Solid Homes v. Hon. Court of Appeals

Summary

Solid Homes mortgaged properties to State Financing Center for P10-13 million. When default occurred, parties executed dacion en pago agreement on February 28, 1983, allowing 180 days to pay P14.2 million, with automatic transfer if unpaid and 10-month repurchase right. Solid Homes failed to pay, titles transferred to State Financing on September 15, 1983. Solid Homes sued one day before repurchase expiry, claiming damages for non-annotation of repurchase rights and challenging redemption price calculation. Supreme Court affirmed validity of agreement as sale with right of repurchase, denied damages for lack of malice/bad faith proof, upheld contractual redemption price terms under Articles 1601 and 1616, but excluded void registration expenses. Confirmed vendee's right to immediate possession during redemption. Case establishes principles on pacto de retro sales, redemption price calculation, and annotation requirements.