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    Abilla Vs Gobonseng SALES

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    dayneblaze
    This case involves a dispute over whether a land transaction between two parties was a sale with a pacto de retro (option to repurchase) or an equitable mortgage. The trial court and Court of Appeals both ruled it was a pacto de retro sale. The issue is whether the vendors can still exercise the right to repurchase under the Civil Code after arguing in court that it was actually an equitable mortgage. The Supreme Court rules that right of repurchase does not apply because the transaction was found to be a sale, and the vendors did not show an honest belief it was a mortgage by consigning payment when disputing the nature of the transaction in court. The trial court order allowing repurchase is reversed.

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    Abilla Vs Gobonseng SALES

    Uploaded by

    dayneblaze
    177 views8 pages
    This case involves a dispute over whether a land transaction between two parties was a sale with a pacto de retro (option to repurchase) or an equitable mortgage. The trial court and Court of Appeals both ruled it was a pacto de retro sale. The issue is whether the vendors can still exercise the right to repurchase under the Civil Code after arguing in court that it was actually an equitable mortgage. The Supreme Court rules that right of repurchase does not apply because the transaction was found to be a sale, and the vendors did not show an honest belief it was a mortgage by consigning payment when disputing the nature of the transaction in court. The trial court order allowing repurchase is reversed.

    Original Description:

    sales law, extinguishment of sale, art.1606

    Original Title

    Abilla vs Gobonseng SALES

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    This case involves a dispute over whether a land transaction between two parties was a sale with a pacto de retro (option to repurchase) or an equitable mortgage. The trial court and Court of Appeals both ruled it was a pacto de retro sale. The issue is whether the vendors can still exercise the right to repurchase under the Civil Code after arguing in court that it was actually an equitable mortgage. The Supreme Court rules that right of repurchase does not apply because the transaction was found to be a sale, and the vendors did not show an honest belief it was a mortgage by consigning payment when disputing the nature of the transaction in court. The trial court order allowing repurchase is reversed.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    177 views8 pages

    Abilla Vs Gobonseng SALES

    Uploaded by

    dayneblaze
    This case involves a dispute over whether a land transaction between two parties was a sale with a pacto de retro (option to repurchase) or an equitable mortgage. The trial court and Court of Appeals both ruled it was a pacto de retro sale. The issue is whether the vendors can still exercise the right to repurchase under the Civil Code after arguing in court that it was actually an equitable mortgage. The Supreme Court rules that right of repurchase does not apply because the transaction was found to be a sale, and the vendors did not show an honest belief it was a mortgage by consigning payment when disputing the nature of the transaction in court. The trial court order allowing repurchase is reversed.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 8

    374 SCRA 51 January 17, 2002

    RONALDO P. ABILLA AND GERALDA A.


    DIZON, PETITIONERS,
    VS.
    CARLOS ANG GOBONSENG, JR. AND THERESITA
    MIMIE ONG, RESPONDENTS.
    FACTS:
    Spouses Abilla Spouses Gobonseng
    action for specific
    performance, recovery of
    sum of money and damages
    reimbursement of the
    expenses they incurred in
    the preparation and
    registration of 2 public
    instruments
    Deed
    of Sale
    Option
    to Buy
    DEFENSE:
    contended that the
    transaction
    covered by the
    instruments was a
    mortgage.
    Spouses Abilla
    declared that the transaction
    between the parties was not an
    equitable mortgage
    October 29, 1990 Trial Court
    Favored
    Spouses Gobonseng
    On appeal by
    respondents, the
    Court of Appeals ruled
    that the transaction
    between the parties
    was a pacto de
    retro sale, and not an
    equitable mortgage.
    stating that it was a sale
    giving Spouses
    Gobonseng until Aug.
    31, 1983 within which to
    buy back the 17
    lots subject of the sale
    February 23, 1999
    Spouses Gobonseng
    filed with the RTC an urgent
    motion to repurchase the
    lots with tender of payment
    DENIED
    after the judge inhibited
    himself from the case, it
    was re-raffled to a
    different branch
    granted the
    motion to
    repurchase
    ISSUE:
    Whether or not the vendors in a sale judicially declared as
    a pacto de retro may exercise the right of repurchase under
    Article 1606, third paragraph, of the Civil Code, after they
    have taken the position that the same was an equitable
    mortgage.
    RULING:
    It was held that the said provision was inapplicable.
    Sellers in a sale judicially-declared as pacto de retro may NOT
    exercise the right to repurchase within the 30-day period provided
    under Art. 1606, although they have taken the position that the same
    was an equitable mortgage, if it shown that there was no honest belief
    thereof since:
    (a) none of the circumstances under Art. 1602 were shown to exist
    to warrant a conclusion that the transaction was an equitable
    mortgage;
    (b) that if they truly believed the sale to be an equitable mortgage,
    as a sign of good faith, they should have consigned with the trial
    court the amount representing their alleged loan, on or before the
    expiration of the right to repurchase.
    In the case at bar, both the trial court and the Court of Appeals were of
    the view that the subject transaction was truly a pacto de retro sale;
    and that none of the circumstances under Article 1602 of the Civil
    Code exists to warrant a conclusion that the transaction subject of the
    Deed of Sale and Option to Buy was an equitable mortgage.
    The Court of Appeals correctly noted that if respondents really
    believed that the transaction was indeed an equitable mortgage, as a
    sign of good faith, they should have, at the very least, consigned with
    the trial court the amount of P896,000.00, representing their alleged
    loan, on or before the expiration of the right to repurchase on August
    21, 1983.
    Clearly, therefore, the declaration of the transaction as a pacto de
    retro sale will not, under the circumstances, entitle respondents to the
    right of repurchase set forth under the third paragraph of Article 1606
    of the Civil Code.

    FALLO:
    WHEREFORE, in view of all the foregoing, the instant petition
    is GRANTED and the January 14, 2001 Order of
    the Regional Trial Court of Dumaguete City, Branch 41, in Civil Case
    No. 8148, is REVERSED and SET ASIDE.
    SO ORDERED.

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