! "# $DMP!I"N AND ASS&MP!I"N "# "'LIGA!I"N GNO< "EE M1N 3H T=1S1 PR1S1NTS; This instruent, ade trial e0ecuted b trial beteen /OS1 P. DIJON, arried to Norberta P. Torres, Filipino, of le6al a6e, ith residence trial postal address at Mabalacat, Papan6a. hereinafter referred to as the "SSI$NOR trial "EFR1DO $. $"3ORRO, arried to Pacita de $u-an, li4eise of le6al a6e, Filipino, ith residence trial postal address at %&, (th Street, $ilore "ve., Kue-on !it, hereinafter referred to as the "SSI$N11,
!$ANS#$ C$!I#ICA! "# !I!L N". ()*+ P$"INC "# PAMPANGA 9. " parcel of land +Eot No. 9:: of the !adastral Surve of Mabalacat2, ith the iproveents thereon, situated in the
Municipalit of Mabalacat. 3ounded on the N1 b Eot No. 9:(; on the S1. b Eots Nos. 9:@, 9:', 9'9 trial 9'8L on the S<. b Eot No. 9'8L trial on the N< b the uniproved provincial road to Ma6alan. !ontainin6 an area of to hundred tent#one thousand one hundred trial sevent to sCuare eters +889,9(82, ore or less. 8. " parcel of land +Eot No. 9'@ of the !adastral Surve of Mabalacat2, ith the iproveents thereon, situated in the Municipalit of Mabalacat. 3ounded on the N1. b a road trial Eots Nos. )&', )( trial )(9L on the S1. b Eot No. )(9 trial the uniproved road to Ma6alan#, on the S<. b a roadL trial on the N< b a road trial the Sapan6 Pritil !ontainin6 an area of nine hundred sevent ei6ht thousand seven hundred and seven hundred sCuare eters +'(:,(9(2, ore or less. @. " parcel of Eand +Eot No. )&: of the !adastral Surve of Mabalacat2, ith the iproveents thereon, situated in the Municipalit of Mabalacat, 3ounded on the N1. b Eot No. )(L and on the S1., S<. and N<. b roads. !ontainin6 an area of one hundred 7ve thousand nine hundred and tent#one sCuare eters +9),'892, ore or less. <=1R1"S, the above described properties ere ort6a6ed ith the Rehabilitation Finance !orporation, no Developent 3an4 of the Philippines, hich ort6a6e has been foreclosed on Ma 8&, 9')'L "ND <=1R1"S, the herein "ssi6nor has still the ri6ht to redee the said properties fro the said Developent 3an4 of the Philippines ithin a period of one +92 ear counted fro the date of foreclosure of the said ort6a6e. NO<, T=1R1FOR1, for ......................................... trial other valuable considerations, receipt hereof is hereb ac4noled6ed b the "ssi6nor fro the "ssi6nee, The herein "ssi6nor does hereb transfer trial assi6n to the herein "ssi6nee, his heirs, successors trial assi6ns the aforesaid ri6ht to redee the aforeentioned properties above described. That ith this docuent the herein "ssi6nor relinCuishes an and all ri6hts to the said properties includin6 the iproveents e0istin6 thereon. That the "ssi6nee, b these presents, hereb assues the obli6ation in favor of the d Developent 3an4 of the Philippines, as Pain6 hatever le6al indebtedness the "ssi6nor has ith the d 3 in connection ith the transaction re6ardin6 the hove entioned Properties sub>ect to the 7le and conditions that the said 3an4 a reCuire and further reco6ni-es the second ort6a6e in favor Of the Philippine National 3an4. IN
+"c4noled6ent Oitted2 "fter the e0ecution of the conditional e to hi $aborro ade several paents to the D3P and PN3. =e introduced iproveents, cultivated the 4inds raised su6arcane and other crops and appropriated the produce to hiself. =e ill paid the land ta0es thereon. On /ul ), 9'&9, /ose P. Di-on throu6h his laer, "tt. Eeonardo "bola, rote a letter to $aborro inforin6 hi that he is forall o?erin6 reiburse $aborro Of hat he paid to the ban4s but ithout, hoever, tenderin6 an cash, and deandin6 an accountin6 of the incoe and of the pro contendin6 that the transaction the entered into as one of antichresis. $aborro did not accede to the deands of the petitioner, hereupon, on /EH @, 9'&8, /ose P. Di-on instituted a coplaint in the !ourt of First Instance of Papan6a, $aborro, alle6in6 that the docuents Deed of Sale udicial foreclosure sale held on Ma 8&, 9')', and that