Ramirez v. Court of Appeals
REITERATIONFacts
The Antecedents: Spouses Agustin and Aniceta Ramirez executed a Deed of Sale on December 18, 1965, selling a parcel of land to Maria vda. de Ramos for P28,000.00. Maria took possession but title was not transferred. Upon Maria's death in 1974, her son Benedicto Ramos inherited the land. On March 25, 1977, Benedicto Ramos executed a "Settlement and Extrajudicial Adjudication of the Estate of Maria vda. de Ramos by a Sole Heir with Simultaneous Sale of Inheritance" conveying the same property to Vicente Aniñon for P20,000.00. After Agustin Ramirez died in 1982, his heirs executed a "Settlement and Extrajudicial Adjudication of Estate of Agustin Ramirez by the Undersigned Heirs with Deed of Sale" on December 20, 1984, selling the same property for P95,000.00 to spouses Vicente and Baldomera Aniñon, who then sold it to spouses Elmer and Beng Tee Sunbanum, in whose names TCT No. T-93448 was issued. Procedural History: On July 4, 1984, Benedicto Ramos' lawyer demanded the title from Aniceta Ramirez. Aniceta's lawyer replied that the full consideration for the first sale was not paid and partial payments were refunded. On May 14, 1985, Benedicto and Evangeline Ramos filed a Complaint for Quieting of Title, Annulment of Sale, Cancellation of Certificate of Title, and Damages against the heirs of Agustin Ramirez, spouses Aniñon, and spouses Sunbanum, assailing the series of transfers. The trial court dismissed the complaint on March 12, 1986, for lack of cause of action, deeming the private respondents' (Ramos spouses) failure to deny the genuineness and due execution of the Deed of Sale in favor of Vicente Aniñon under oath as an admission. The Court of Appeals reversed this decision on April 18, 1990, declaring the second deed of sale (Ramos to Aniñon) as an equitable mortgage, declaring the sale by Agustin Ramirez's heirs void, and ordering the cancellation of titles and issuance of a new one in the names of Benedicto and Evangeline Ramos. The Court of Appeals denied the motion for reconsideration on December 5, 1990. The Petition: The heirs of Agustin Ramirez, spouses Aniñon, and spouses Sunbanum (petitioners) filed a Petition for Review on Certiorari, assailing the Court of Appeals' decision and resolution.
Issue(s)
Whether the Court of Appeals erred in reversing the trial court's dismissal of the complaint, encompassing the validity of the first Deed of Sale between spouses Agustin Ramirez and Maria vda. de Ramos. Whether the first Deed of Sale between spouses Agustin Ramirez and Maria vda. de Ramos was validly consummated, thereby precluding Agustin Ramirez's heirs from selling the property. Whether the Deed of Sale executed by Benedicto Ramos in favor of Vicente Aniñon was an absolute sale or an equitable mortgage.
Ruling
The Supreme Court affirmed the Decision of the Court of Appeals in C.A.-G.R. CV No. 15013 en toto. The Court ruled that the first Deed of Sale was validly consummated, making the subsequent sale by the heirs of Agustin Ramirez void. The transaction between Benedicto Ramos and Vicente Aniñon was declared an equitable mortgage.
Ratio Decidendi
On the validity of the first Deed of Sale and the Court of Appeals' decision: The Court held that the petitioners failed to substantiate their claim of non-payment of the full purchase price for the first Deed of Sale. The letter from Aniceta Ramirez's lawyer was insufficient evidence. The absence of rescission by the vendors indicated full payment and consummation. The Court found no basis to disturb the Court of Appeals' finding that the purchase price was fully paid. On the validity of the sale by the heirs of Agustin Ramirez: Since the first Deed of Sale to Maria vda. de Ramos was validly consummated, the property was no longer owned by Agustin Ramirez at the time of his death. Consequently, his heirs had no right to sell the property. The subsequent Deed of Sale executed by the heirs of Agustin Ramirez in favor of petitioner Vicente Aniñon was therefore void. The property was validly conveyed to Maria vda. de Ramos, and upon her demise, her sole heir, Benedicto Ramos, became the owner by hereditary succession. On the nature of the transaction between Benedicto Ramos and Vicente Aniñon: The Court affirmed the Court of Appeals' ruling that the Deed of Sale between Benedicto Ramos and Vicente Aniñon was an equitable mortgage, applying Article 1602 of the Civil Code. This conclusion was based on Benedicto Ramos remaining in possession after the supposed sale and the inference that the real intention was to secure the payment of a debt. The fact that Vicente Aniñon later bought the same property from the heirs of Agustin Ramirez further reinforced the conclusion that the 1977 transaction was not an absolute sale but a security for a debt.
Main Doctrine
A deed of sale is presumed to be an equitable mortgage under Article 1602 of the Civil Code when the vendor remains in possession of the property or when it can be inferred that the real intention of the parties is to secure the payment of a debt or the performance of an obligation. The failure to pay the full purchase price of a property sold under a deed of sale, without rescission by the vendor, implies full payment and consummation of the sale.