Domalanta v. Court of Appeals
REITERATIONFacts
The Antecedents: Magdalena Bautista, the owner of a house and lot in Quezon City, obtained loans from Tomas Ilao, leading to an adverse claim annotation on her title. Subsequently, she obtained a P3,000.00 loan from Ignacio Domalanta, secured by a real estate mortgage prepared by Ignacio's son, Atty. Teodoro Domalanta. After failing to redeem the property, Bautista executed a deed of absolute sale to Atty. Teodoro Domalanta for P6,000.00. Atty. Domalanta later filed a complaint to recover possession and cancel Ilao's adverse claim, during which he conveyed the property to his brother, Dominador Domalanta. Following a decision in the CFI, Dominador Domalanta filed an ejectment suit against Bautista for non-payment of rentals. Procedural History: Magdalena Bautista filed a suit against the Domalantas, seeking to reform the deed of sale into an equitable mortgage and annul the titles issued to Teodoro and Dominador Domalanta. The Court of First Instance (CFI) ruled in favor of Bautista, declaring the sale an equitable mortgage and voiding the sale to Dominador. The Domalantas appealed to the Court of Appeals, which modified the CFI's decision, declaring the sale an equitable mortgage, the subsequent sale an assignment of credit, and ordering Bautista to pay P6,000.00 plus interest, among other directives. The Court of Appeals denied a motion for reconsideration filed by the Domalantas, deeming it tardy, and subsequently denied a motion to set aside its resolutions. The Petition: The petitioners, the Domalantas, filed a petition for certiorari with the Supreme Court, assigning as their sole error the Court of Appeals' failure to give due course to their motion for reconsideration. They argued that the Court of Appeals erred in not correctly applying Section 1, Rule 13 of the Rules of Court regarding the filing of pleadings by registered mail. The Supreme Court affirmed the assailed decision and resolutions, finding that the motion for reconsideration was indeed tardy and that the Court of Appeals correctly ruled on the matter, dismissing the petition.
Issue(s)
Whether the Court of Appeals erred in denying the motion for reconsideration for being tardy. Whether the deed of absolute sale executed by Magdalena Bautista in favor of Atty. Teodoro Domalanta constitutes an equitable mortgage.
Ruling
The Supreme Court affirmed the decision and resolutions of the Court of Appeals, dismissing the petition. The Court held that the motion for reconsideration was indeed tardy and the Court of Appeals correctly denied it, divesting it of jurisdiction. The Court also found that the deed of absolute sale was properly declared an equitable mortgage based on the evidence presented.
Ratio Decidendi
On the issue of the tardy motion for reconsideration: The Court held that the Court of Appeals correctly denied the motion for reconsideration filed by the petitioners. The decision of the CA was promulgated on July 30, 1980, and received by the petitioners on August 12, 1980. The reglementary period for filing a motion for reconsideration expired on August 28, 1980. The motion for reconsideration was received by the CA on September 23, 1980, which was 26 days late. The Court emphasized that mailing a pleading to the Clerk of Court of the Supreme Court instead of the Court of Appeals where the case was pending did not constitute a valid filing. Section 1, Rule 13 of the Rules of Court requires that pleadings sent by registered mail must be plainly addressed to the court where the case is pending. The CA correctly ruled that it was divested of jurisdiction after the decision became final and executory on August 27, 1980. The Court found no warrant for liberality in applying the rules given that the CA's decision was satisfactorily supported by the records. On the issue of the equitable mortgage: The Court found that the evidence overwhelmingly supported the conclusion that the deed of absolute sale was an equitable mortgage. The circumstances surrounding the execution of the deed indicated that the true intention was to secure a loan, not to transfer ownership. The Court noted that Magdalena Bautista retained possession of the property, and the Domalantas did not transfer the property to their names for taxation purposes. Crucially, Bautista continued to pay monthly interest payments to Atty. Teodoro Domalanta, first P150.00 and later P300.00, which is a strong indication of a loan with interest. The accumulated debt, including the principal of P6,000.00 and accrued interest of P13,442.28, further supported the existence of an equitable mortgage under Article 1603 of the Civil Code. The Court of Appeals' findings on this matter were deemed satisfactory and supported by the records.
Main Doctrine
A deed of absolute sale may be declared an equitable mortgage if the circumstances surrounding its execution and the subsequent conduct of the parties indicate that the true intention was to secure a loan, despite the form of the instrument. Furthermore, a motion for reconsideration that is not filed within the reglementary period, even if mailed, is considered tardy and does not divest the court of its jurisdiction.