Ramos v Sarao

Ramos v Sarao

Facts: Spouses Jonas Ramos Ramos and Myrna Ramos executed a contract over their conjugal house and lot in favor of Susana S. Sarao for and in consideration consideration of P1!1"#!". $ntitled %&$$& 'F S()$ *+&$R P(,-' P(,-' &$ R$-R' the contract inter alia granted the Ramos spouses the option to repurchase the property /ithin six months from Fe0ruary 1 1221 for P1!1"#!" plus an interest of #.3 percent a month. 4t /as further agreed that should the spouses fail to pay the monthly interest or to exercise the right to repurchase /ithin the stipulated period the conveyance /ould 0e deemed an a0solute sale.

Myrna Ramos tendered to Sarao the amount of P15!!"!#." in the form of t/o manager6s chec7s /hich the latter refused to accept for 0eing allegedly allegedly insu8cient. 'n (ugust 9 1221 Myrna led a ,omplaint for the redemption of the property property and moral damages plus attorney6s fees. 'n (ugust 1! 1221 she deposited /ith the R-, t/o chec7s that Sarao refused to accept.

 -hereafter  -hereafter Sarao Sarao led against against the Ramos Ramos spouses spouses a Petition Petition %for %for consolidation consolidation of of o/nership o/nership in pacto de retro retro sale.

4ssue: ;hether the parties intended the contract to 0e a 0ona de pacto de retro sale or an e
=eld: -here is no single conclusive conclusive test to determine determine /hether a deed a0solute on its face is really a simple loan accommodation accommodation secured 0y a mortgage. =o/ever the la/ enumerates several instances that sho/ /hen a contract is presumed to 0e an e
Article 1602.

-he contract shall 0e presumed to 0e an e
>1? ;hen the price of a sale /ith right to repurchase is unusually inade
>? ;hen the vendor remains remains in possession as lessee or other/ise@

>!? ;hen upon or after the expiration expiration of the right to repurchase another instrument extending the period of redemption or granting a ne/ period is executed@

>#? ;hen the purchaser retains for himself a part of the purchase price@

>3? ;hen the vendor 0inds himself to pay the taxes on the thing sold@

>5? 4n any other case /here it may 0e fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a de0t or the performance of any other o0ligation.

4n any of the foregoing cases any money fruits or other 0enet to 0e received 0y the vendee as rent or other/ise shall 0e considered as interest /hich shall 0e su0ject to the usury la/s.

Furthermore a contract purporting to 0e a pacto de retro is construed as an e
 Jurisprudence has consistently declared that the presence of even just one of the circumstances set forth in the forgoing ,ivil ,ode provision su8ces to convert a contract to an e
4n the present factual milieu the vendor retained possession of the property allegedly sold. Petitioner and her children continued to use it as their residence even after Jonas Ramos had a0andoned them. 4n fact it remained as her address for the service of court orders and copies of Respondent Sarao6s pleadings.

 -he presumption of e
,ontrary to Sarao6s 0are assertions a meticulous revie/ of the evidence reveals that the alleged contract /as executed merely as security for a loan.