MYRNA RAMOS, petitioner,
vs. SUSANA S. SARAO and JONAS RAMOS, respondents.
[G.R. No. 149756. February 11, 2005]
Spouses Jonas Ramos and Myrna Ramos executed a contract over their conjugal house and lot in favor of respondent for and in consideration of P1,310,430. Entitled “DEED OF SALE UNDER PACTO DE RETRO,” the contract, inter alia, granted the Ramos spouses the option to repurchase the property within six months plus an interest of 4.5 percent. Petitioner tendered to Sarao the amount of P1,633,034.20 in the form of two manager’s checks, which the latter refused to accept for being allegedly insufficient. Myrna filed a Complaint, and she deposited with the RTC two checks that Sarao refused to accept. Sarao filed against the Ramos spouses a Petition “for consolidation of ownership in pacto de retro sale”. Both RTC and CA dismissed petitioner’s complaint and appeal respectively in favor of respondent Sarao.
Whether or not the pacto de retro sale was in reality an equitable mortgage?
YES. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered (Art.1371, NCC). The contract shall be presumed to be an equitable mortgage, in any of the following cases:(1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; (6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation. (Art. 1602, NCC)