Cirilo Abella v. Mariano Gonzaga

Summary

This landmark case involved the interpretation of a contract titled 'Special Contract of Lease' between Cirilo Abella and Mariano Gonzaga regarding 1.78 hectares of land. Despite its title, the Supreme Court determined the contract was actually a sale on installments based on its substantive provisions, particularly the clause transferring ownership upon completion of payments. The Court applied the Civil Code principle that contracts should be interpreted according to the parties' true intention rather than mere terminology. After Abella fulfilled all payment obligations, including the final payment in 1927, the Court ordered Gonzaga to execute the deed of transfer, first redeeming the property from an existing mortgage. The decision established important precedent for contract interpretation, emphasizing substance over form in determining the true nature of agreements between parties.