G.R. No. 105756 - MAY 1993 - PHILIPPINE JURISPRUDENCE CASE NUMBERCASE TITLE G.R. No. 105756May 31, 1993 Spouses Loreto Claravall, et al. vs. Florenio E. Tierra, et al. G.R. No. 101641May 31, 1993 Venancio Diola, et al. vs. National Labor Relation Commission, et al. G.R. No. 101005May 31, 1993 People of the Philippines vs. Ernesto G. Corpuz G.R. No. 100947May 31, 1993 Pnoc Energy Dev't. Corp., et al. vs. Nat'l Labor Relations Commission, et al. G.R. No. 100682May 31, 1993 Gil Tapalla, et al. vs. Court of Appeals, et al. G.R. No. 96497May 31, 1993 San Miguel Corp. vs. National Labor Relations Commission, et al. G.R. No. 94703May 31, 1993 People of the Philippines vs. Roberto Oliquino G.R. No. 61154May 31, 1993 People of the Philippines vs. Segundino Jotoy G.R. No. 101522May 28,1993 Leonardo Mariano, et al. vs. Court of Appeals G.R. No. 103554May 28, 1993 Teodoro Caneda, et al. vs. Court of Appeals, et al. G.R. No. 102996May 28, 1993 Top Management Programs Corp. vs. Court of Appeals, et al. G.R. Nos. 102949-51May 28, 1993 People of the Philippines vs. Jesus Lagnas, et al. G.R. No. 101310May 28, 1993 People of the Philippines vs. Romeo A. Bay G.R. No. 100771May 28, 1993 People of the Philippines vs. Romeo Pamintuan, et al. G.R. Nos. 99054-56May 28, 1993 Erlinda O. Medina, et al. vs. Consolidated Broadcasting System, et al. G.R. No. 93722May 28, 1993 People of the Philippines vs. Danilo M. Gonzales G.R. No. L-52080May 28, 1993 Government Service Insurance System vs. Court of Appeals, et al. G.R. No. 104754May 27, 1993 German P. Zagada vs. Civil Service Commission, et al. G.R. Nos. 101189-90May 27, 1993 People of the Philippines vs. Gilbert S. San Andres G.R. No. 101847May 27, 1993 Lourdes Navarro, et al. vs. Court of Appeals, et Al G.R. No. 99327May 27, 1993 Ateneo De Manila University, et al. vs. Ignacio M. Capulong, et al. G.R. No. 90342May 27, 1993 People of the Philippines vs. Hilario C. Macasling, Jr. G.R. No. 102314May 26, 1993 Lea O. Camus vs. Court of Appeals, et al. G.R. No. 74189May 26, 1993 People of the Philippines vs. Antonio V. Enrile, et al. G.R. No. 98043May 26, 1993 Baguio Colleges Foundation, et al. vs. National Labor Relations Commission, et al. G.R. No. 97203May 26, 1993 Isidro Cariño, et al. vs. Ignacio M. Capulong, et al. G.R. No. 105360May 25, 1993 Pedro P. Pecson vs. Court of Appeals, et al. G.R. Nos. 101804-07May 25, 1993 People of the Philippines vs. Felimon Ramos, et al. G.R. No. 100525May 25, 1993 Socorro Abella Soriano vs. Court of Appeals, et al. G.R. No. 76951May 25, 1993 People of the Philippines vs. Armando Maestro, et al. G.R. No. 105907May 24, 1993 Feliciano V. Agbanlog vs. People of the Philippines, et al. G.R. No. 100232May 24, 1993 People of the Philippines vs. Roberto Alib G.R. No. 97427May 24, 1993 People of the Philippines vs. Reynaldo P. Crisostomo G.R. Nos. 97141-42May 24, 1993 People of the Philippines vs. Lucilo M. Bernardo, et al. G.R. No. 95775May 24, 1993 Danilo Rabino, et al. vs. Adora Cruz, et al. G.R. No. 91436May 24, 1993 Metropolitan Bank And Trust Co. vs. Quilts And All, Inc. G.R. No. 89252May 24, 1993 Raul Sesbreño vs. Court of Appeals, et al. G.R. No. 104285-86May 21, 1993 People of the Philippines vs. Victor R. Angeles G.R. Nos. 103442-45May 21, 1993 National Power Corp., et al. vs. Court of Appeals, et al. G.R. No. 101831May 21, 1993 People of the Philippines vs. Rogelio A. Balidiata G.R. Nos. 98425-26May 21, 1993 People of the Philippines vs. Reynaldo Aguilar