Amelia Roberts v.

Martin Papio (2007) Doctrine: An option to buy or a promise to sell is different and distinct from the right of repurchase that must be reserved by means of stipulations to that effect in the contract of sale. One repurchases only what he previously sold- the right to repurchase presupposes a valid contract of sale between the same parties. Ponente:Callejo, Sr.,J Short Version:Sps. Papio(Res) needed money to redeem subject property so they executed Deed of Absolute Sale in favor of oberts (Pet). They then executed a 2year lease subject to renewal. However Sps.Papio failed to pay monthly rentals (after expiration of lease), 2 demand letters, Roberts instituted initial suit. Sps.Papio claims they repurchased the said land or Equitable Mortgage. SC no its only a Contract of Sale, right to repurchase was not reserved, and Papio admitted the existence of the sale in insisting he repurchased the land which is incompatible with the defense of equitable mortgage. Facts: 1. Sps. Martin and Lucina Papio owner 274sqm lot in Makati. They mortgaged the same lot to Amparo investments for Php59K. They failed to pay, and the co. filed a pet for extrajudicial foreclosure. 2. To prevent the extrajudicial foreclosure: Deed of Absolute Sale April 13, 1982 in favor of Martin Papios cousin, Amelia Roberts. For Php.85K (Php59K was paid to Amparao, Php26K kept by the Sps.Papio) The loan with Amparo was settled. 3. 2year contract of lease, subject to renewal, April 15,1982 Roberts:Lessor, Papios:Lessee. Monthly rentals at Php800 4. July 6, 1982 TCT was issued in the name of Amelia Roberts 5. Papio paid rentals May1,1982 to May 1,1984 and thereafter for another year. He then failed to pay further rentals but he remained in possession for almost 13years. 6. June 3,1998 Amelia Roberts letter to Papios reminding him to pay. Demand vacate if not settled in 15 days April 22,1999 2nd demand letter. Again Papio refused to leave. 7. FILED: Unlawful detainer and damages against Papio MeTC Makati Roberts Stand: She bought the land. Appended Deed of Abs Sale and Lease Contract Papio Stand: He had Right to Repurcahse/Equitable Mortgage. He asked Roberts to let him reacquire property, she agreed, only then did he sign Deed of absolute sale. Pursuant to that right, he repurchased land for Php250K which he gave to Perlita Ventura, Roberts representative in Phil. Since Roberts was already in the US. (Problema na daw ni Roberts kung hindi pala ni remit sa kanya ni Ventura yung Php.250K) Roberts Reply: She did not know about the Php250K given to Ventura. She offered to sell property to Papio in 1984 for US $15K, but he refused. 8. MeTC: Odered Papio to vacate premises. Roberts merely tolerated the stay of Papio after the expiration of the contract. Right to repurchase was not reserved by Papio when he signed the Deed of abs. sale. RTC:Affirmed CA: Reversed. It was an equitable mortgage because he retained ownership and its peaceful possession. Issue: What is the nature of the Deed of Absolute Sale Contract of sale/Contract of sale with right to repurchase/Equitable mortgage? Decision: It was a simple Contract of Sale. 1. Papio in his affidavits and position papers, said that petitioner granted him the right to repurchase and which he did in fact exercise. This claim is antithetical to an equitable mortgage.

2. Equitable Mortgage-mortgagor retains ownership but subject to foreclosure and sale at public auction upon failure of the mortgagor to pay his obli. a) Parties entered into a contract denominated as Contract of Sale b) Intention was to secure an existing debt by way of Mortgage- intention is the decisive factor. 3. Pacto de Recto Sale (Sale with right to repurchase)- Ownership is transferred to the buyer, subject to right of vendor to repurchase. (note TCT was issued to Roberts: proof of transfer of ownership) 4. One can repurchase only what one has previously sold. - By insisting that he has repurchased, Papio had admitted that the Deed of Absolute Sale is not an equitable mortgage. - This is buttressed by the Lease Contract 5. Villarica et al v. CA - The right of repurchase must be reserved by vendor in the same instrument of sale as one of the stipulations of the contract. - This right was not reserved in the Deed - Neother is there any documentary evidence showing that Ventura was authorized to sell/resell land at Php250K/receive said amount as purchase price of the property. - Payment to Ventura was Void. - Papio failed to prove that negotiations culminated in his offer to buy the property at Php250K. Only offer on record is the take it or Leave it at US$15K in May1984. 6. There was NO contract of sale/repurchase between Papio and Ventura (as ventura was not authorized to do the same) WHEREFORE CA REVERSED. MeTC AFFIRMED. It was a Contract of Sale. No right to repurchase. Not Equitable Mortgage. -Czarina Dee