the onl ri6ht hich plainti? possessed as a ere ri6ht to redee the lands under "ct @9@) as aended. Defendant "lfredo $. $aborro also anser, denin6 the aterial averents of the coplaint, statin6 that the *Deed of Sale ith "ssuption of Mort6a6e* e0presses the true a6reeent of the parties *full, truthfull and reli6iousl* but the Option to Purchase Real 1state* does not e0press the true intention of the parties because it as ade onl to protect the reputation of the plainti? aon6 his tonates, and even in the supposition that said option is valid, the action is preature. =e also 7led a counterclai for daa6es, hich plainti? denied. The issues havin6 been >oined, a pre#trial as held and the folloin6 stipulation of facts aditted b the parties as approved b the !ourt in the folloin6 order dated Februar 88, 9'&@; ORD1R "t todaBs initial trial the folloin6 ere present; Mr. Eeonardo "bola, for the plainti?L Mr. !arlos "ntiporda, for the defendant "lfredo $aborroL and Mr. Vir6illo Fu6oso, for the Developent 3an4 of the Philippines; The parties brave stipulated on the folloin6 facts; 9. That "nne0 " attached to the coplaint is ar4ed 10hibit "# Stipulation. The parties have aditted the due e0ecution, authenticit and
6enuineness of said 10hibit "#Stipulation. This fact has been aditted b all the three parties. 8. That the defendant $aborro e0ecuted "nne0 3, hich is ar4ed 10hibit 3# Stipulation. This fact has been aditted onl beteen plainti? and defendant $aborro. @. That the three parcels of land referred to in para6raph @ of the coplaint, on or before October &, 9')', ere sub>ect to a 7rst ort6a6e lien in favor of the Developent 3an4 of the Philippines, forerl Rehabilitation Finance !orporation, to secure paent of a loan obtained b the plainti? /ose P. Di-on in the ori6inal su of P@:,. plus interest, hich has been assued b defendant $aborro b virtue of a docuent, 10hibit "#Stipulation, and also sub>ect to a second ort6a6e lien in favor of the Philippine National 3an4 to secure the paent of a loan in the su of P'@,:@9.'9 plus interest up to "u6ust @, 9')9, hich ort6a6e liens ere dul annotated on T!T 9)&('. This fact has been aditted b the plainti? and defendant $aborro. %. In respect to the foreclosure of the 7rst ort6a6e referred to above, it as adit that the sae as foreclosed on Ma 8&, 9')', the second ort6a6e has not been aditted nor foreclosed. ). That the Developent 3an4 of the Philippines adits that the 7rst ort6a6e referred to above as foreclosed on Ma 8&, 9')' under the provision,,L of Public "ct No# @9@), as aended. &. That subseCuentl the Developent 3an4 and the defendant $aborro e0ecuted a docuent entitled !onditional Sale over the sae parcels of land referred to in para6raph @ of the coplaint, and cop thereof ill be furnished b the Developent 3an4 of the Philippines and ar4ed 10hibit !#Stipulation. (. That on or before October &, 9'&, T!T No. 9)&(' of the Re6ister of D of Papan6a in the nae of /ose P. Di-on coverin6 the three parcels of land referred to in the coplaint as cancelled and in lieu thereof T!T NO. 8%8'8 of the Re6ister of Deeds of Papan6a as issued in the nae of the Developent 3an4 of the Philippines. This fact has been aditted b all the parties. :. That after the e0ecution of the deed of conditional sale, certain paents ere ade b the defendant $aborro to the Developent 3an4, the e0act aount to be deterined later and receipts of paents to be also e0hibited later. This fact has been aditted b all the three parties. '. That since October &, 9')', the defendant $aborro has ade several paents to the PN3 in the aounts appearin6 on the receipts hich ill be shon later, such paents bein6 ade on account of the su of P@:,:@9.'9. The paent as assued b said # defendant $aborro. This fact has been aditted b plainti? and defendant $aborro onl. 9. That since the e0ecution of 10hibits " and 3#Stipulation, it,, defendant $aborro has been and still is in the actual possession f the three parcels of land in Cuestion and he is actuall cultivatin6 the sae and that the land ta0es thereon have been paid b said defendant $aborro, the aounts of said
