Jesus Morales v. Court of Appeals

Summary

This case involved a dispute over ownership of a rebuilt jeepney originally owned by Lazaro Calderon but registered in Angelita Asuncion's name for franchise purposes. When Asuncion failed to return the borrowed vehicle, she executed a deed of sale to Jesus Morales for P17,000, significantly below the vehicle's actual value of P40,000-70,000. The Supreme Court affirmed lower courts' findings that due to gross inadequacy of price, the transaction was an equitable mortgage rather than a sale. While Calderon was estopped from questioning valid transactions due to allowing registration in Asuncion's name, he retained ownership since the equitable mortgage did not transfer title. The Court rejected Morales' claims of good faith, noting suspicious circumstances including his immediate resale to another party. This case demonstrates the application of Civil Code provisions on equitable mortgage and estoppel in property disputes involving registration in another's name for business purposes.