G.R. No. L-3889 November 26, 1951
VICENTE BAUTISTA, plaintiff-appellant, vs. LAM PING and JOSE O. VERA, defendants-appellees.

FACTS

In 1933, defendant Lam Ping borrowed P30,000 from Silvestre T. Bautista (plaintiff Vicente Bautista’s father and assignor) and executed a deed of sale with right of repurchase over the subject property. This deed was not registered. In 1941, Lam Ping borrowed P55,000 from Silvestre to pay a P35,000 bank loan and finish constructing a building on the same property. For this loan, Lam Ping executed another deed of sale with option to repurchase within eight years. Lam Ping, who knew little English or Spanish, had the deed interpreted, questioned its form, but signed due to urgent need for funds. Silvestre registered this deed, resulting in the cancellation of Lam Ping’s title and issuance of a new one in Silvestre’s name. When Lam Ping received a tax assessment notice indicating the property was in Silvestre’s name, he became alarmed and sought to redeem it immediately. During the Japanese occupation, Lam Ping obtained a loan of P57,000 from defendant Jose O. Vera. After Silvestre signed a deed of repurchase, Lam Ping, with Vera’s son-in-law, tendered P55,000 in Japanese Military Notes to Silvestre, who initially refused the cash but accepted a bank check for the same amount. Silvestre deposited and used the check. Plaintiff Vicente Bautista, as assignee of Silvestre, later filed a complaint for annulment of the deed of resale, alleging it was obtained by intimidation and violated the constitutional prohibition against aliens acquiring private agricultural land.

ISSUE

1. Whether the transaction between Silvestre Bautista and Lam Ping was a true sale with right to repurchase or an equitable mortgage.
2. Whether the redemption (resale) by Lam Ping violated the constitutional prohibition against aliens acquiring private agricultural land.
3. Whether Silvestre Bautista accepted the redemption payment under intimidation.

RULING

1. The transaction was an equitable mortgage, not a true sale with right to repurchase. The Court agreed with the trial court, citing circumstances: Lam Ping never intended to sell the property; he used the loan to pay a bank debt and complete construction on the same property (which would be irrational if he had sold it); he was alarmed upon learning of the title transfer; and Silvestre had assured him the form made no difference as he could repurchase within eight years.
2. No, the redemption did not violate the constitutional prohibition. Even assuming the transaction was a sale with right to repurchase, Lam Ping’s repurchase constituted a redemption, not a “sale, transfer, or assignment” of land to an alien within the meaning of the constitutional ban.
3. No, the acceptance of payment was not due to intimidation. The alleged intimidation involved a separate transaction where a broker accused Silvestre before Japanese authorities for refusing Japanese Military Notes in a different land sale. Silvestre stood firm in that case, showing the accusation did not intimidate him. In this case, Silvestre initially refused bulky cash but willingly accepted a check for the same amount, deposited it, and used the funds, demonstrating voluntary acceptance.
The appealed judgment dismissing the complaint was affirmed.