Levy Hermanos Vs.

Pedro Paterno
G. R. no. L – 5515
Levy Hermanos Vs. Pedro Paterno

Facts:
1. Pedro Paterno (defendant) executed a document in favor of Levy Hermanos (plaintiff), indicating that a balance of
P6,177.35 will be payable in partial payments.
2. The defendant made several payments and later claimed to establish the installment of P30.00 per month payment.
3. The plaintiff disagreed and brought suit and asked that he should be paid the sum of P5,862.35 (unpaid balance) or that a
period be specified within which he should pay the same, in case the court should deem such manner of payment more
equitable.
4. During the trial it was agreed by the parties that the sum which the defendant owed the plaintiff was P5,317.35
5. In view of the evidence adduced during the trial, a monthly payment of P200 would be reasonable compliance with the
agreement to pay the debt in installment. The payment will be rendered on or before the 15 th of each month.
6. The defendant appealed that:
a. The obligation is one of payment by installment, its fulfillment cannot be required immediately;
b. No fixed day was specified for its fulfillment;
c. Payment is undetermined or was not fixed by parties when they executed the contract.

ISSUE:
Whether or not the defendant should pay the plaintiff according to the period fixed by court.

HELD:

Yes. The trial court acted in accordance with the law in exercising said power by fixing the duration of the period
on the basis that the payment of the debt should be made at the rate of P200.00 a month.

There was no abuse of judicial discretion in fixing such a rate, considering the importance of the obligatin and the absence
of any stipulation of the interest in favor of the creditor.
 Angela M. Butte vs Manuel Uy and Sons, Inc
G.R. No. L-15499 February 28, 1962

ANGELA M. BUTTE, plaintiff-appellant,

vs.
MANUEL UY and SONS, INC., defendant-appellee.

FACTS

1. Jose V. Ramirez was a co-owner of a house and lot located at Sta Cruz, Manila. Upon the death of Jose V. Ramirez,
all his property including the 1/6 undivided share was bequeathed to his children and grandchildren and 1/3 of the
free portion to Mrs. Angela M. Butte.

2. Mrs. Marie Garnier Vda de Ramirez sold the property to Manuel Uy and Sons, Inc. including the undivided 1/6
share property in Sta Cruz, Manila. On the same day, a copy of letter regarding the above-mentioned sell was sent
to Bank of the Philippine Islands, as administrator of the property of Jose V. Ramirez.

3. Mrs. Angela M. Butte filed a case against Manuel Uy and Sons, Inc for legal redemption when the latter refused Mrs.
Butte to redeem the said sold property.

ISSUE

Whether or not Mrs. Angela M. Butte has the right of succession to exercise legal redemption over the share sold by
Mrs. Marie Garnier Vda de Ramirez.

HELD

Yes, Mrs. Angela M. Butte has the right of succession to exercise legal redemption over the share sold by Mrs.
Marie Garnier Vda de Ramirez for being one of the co-owners of the heirs of the 1/6 undivided property of Jose V.
Ramirez.

According to Article 1620 of the Civil Code of the Philippines, a co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-owners or of any of them, are sold to a third person. If the price of
the alienation is gross expensive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right to redemption, they may only do so in proportion to the
share that may respectively have in the thing owned in common.
CRUZ v LEIS- Redemption and Co-ownership
Redemption by a co-owner doesn't terminate the co-ownership nor give her title to the whole property subject of the co-
ownership

FACTS:

Leis and Isidro married each other in 1923. Isidro subsequently acquired from the Department of Agriculture and Natural
Resources a parcel of land, which was titled in her name, with the description that she was a “widow”. Leis only passed
away in 1973 without executing a will.

Isidro then secured a loan from Cruz (PhP 15,000, with 5% interest) secured by a mortgage on the land from DANR, but
failed to pay on due date. Isidro executed 2 contracts in favor of Cruz: an Deed of Absolute Sale and a Contract indicating
a pacto de retro sale. Isidro still failed to repurchase the property within 1 year, so she consolidated the ownership of the
land in favor of Cruz.

When Isidro died, Cruz demanded her heirs to vacate the premises. The heirs then filed a complaint with the RTC
averring that the land was conjugal property having been purchased during their marriage. The RTC found in favor of the
heirs. The case was appealed to the CA, but the CA merely affirmed the ruling because Cruz failed to get a judicial order
to have the land consolidated in his name after failure of Isidro to comply with the requirements of the right to repurchase
(Art. 1607).

ISSUE:

Whether or not the land in question is conjugal property, and therefore subject to the rules on co-ownership?

