Lambo v. Vega-Rose

Summary

This case involves a dispute over whether a transaction intended to settle a delinquent HDMF loan constituted an absolute sale or an equitable mortgage. The respondent advanced over PHP3.6 million to prevent the foreclosure of the petitioner's property, based on an agreement that a Deed of Absolute Sale would be executed as security. The petitioner later repudiated the agreement, citing the lack of notarization and the unauthorized actions of her brother. The RTC and CA both ruled that the transaction was an equitable mortgage, noting the gross inadequacy of the consideration and the petitioner's continued possession of the property. The Supreme Court affirmed these rulings, emphasizing that the petitioner's acts of signing and transmitting the documents ratified the transaction. Even if the contract were deemed invalid, the Court held that the petitioner is liable to reimburse the respondent under the principle of 'solutio indebiti' to prevent unjust enrichment, as the payment was clearly beneficial to the petitioner.