Ramos v. Dizon
REITERATIONFacts
The Antecedents: Respondents, Spouses Domingo and Edna Dizon, are owners of an undivided one-half portion of a parcel of land. Petitioner, Anatalia Ramos, claims that respondent Domingo executed a Special Power of Attorney (SPA) authorizing Elpidio Domingo to sell this portion of land with a right to repurchase within five months. Elpidio allegedly sold the land to petitioner under a pacto de retro sale, and respondent Domingo failed to repurchase it, leading to the consolidation of ownership in petitioner. Respondent Domingo, however, contends that the SPA was for securing a loan, not for selling the property. He asserts that Elpidio exceeded his authority, misused loan proceeds, and that the pacto de retro sale was simulated and should be treated as an equitable mortgage. Procedural History: The petitioner filed a petition for registration of consolidation of ownership over the disputed real property with the Regional Trial Court (RTC) of Manila. The RTC, after trial, rendered a decision holding that the contract between petitioner and Elpidio was an equitable mortgage, not a pacto de retro sale, and dismissed the petition. Petitioner appealed this decision to the Court of Appeals, which affirmed the RTC's ruling. Petitioner's subsequent motion for reconsideration was also denied, prompting the filing of the present petition for review on certiorari before the Supreme Court. The Petition: Petitioner seeks review of the Court of Appeals' decision, raising several issues. Primarily, she argues that the appellate court erred in affirming the trial court's decision despite the respondents allegedly not presenting any evidence and in considering evidence that was not formally offered. Petitioner contends that the trial court improperly admitted and considered evidence without allowing her the opportunity to file comments or oppositions and to cross-examine witnesses. Furthermore, she disputes the conclusion that the transaction was an equitable mortgage, arguing that the Special Power of Attorney was valid and subsisting at the time of the sale, and that the selling price was not unusually inadequate. The petition questions the application of the relaxed rule on evidence admission and the findings regarding the nature of the transaction as an equitable mortgage.
Issue(s)
Whether the Court of Appeals erred in applying the rule enunciated in Vda. De Oñate v. Court of Appeals pertaining to the admission and consideration of evidence not formally offered. Whether the Court of Appeals erred in sustaining the trial court’s ruling that the contract between petitioner and Elpidio was actually one of equitable mortgage and not a pacto de retro sale.
Ruling
The Supreme Court denied the petition, affirming the decision of the Court of Appeals which upheld the trial court's ruling that the transaction was an equitable mortgage and not a sale under pacto de retro. The Court found that the evidence, even if not formally offered, was properly admitted and considered, and that the circumstances surrounding the transaction clearly indicated an equitable mortgage.
Ratio Decidendi
On the admission and consideration of evidence not formally offered: The Court held that while generally, evidence must be formally offered to be considered, it may relax this rule if the evidence was duly identified by testimony and incorporated into the records. In this case, the exhibits were presented and marked during pre-trial, and their contents were explained by witness Elpidio Dizon during his cross-examination. The Court noted that the respondents' exhibits were marked and admitted during the pre-trial stage, as shown by the Pre-Trial Order. The Court reiterated its ruling in Marmont Resort Hotel Enterprises v. Guiang, stating that stipulations of facts made during pre-trial constitute judicial admissions that require no further proof unless shown to have been made through palpable mistake. Since the pre-trial forms part of the proceedings, matters dealt with therein cannot be disregarded in decision-making. Therefore, the trial court did not err in admitting and considering the respondents' exhibits despite them not being formally offered prior to the decision. On the nature of the transaction as an equitable mortgage: The Court affirmed the trial court's conclusion that the transaction was an equitable mortgage, applying Article 1602 of the Civil Code. The Court found that Elpidio Dizon remained in possession of the two-door apartment and continued to collect rent even after the supposed expiration of the repurchase period. This continued possession and collection of rent, despite the lapse of a considerable time, cast doubt on the true nature of the transaction as a pacto de retro sale, as the petitioner should have enforced her right to rental payments immediately if it were a true sale. Furthermore, Elpidio testified that the P350,000.00 stated in the pacto de retro sale was the same amount covered by the Real Estate Mortgage and promissory notes he had previously executed. This indicated that no separate consideration was received for the pacto de retro sale apart from the proceeds of the earlier loans, lending credence to the respondents' position that the sale was merely security for the loans extended by the petitioner. The Court also considered the unusual inadequacy of the price, as Elpidio had offered the improvements on the lot for P550,000.00, which was significantly higher than the P350,000.00 stated in the pacto de retro sale.
Main Doctrine
A contract of sale with a right to repurchase is presumed to be an equitable mortgage when the price is unusually inadequate, when the vendor remains in possession, when another instrument extending the period of redemption is executed, when the purchaser retains part of the purchase price, when the vendor binds himself to pay taxes, or 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. Evidence not formally offered may be admitted and considered if duly identified by testimony and incorporated into the records, especially if marked during pre-trial.