Desiderio Ranara, Jr. v. Zacarias de Los Angeles, Jr.

Summary

This case involved a dispute over a land transaction originally structured as a loan secured by a Deed of Sale with Right to Repurchase. Leonor Parada borrowed P60,000.00 from Zacarias de los Angeles, Jr. in 1989, offering her agricultural land as security. When respondent later sold the property to petitioner Desiderio Ranara, Jr. for P300,000.00, Parada sued claiming the original transaction was an equitable mortgage. The courts ruled in Parada's favor, finding the transaction was indeed an equitable mortgage under Article 1602(6) of the Civil Code. Petitioner's claims for reimbursement of the purchase price and P300,000.00 in property improvements were denied because he was found to be a purchaser in bad faith who failed to investigate the vendor's title. The Supreme Court affirmed, emphasizing the caveat emptor principle and rejecting petitioner's in pari delicto defense.