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GR No 141993 March 17, 2006

*equitable mortgage, right of redemption
FACTS: A parcel of land in Cebu is registered in the name of Anunciacion Bahena vda de Nemeo. Upon her
death, ownership was transferred to her five children, the petitioners in this case. These heirs built
respective houses on the lot. Respondent Barabat leased a portion of the house owned by Avila, his wife
moved in with him after their marriage. Avila relocated to CDO and decided to sell her hose and share in
the lot. Respondents agreed to buy it, evidenced by a private document. Respondents stopped paying
rent and took possession of the property as owners and assumed the payment of realty taxes. The spouses
received a letter informing them that Avila sold the house and share in the lot to the spouses Adlawan.
The spouses demanded that Avila execute a public document evidencing the sale of the property to them,
but Avila refused.
Respondents filed complaint for quieting of title with the RTC. RTC rendered judgment in favor of
respondents and nullified subsequent sale to respondents. Petitioners appealed to the CA. CA affirmed
the decision of the RTC in toto. They filed a motion for reconsideration but it was denied.
ISSUE: Whether it was an equitable mortgage between Avila and the Spouses Barabat
RULING: NO. Art 1602 and 1604 provides for contracts of equitable mortgage. For these articles to apply,
2 requisites must concur: (1) the parties entered into a contract denominated as a contract of sale and (2)
their intention was to secure an existing debt by way of mortgage. The private document evidenced a
contract of sale. In the absence of evidence as to the fair market value of a parcel of land at the time of
its sale, we cannot reasonably conclude that the price at which it was sold was inadequate. Art 1620 and
1623, the right of redemption of co-owners cannot apply in this case because at the time of conveyance,
the co-ownership had already been extinguished by partition. By their own admission, petitioners already
segregated and took possession of their respective shares in the lot. Their respective shares were
therefore physically determined, clearly identifiable and no longer ideal. Thus, the co-ownership had been
legally dissolved. With that, petitioners right to redeem any part of the property from any of their former
co-owners was already extinguished. CA decision affirmed.