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    DOCTRINE: Art. 1603 of The Code Provides That, in Case of Doubt, A Contract Purporting To Be A

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    Harry Dave Ocampo Pagaoa
    The document discusses a case where Ching constructed a house on his property and agreed to sell it to Vicente for 150,000 pesos. Ching later executed an absolute deed of sale to Vicente. However, Vicente still owed Ching 43,000 pesos. They then executed a deed of sale with assumption of mortgage and right to repurchase, where Ching assumed Vicente's mortgage to the SSS and paid it in full. Ching argued this was an equitable mortgage intended to secure the remaining debt. The Court agreed, finding the consideration for the repurchase was inadequate, Vicente retained possession, and the real intent was to secure payment of the outstanding balance and transfer fees.

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    DOCTRINE: Art. 1603 of The Code Provides That, in Case of Doubt, A Contract Purporting To Be A

    Uploaded by

    Harry Dave Ocampo Pagaoa
    166 views2 pages
    The document discusses a case where Ching constructed a house on his property and agreed to sell it to Vicente for 150,000 pesos. Ching later executed an absolute deed of sale to Vicente. However, Vicente still owed Ching 43,000 pesos. They then executed a deed of sale with assumption of mortgage and right to repurchase, where Ching assumed Vicente's mortgage to the SSS and paid it in full. Ching argued this was an equitable mortgage intended to secure the remaining debt. The Court agreed, finding the consideration for the repurchase was inadequate, Vicente retained possession, and the real intent was to secure payment of the outstanding balance and transfer fees.

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    Pg 10 #16 Ben vs. CA

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    The document discusses a case where Ching constructed a house on his property and agreed to sell it to Vicente for 150,000 pesos. Ching later executed an absolute deed of sale to Vicente. However, Vicente still owed Ching 43,000 pesos. They then executed a deed of sale with assumption of mortgage and right to repurchase, where Ching assumed Vicente's mortgage to the SSS and paid it in full. Ching argued this was an equitable mortgage intended to secure the remaining debt. The Court agreed, finding the consideration for the repurchase was inadequate, Vicente retained possession, and the real intent was to secure payment of the outstanding balance and transfer fees.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    166 views2 pages

    DOCTRINE: Art. 1603 of The Code Provides That, in Case of Doubt, A Contract Purporting To Be A

    Uploaded by

    Harry Dave Ocampo Pagaoa
    The document discusses a case where Ching constructed a house on his property and agreed to sell it to Vicente for 150,000 pesos. Ching later executed an absolute deed of sale to Vicente. However, Vicente still owed Ching 43,000 pesos. They then executed a deed of sale with assumption of mortgage and right to repurchase, where Ching assumed Vicente's mortgage to the SSS and paid it in full. Ching argued this was an equitable mortgage intended to secure the remaining debt. The Court agreed, finding the consideration for the repurchase was inadequate, Vicente retained possession, and the real intent was to secure payment of the outstanding balance and transfer fees.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    DOCTRINE: Art.

    1603 of the Code provides that, in case of doubt, a contract purporting to be a


    sale with right to repurchase should be considered an equitable mortgage. The policy of the law
    is to discourage pacto de retro sales and thereby prevent the circumvention of the prohibition
    against usury and pactum commissorium. This Court has taken judicial notice of the fact that
    pacto de retro sales have been frequently used to conceal contracts of loan secured by a
    mortgage. The provisions of the Civil Code, which consider certain types of sales as equitable
    mortgages, are intended for the protection of those who are the unlettered and who are penurious
    vis-à-vis their creditors.

    CHING SEN BEN, married to CRISTINA TAN SIONG v. COURT OF APPEALS, and
    DAVID VICENTE, married to ESTELITA M. VICENTE
    G.R. No. 124355. September 21, 1999
    SECOND DIVISION, MENDOZA, J.

    FACTS:

    Petitioner constructed a house on his Marikina lot (TCT 128394) and agreed to transfer
    the same to Vicente for P150, 000 to be paid by Vicente from the proceeds of his housing loan
    from the SSS which granted him a P119, 400 loans. Ching then executed a Deed of Absolute
    Sale over said realty in Vicente’s favor. Ching informed Vicente that he has a P43k balance on
    the house and lot. Vicente failed to pay the said amount. Thereafter, they executed a Deed of
    Sale with Assumption of Mortgage and With Right to Repurchase whereby Vicente conveyed
    the property to Ching. It provided that Ching will assume all the duties and obligations of
    Vicente imposed upon by the latter in the deed of mortgage he executed in SSS’s favor, as if
    Ching was the original mortgagor in the mortgaged deed. However, Vicente retained possession
    of the property. Ching paid in full to the SSS Vicente’s account.  SSS then issued a release of
    REM annotated on TCT 146078 under Vicente’s name.  Ching demanded that Vicente execute a
    Deed of Absolute Sale over the property.  Vicente ignored it. 

    ISSUE:
    Is the Deed of sale an equitable mortgage?

    HELD: 
    Yes.

    The deed of sale with assumption of mortgage and right to repurchase is actually an
    equitable mortgage. The purported consideration for the sale with right to repurchasing the
    amount of P60, 242.86 is unusually inadequate compared to the purchase price of P150k when
    Vicente bought it from Ching 6 months before the execution of the deed.  Not only did Vicente
    retained possession of the property but he also retained ownership thereof which led Ching to file
    the consolidation case. The real intention of the parties was to secure the payment by Vicente of
    the balance of the purchase price and the transfer fees of P43k.  The stipulation in the Deed of
    sale with right to repurchase that absolute title shall be vested in the vendee in case the vendor
    failed to redeem the property on the specified date is void for being a pactum
    commissorium.  Further, that Ching assumed the mortgage obligation of Vicente to the SSS does
    not detract from the real nature of the agreement as a contract of mortgage to secure the debt’s
    payment.

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