G.R. No. 124355 - CHING SEN BEN, MARRIED TO CRISTINA TAN SIONG, VS. COURT OF APPEALS, AND DAVID VICENTE, MARRIED TO ESTELITA M. VICENTE.

Ruling

WHEREFORE, judgment is hereby rendered dismissing the petition for lack of merit and ordering petitioner (Ching Sen Ben) to pay respondent (David Vicente) P5,000.00 as attorneys fees, plus the cost of suit. On appeal, the Court of Appeals affirmed the trial courts decision. The appellate court ruled that the deed of sale with assumption of mortgage and right to repurchase entered into by the parties is actually an equitable mortgage considering that private respondent David Vicente remained in possession of the subject property even after the execution of the said deed of sale, but petitioner, as the mortgagee, cannot seek the foreclosure of the mortgage in a petition for consolidation of title under Rule 64. Hence, this petition for review on certiorari. Petitioner contends that the appellate court erred [3] - I IN NOT ORDERING FORECLOSURE, THE RESPONDENT, THE COURT OF APPEALS, HAS DECIDED A QUESTION OF SUBSTANCE, OR HAS DECIDED IT IN A WAY PROBABLY NOT IN ACCORD WITH LAW, THAT LAW BEING THE LAW, AMONG OTHER THINGS, AGAINST UNJUST ENRICHMENT, OR WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT. II IN HOLDING THAT THE TRANSACTION BETWEEN THE PARTIES WAS A[N] EQUITABLE MORTGAGE, THE RESPONDENT, THE COURT OF APPEALS, HAS DECIDED A QUESTION OF SUBSTANCE, OR HAS DECIDED IT IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT. The Court finds the foregoing contentions to be without merit. First. In the determination of a contracts real nature, courts are not bound by the parties denomination of the same. The decisive factor is the intention of the parties, as shown by the parties contemporaneous acts at the time of the execution of the said contract and their acts subsequent thereto. [4] Even though a contract is denominated a pacto de retro sale , the owner of the property may prove that it is otherwise by showing, by means of parol evidence, the true intent of the parties. [5] Article 1602 of the Civil Code enumerates the instances when a contract will be presumed to be an equitable mortgage, to wit: ART. 1602. 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. In any of the foregoing case, any money, fruits, or other benefit to be received by the vendees as rent or otherwise shall be considered as interest which shall be subje