Heirs of Dominga Tabora Vda. de Macoy v. Hon. Court of Appeals

Summary

This case involved a dispute over whether a 1970 'Pabilihang Mabibili-Muli' document executed by the late Dominga Tabora Vda. de Macoy in favor of spouses Redillas constituted a pacto de retro sale or an equitable mortgage. When the heirs failed to repurchase the land within the stipulated period (1973-1975), Redillas sought consolidation of ownership. The heirs challenged this in court, claiming improper service of summons and arguing the transaction was an equitable mortgage. While the Supreme Court agreed that the original default judgment was void due to invalid service of summons, it ultimately affirmed that the document constituted a genuine pacto de retro sale. The Court applied Article 1602 of the Civil Code and found none of the circumstances indicating equitable mortgage were present. The heirs were also denied relief under Article 1606, paragraph 3 due to lack of good faith, as they knew the transaction was truly a sale with right to repurchase.