Case Digest on Obligations and Contracts: Pacto de Retro Sale Distinguished From Equitable Mortgage - Myrna Ramos vs. Susana Sarao G.R. No. 149756
Myrna Ramos v. Susana Sarao G.R. No. 149756, February 11, 2005 Facts: Respondent Sarao avers that the herein Petition should have been dismissed outright, because petitioner (1) failed to show proof that she had served a copy of it to the Court of Appeals and (2) raised questions of fact that were not proper issues in a petition under Rule 45 of the Rules of Court. Issue: Whether the parties intended the contract to be a bona fide pacto de retro sale or an equitable mortgage. Ruling: In a pacto de retro , ownership of the property sold is immediately transferred to the vendee a retro , subject only to the repurchase by the vendor a retro within the stipulated period. The vendor a retro's failure to exercise the right of repurchase within the agreed time vests upon the vendee a retro , by operation of law, absolute title to the property. Such title is not impaired even if the vendee a retro fails to consolidate title under Article 1607 of the Civil Code. On the...