[ G.R. No. L-49240. December 20, 1946 ] 77 Phil. 782
[ G.R. No. L-49240. December 20, 1946 ]
LAUREANO MARQUEZ, IN HIS OWN BEHALF AND IN REPRESENTA TION OF THE INTESTATE OF EUSEBIA CAPIRAL, PATROCINO MAKQUEZAND NORBERTO L.,DILAG, PETITIONERS AND APPELLANTS, VS. VICENTE VALENCIA, RESPONDENT AND APPELLEE. D E C I S I O N
PARAS, J.:
A document (Exhibit B), purporting to be a pacto de retro sale of a fishpond situated in the barrio of Marulaw, municipality of Hagonoy, Bulacan, is assailed by the petitioners on the ground that it does not reflect the true agree ment between the parties: antichresis. The respondent invokes the letter of the contract. Petitioners’ theory was sustained by the Court of First Instance of Bulacan where in this case was commenced. The Court of Appeals, however, rendered a decision of reversal. Appealing by way of certiorari, the petitioners in the main argue that Exhibit B should be held effective only as an equitable mortgage. The next following six paragraphs, taken ver batim from the decision of the Court of Appeals, contain the basic findings of fact.
(1) On December 4, 1928, the spouses Laureano Marquez and Eusebia Capiral leased to defendant Vicente Valencia, by the document Exhibit A, the herein mentioned fishpond for a period of ten years, expiring December 31, 1938. The stipulated yearly rental was P1,000, payable every month of January. Valencia held the fishpond and paid the rents for the years 1929, 1930 and 1931. According to plaintiffs, Valencia could make a net profit of P2,000 every year.
(2) Before July, 1931, Laureano Marquez had a litigation with Fortunato Santiago, and to settle it, he got that month seven thousand pesos (P7,000) from Vicente Valencia who did not want to give it “unless Laureano Marquez signed the document Exhibit E.” Although Marquez actually received the amount of P7,000 only, the document Exhibit B listed the, sum of P11,290 as purchase and repurchase price in accordance with the items written by Vicente Valencia in Exhibit C, as follows:
“320
—160 Amillaramiento x 2
8,470
—7,000 at 10%—700 x 2—1470
2,000
2,000—mejora
500 ______
500 por 5 meses no consumados
11,290”
(3) Vicente Valencia admitted having written Exhibit C, and explaining the item of P8,470 said “the amount of P7,000, the capital, corresponds to the amount received by Mr. Marquez, at 10 per cent rate of interest per year compound edly, that sums P700 for the first year and 1,400 for two years. Now the P700 at 10 per cent again, that is 10 per cent of P700 gives P70. That, in all, makes P1,470. Summing up, the total becomes P8,470.” (Page 27, t. s. n.) He added that he had paid P1,000 in January, 1931, as rent, and inasmuch as in July, 1931, he ceased being a lessee (he became purchaser), the amount of P500 was due to him for reimbursement—that accounts for the P500 in Exhibit C.
(4) As to the amount of P2,000, he declared that it represented the value of the improvements he had made on the fishpond, as lessee, during the years previous, to 1931, which improvement he would necessarily lose upon repurchase by plaintiffs. Plaintiff Marquez had to agree that the P2,000 represented “mejoras,” although he implicitly asserted, without corroboration,, that it represents the “mejoras” which the defendant had agreed to build on the land.
(5) It appears that on the same day when Exhibit B was executed, Laureano Marquez and companion signed Exhibit D, * * *.
(6) Defendant explained that under this exhibit, if plaintiff, upon repurchase, should. execute another lease in his favor, he would allow them, to repay, only P8.790, thereby waiving the indemnities.he would otherwise charge, them (a) for the improvements he had made (P2,000)— which he would again enjoy under the lease—and (b) the P500 for the unexpired five months of his lease.
Limiting our curiosity within the narrow confines of the foregoing narration of facts, we find petitioner Laureano Marquez in urgent need of P7,000 in order to settle a litigation with Fortunato Santiago, and respondent Vicente Valencia unwilling to give that amount unless Laureano Marquez signed the document Exhibit B. What could he do? “The distress for money under which he then was, places him in the same condition as other borrowers, in numerous cases reported in the books, who have submitted tc the dictation of the lender under the pressure of their wants; * * *. Necessitous men are not, truly speaking, free men; but, to answer a present emergency, will submit to any terms that the crafty may impose upon them.” (Villa vs. Santiago, 38 Phil., 157, 164.)
Now, it is easy to understand (a) why the petitioners were required to pay the land taxes; (b) why they were charged compound interest at the rate of ten per cent; (c) why they received only P7,000, when the alleged purchase and repurchase price was P11,290; (d) why the amount actually received by the petitioners coincided with the total rental for the unexpired term of the lease, Exhibit A; (e) why the respondent Vicente Valencia spoke of “the amount of P7,000, the capital;” and (f) why the sum actually received by the petitioners, or even the alleged-purchase and repurchase price of P11,290, was much below the assessed value.
