G.R. No. 186322 - ENRICO S. EULOGIO AND NATIVIDAD V. EULOGIO, VS. PATERNO C. BELL, SR., ROGELIA CALINGASAN-BELL, PATERNO WILLIAM BELL, JR., FLORENCE FELICIA VICTORIA BELL, PATERNO FERDINAND BELL III, AND PATERNO BENERAÑO BELL IV.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, prescinding from all the foregoing, the Court hereby declares: 1. That the sale of the subject house and lot under Deed of Sale marked as Exhibit "F" is only an equitable mortgage in favor of the defendants Enrico Eulogio and Natividad Eulogio. However, the mortgage cannot bind the property in question for being violative of Chapter 2, Title 4 of the Family Code, its encumbrance not having been consented to in writing by a majority of the beneficiaries who are the plaintiffs herein; 2. The said equitable mortgage is deemed to be an unsecured mortgage [sic] for which the Spouses Paterno C. Bell, Sr. and Rogelia Calingasan Bell as mortgagors are liable to the defendants-spouses Enrico Eulogio and Natividad Eulogio in the amount of P1,000,000 plus interest of 12% per annum. However, under the Fourth Party Complaint Sps. Paterno C. Bell, Sr. and Rogelia Calingasan Bell have the right of reimbursement from fourth party defendants Nicolas Moraña and Julieta Moraña for whom their loan of P1,000,000 was secured by Sps. Paterno C. Bell, Sr. and Rogelia Calingasan Bell. Accordingly, the fourth party defendants Nicolas Moraña and Julieta Moraña are hereby ordered to reimburse Paterno C. Bell, Sr. and Rogelia Calingasan Bell the loan of P1,000,000 plus interest of 12% per annum to be paid by the latter to defendants Enrico and Natividad Eulogio; 3. The house and lot in question is free from any and all encumbrances by virtue of said equitable mortgage or the purported sale; and 4. The Deed of Sale (Exhibit "F") is null and void for being contrary to law and public policy. Accordingly, (1) the Register of Deeds of Batangas City is hereby ordered to cancel Transfer Certificate of Title No. T-131472 in the name of defendants Enrico S. Eulogio and Natividad Eulogio and to re­constitute ( sic ) Transfer Certificate of Title No. RT-680-(5997) as "family home" of the plaintiffs Florence Felicia Victoria C. Bell, Paterno William C. Bell Jr., Paterno Ferdinand C. Bell III, Paterno Benerano C. Bell IV and fourth party plaintiffs Paterno C. Bell Sr. and Rogelia Calingasan Bell; or in the alternative to issue a new Transfer Certificate of Title under the same tenor; 2. The City Assessor of Batangas City is hereby directed to issue a tax declaration covering the said subject property as family home for the said plaintiffs and fourth party plaintiffs Paterno C. Bell and Rogelia Calingasan Bell; and 3. Defendants Enrico Eulogio and Natividad Eulogio are ordered to pay the plaintiffs attorney's fees and litigation expenses of P35,000.00, as the plaintiffs have been compelled to litigate to protect their property rights, and costs. [3] Both petitioners and respondents appealed to the CA, but the trial court's Decision was affirmed en toto . Spouses Bell later brought the case to this Court to question their liability to petitioners in the amount of P1 million plus interest. The Court, however, dismissed their Petition for failure to show any reversible error commi