Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=40422:g-r-no-134166-august-25,-2000-mario-reyes,-et-al-v-court-of-appeals,-et-al&amp;catid=1396&amp;Itemid=566
Timestamp: 2019-04-22 02:17:27+00:00

Document:
SPOUSES MARIO REYES and CONCEPCION DOMINGUEZ-REYES, and SPOUSES DOMINADOR VICTA and ARACELI DOMINGUEZ-VICTA, Petitioners, v. COURT OF APPEALS and SPOUSES JAIME RAMOS and NILDA ILANO-RAMOS, Respondents.
In early 1991 Lot No. 4705 was finally. subdivided into several smaller lots and partitioned extrajudicially among the five (5) heirs of Florentino Dominguez although the records only disclosed three (3) names, Concepcion Dominguez-Reyes, Araceli Dominguez-Victa and Fortunata Dominguez. Concepcion acquired a 2,440 square meter lot covered by TCT No. 304193, while Araceli took possession of two (2) lots with a combined area of 2,340 square meters for which TCTs Nos. 304190 and 304192 were issued in her name.
Upon learning of the partition, the Ramoses repeatedly demanded from Concepcion and Araceli to make good their undertakings under the deeds of sale — to segregate a total of 3,000 square meters from their respective shares in Lot No. 4705 and to execute the necessary deed of conveyance therefor — but the latter refused, insisting that the deeds did not. reflect the true intention of the parties as their real intention was simple loans of money the payment of which was to be secured by mortgages.
We have examined the instruments evidencing the transactions under consideration and found the language of each clearly and without ambiguity to be setting forth a contract of sale and purchase. And the authenticity and due execution of these deeds, it must be emphasized, are not disputed. They are in fact admitted . . . . In the mind of this court, appellants have convincingly proven the reality of the sale of the parcels of land subject hereof . . . these pieces of evidence are not mere drafts of contracts since everything for the existence of a perfect contract of purchase and sale are present. Neither can they possibly be mistaken for receipts inasmuch as even their title — typewritten in capital letters and underlined — proclaims what each of the documents is all about . . . . When contracting minds have reduced their agreement into writing, the contents of the writing constitute the sole repository of the terms of the contract between the parties . . . .
In this petition for review, petitioners tenaciously insist that the transactions in question were not what they purported to be but were in reality equitable mortgages. In stark contrast, respondents maintain in their comment that the transactions were absolute sales as clearly shown in the subject Deed(s) of Absolute Sale and Transfer.
The pivotal issue then is whether the parties intended the contested Deed(s) of Absolute Sale and Transfer to be bona fide absolute conveyances of parcels of land, or merely equitable mortgages.
Preliminarily, the question involved in the instant case is primarily one of fact since extraneous evidence is required to ascertain the real intention of the parties to the transactions. The rule is well-settled that in the exercise of the power to review the factual findings of the Court of Appeals are normally conclusive and binding on this Court. 8 However, since the factual findings of the appellate court are at variance with those of the trial court, we are constrained to go over the records of the case and examine the arguments of the parties in their pleadings in light of the factual milieu.
After a thorough examination of the records, we find the petition to be impressed with merit. The facts and evidence decidedly show that the true intention of the parties was to secure the payment of the loans and not to convey ownership over the property in question. The transactions were replete with veritable badges of equitable mortgage.
Q:	And of course you also understand what loan means even if that is in English?
Q:	You understood well the distinction that you have mentioned when you executed the deeds of absolute sale. Is it not? The different deeds of absolute sale in favor of spouses.
A:	I do not understand it well . . .
Q:	And so you mean to say that you signed, you affixed your name with the witnesses without understanding what you have written, what you have signed . . . .
A:	They were the ones who offered us that is the requirement, as formality . . . .
Q:	What do you mean by that Mrs. Witness, the terms requirement and formality?
A:	Requirement means they want us to sign the document and formality means in case I will be unable to pay, they will get the land . . . .
Court:	Stating that it was a mere formality. So that was the essence of her testimony. It was merely formality, the signing of the documents.
Q:	Now, did you not ask spouses Ramos to change the contents of the documents since it does not reflect your understanding that that is just a formality or requirement considering that the documents state is the deed of absolute sale?
Q:	Do you recall having a discussion with Mrs. Ramos at one point in time when you were in dire need of fund or money?
A:	In our church, sir, I remember that we have (sic) talked about it. At the kapilya.
