CASE TITLE: Dizon v.

Gaborro AUTHOR:
TOPIC: 1307; Innominate Contracts NOTES:
PONENTE:
CASE LAW/ DOCTRINE:

FACTS:
Petitioner, Jose P. Dizon, was the owner of the three parcels of land, situated in Mabalacat, Pampanga. He constituted a first mortgage to DBP to secure a
loan of P38,000.00 and a second mortgage to PNB amounting P93,831.91.
Petitioner defaulted in the payment of his debt, therefore, the Development Bank of the Philippines foreclosed the mortgage extrajudicially.
Gaborro became interested in the lands of Dizon.
But since the property was already foreclosed by the DPB. They then entered into a contract captioned as Deed of sale with assumption of mortgage and
the second contract executed the same day, is called Option to Purchase Real Estate After the execution of said contracts, Alfredo G. Gaborro took
possession of the three parcels of land.
After the execution of the contract and its conditions to him, Gaborro made several payments to the DBP and PNB. He improved, cultivated the kinds raised
sugarcane and other crops produce.
Jose P. Dizon through his lawyer, wrote a letter to Gaborro informing him that he is formally offering reimburse Gaborro of what he paid to the banks.
Gaborro did not agreed to the demands of the petitioner, hence, Jose P. Dizon instituted a complaint in the Court of First Instance of Pampanga, alleging
that the documents Deed of Sale With Assumption of Mortgage and the Option to Purchase Real Estate did not express the true intention and agreement
between the parties.
Petitioner, contended that the two deeds constitute in fact a single transaction that their real agreement was not an absolute sale of the land but merely
an equitable mortgage or conveyance by way of security for the reimbursement or refund by Dizon to Gaborro of any and all sums which the latter may
have paid on account of the mortgage debts in favor of the DBP and the PNB.

ISSUE:
Whether or not the contract showed the true agreement between the parties.
HELD:
No.
RATIO:
The court held that the true agreement between the plaintiff and defendant is that the defendant would assume and pay the indebtedness of the plaintiff to DBP
and PNB, and in consideration therefore, the defendant was given the possession and enjoyment of the properties in question until the plaintiff shall have reimbursed
to defendant fully the amount of P131,831.91 plus 8% interest per annum from October 6, 1959 until full payment, said right to be exercised within one year from
the date the judgment becomes final, if he fails to do so within the said period, then he is deemed to have lost his right over the lands forever.

DISSENTING/CONCURRING OPINION(S):