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[ GR No. 5729, Mar 16, 1911 ]



19 Phil. 65

[ G. R. No. 5729, March 16, 1911 ]




This is an appeal from a judgment of the  Court of First Instance  of the Province of Nueva Ecija, the Hon. Julio Llorente presiding, ordering  the defendant to permit plaintiff to recover her land on the payment of P1,009, to deliver to the plaintiff a certain document, and dismissing: the cross complaint of the defendant.

The document which is the basis of this controversy reads as follows:
"In this pueblo of Gapan, Nueva Ecija, this 2d day of June, 1896, I,  Da. Vicenta Padilla,  widow, native of said pueblo, with cedula of the 8th class,  5922 and 14, under the order issued by the administrator the 7th day of January of said year and listed here as 623, declare that the  fifth part of my land, described in the deed hereto attached, which, according to the entry in the  registry  is numbered 1268, land No. 136, folio 186, vol. 7, book 1 of the registry of Gapan dated January  12, 1894, I have pledged to the two spouses D. Simeon Linsangan and Da. Facunda Ortiz Luis, of this pueblo, for  the sum of two  hundred pesos,  which I have received in money; but we agree that I myself shall cultivate the said land and  pay them out of each  crop fifty cavanes of palay  until I can  redeem said  land, and that I  will deposit said palay  in  my camarin and  will  sell it whenever they require it.  This is what we have agreed and I have signed this with witnesses.

       "JUAN YAMSUAN."

To this writing, and upon the same paper, appear these additions:

"Note. - I, the maker of the foregoing, Da. Vicenta Padilla, have received,  in addition, fifty pesos under the same conditions  above expressed.

"Gapan, 3d of June, 1896.


"I, the same maker, Da. Vicenta Padilla, declare that I have received from the.said spouses, D. Simeon Linsangan and Dona  Facunda  Ortiz Luis, the sum of five hundred pesos; I have delivered also to them all the lands described in my deeds under the condition that I pay two hundred' cavanes; and  I hereby sign this with  witnesses this 5th day of June, 1896.


"I, the one who made the first contract, Da. Vicenta  Padilla, state that by reason of my great necessities at this moment, I have  again  asked  the spouses, Don Simeon Linsangan arid Dona Facunda Ortiz Luis, to increase my debt by fifty-nine pesos,  five reales and a half, which they have done, with which  the total  sum in which my lands stand pledged is eight  hundred and nine pesos,  five reales  and  a half, Under the same conditions as the  first.  I therefore sign this with my witnesses in the pueblo of Gapan this 29th day of September, 1897.

The question raised and argued on this appeal is whether the agreement above set out constitutes a sale with pacto de retro, or simply an attempt to secure a debt by a delivery of lands.

In the case of Olino vs. Medina (13 Phil. Rep., 379), the court said
"From the facts alleged and proven at the trial of this cause it is  gathered  that there was entered into between Medina and Olino either a contract of sale of said land with the right of repurchase, or one of loan of P175 secured by the land in question.

"Inasmuch as  we are in  doubt as to which of the two contracts it was by reason of which Medina furnished the PI75 with  which  Olino redeemed his land from Isidora Rendon, and Olino  in turn consented to the transfer of the land to Medina,  the  party  who furnished  the money, we elect to consider that said contract was that of loan, because such a  contract involves a smaller transmission of  rights, and  interests, and the debtor does not surrender all  rights to his property but simply confers upon the creditor the right to collect what is owing from the value of the  thing given as security,  there existing between the parties  a greater reciprocity  of  rights  and obligations.   (Art.  1289,  Civil Code.)"
Following this case,  we will not  construe these instruments to be sales with the right to repurchase, with the stringent and  onerous effects which  follow,  unless the terms of the document and the surrounding circumstances require  it.  Whenever, under the terms  of the writing, any other construction can fairly and reasonably be made, such construction will be adopted.  Sales with right to repurchase are not favored and the contract will be construed as a mere loan unless the court can see that the contract, if enforced  according to its terms,  is not an unconscionable  one.

We are of the  opinion that the instrument presented in the case at  bar is not a sale with the right to repurchase but was simply an attempt to pledge real estate as security for the payment of a loan.

Arellano, C.J., Mapa, Carson, and Trent, JJ., concur.