LUZ ARDENA SALAME AND RAMON A. SALAME, petitioners, vs. COURT OF APPEALS AND SPOUSES ATILA BALGOS AND TEODORICA ASIS, respondents.
FACTS
Petitioners, heirs of Vicenta Acevedo, and private respondents were co-owners of an agricultural land. On November 10, 1962, Vicenta executed a “Contract of Sale of Undivided Share by Installment with Right of Repurchase” over her half in favor of respondents for P5,300, with an eight-year repurchase period extendible for two more years. Subsequently, on December 24, 1964, Vicenta executed a “Deed of Absolute Sale” selling the same half-share to respondents for P9,000. Later, on January 1, 1967, respondents executed a “Promise to Sell,” undertaking to sell the half-share back to Vicenta between 1973 and 1974. Vicenta died in 1968. In 1974, petitioners offered to repurchase the property for P9,000, but respondents refused, prompting petitioners to file a complaint for reconveyance and damages.
ISSUE
Whether the series of transactions constituted an equitable mortgage, thereby entitling petitioners to redeem the property.
RULING
The Supreme Court denied the petition, affirming the Court of Appeals. The Court ruled that the three documents were separate, independent, and notarized contracts, enjoying the presumption of regularity. To overcome this presumption and establish that the transactions constituted a single equitable mortgage under Articles 1602 and 1604 of the Civil Code, evidence must be clear, convincing, and more than merely preponderant. Petitioners failed to present such evidence. The Parol Evidence Rule applies as the documents are clear, unambiguous, and express the true intent of the parties. Exhibit “A” was a conditional sale with a right to repurchase. Exhibit “B” was an absolute sale without any repurchase stipulation, which extinguished the right under Exhibit “A.” Exhibit “C,” the “Promise to Sell,” was a separate, unilateral promise governed by Article 1479 of the Civil Code. For such a unilateral promise to be binding, it requires a price certain and a consideration distinct from the price. Exhibit “C” specified no price and showed no separate consideration; it was also executed solely by the respondents without Vicenta’s participation. Therefore, it was unenforceable. Consequently, petitioners had no right to redeem the property.