G.R. No. 97028May 21, 1993 People of the Philippines vs. Alicia B. Gaoat G.R. No. 93947May 21, 1993 People of the Philippines vs. Agustin Abiera G.R. No. 92847May 21, 1993 People of the Philippines vs. Catalino L. Quiming, et al. G.R. No. 90257May 21, 1993 People of the Philippines vs. Cesar Cervantes G.R. No. 87667May 21, 1993 People of the Philippines vs. Rolando S. Quetua G.R. No. 46717May 21, 1993 Antonio Banzagales, et al. vs. Herminia Galman, et al. A.M. No. 92-1-030-RTCMay 21, 1993 Lolita Hernandez Loy vs. William Baden A.M. No. R-710-RTJMay 21, 1993 Filomeno R. Negado vs. Manuel E. Autajay, et al. G.R. No. 103219May 18, 1993 Peter Paul Phil Corp. vs. National Labor Relations Commission, et al. G.R. No. 100311May 18, 1993 Juanito Lim vs. Court of Appeals, et al. G.R. No. 98318May 18, 1993 Halili Inn, Inc. vs. Cresenciano B. Trajano, et al. G.R. No. 97175May 18, 1993 Development Bank of the Philippines vs. Nlrc, et al. G.R. No. 95755May 18, 1993 People of the Philippines vs. Enrique A. Coloma G.R. No. 92504May 18, 1993 People of the Philippines vs. Welli Quinones G.R. No. 80078May 18, 1993 Atok Finance Corp. vs. Court of Appeals, et al. G.R. No. 79089May 18, 1993 People of the Philippines vs. Rogelio Bondoy G.R. No. 75906May 18, 1993 American Express Phils., et al. vs. Vicente Leogardo, Jr., et al. G.R. No. 73875May 18, 1993 Republic of the Philippines vs. Joselito Agbulos G.R. No. 73907May 18, 1993 People of the Philippines vs. Buenaventura Aruta, et al. G.R. No. 103805May 17, 1993 People of the Philippines vs. Reynaldo Kyamko G.R. No. 103125May 17, 1993 Province of Camarines Sur, et al. vs. Court of Appeals, et al. G.R. No. 102539May 17, 1993 People of the Philippines vs. Jose Arguelles G.R. No. 101426May 17, 1993 Phil. American General Insurance Company, Inc. vs. Court of Appeals, et al. G.R. No. 101124May 17, 1993 People of the Philippines vs. Carmelina C. Tabar, et al. G.R. No. 98382May 17, 1993 Philippine National Bank vs. Court of Appeals, et al. G.R. No. 97218May 17, 1993 Provident Savings Bank vs. Court of Appeals, et al. G.R. No. 94977May 17, 1993 People of the Phil. vs. Gilberto Yumang G.R. No. 94761May 17, 1993 Maersk Line vs. Court of Appeals, et Al G.R. No. 93199May 17, 1993 People of the Philippines vs. Blas Aguarino, et al. G.R. No. 85434May 17, 1993 People of the Philippines vs. Perfecto Crisostomo, et al. G.R. No. 79021May 17, 1993 Romeo S. Chua vs. Court of Appeals, et al. A.M. No. CA-91-3-PMay 17, 1993 Ansberto P. Paredes vs. Francisco S. Padua, et al. G.R. Nos. 102361-62May 14, 1993 People of the Philippines vs. Rudy Fronda G.R. No. 95756May 14, 1993 People of the Philippines vs. Crisologo Empacis G.R. Nos. 94994-95May 14, 1993 People of the Philippines vs. Lilibeth P. Caco, et al. G.R. No. 104405May 13, 1993 Liberty Insurance Corp. vs. Court of Appeals, et al. G.R. No. 102970May 13, 1993 Luzan Sia vs. Court of Appeals, et al. G.R. No. 98709May 13, 1993 Magdalena Llenares vs. Court of Appeals, et al. G.R. No. 85867May 13, 1993 E. Razon, Inc., et al. vs. Secretary of Labor, et al. G.R. No. 101315May 12, 1993 People of the Philippines vs. Miguel Ll. Dela Cruz G.R. No. 98242May 12, 1993 Radio Com. of the Philippines, Inc. vs. National Labor Relations Commission, et al. G.R. No. 97838May 12, 1993 La Campana Food Products, Inc. vs. Court of Appeals, et al. G.R. No. 97239May 12, 1993 Int'l Rice Research Institiute vs. National Labor Relations Commission, et al. G.R. No. 95890May 12, 1993 People