Of course, neither the payment by the vendor of the land tax, interest, or other additional charges, nor any of the circumstances above enumerated, taken singly, will preclude the existence of a pacto de retro sale; and stipulations essentially not germane to a sale may be legally or morally acceptable. In this particular case, however, the collective weight of such considerations, in our opinion, sufficiently reveals the intention of the parties to enter into a loan agreement with security, that is, an equitable mortgage. “While it is true that the contracting parties, may establish any agreements, terms and conditions they may deem advisable, provided they are not contrary to law, morals, or public order (article 1255, Civil Code), the validity of these agreements is one thing, and the juridical qualification of the contract resulting therefrom is very distinctly another.” (Aquino vs. Deala, 63 Phil., 582.)
In further elaboration, we may state that, in spite of the terms of Exhibit B (in which, according to the Court of .Appeals, “there is surely no ambiguity nor uncertainty”), the respondent frankly admitted that the amount of P7,000 was the capital and the sum of P1,470 the total compound interest for two years. Such admission is clearly descriptive of a loan, rather than of a sale.
The fishpond contains an area of more than 29 hectares and, on the date of Exhibit B, was admittedly assessed at P18,260. With this as a basis, and considering that the petitioners were receiving a yearly rental of P1,000, it is believed that the sum of P7,000 actually received by them— the very amount that would have been realized by the petitioners under the unexpired term of the lease Exhibit A—was too inadequate a consideration. While the purchase and repurchase price is alleged to be P11,290, an owner will naturally look only to actual cash values. Indeed, even the respondent concerned himself with the interest on P7,000, and not on Pll-,290. While it may be a fact, also, that the guardian of one of the petitioners- had admitted in a sworn motion filed in civil case No. 3785 that he “could not secure better conditions,” it should be remembered that it was part of a course of action he had to pursue in order to extricate himself from a predicament. It may be argued that, generally, a person sells his property in view of some sort of necessity, but in all such, cases the nature of the transaction is always made, clear and unmistakable not only by their terms and incidents but by the subsequent conduct of the parties.
The payment by the petitioners of the land tax, a usual burden attached to ownership, helps in showing that the intended deal was a loan; otherwise, there seems to be no fairness in requiring the vendors, who have ceased to be owners, to still pay the same. At any rate, the arrangement (even if legally permissible) emphasizes the extent to which the petitioners “have submitted to the dictation of the lender under the pressure of their wants;” for, while the petitioners were strict and careful enough to require, in the lease, Exhibit A, the respondent (the lessee) to pay the land tax, they had become so meek and accommodating as to assume that obligation under Exhibit B.
The supposition of the Court of Appeals that the respondent could not have preferred the loan to his more advantageous lease, Exhibit A, is plausible only if the loan is said to be antichretic, and not, as justified by the facts found by the said court, simply an equitable mortgage under which the respondent enjoyed the possession of the fish-pond, in addition to interest and other indemnities to be paid by the petitioners.
There is no merit in the contention that the petitioners have adopted a change of theory on appeal. Although the petitioners’ complaint in the Court of First Instance alleges a case of antichresis, there is no fundamental difference between that’contract and an equitable mortgage, in so far as the principal subject matter is concerned, namely, a loan.
It is noteworthy that the present decision is predicated solely on facts appearing in the judgment of the Court of Appeals, although the conclusion we have drawn therefrom was reached upon arguments overlooked or otherwise erroneously rejected by said court. “* * * The change of emphasis from one phase of the case as presented by one set of facts to another phase macle prominent by another set of, facts, all of which facts were received in evidence without dbj.eetion as clearly pertinent to the issues framed by the parties in their pleadings, does not result in a change of theory, and particularly not where the two sets of facts are so closely related both as to time and nature1 that they are to all intents and purposes inseparable.’” (Limpangco Sons vs. Yangco Steamship Co., 34 Phil., 597, 608.)
It is, therefore, our judgment that the petitioners should be held liable for the payment to the respondent of the sum of P7,000. Under the facts found by the Court of Appeals, we are not justified in concluding that the respondent is guilty of usury or answerable for the products of the fishpond. The most that can be done, on equitable grounds, is to consider the stipulations regarding interest and other indemnities imposed upon the petitioners, as offset and satisfied by the income obtained by the respondent during the period of his possession.
The decision of the Court of Appeals is hereby reversed and the petitioners sentenced to pay P7,000 to the respondent, who shall be entitled to remain in possession of the fishpond in question until the said amount is fully paid. So ordered, without costs.
Perfecto, Padilla, and Tuason JJ., concur.