Q:	And do you remember the subject of your discussion at that time?
A:	It is about the deed of sale and the payment.
Q:	You mentioned the word "payment." Why are you discussing payment at the time?
Q:	Mrs. Witness, you testified that you received money from Mrs. Ramos in installments. Can you explain how you received this from Mrs. Ramos?
A:	First of all I trusted her because she is my kumadre and when the Ten Thousand Pesos is completed in installments and then for formality, I signed it.
Q:	What is your understanding of the word "formality" when you agreed to sign the document?
A:	If I cannot pay her my loan I will sell my lot, sir.
Q:	Whose formality is it that you were required to sign this (sic) deeds of sale?
Second. The records show that even after the execution of the disputed deeds of sale, petitioners remained in actual possession of the property through their tenant Enrique Diaz. This is an undeniable act of dominion. The lease contract between petitioners and Enrique Diaz involving the disputed property subsisted until 1991 when Diaz voluntarily surrendered the premises to its owners. In addition, petitioners continued to pay the real estate taxes due on the property — a usual burden attached to ownership — even after the purported sales, as evidenced by Annexes "4" to "10," inclusive, which are the official tax receipts in the name of Fortunata Dominguez, petitioners’ sister. As is well known, the payment of taxes coupled with actual possession of the land covered by the tax declaration strongly supports a claim of ownership.
But even if we indulge in the conclusion reached by the Court of Appeals that respondents were justified in not taking possession of the property and paying the taxes thereon considering that what was sold to them were only the rights, interests and participation of petitioners in the undivided portion of the property, such fact will not alter our conclusion for there are other circumstances, which will be discussed at length in the succeeding paragraphs, that support the finding that the transactions herein involved were, in reality, merely loan accommodations.
Q:	The receipts which have been presented here from Exhibits H, I, J, K and the receipts marked as Exhibits P, Q, R, some of them are in handwriting. Would you be able to identify those handwritings or whose writings are those found on these receipts? The handwritten part only.
A:	That is my handwriting.
Q:	Do you now admit the receipts were prepared by you?
Q:	And the receipts were presented to the defendants for them just to sign?
Q:	And these receipts as you claimed, what are they representing?
This is, however, belied by the receipts, particularly Exhs. "3," "8," "9," "10," "11," "12" and "13," which expressly state on their faces that the amounts received by petitioners were loans; and further, that the receipts disproved respondents’ claims of title over the disputed property.
WHEREFORE, we find the Decision of respondent Court of Appeals inconsistent with law and equity, for the transactions involved herein are forthrightly equitable mortgages. Conformably therewith, the assailed Decision dated 21 October 1997 and Resolution dated 15 June 1998 in question are REVERSED and the decision of the trial court REINSTATED and AFFIRMED. Consequently, Civil Case Nos. 555-91 and 563-91 are DISMISSED for want of cause of action.
2.	Eleven "Deed(s) of Absolute Sale and Transfer" signed by Concepcion Dominguez-Reyes, Annexes "A" to "K," inclusive (see Vol. I, Records, pp. 5-16); Seven "Deed(s) of Absolute Sale and Transfer" signed by Araceli Dominguez-Victa, Annexes "A" to "G," inclusive (see Vol. II, Records, pp. 4-11).
4.	TSN, 25 March 1993, pp. 47-61.
5.	Id., 30 March 1993, p 7.
6.	Penned by Judge Luis R. Reyes, RTC-Br. 22, Imus, Cavite.
7.	Penned by Associate Justice Cancio C. Garcia, concurred in by Associate Justices Delilah Vidallon-Magtolis and Marina L. Buzon.
8.	See American Express, Inc. v. Court of Appeals, G.R. No. 128899, 8 June 1999.
9.	Zamora v. Court of Appeals, G.R. No. 102557, 30 July 1996, 260 SCRA 10.
10.	Art. 1603, New Civil Code.
11.	Uy v. Court of Appeals, G.R. No. 104784, 3 March 1994, 230 SCRA 664; Claravall v. Court of Appeals, No. L-47120, 15 October 1990, 190 SCRA 439, 448.
12.	Art 1604, New Civil Code.
13.	TSN, 25 March 1993, pp. 5-11.
15.	TSN, 31 March 1993, pp. 3-4.
16.	No. L-25931, 30 October 1978, 86 SCRA 16, 22.
17.	Exhs "1" to "13," inclusive.
18.	TSN, 1 April 1993, pp. 28-30.

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