G.R. No. 244422. July 06, 2022
HEIRS OF ANIOLINA VDA. DE SEBUA, PETITIONERS, VS. FELICIANA BRAVANTE, RESPONDENT.

FACTS

Petitioners, the heirs of Aniolina Sebua, filed a complaint for redemption and recovery of possession against respondent Feliciana Bravante over a 16,000-square-meter parcel of land in South Cotabato. Petitioners alleged that in 1985, Aniolina’s husband, Exequeil, mortgaged the land to respondent’s husband, Julian Bravante, as security for a P30,000.00 loan. The agreement allowed Julian to cultivate the land and retain its income until redemption. Petitioners claimed that Exequeil attempted to redeem the property in 1995 and again in 2003 but was unsuccessful, and both parties subsequently died. Upon the heirs’ demand to redeem, respondent refused and claimed absolute ownership.
Respondent presented a contrary version. She asserted that the petitioners’ predecessors had initially mortgaged the land to another person, Recto Debuque. In 1982, to redeem it from Recto, they borrowed P7,000.00 from respondent and her husband, with the land as security and with possession transferred to them. Respondent claimed the debt ballooned through additional loans, and by 1985, the total obligation reached P22,202.00. The parties then allegedly agreed to a “waiver” of the property for a total consideration of P30,000.00, which respondent paid in installments, culminating in a final payment on October 3, 1985, which she argued constituted a sale.

ISSUE

Whether the transaction between the parties was an equitable mortgage or an absolute sale.

RULING

The Supreme Court ruled that the transaction was an equitable mortgage, reversing the Court of Appeals and reinstating the Regional Trial Court’s decision with modification. The legal logic hinges on the application of Article 1602 of the Civil Code, which establishes presumptions of an equitable mortgage. The Court found the presence of several indicia under this provision. Critically, the price of P30,000.00 was found to be grossly inadequate for a 16,000-square-meter land, strongly indicating it was a loan security. Furthermore, petitioners’ predecessors remained in constructive possession as registered owners, and respondent’s possession was merely by tolerance as mortgagee. The purported “waiver” document was executed by necessitous borrowers, supporting the inference that the real intention was to secure a debt.
The Court emphasized that the respondent’s claim of a sale contradicted the evidence of repeated redemption attempts by the petitioners’ predecessors, conduct inconsistent with a completed sale. Consequently, petitioners were granted the right to redeem the property. They were ordered to pay respondent the P30,000.00 loan, plus interest at 12% per annum from the filing of the complaint on August 6, 2009, until June 30, 2013, and 6% per annum thereafter until full payment, within 90 days from finality of the decision. Failure to redeem would result in a foreclosure sale. No damages were awarded as both parties acted under an honest belief in their rights.