Francisco Crisologo v. Isaac Centeno

Summary

This case involved a petition for consolidation of ownership over land sold with pacto de retro. The Crisologo spouses initially obtained an ex parte order consolidating ownership, claiming the Centeno spouses failed to exercise their repurchase rights. However, the Supreme Court affirmed the lower court's finding that the sale contracts were actually equitable mortgages securing usurious loans. The Court emphasized that Article 1607 of the Civil Code requires contentious proceedings with proper notice to vendors in consolidation cases. The original ex parte proceeding was declared a patent nullity for lack of jurisdiction. After proper proceedings, the trial court correctly determined the contracts' true nature as equitable mortgages, entitling the Centenos to redeem the properties. The case demonstrates the importance of procedural due process in property consolidation proceedings and the judicial scrutiny applied to distinguish between sales with pacto de retro and equitable mortgages, particularly when usurious interest rates suggest the latter.