of the Phil. vs. Olando Precioso, et al. G.R. No. 95125May 12, 1993 People of the Phil. vs. Wilfredo Pagsanjan G.R. Nos. 100225-26May 11, 1993 People of the Philippines vs. Raul N. Santos, et al. G.R. No. 97788May 11, 1993 Teofila De Luna vs. Court of Appeals, et al. G.R. No. 97189May 11, 1993 Jisscor Independent Union vs. Ruben Torres, et al. G.R. No. 96795May 11, 1993 Antonio M. Corral vs. National Labor Relations Commission, et al. G.R. No. 96251May 11, 1993 People of the Philippines vs. Daniel C. Navarro G.R. No. 94754May 11, 1993 U-Sing Button And Buckle Ind., et al. vs. National Labor Relations Commission, et al. G.R. No. 94569May 11, 1993 People of the Philippines vs. Jose P. Tanilon G.R. No. 94469May 11, 1993 People of the Philippines vs. Juan Villa G.R. No. 101798May 10, 1993 People of the Philippines vs. Mario Rivera G.R. No. 97169May 10, 1993 People of the Philippines vs. Teofilo Kempis G.R. No. 104404May 6, 1993 Spouses Tiu Peck, et al. vs. Court of Appeals, et al. G.R. No. 103313May 5, 1993 People of the Philippines vs. Alfredo Vergara Balogong, et al. G.R. No. 98442May 4, 1993 People of the Philippines vs. Santiago Ferolino G.R. No. 88167May 3, 1993 University of the Philippines, et al. vs. Teodoro P. Regino, et al. G.R. No. 100480May 1, 1993 Blanca Consuelo Roxas vs. Court of Appeals, et al. The Lawphil Project - Arellano Law Foundation, Inc. Spouses Loreto Claravall, et al. vs. Florenio E. Tierra, et al. Venancio Diola, et al. vs. National Labor Relation Commission, et al. People of the Philippines vs. Ernesto G. Corpuz Pnoc Energy Dev't. Corp., et al. vs. Nat'l Labor Relations Commission, et al. Gil Tapalla, et al. vs. Court of Appeals, et al. San Miguel Corp. vs. National Labor Relations Commission, et al. People of the Philippines vs. Roberto Oliquino People of the Philippines vs. Segundino Jotoy Leonardo Mariano, et al. vs. Court of Appeals Teodoro Caneda, et al. vs. Court of Appeals, et al. Top Management Programs Corp. vs. Court of Appeals, et al. People of the Philippines vs. Jesus Lagnas, et al. People of the Philippines vs. Romeo A. Bay People of the Philippines vs. Romeo Pamintuan, et al. Erlinda O. Medina, et al. vs. Consolidated Broadcasting System, et al. People of the Philippines vs. Danilo M. Gonzales Government Service Insurance System vs. Court of Appeals, et al. German P. Zagada vs. Civil Service Commission, et al. People of the Philippines vs. Gilbert S. San Andres Lourdes Navarro, et al. vs. Court of Appeals, et Al Ateneo De Manila University, et al. vs. Ignacio M. Capulong, et al. People of the Philippines vs. Hilario C. Macasling, Jr. Lea O. Camus vs. Court of Appeals, et al. People of the Philippines vs. Antonio V. Enrile, et al. Baguio Colleges Foundation, et al. vs. National Labor Relations Commission, et al. Isidro Cariño, et al. vs. Ignacio M. Capulong, et al. Pedro P. Pecson vs. Court of Appeals, et al. People of the Philippines vs. Felimon Ramos, et al. Socorro Abella Soriano vs. Court of Appeals, et al. People of the Philippines vs. Armando Maestro, et al. Feliciano V. Agbanlog vs. People of the Philippines, et al. People of the Philippines vs. Roberto Alib People of the Philippines vs. Reynaldo P. Crisostomo People of the Philippines vs. Lucilo M. Bernardo, et al. Danilo Rabino, et al. vs. Adora Cruz, et al. Metropolitan Bank And Trust Co. vs. Quilts And All, Inc. Raul Sesbreño vs. Court of Appeals, et al. People of the Philippines vs. Victor R. Angeles National Power