ta0es appearin6 on the o5cial receipts to be shon later. This fact has been aditted b plainti? and defendant $aborro onl. 99. That since defendant $aborro too4 possession of the lands in Cuestion, he has been appropriatin6 all the fruits produced and incoe of said lands ithout 6ivin6 to the plainti? an share hereof. This fact has been aditted b plainti? and defendant $aborro onl. Eet a cop of this order be served upon the plainti?, defendant $aborro and the Developent 3an4 of the Philippines ith the understandin6 that, if, ithin 7fteen +9)2 das, none of the parties Cuestions the correctness of The facts set forth above. this stipulation of facts shall be conclusive upon the parties interested in this case. Set the trial on the controversial facts on "pril 9:, 9'&@ at 9@; cloc4 in the ornin6. Para6raphs @ and 9 of the above Cuoted order ere deleted in an order dated /ul 8&, 9'&@. The records disclose that durin6 the pendenc of the case in the trial court, otions ere 7led b the plainti? for the appointent of a receiver of the properties but all ere denied. plainti? also reiterated the sae otion before the appellate court hich, hoever, disissed the sae, reservin6 to hi the ri6ht to 7le in the trial court. Plainti? did 7le but ith the sae result. certiorari proceedin6s ere resorted to in the !ourt of "ppeals in !"# $.R. No. SP#9%@ entitled * Jose P. Dizon vs. %on. #elipe 'ena/ino, et al .* hich the respondent court denied. "fter trial the court held that the true a6reeent beteen /ose P. Di-on, the plainti? therein, and the defendant "lfredo $. $aborro is that the defendant ould assue and pa the indebtedness of the plainti? to the Developent 3an4 of the Philippines and the Philippine National 3an4, and in consideration therefor, the defendant as 6iven the possession and en>oent of the properties in Cuestion until the plainti? shall have reibursed to defendant full the aount of P9@9,:@9.'9 plus :A interest per annu. "ccordin6l, on March 9%, 9'(, the loer court rendered >ud6ent, the dispositive part of hich reads; IN VI1< OF T=1 FOR1$OIN$, the docuents entitled BDeed of Sale ith "ssuption of Mort6a6eB+10hibit "#Stipulation2 and BOption to Purchase Real 1stateB +10hibit 3#Stipulation2 are hereb refored to the e0tent indicated above. =oever, since this action as 7led before the period alloed the plainti? to redee his propert, the preaturit of this action aside fro not bein6 principall alle6ed in the coplaint, deters this !ourt fro orderin6 further reliefs and reedies. The counterclai of the defendant is disissed. The plainti?Bs otion for ne trial and for reconsideration and otion for adission of suppleental coplaint havin6 been denied for lac4 of erit, on /une &, 9'(, plainti? appealed to the !ourt of "ppeals, hich. hoever, a5red the decision ith the odi7cation that the plainti?#appellant has the ri6ht to refund or reiburse the defendant# appellee the su of P9@9,:@9.'9 ith interest at :A per annu fro October &, 9')' until full paent, said ri6ht to be e0ercised ithin one +92 ear fro the date the >ud6ent
becoes 7nal, ith the understandin6 that, if he fails to do so ithin the said period, then he is deeed to have lost his ri6ht over the lands forever. PetitionerBs otion for reconsideration andor rehearin6 havin6 been denied b the !ourt of "ppeals, hence the present petition for revie on certiorari. The petitioner assi6ns the folloin6 errors, to it; I. The !ourt of "ppeals, li4e the loer court, erred in not holdin6 that upon established facts and undisputed docuentar evidence, the deed of sale ith assuption of ort6a6e +10hibit "#Stipulation2 constitutes an eCuitable ort6a6e or conveance to secure petitionerBs obli6ation to reiburse or refund to defendant "lfredo $aborro an and all sus to the e0tent of P9@9,:@9.'9, paid b said