Lomises Aludos v. Johnny M. Suerte

Summary

This case involved a dispute over the nature of an agreement between Lomises Aludos and Johnny Suerte regarding two market stalls in Baguio City. In 1984, they entered into an agreement for the transfer of improvements and rights over the stalls for P260,000, with Johnny paying P68,000 as down payment. When Lomises backed out and returned the money, Johnny sued for specific performance. The Supreme Court affirmed that the agreement constituted both a sale of improvements (valid) and assignment of leasehold rights (void for lack of lessor consent). The Court rejected Lomises' claim that it was merely a loan, analyzing the circumstances under Civil Code provisions on equitable mortgage. The case was remanded to determine the actual value of improvements, with Johnny's heirs to pay the determined amount and receive a deed of sale for the improvements only.