Antonio F. Aquino v. Tomas Deala

Summary

The Supreme Court interpreted a contract formally styled as a sale with pacto de retro as actually constituting a simple loan secured by real property. Despite the contract's language using terms like 'sale,' 'repurchase,' and 'rent,' the Court examined the parties' true intention through contract stipulations and subsequent conduct. Key factors included the vendor's obligations to construct additional improvements, pay insurance premiums and taxes, and maintain the property - obligations inconsistent with a true sale. The Court also noted how rent fluctuations corresponded to loan amount changes rather than property improvements, and how the parties 'extended' an already expired repurchase period. Applying Civil Code provisions on contract interpretation, the Court dismissed the ejectment case without prejudice, finding that lower courts lacked jurisdiction once ownership was properly questioned through evidence.