Corp., et al. vs. Court of Appeals, et al. People of the Philippines vs. Rogelio A. Balidiata People of the Philippines vs. Reynaldo Aguilar People of the Philippines vs. Alicia B. Gaoat People of the Philippines vs. Agustin Abiera People of the Philippines vs. Catalino L. Quiming, et al. People of the Philippines vs. Cesar Cervantes People of the Philippines vs. Rolando S. Quetua Antonio Banzagales, et al. vs. Herminia Galman, et al. Lolita Hernandez Loy vs. William Baden Filomeno R. Negado vs. Manuel E. Autajay, et al. Peter Paul Phil Corp. vs. National Labor Relations Commission, et al. Juanito Lim vs. Court of Appeals, et al. Halili Inn, Inc. vs. Cresenciano B. Trajano, et al. Development Bank of the Philippines vs. Nlrc, et al. People of the Philippines vs. Enrique A. Coloma People of the Philippines vs. Welli Quinones Atok Finance Corp. vs. Court of Appeals, et al. People of the Philippines vs. Rogelio Bondoy American Express Phils., et al. vs. Vicente Leogardo, Jr., et al. Republic of the Philippines vs. Joselito Agbulos People of the Philippines vs. Buenaventura Aruta, et al. People of the Philippines vs. Reynaldo Kyamko Province of Camarines Sur, et al. vs. Court of Appeals, et al. People of the Philippines vs. Jose Arguelles Phil. American General Insurance Company, Inc. vs. Court of Appeals, et al. People of the Philippines vs. Carmelina C. Tabar, et al. Philippine National Bank vs. Court of Appeals, et al. Provident Savings Bank vs. Court of Appeals, et al. People of the Phil. vs. Gilberto Yumang Maersk Line vs. Court of Appeals, et Al People of the Philippines vs. Blas Aguarino, et al. People of the Philippines vs. Perfecto Crisostomo, et al. Romeo S. Chua vs. Court of Appeals, et al. Ansberto P. Paredes vs. Francisco S. Padua, et al. People of the Philippines vs. Rudy Fronda People of the Philippines vs. Crisologo Empacis People of the Philippines vs. Lilibeth P. Caco, et al. Liberty Insurance Corp. vs. Court of Appeals, et al. Luzan Sia vs. Court of Appeals, et al. Magdalena Llenares vs. Court of Appeals, et al. E. Razon, Inc., et al. vs. Secretary of Labor, et al. People of the Philippines vs. Miguel Ll. Dela Cruz Radio Com. of the Philippines, Inc. vs. National Labor Relations Commission, et al. La Campana Food Products, Inc. vs. Court of Appeals, et al. Int'l Rice Research Institiute vs. National Labor Relations Commission, et al. People of the Phil. vs. Olando Precioso, et al. People of the Phil. vs. Wilfredo Pagsanjan People of the Philippines vs. Raul N. Santos, et al. Teofila De Luna vs. Court of Appeals, et al. Jisscor Independent Union vs. Ruben Torres, et al. Antonio M. Corral vs. National Labor Relations Commission, et al. People of the Philippines vs. Daniel C. Navarro U-Sing Button And Buckle Ind., et al. vs. National Labor Relations Commission, et al. People of the Philippines vs. Jose P. Tanilon People of the Philippines vs. Juan Villa People of the Philippines vs. Mario Rivera People of the Philippines vs. Teofilo Kempis Spouses Tiu Peck, et al. vs. Court of Appeals, et al. People of the Philippines vs. Alfredo Vergara Balogong, et al. People of the Philippines vs. Santiago Ferolino University of the Philippines, et al. vs. Teodoro P. Regino, et al. Blanca Consuelo Roxas vs. Court of Appeals, et al. The Lawphil Project - Arellano Law Foundation, Inc.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 105756 May 31, 1993
SPOUSES LORETO CLARAVALL and VICTORIA CLARAVALL,petitioners,
vs.
