21 Ocampo v. Potenciano (1954)

Bautista, B.
| I2023
Ocampo v. Potenciano
Facts:
● One Edilberto Ocampo, married to Paz Yatco, executed a deed of sale with pacto de retro in
favor of Conrado Potenciano and his wife Rufina covering a house and lot
○ The property was registered in the name of Ocampo alone but was actually a conjugal
property.
● Later, Ocampo signed another document, making it appear that the vendees were leasing to
him the property for the duration of the redemption period, for an annual rental of P300 (12%
of the purchase price).
● Several extensions to the redemption period were granted.

○ However, the period elapsed without repurchase.
● Thus, Potenciano filed with the Register of Deeds for the consolidation of title and a TCT was
issued in the name of Potenciano and his wife.
● Later, with Ocampo already dead, Potenciano gave Paz an option to repurchase the property
for P2,500 within 5 years and lease thereon for the same period at an annual rental of P300
(12% of the purchase price).
● Paz sought to exercise the option by tendering to Potenciano the principal and interest.
● However, Potenciano rejected the tender, so Paz deposited the money in court and brought
an action to compel Potenciano to accept and have the title reinstated in her and her
husband’s name.
● Later, Potenciano’s children filed a cross-complaint, alleging that:

○ the option to purchase was null and void as to the share of their deceased mother,
■ and this share was passed to them by right of inheritance.
○ As to their father’s share in the property, they exercised the right of redemption
accorded by law to co-owners of a property, for which they already tendered him
payment after they learned of Paz’s complaint.
● Plaintiff Paz amended her complaint alleging that:

○ the pacto de retro sale was in reality a mortgage to secure a pre-existing debt, with the
rental contract thrown in to cover the stipulated interest of 12%.
○ The option to repurchase and the annual rental equal to 12% was also meant to be an
extension of the life of the mortgage.
1
Bautista, B. | I2023
○ Thus, the tender of payment was valid, it having been made within the extended
period.
● CFI ruled in favor of Paz, as substituted by her children after her death.
● On appeal, the CA rendered judgment affirming the CFI

○ declaring that:
■ the contract entered into between Ocampo and Potenciano was one of
mortgage
■ the mortgage contract was superseded through novation by the option
agreement for repurchase of the mortgaged property
■ the late Paz Yatco exercised her option to purchase the property in litigation
within the time she had to do so;
○ Ordering:
■ defendant Potenciano to execute the corresponding deed of conveyance to
transfer the title to the heirs of the deceased spouses Ocampo
● thus, this petition.

● Potenciano’s children, as Appellants, contend that:
○ Potenciano had no authority to enter into the option agreement for repurchase of the
mortgaged property after the death of his wife
Issues + Held:
1. W/N Potenciano had the authority to enter into another option agreement for repurchase
after the death of his wife – NO
Potenciano had no autjority

● Potenciano had no authority to enter into that agreement after the death of his wife
● CA erred in supposing that the surviving spouse had such authority as de facto
administrator of the conjugal estate.
○ The decisions relied on by CA are now obsolete.
○ Those decisions laid down the rule that, upon the dissolution of the marriage
by the death of the wife, the husband must liquidate the partnership affairs.
● However, the procedure has been changed by Act No. 3176, now ROC 75, Sec. 2,
which provides that:
○ when the marriage is dissolved by the death of either husband or wife, the
partnership affairs must be liquidated in the testate or intestate proceedings
of the deceased spouse.
2
Bautista, B. | I2023
So who owns the property? Yatco

● It is not disputed that the pacto de retro sale made by Ocampo in favor of Potenciano
and his was in reality a loan with security or an equitable mortgage.
○ Such being the case, Potenciano and wife had no authority to consolidate the
title in themselves over the property given as security through the unilateral
declaration of one or both them.
○ Therefore, the consolidation of title effected by Potenciano was null and void.
● As the ownership in the property never passed to Sps. Potenciano the appellants
never inherited one-half thereof from their mother and never acquired the right of
legal redemption.
● Moreover, there is also ground to believe that the new option agreement was just a
mere extension of time for the payment of the mortgage debt.
○ It follows that when Paz Yatco made the tender of payment and consigned the
amount in court, the contract of loan with security was still in effect.
○ Thus, the tender and consignation effectively relived the debtor from liability.
Dispositive Portion: Wherefore, with the modifications of the judgment below, let judgment be
entered, declaring the obligation evidenced by Exhibit "A", which is hereby held to be mere contract
of loan with security or equitable mortgage, already discharged, and ordering the Register of Deeds of
Laguna to cancel transfer certificate of title No. 18056 and to issue in lieu thereof a new certificate of
title for said property in favor of the heirs of the spouses Edilberto Ocampo and Paz Yatco upon
payment of the corresponding fees. With costs against the appellants.

21 Ocampo v. Potenciano (1954)

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Bautista, B.

● Several extensions to the redemption period were granted.

● Later, Potenciano’s children filed a cross-complaint, alleging that:

● Plaintiff Paz amended her complaint alleging that:

● On appeal, the CA rendered judgment affirming the CFI

● thus, this petition.

Potenciano had no autjority

So who owns the property? Yatco

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