Abapo v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns a 1,695 square meter parcel of land in Inawayan, Cebu, identified as Lot 3912, originally owned by the late spouses Victoriano Abapo and Placida Mabalate. The conflict arises among the heirs of their children, Santiago Abapo and Crispula Abapo-Bacalso, stemming from a Deed of Sale Under Pacto de Retro executed on August 8, 1967, by Crispula Abapo-Bacalso and Santiago Abapo in favor of Teodulfo Quimada for P500.00, with a five-year redemption period. After the period expired without redemption, Teodulfo Quimada sold the property to Crispula Abapo-Bacalso and her husband, Pedro Bacalso, via a Deed of Absolute Sale on February 13, 1975, for the same amount. The spouses Bacalso then took possession, enjoyed the land's fruits, and paid taxes until their deaths. 2. Procedural History: Following the death of the spouses Bacalso, their heirs executed an Extrajudicial Declaration of Heirs on February 20, 1990, allotting the land among themselves and continuing possession and tax payments. Subsequently, Santiago Abapo initiated a successful petition for reconstitution of the original certificate of title, leading to the issuance of Original Certificate of Title No. RO-2998 in Victoriano Abapo's name, with the owner's copy given to Santiago. Upon discovering this, the heirs of the spouses Bacalso filed a petition to surrender the owner's copy, which was dismissed without prejudice. Consequently, on January 31, 1992, the private respondents filed a complaint for Quieting of Title with Damages against Santiago Abapo, arguing his possession of the title clouded their ownership. The Regional Trial Court of Cebu City, Branch 8, ruled in favor of the private respondents, declaring them absolute owners and ordering the surrender or nullification of the owner's copy. Santiago Abapo appealed to the Court of Appeals, and upon his death during the appeal, he was substituted by his heir, Natividad Abapo-Almario. The Court of Appeals affirmed the trial court's decision on July 15, 1996, and denied the motion for reconsideration on March 3, 1997. 3. The Petition: This case is now before the Supreme Court on a petition for review on certiorari, filed by Natividad Abapo-Almario, heir of Santiago Abapo, challenging the Court of Appeals' decision and resolution. The petition raises four assigned errors, primarily contending that the Court of Appeals gravely erred by not finding the Deed of Sale Under Pacto de Retro to be an equitable mortgage, by not declaring the Deed of Absolute Sale void, by not recognizing Santiago Abapo as a lawful co-owner entitled to a one-half share of the property, and by not awarding damages. The petitioner asserts that the P500.00 consideration for both deeds was unusually inadequate, suggesting the transactions were intended to secure a debt rather than absolute sales, and seeks a reversal of the appellate court's decision, asserting Santiago Abapo's rightful co-ownership and entitlement to damages.
Issue(s)
Whether the Deed of Sale under pacto de retro dated August 8, 1967, should be considered an equitable mortgage. Whether the Deed of Absolute Sale dated February 13, 1975, is illegal and void. Whether petitioner Santiago Abapo is a lawful co-owner of the subject parcel of land. Whether damages should have been awarded against the respondent heirs.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, upholding the private respondents as the absolute owners of the property. The Court ruled that the Deed of Sale under pacto de retro was not an equitable mortgage and that the subsequent Deed of Absolute Sale was valid. The petition for review on certiorari was denied, and the decision of the Court of Appeals was affirmed.
Ratio Decidendi
On the issue of whether the Deed of Sale under pacto de retro is an equitable mortgage: The Court held that the petitioner failed to establish that the contract was an equitable mortgage. The consideration of P500.00 was not found to be unusually inadequate, as the assessed value of the land in 1970 was P400.00, making the sale price of P500.00 in 1967 above the assessed value. The Court reiterated that inadequacy of price alone, unless grossly inadequate or shocking to the conscience, does not invalidate a sale. Furthermore, the fact that Teodulfo Quimada enjoyed the fruits of the land from 1967 to 1975, and only became a tenant again after the spouses Bacalso bought the land in 1975, contradicted the claim of an equitable mortgage, as this scenario is incompatible with the provisions of Article 1602 of the Civil Code. The Court emphasized that the Supreme Court is not a trier of facts and that factual findings of the CA, when affirmed by the RTC, are generally conclusive. On the issue of the validity of the Deed of Absolute Sale: The Court found no basis to declare the Deed of Absolute Sale void. The contracts in dispute, being public documents attested by a notary public, enjoy a presumption of regularity and are evidence of the facts stated therein. The petitioner failed to overcome this presumption with clear, strong, and convincing evidence. The Court noted that there was no proof of pressure, force, or intimidation exerted upon the signatories, and that the petitioner's claims of deceitful manipulations were unsubstantiated by evidence beyond oral testimony, which is less reliable than documentary evidence. The Court also pointed out the significant delay of over two decades before the validity of the documents was questioned, indicating the staleness of the claim. On the issue of co-ownership: Based on the findings that the Deed of Sale under pacto de retro was a valid sale and not an equitable mortgage, and that the subsequent Deed of Absolute Sale was also valid, the petitioner's claim of co-ownership was rendered without merit. The Court affirmed the private respondents' status as absolute owners, as established by the chain of valid conveyances and their continuous possession and payment of taxes to the exclusion of Santiago Abapo. On the issue of damages: Since the Court found no merit in the petitioner's claims regarding the invalidity of the sales and co-ownership, the claim for damages against the respondent heirs was also denied. The Court's affirmation of the private respondents' ownership meant that Santiago Abapo's actions in reconstituting the title and claiming ownership were considered wrongful, thus negating any basis for awarding damages in his favor.
Main Doctrine
The Supreme Court affirmed the Court of Appeals' decision declaring private respondents as absolute owners of the property, holding that the Deed of Sale under Pacto de Retro was not an equitable mortgage and that the subsequent Deed of Absolute Sale was valid. The Court emphasized that inadequacy of price alone, unless grossly inadequate or shocking to the conscience, does not invalidate a sale, and that public documents enjoy a presumption of regularity which the petitioner failed to overcome.