defendant in total or partial satisfaction of petitionerBs ort6a6e debts to the D3P and the PN3. In this connection, the !ourt of "ppeals erred; +"2 In not 7ndin6 that the petitioner as the laful oner of the lands in Cuestion; +32 In not 7ndin6 that the deed of sale in Cuestion is not a real and unconditional saleL and +!2 In not holdin6 that the option to purchase real estate +10hibit 3#Stipulation is conclusive evidence that the transaction in Cuestion is in fact an eCuitable ort6a6e. II. The !ourt of "ppeals also erred in 7ndin6 that the instruent entitled B"ssi6nent of Ri6ht of Redeption and "ssuption of Obli6ationB is conclusive evidence that the real transaction 1videnced b the BDeed of Sale ith "ssuption of Mort6a6eB is not an eCuitable ort6a6e. In this connection the said court also erred or at least coitted a 6rave abuse of discretion; +"2 In not 7ndin6 that the said deed of assi6nent is in fact a ere reiteration of the ters and condition of the deed of saleL +32 In 7ndin6 that the price or consideration of The aforesaid assi6nent. of ri6ht of redeption consisted of @ cavans of pala delivered b Mrs. $aborro to the petitionerL and +!2 In 7ndin6 that defendant $aborro purchased the lands in Cuestion b virtue of the aforeentioned deed of assi6nent. III. The, !ourt of "ppeals, li4e the trial court, also erred in not 7ndin6 that the estate of "lfredo $. $aborro is under obli6ation to render an accountin6 of all the produce, fruits and other incoe of the lands in Cuestion fro October &, 9')', and to reconve the said lands to the herein petitioner. In to connection, the said court also erred; +"2 In not holdin6 that as a ort6a6ee in possession the $aborro estate has the obli6ation to either render an accountin6 of the produce or fruits of the lands, or to pa rentals for the occupation of said landsL
+32 In not 7ndin6 that the $aborro estate has the obli6ations to reconve the lands in controvers to the herein petitioner, upon paent of the balance due fro hi after deductin6 either the net value of the produce or fruits of the Said lands or the rentals thereof, +!2 In not 7ndin6 that further reliefs or reedies a be 6ranted the herein petitionerL and +D2 In not orderin6 the adission of herein petitioners BSuppleental !oplaintB dated "pril @, 9'(. IV. The !ourt of "ppeals 7nall erred in not reversin6 the decision of the trial court, and in not renderin6 >ud6ent declarin6 that the deed of sale ith assuption of ort6a6e +10hibit " Stipulation2 is in fact an eCuitable ort6a6eL and in not orderin6 the $aborro estate either to render an accountin6 of all the produce or fruits of the lands in Cuestion or to pa rentals for the occupation thereof, fro October &, 9')'L and in not orderin6 the estate of "lfredo $. $aborro to reconve, transfer and assi6n unto the petitioner the aforeentioned lands. The to instruents sou6ht to be refored in this case ap pear to stipulate ri6hts and obli6ations beteen the parties thereto Pertainin6 to and involvin6 parcels of land that had alread beer foreclosed and sold e0tra>udiciall, and purchased b the ort6a6e creditor, a de6ree part. It becoes, therefore, necessar to deterine the le6alit of said ri6hts and obli6ation arisin6 fro the foreclosure and e pro. proceedin6s onl beteen the to contractin6 parties to the instruents e0ecuted beteen the but also in the so far a a6reeent a?ects the ri6hts of the de6ree pant, the purchase 3an4. "ct @9@), Section & as aended b "ct %99:, under hich the Properties ere e0tra>udiciall foreclosed and sold, provides that; Sec. &. In all cases in hich an e0tra>udicial rule is ade under the special poer hereinbefore referred to, the debtor, his successors in interest or an >udicial creditor or >ud6ent creditor of e debtor, or an person havin6 a lien on the propert subseCuent to the ort6a6e or deed of trust under hich the propert is sold, a redee the sae at an tie ithin the ter or one ear fro and after the date of the saleL