Inocente Leonardo v. Court of Appeals

Summary

This case involved a family property dispute over a 1,700 square meter lot in Cebu City. Facing DBP foreclosure, father Inocente Leonardo executed a contract with son Troyano Leonardo, transferring the property in exchange for assumption of the mortgage debt, while reserving a 7-year right to repurchase half the property. When Inocente attempted to exercise the repurchase right 12 days late, Troyano rejected it and filed for consolidation of ownership. All three court levels ruled in favor of Troyano, holding that the contract was a valid pacto de retro sale with clear terms, not an equitable mortgage as later claimed by the father. The Supreme Court emphasized that contract interpretation follows literal meaning when terms are clear, and factual findings of lower courts are conclusive absent exceptional circumstances. The case demonstrates the importance of strict compliance with contractual deadlines in property transactions and the courts' reluctance to recharacterize clear contracts absent evidence of the parties' true intent.