GR 158384; (June, 2008) (Digest)
G.R. No. 158384 ; June 12, 2008
JUAN OLIVARES and DOLORES ROBLES, petitioners, vs. ESPERANZA DE LA CRUZ SARMIENTO, respondent.
FACTS
Respondent Esperanza de la Cruz Sarmiento owned a residential lot mortgaged to the Development Bank of the Philippines (DBP). She alleged she obtained a loan from Luis Boteros to pay DBP, but Boteros and his niece forged her signature in deeds of sale, making it appear she and her husband sold the property to Boteros. Boteros claimed respondent offered to sell him the property provided he paid her DBP loan. He paid P21,009.62 to DBP, and they executed a notarized Deed of Absolute Sale dated July 2, 1979, for P25,000. TCT was issued in Boteros’s name. In 1984, Boteros sold the property to petitioners Juan Olivares and Dolores Robles, who obtained a new title.
Respondent filed a complaint for recovery of ownership and annulment of title against Boteros and petitioners. The Regional Trial Court dismissed the complaint, upholding the sale’s validity. The Court of Appeals reversed, declaring the deeds of sale void, characterizing the transaction as an equitable mortgage, and ordering respondent to reimburse Boteros for the DBP payment to recover the property.
ISSUE
Whether the transaction between respondent and Boteros was an absolute sale or an equitable mortgage.
RULING
The Supreme Court ruled the transaction was an absolute sale, not an equitable mortgage. The legal logic rests on the insufficiency of the circumstances cited by the Court of Appeals to invoke the presumption of an equitable mortgage under Article 1602 of the Civil Code. The Court found no proof of gross inadequacy of price, as the P25,000 consideration was not proven shockingly low for 1979. Respondent’s continued possession after the sale was not indicative of a mortgage, as it was merely tolerated by Boteros until he sold the property and petitioners demanded vacation. The notarized Deed of Absolute Sale carries the evidentiary weight of a public document, and respondent failed to present clear and convincing evidence of forgery or vitiation of consent. The subsequent sale to petitioners, who were buyers in good faith, was therefore valid. The Supreme Court granted the petition, reinstating the trial court’s decision dismissing respondent’s complaint.