and such redeption shall be 6overned b the provisions of sections four hundred and si0t#four to four hundred and si0t#si0, inclusive, of the !ode of !ivil Procedure, in so far as these are not consistent ith the provisions of this "ct. nder the Revised Rules of !ourt, Rule @', Section @@, the >ud6ent debtor reains in possession of the propert foreclosed and sold, durin6 the period of redeption. If the >ud6ent debtor is in possession of the propert sold, he is entitled to retain it and receive the fruits, the purchaser not bein6 entitled to such possession. +Riosa v. Ver-osa, 8& Phil. :&L Velasco v. Rosenber6Bs Inc., @8 Phil. (8L Pabico v. Pauco %@ Phil. )(8L Poer v. PN3, )% Phil. )%L $orospe v. $ochan6co E#98(@), Oct. @, 9')'2. " >ud6ent debtor, hose propert is levied on e0ecution, a transfer his ri6ht of redeption to an one ho he a desire. The ri6ht to redee land sold under e0ecution ithin 98 onths is a propert ri6ht and a be sold voluntaril b its oner and a also be attached and sold under e0ecution +Ma6no v. Viola and Sotto, &9 Phil. :2.
pon foreclosure and sale, the purchaser is entitled to a certi7cate of sale e0ecuted b the sheri?. +Section 8(, Revised Rules of !ourt2 "fter the terination of the period of redeption and no redeption havin6 been ade, the purchaser is entitled to a deed of conveance and to the possession of the properties. +Section @), Revised Rules of !ourt2. The ei6ht of authorit is to the e?ect that the purchaser of land sold at public auction under a rit of e0ecution onl has an inchoate ri6ht in the propert, sub>ect to be defeated and terinated ithin the period of 98 onths fro the date of sale, b a redeption on the part of the oner. Therefore, the >ud6ent debtor in possession of the propert is entitled to reain therein durin6 the period alloed for redeption. +Riosa v. Ver-osa. 8& Phil, :&L :'L $on-ales v. !alibas, )9 Phil. @)).2 In the case before s, after the e0tra>udicial foreclosure and sale of his properties, petitioner Di-on retained the ri6ht to redee the lands, the possession, use and en>oent of the sae durin6 the period of redeption. "nd these are the onl ri6hts that Di-on could le6all transfer, cede and conve unto respondent $aborro under the instruent captioned Deed of Sale ith "ssuption of Mort6a6e +10h. "#Stipulation2, li4eise the sae ri6hts that said respondent could acCuire in consideration of the latterBs proise to pa and assue the loan of petitioner Di-on ith D3P and PN3. Such an instruent cannot be le6all considered a real and unconditional sale of the parcels of land, 7rstl, because there as absolutel no one consideration therefor, as adittedl stipulated the su of P9@9,:@9.'9 entioned in the docuent as the consideration *receipt of hich as ac4noled6ed* as not actuall paidL and secondl, because the properties had alread been previousl sold b the sheri? at the foreclosure sale, thereb divestin6 the petitioner of his full ri6ht as oner thereof to dispose and sell the lands. In le6al conseCuence thereb, respondent $aborro as transferee of these certain liited ri6hts or interests under 10h. "#Stipulation, cannot 6rant to petitioner Di-on ore that said ri6hts, such ac the option !o purchase the lands as stipulated in the docuent called Option to Purchase Real 1state +10hibit 3#Stipulation2, This is necessaril so for the reason that respondent $aborro did not purchase or acCuire the full title and onership of the properties b virtue of the Deed of Sale oent and use of the lands until petitioner can reiburse full the respondent the aounts paid b the latter to D3P and PN3, to accoplish the folloin6 ends; +a2 paent of the ban4 obli6ationsL +b2 a4e the lands productive for the bene7t of the possessor, respondent $aborro, +c2 assure the return of the land to the ori6inal oner, petitioner Di-on, thus renderin6 eCuit and fairness to all parties concerned. In vie of all these considerations, the la and /urisprudence, and the facts established.
