Hilaria Aguilar v. Juan Rubiato

Summary

This case involved a fraudulent scheme where Juan Rubiato was induced to sign a power of attorney allowing Manuel Gonzalez Vila to secure a loan. Instead, Vila sold Rubiato's P26,000 worth of land to Hilaria Aguilar for only P800 under a pacto de retro arrangement. The Supreme Court found the power of attorney was a sham document and that the transaction was essentially a loan, not a sale, given the grossly inadequate consideration. The court affirmed Rubiato's liability to repay P800 to Aguilar but modified the interest rate to 6% per annum, applying principles against agreements contrary to public policy. The decision demonstrates judicial protection against unconscionable contracts and fraudulent agency relationships in civil law matters.