G.R. No. 127348 - LYDIA R. LAPAT, ASSISTED BY HER HUSBAND JIMMY LAPAT, VS. JOSEFINO ROSARIO, MARIA ROSARIO, HON. HENEDINO EDUARTE, IN HIS CAPACITY AS PRESIDING JUDGE, RTC - BR. 20, CAUAYAN, ISABELA, AND COURT OF APPEALS. D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, judgment is hereby rendered in favor of defendants and against the plaintiff Lydia Lapat: (1) declaring the two (2) deeds of sale with right to repurchase as equitable mortgage;(2) dismissing the complaint; (3) ordering the plaintiff to return the possession of the two (2) parcels of land described in the two (2) deeds of sale with right to repurchase, to the defendants; (4) ordering the plaintiff to pay to the defendants P20,000.00 attorney's fee and to pay cost. Petitioner appealed to the Court of Appeals imputing the following errors to the court a quo : (a) in interpreting the two (2) Deed(s) of Sale with Right to Repurchase as equitable mortgages; and, (b) in giving credence to appellees' bare denial of actual receipt of the purchase price as against the overwhelming documentary evidence of such payments for the two (2) Deed(s) of Sale with Right to Repurchase . [4] But the Court of Appeals found no reversible error in the appealed decision. Consequently, the decision of the court a quo was affirmed in toto. In this Petition for Review on Certiorari , petitioner seeks reversal of the decision of the Court of Appeals on the same grounds relied upon in the appellate court. [5] The petition is without merit. The records of the case coupled with the testimonial and documentary evidence of the parties indubitably show that the Court of Appeals committed no reversible error in affirming the decision of the trial court. Article 1602 of the New Civil Code enumerates the instances when a contract, regardless of its nomenclature, may be presumed to be an equitable mortgage. Specifically, Art. 1602 provides that a contract shall be presumed to be an equitable mortgage (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; and, (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. The instant case falls squarely under par. (6) of Art. 1602, to wit: 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. Circumstances abound pointing to this conclusion. First . Petitioner claims that in June 1991 she bought two (2) parcels of land from respondents paying the latter P500,000.00 in cash. If this were true then why could not respondents afford the P60,000.00 needed for the repair of the Isuzu Elf truck? Why would they take the extra burden of borrowing P60,000.00 from petitioner at a grossly