of the nature of the antichresis insofar as the principal parties, petitioner Di-on and respondent $aborro, are concerned. Mista4e is a 6round for the reforation of an instruent hich there havin6 been a eetin6 of the inds of The parties o a contract, their true intention is not e0pressed in the instruent purportin6 to ebod the a6reeent, and one of the parries a as4 for such reforation to the end that such true intention a be e0pressed. +"rt. 9@)', Ne !ivil code2. ustice that since ud6ent as laid don b the !ourt of "ppeals for the e0ercise of such ri6ht b petitioner Di-on appears fair and reasonable and
+b2 "n outstandin6 balance due on Di-onBs ori6inal principal loan of P@:,. ith the Developent 3an4 of the Philippines assued b $aborro and on Di-onBs ori6inal principal loan of '@,:@9.'9 ith the PN3 sha6 be deducted fro the above#70ed reconveance price paable to $aborro, in order to enable Di-on to pa o? the said ort6a6e loans directl to the said ban4s, in accordance ith 7le utuall a6reed upon ith the b Di-onL +c2 In other ords, the a0iu reconveance price that Di-on is obli6ated to pa is the total su of 9@9,:@9.'9 +the su total of the principals of his to ori6inal loans ith the D3P and PN32, and should the aounts due to the said ban4s e0ceed this total of P9@9,:@9.'9 +because of delinCuent interests and other char6es2, nothin6 shall be due $aborro b a of reiburseent and Di-on ill thereupon step into the shoes of $aborro as oner#ort6a6or of the properties and directl arran6e ith the ban4s for the settleent of the aounts still due and paable to the, sub>ect to the ri6ht of Di-on to recover such aounts in e0cess of P9@9,:@9.'9 fro $aborro b rit of e0ecution in this caseL and +d2 "s alread stated, Di-on is not entitled to an accountin6 of the fruits, harvests and other incoe received b $aborro fro the land hile $aborro in turn is not entitled to the paent of an interests on an aounts paid b hi on account of the principal loans to the ban4s nor reiburseent of an interests paid b hi to the ban4s. <=1R1FOR1, the >ud6ent appealed fro is hereb a5red ith the odi7cation that petitioner Di-on is 6ranted the ri6ht ithin one ear fro 7nalit of this decision to a reconveance of the properties in liti6ation upon paent and reiburseent to respondent estate of o $. $aborro of the aounts actuall paid b $aborro or his estate on account of the principal onl of Di-onBs ori6inal loans ith the Developent 3an4 of the Philippines and Philippine National 3an4 in and up to the total aount of P9@9,:@9.'9, under the ters and conditions set forth in the precedin6 para6raph ith subpara6raphs +a2 to +d2, hich are hereb incorporated b reference as an inte6ral part of this >ud6ent, and upon the e0ercise of such ri6ht, respondent estate shall forthith e0ecute the correspondin6 deed of reconveance in favor of petitioner Di-on and deliver possession of the properties to hi.
!ee2an3ee 4C2air/an5, Ma3asiar, M6oz Pal/a and #ernandez, JJ., onr.
!oo&no&e% 9 First division, penned b /ustice !anono, ith the concurrence of "ctin6 Presidin6 /ustice /uan P. 1nriCue- trial /ustice 1ulo6io S. Serrano. 8 Records. pp. )#)9.
