Spouses Jose Salonga v. Spouses Efren A. Lorenzo

Summary

This case involves a property dispute between two sets of spouses over eight parcels of land. The Lorenzos mortgaged their properties to PCI Bank and asked the Salongas to pay their P150,000.00 obligation to avoid foreclosure, with an agreement that the Salongas would hold the titles until reimbursement. However, the Salongas later registered a Deed of Absolute Sale transferring ownership to them. The Lorenzos sued claiming forgery, but the courts found no forgery. Instead, all appellate courts ruled the deed constituted an equitable mortgage under Article 1602 of the Civil Code, as the real intention was to secure debt payment, not transfer ownership. The Supreme Court affirmed, noting the Salongas themselves testified their intent was merely to recover their advance payment. The case establishes that courts can address closely related issues not specifically assigned as errors on appeal, and confirmed the 30-year prescriptive period for real actions had not elapsed.