HON. FLORENIO E. TIERRA, in his capacity as Presiding Judge, Regional Trial Court, Branch 16, Ilagan, Isabela, CAROLINA P. RAMIREZ,respondents.
Emmanuel O. Sales for petitioners.
Pedro S. Eugenio for private respondents.
DAVIDE, JR.,J.:
Claiming that the respondent Judge acted without jurisdiction and/or with grave abuse of discretion in issuing the 25 March 1992 Resolution of the motion for execution in Civil Case No. 2143 and the 22 April 1992 Order denying the motion for reconsideration of the said Resolution, petitioners come before Us in this petition forcertiorariandmandamusunder Rule 65 of the Revised Rules of Court seeking the annulment of the Resolution and Order, and praying for the issuance of a writ ofmandamusdirecting the respondent Judge to execute the decision of this Court in G.R. No. L-47120 promulgated on 15 October 1990.
The antecedent facts of this case are not disputed.
Petitioners obtained a loan in the amount of P75,000.00 from the private respondent and her husband Francisco Ramirez. Subsequently, they executed on 29 December 1965 a deed of sale ofa real property situated in the Municipality of Ilagan, Isabela in favor of the Ramirezes. On the same date, the Ramirezes executed an instrument granting the petitioners, for and inconsideration of the sum of P10,000.00, an option to repurchase the property within two (2) years therefrom. Petitioners failed to repurchase the property within the stipulated period and their subsequent offer to buy back the property was refused by the Ramirezes.
The petitioners then brought suit against the Ramirezes to compel the latter to sell back the property to them. The case was filed with the Regional Trial Court (RTC) of Ilagan, Isabela. It was docketed as Civil Case No. 2143 and raffled off to Branch16 of the same court. On 25 August 1969, the trial court rendered a judgment adverse to the petitioner which, on appeal, was affirmedin totoby the Court of Appeals in a decision dated 22 April 1976. The petitioners filed a petition for review with this Court which was docketed as G.R. No. L-47120. On 21 October 1990, this Court, per Mr. Justice Abdulwahid A. Bidin, rendered therein a decision1reversing the judgment of the Court of Appeals and holding that the transaction between the parties, although denominated as a deed of sale with an option to repurchase, was one of equitable mortgage. The dispositive portion of the decision reads:
WHEREFORE, the decision of respondent Court promulgated on April 22, 1976 and its resolution of June 22, 1977 are hereby Reversed and Set Aside. The deed of absolute sale between the parties with the option to repurchase is declared as an equitable mortgage and, petitioners are declared entitled to redeem the mortgage property which shall be effected upon payment of their mortgage debt to private respondents in the total amount of P85,000.00 with legal rate of interest from December 31, 1967, the time the loan matured until it is fully paid.2
After the decision had become final and executory, the petitioners filed in Civil Case No. 2143 a motion for execution of judgment3and deposited with the Clerk of Court of the trial court a manager's check in the amount of P207,825.00 representing the redemption price which they had computed in this wise:
Principal Indebtedness P 85,000.00
Interest of 6% p.a. on
the P85,000.00 from
December 31, 1967 to
December 31, 1991 P 122,400.00
Interest of 6% p.a. on
the P85,000.00 from
January 1, 1992 to
January 31, 1992 P 425.00
—————
TOTAL P 207,825.00
On 5 March 1992, the trial court ordered the issuance of thecorresponding writ of execution.4
On 19 March 1992, the Ramirezes filed an opposition5to the petitioners Motion for Execution and to Deposit Redemption Price on the grounds that (a) the redemption money offered by the petitioners is insufficient because the legal interest was computed at the rate of six percent (6%)per annuminstead of twelve percent (12%)per annumin accordance with Central Bank (CB) Circular No. 416 and the ruling inReformina vs.Tomol,6and (b) the redemption price should include the value of the improvements on the property and the escalation of the dollar based on the exchange rate of the dollarvis-a-visthe peso at the time of actual repurchase.