HELD:

Although the land was purchased during the marriage, upon Leis’ death, the conjugal property regime ceased, and gave
Isidro an equal portion of Leis’ half of the property to be divided among his legitimes. Co-ownership of the land then
began.

However, upon failure of Isidro the heirs to exercise the right to repurchase, the ownership of the land transferred to Cruz.
Despite the TCT being void for non-compliance with 1607, the ownership did not transfer back to the heirs, for compliance
with 1607 is merely for purposes of registering the title in the Torrens System.
GR No. 208021, February 3, 2016
Oscar Villarta (Petitioner) v Gaudioso Talavera Jr (Respondent)
Second Division
Ponente: Carpio, J.

Nature of Action: Action for reformation of contract.

FACTS:
Appellant Oscar Villarta filed the complaint for reformation of contracts. He alleged that he owned four
parcels of land, all situated in Santiago City. That he obtained several loans from appellee who was a distant
relative. That appellee employed insidious words and machinations in convincing him to execute a deed of
absolute sale over TCT No. T-130095; however, the real agreement was that the lot would only serve as
security for the several loans he obtained. On May 18, 2001, he also executed another deed of absolute sale and
alleged that the real agreement was that the lot would only serve as collateral. The Deeds of Absolute Sale dated
March 1995 and May 18, 2001 were in reality an equitable mortgage. That the P500,000.00 consideration for
the Deed of Absolute Sale dated May 18, 2001 was grossly inadequate because the actual market value of the
subject land was P5,900,000.00. That despite the execution of the two deeds of absolute sale, he still had
possession of the subject lots and even leased them.
Appellee Gaudioso Talavera, Jr. on the other hand averred that even before 1996, appellant had been
obtaining loans from him. During their early transactions, appellant paid his obligations. That appellant
obtained a loan to him duly covered by two (2) Metrobank checks and secured by three parcels of land.
However, when the checks were presented for payment, they were dishonored by the bank for the reason of
account closed. Despite repeated demands, appellant failed to settle his obligations. Appellant told him that he
could no longer raise the sum to pay off his loans, and, instead offered his properties, i.e., TCTs T-130095 and
T-214950, to satisfy his obligation. The properties covered by TCTs T-130095 and T-214950 were delivered to
him via appellant’s two deeds of absolute sale. That there could be no equitable mortgage over TCT T-214950
for the same was never made a collateral for the loan; there could also be no equitable mortgage over TCT T-
130095 for though it was true that the same initially served as security, the arrangement was novated when
appellant offered the lot as payment; appellant’s complaint failed to state a cause of action; the transfer of the
properties to him was by virtue of dacion en pago
The RTC rendered a Decision and ruled in favor of respondent. On their faces, the Court finds no other
intention, nor ambiguity in them, hence, no cogent reason to reform them nor to consider them as equitable
mortgages, obviously, for want of evidence. The CA dismissed petitioner’s appeal and affirmed the RTC’s
Decision and Resolution. The CA rejected petitioner’s argument that the real transaction is an equitable
mortgage and consequently denied the request to re-compute the obligation.

ISSUE:
Whether there was an equitable mortgage.

RULING:
None. The transaction between petitioner and respondent is not an equitable mortgage, but a dacion en
pago.
We agree with the lower courts’ assessment of the facts. The conduct of the parties prior to, during, and
after the execution of the deeds of sale adequately shows that petitioner sold to respondent the lots in question
to satisfy his debts. Respondent was able to sufficiently explain why the presumption of an equitable mortgage
does not apply in the present case. The inadequacy of the purchase price in the two deeds of sale dated 18 May
2001 was supported by an Affidavit of True Consideration of the Absolute Sale of the Property. Respondent did
not tolerate petitioner’s possession of the lots. Respondent caused the registration and subsequent transfer of
TCT No. T-214950 to TCT No. T-333921 under his name, and paid taxes thereon. There were no extensions of
time for the payment of petitioner’s loans; rather, petitioner offered different modes of payment for his loans. It
was only after three instances of bounced checks that petitioner offered TCT Nos. T-130095 and T-214950 as
payment for his loans and executed deeds of sale in respondent’s favor. The transaction between petitioner and
respondent is thus not an equitable mortgage, but is instead a dacion en pago.
Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as
an accepted equivalent of the performance of an existing obligation. It is a special mode of payment where the
debtor offers another thing to the creditor who accepts it as equivalent to the payment of an outstanding debt.
For dacion en pago to exist, the following elements must concur: (a) existence of a money obligation; (b) the
alienation to the creditor of a property by the debtor with the consent of the former; and (c) satisfaction of the
money obligation of the debtor.