Civil Law 1

Civil Law; Equitable Mortgage

SPS. FELIPE SOLITARIOS SOLITARIOS and JULIA TORDA TORDA

vs. SPS. GASTON JAQUE and LILIA JAQUE G.R. No. 199852; Noveme! 12" 2#1$

 A purported contract of sale where the vendor remains in physical possession of the land, as lessee or otherwise, is an indicium of an equitable mortgage.

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Sps. Gaston Jaque and Lilia Jaque initiated a Complaint for Ownership and e!over" of  #ossession against Sps. $elipe Solitarios So litarios and Julia %orda. Spouses Ja!que alleged that the" pur!hased Lot &'() from the spouses Solitarios in stages. *!!ording to spouses Ja!que+ the" initiall" bought one,half of Lot -o. &'() for +'''.''. %his sale is allegedl" eviden!ed b" a notari/ed 0eed of Sale dated Ma" (+ 1)(1. %wo months later+ the spouses Solitarios supposedl" mortgaged the remaining half of Lot &'() to the Jaques via a eal Estate Mortgage 2EM3 dated Jul" 14+ 1)(1+ to se!ure a loan amounting to 5+'''.''. *fter almost two 263 "ears+ the spouses Solitarios finall" agreed to sell the mortgaged half. 7owever+ instead of e8e!uting a separate deed of sale for the se!ond half+ the" e8e!uted a 0eed of Sale dated *pril 69+ 1)(5 for the whole lot to save on ta8es+ b" ma:ing it appear that the !onsideration for the sale of the entire lot was onl" 16+'''.'' when the Jaques a!tuall" paid 1)+'''.'' 1)+'''.'' in !ash and !ondoned !ondoned the spouses Solitarios Solitarios 5+'''.'' 5+'''.'' loan. *s a result+ result+ the title title was transferred and registered from spouses Solitarios to spouses Jaque. orse+ the spouses Solitarios even !laimed ownership over Lot &'(). %hus+ the Jaques filed the !omplaint with the %C. %C. $or their defense+ defendants spouses Solitarios ?denied selling Lot &'() and e8plained that the" merel" mortgaged the same to the Jaques after the latter helped them redeem the land from the #hilippine -ational @an: 2#-@3. I'')e(  >hether the parties entered into a !ontra!t of absolute sale or an equitable mortgage.

Civil Law; Equitable Mortgage R)*+n,( %he Supreme Court de!lared that the transa!tion between the parties is a!tuall" one of  equitable mortgage pursuant to the foregoing p rovisions of the Civil Code.
%he Court had held that a purported !ontra!t of sale where the vendor remains in ph"si!al  possession of the land+ as lessee or otherwise+ is an indi!ium of an equitable mortgage. 0uring the period material to the present !ontrovers"+ the petitioners+ spouses Solitarios+ retained a!tual  possession of the propert". %his was never disputed.