The petitioners filed their reply7to the opposition contending that (a) CB Circular No. 416 cannot be applied to an equitable mortgage; (b) CB Circular No. 416, which became effective on 29 July 1974, cannot retroact to 31 December 1967, the date granted to the petitioners for the repurchase of the property; and (c) the Ramirezes cannot recover the value of the improvements on the property or any alleged dollar escalation, both of which had not been provided for in the decision.
On 25 March 1992, the trial court issued the questioned Resolution8which held that "the amount stated in the said decision corresponds to the sum of money involved in the execution of the 'deed of absolute sale between the parties with the option to repurchase.'" The trial court stated that the amount, therefore, "cannot be characterized other than a loan," and, hence, covered by CB Circular No. 416. It accordingly decreed that the principal amount of P85,000.00 to be paid by the petitioners should bear interest at the rate of twelve percent (12%)per annumfrom 31 December 1967 until it is fully paid. The courta quopassedsub silentioon the private respondents prayer for payment of the value of the improvements on the property and did not touch the issue of the escalated dollar rate of exchangevis-a-visthe peso because "the same is not an incident or arising (sic) out of the decision" in G.R. No.
L- 47120. The dispositive portion of the resolution reads:
IN VIEW OF THE FOREGOING, Circular No. 416 of the Central Bank, dated July 29, 1974 should be applied in the decision of the instant case — that is the amount of P85,000.00 to be paid by the plaintiffs-petitioners to the respondents-defendants should be charged with interest rate of 12%per annumfrom December 31, 1967 until fully paid.
The petitioners motion for reconsideration9was denied by the trial court on 22 April 1992.
Hence, the instant petition. Only Carolina Ramirez is impleaded as private respondent since Francisco Ramirez had earlier died.10
Petitioners allege as grounds for the petition the following, to wit:
1. THE RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF THE JURISDICTION AND/OR WITH GRAVE ABUSE OF DISCRETION IN APPLYING CIRCULAR NO. 416 DATED JULY 29, 1974 RETROACTIVELY AS OF DECEMBER 31, 1967 WHEN SAID CIRCULAR NO. 416 WAS NOT YET EXISTING AND THE LEGAL RATE OF INTEREST WAS 6%PER ANNUM;AND
2. THE RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF HIS JURISDICTION AND/OR WITH GRAVE ABUSE OF DISCRETION IN APPLYING CIRCULAR NO. 416 DATED JULY 29, 1974 IN A CONTRACT OF DEED OF SALE WITH RIGHT TO REPURCHASE WHICH WAS DECLARED BY THIS HONORABLE (sic) COURT AS AN EQUITABLE MORTGAGE NOT COVERED BY SAID CB CIRCULAR NO. 416.11
The second ground raises the primary issue of the applicability of CB Circular No. 416 to the instant case. Petitioners advance the view that it does not because the transaction between the parties in this case is a deed of sale with an option to repurchase, although declared an equitable mortgage in G.R. No. L-47120, and an equitable mortgage is notstrictly a loan, or a forbearance of money, goods or credits which is covered by the circular.
Indeed, it is settled that CB Circular No. 416, which took effect on 29 July 1974, applies only to interest on (a) loans; (b) forbearance of any money, goods or credits; and (c) judgments in cases involving loans or forbearances of any money, goods or credits.12
InReformina vs.Tomol,13We held:
Central Bank Circular No. 416 which took effect on July 29, 1974 was issued and promulgated by the Monetary Board pursuant to the authority granted to the Central Bank by P.D. No. 116, which amended Act No. 2655, otherwise known as the Usury Law. The amendment from which said authority emanated reads as follows —
Sec. 1-a. The Monetary Board is hereby authorized to prescribe the maximum rate or rates of interest for theloan or renewal thereof or the forbearance of any money, goods or credits, and to change such rate or rates whenever warranted by prevailing economic and social conditions:Provided, That such changes shall not be made oftener than once every twelve months.
In the exercise of the authority herein granted, the Monetary Board may prescribe higher maximum rates for consumer loans or renewals thereof as well as such loans made by pawnshops, finance companies and other similar credit institutions although the rates prescribed for these institutions need not necessarily be uniform. (Emphasis supplied).
Acting pursuant to this grant of authority, the Monetary Board increased the rate of legal interest from that of six (6%) percentper annumoriginally allowed under Section 1 of Act 2655 to twelve (12%) percentper annum.
