Spouses Joventino v. Grace de Leon

Summary

Spouses Ruiz filed suit seeking annulment of registration of a Deed of Absolute Sale (DOAS) over their 1,168 sq.m. property, claiming it was merely security for a P700,000 loan from Grace De Leon, not an actual sale. They alleged the DOAS was fraudulently registered with an altered date and constituted void pactum commissorium. De Leon maintained it was a legitimate sale for P700,000. The Regional Trial Court, Court of Appeals, and Supreme Court unanimously held it was a valid sale, not an equitable mortgage. The courts found insufficient evidence to establish the circumstances required under Article 1602 of the Civil Code for presuming an equitable mortgage, particularly gross inadequacy of price. The Supreme Court emphasized it does not review factual determinations and found petitioners failed to overcome the presumption of regularity of the notarized DOAS. The decision affirmed the principle that clear and convincing evidence is required to establish that an absolute deed of sale is actually an equitable mortgage.