GR 44111; (August, 1989) (Digest)
G.R. No. 44111 August 10, 1989
MERCEDES T. RIVERA, JESUS F. LUNOD and EPIFANIA MANAHAN, petitioners, vs. COURT OF APPEALS, FELIZARDO M. MARTINEZ and VICTORIA MAGAYANES-MARTINEZ, respondents.
FACTS
The private respondents, spouses Felizardo Martinez and Victoria Magayanes-Martinez, were the owners of a bungalow in Marikina. On June 29, 1971, they executed a document entitled “Deed of Absolute Sale” in favor of petitioner Mercedes T. Rivera for P20,000. Rivera later sold the property to the other petitioners, spouses Jesus Lunod and Epifania Manahan. The Lunod spouses subsequently filed an ejectment case against the Martinez spouses. In response, the Martinez spouses filed a civil action (Civil Case No. 15761) before the Court of First Instance of Rizal, praying for the annulment of the deeds of sale.
In their complaint, the Martinez spouses alleged that their transaction with Rivera was not a true sale but merely a loan secured by a mortgage, disguised as a sale to conceal usury. They claimed the agreement included a right to repurchase within four months, that they received only P18,000 of the stated price, and that the property’s true value was far higher. The trial court dismissed their complaint, finding insufficient evidence to prove fraud or misrepresentation in the execution of the deed.
ISSUE
Whether the Court of Appeals erred in ruling on the case based on a theory of sale with a right to repurchase, which the petitioners argue constituted a prohibited change of theory on appeal from the respondents’ original plea for annulment of the contract.
RULING
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that there was no prohibited change of theory on appeal. The respondents’ complaint, while praying for annulment, contained clear allegations describing a transaction intended as an equitable mortgage or a sale with a right of repurchase, including the receipt of only a portion of the consideration and an agreement to repurchase. The Court ruled that the nature of the contract was squarely placed in issue by these pleadings.
The legal logic is that a prayer for “such other reliefs as may be deemed just and equitable” allows the court to grant relief warranted by the facts alleged and proven, even if not specifically demanded. The respondents’ appeal, seeking to redeem the property, was consistent with their core assertion that the deed did not reflect their true agreement, which involved a right to recover the property. Granting the right to redeem was the substantive relief corresponding to their proven cause of action. The Court of Appeals correctly characterized the contract as a pacto de retro sale under Article 1606 of the Civil Code and properly allowed redemption within thirty days from finality of judgment, a right enforceable even against subsequent buyers.