It will be noted that Act No. 2655 deals with interest on (1) loans; (2) forbearances of any money, goods or credits; and (3) rate allowed in judgments.
Petitioners had argued that the deed of absolute sale in relation to the option to repurchase was in reality an equitable mortgage, and in G.R. No.
L-47120, this Court categorically stated this to be the main issue, thus:
The main issue in this case is whether or not the Deed of Absolute Sale and Option to Repurchase executed by the parties must be considered as an equitable mortgage and not the absolute sale it purports to be.14
The dispositive portion of Our decision therein, quoted earlier, leaves no doubt that the real transaction was, in fact,one of loan, for We declared the petitioners "entitled to redeem the mortgaged property which shall be effected upon payment of their mortgage debt to private respondents in the total amount of P85,000.00 with legal rate of interest from December 31, 1967, the time theloan matureduntil it is fully paid."15In fine, We ruled therein that the principal transaction between the parties was one of loan and the so-called deed of absolute sale was intended as a security for the payment of the loan.
An equitable mortgage "arises from a transaction, regardless of its form, which resolves into a security, or an offer or attempt to pledge land as security for a debt or liability."16Otherwise stated, the "essential feature or essence of an equitable mortgage is the intent of the parties to create a mortgage, lien, or charge on property sufficiently described or identified to secure an obligation, which intent must be clearly established in order that such a mortgage may exist."17
Petitioners cannot, now, execute avolte-faceand argue that CB Circular No. 416 is inapplicable to this case. The second ground for the petition must then be resolved against the petitioners.
There is, however, merit in their first ground.
The trial court erred in charging the petitioners with interest on the redemption amount of P85,000.00 at the rate of twelve percent (12%)per annumas prescribed by CB Circular No. 416, from 31 December 1967 until full payment of the said redemption amount. The legal rate, of interest before 29 July 1974 was only six percent (6%)per annumand it was only on that date when the said rate was increased to twelve percent (12%)per annumby CB Circular No. 416. We held inViloria vs.Court of Appeals18that CB Circular No. 416 should not be given retrospective effect.
Respondent trial court, therefore, acted with grave abuse of discretion when it imposed a twelve percent (12%)per annuminterest on the redemption amount before 29 July 1974.
WHEREFORE, the instant petition forcertiorariis PARTIALLY GRANTED. The 25 March 1992 Resolution of the trial court is affirmed insofar as it held that the redemption amount in G.R. No. L-47120 is covered by CB Circular No. 416 and partially set aside insofar as it orders the petitioners to pay the private respondent interest thereon at the rate of twelve percent (12%)per annumfrom 31 December 1967 until 28 July 1974. The interest should be six percent (6%)per annumfrom 31 December1967, when the loan matured, until 28 July 1974, and at the rate of twelve percent (12%)per annumfrom 29 July 1974, the date when CB Circular No. 416 took effect, until full payment of the said redemption amount. The writ of execution must then be amended in conformity with this Decision.
Costs against the private respondent.
SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.
#Footnotes
1 Annex "A" of Petition;Rollo, 19-33.
2Rollo, 32-33.
3 Annex "B" of Petition;Id., 34-36.
4 Annex "D",Id.;Id., 40.
5 Annex "E" of Petition;Rollo, 41-42.
6 139 SCRA 260 [1985].
7 Annex "F", Petition,op.cit.;Rollo, op.cit., 43-52.
8 Annex "G",Id.;Id., 53-55.
9Rollo, 65.
10Id.,3.
11Rollo, 8.
12 Reformina vs. Tomol,supra.; Philippine Rabbit Bus Lines, Inc. vs. Cruz, 143 SCRA 158 [1986]; Meridian Assurance Corp. vs. Dayrit, 184 SCRA 20 [1990]; Philippine Virginia Tobacco Administration vs. Tensuan, 188 SCRA 628 [1990]; FNCB Finance vs. Estavillo, 192 SCRA 514 [1990]; GSIS vs. Court of Appeals, G.R. No. 103590, 29 January 1993.
13Supra.
14Rollo, 26.
15 Underscoring supplied for emphasis.
16 59 C.J.S. 42.
17Id., 43.
18 123 SCRA 259 [1983].See also, Buiser vs. Court of Appeals, 154 SCRA 438 [1987].