Bautista v. Unangst

UP Law F2021 [046] Bautista v.
Unangst
Civil Procedure Payment of Filing Fees 2008 Reyes, R.T.
SUMMARY
Petitoner Bautista assailed the decision of RTC granting the petition for relief of respondent Unangst even
though they did not pay the proper amount of docket fees at the first instance. Respondents Unangst
subsequently paid the proper amount, averring that the amount initially paid was provided by the Clerk of
Court himself, and that they should not be faulted for the error. Bautista questioned the jurisdiction of RTC,
averring that it did not acquire jurisdiction since it could only acquire jurisdiction upon payment of proper
docket fees. Since the proper fees were belatedly paid, RTC could not have granted the questioned petition
for relief. The SC sided with the RTC.
FACTS
 1996 - Bautista filed a complaint for estafa, violation of BP 22 and carnapping against Hamilton Salak
for failing to return his car which Salak rented;
 Feb 2, 1997 - Salak and his common-law wife Unangst were arrested and made to pay Bautista
P232,000 for car rental and other incidental expenses;
 Feb. 3, 1997 - They entered an amicable settlement with Bautista to pay for the amount;
 They executed a sale with repurchase agreement with the petitioner Bautista, his wife Cynthia
Unangst agreed to sell, with option to repurchase, Unangst’s property to Bautista with Bautista’s
assumption of unpaid mortgage loan of P295,000. Unangst et al would still be in the possession of the
property and should they fail to repurchase after 30 days, they would have to vacate and surrender
the same to Bautista;
 Unangst and Salak failed to repurchase the property on agreed date. Bautista demanded for the
delivery of the property but Unangst et al did not comply;
 June 15, 1998 - Bautista filed with the RTC petition for specific performance or recovery of possession,
for sum of money, for consolidation of ownership and damages against respondent Unangst;
 July 29, 2004 - RTC granted the petition;
 Sept. 10, 2004 - Respondent Unangst filed a petition for relief before the RTC and explained the delay
in the appeal, averring that she learned of the decision only on Sept. 6, 2004 when a copy of motion for
execution was sent to her;
 They further argued that respondent Unangst's consent to the deed of sale with right to repurchase
was procured under duress and that even assuming that her consent was freely given, the contract
partakes of the nature of an equitable mortgage;
 Petitioner Bautista moved for dismissal on the ground that Unagst et al did not pay the proper amount
of docket fees (P1,715 instead of only P200 the respondents had paid);
 Respondents explained that the P200 was computed by the Clerk of Court and they should not be
faulted for it; they paid the remaining amount when they learned of the mistake on Feb 22 2005;
 Feb 23, 2005 - RTC granted the respondent Unangst’s petition for relief. They immediately filed their
appeal at the CA averring that RTC erred in (1) not appreciating that Unangst’s consent was procured
under duress and (2) assuming arguendo that the agreement was a valid contract, it is only one of
equitable mortgage and not of sale;
 Petitioner countered that although the petition for relief of respondents was filed on time, the proper
filing fees for said petition were paid beyond the 60-day reglementary period. He posited that
jurisdiction is acquired by the court over the action only upon full payment of prescribed docket fees;
 CA reversed the RTC judgment saying that the agreement was one of equitable mortgage
 On procedural aspect, CA said that "the trial court, in opting to apply the rules liberally, cannot be
faulted for giving due course to the questioned petition for relief which enabled appellants to
interpose the instant appeal."
 Hence this appeal by the petitioner.
RATIO
W/N the RTC acquired jurisdiction over the respondent’s petition although respondents belatedly
pay the right amount of docket fees
Yes.
The Court sided with the respondent; that as sufficiently explained in their petition, their failure to pay the
correct amount of docket fees was due to a justifiable reason. Citing Aranas v. Endona, the Court said that
while there is strict application of the jurisdictional nature of the above rule on payment of appellate docket
fees, the same may be mitigated under exceptional circumstances to better serve the interest of
justice. It is always within the power of this Court to suspend its own rules, or to except a particular
case from their operation, whenever the purposes of justice require it.
Technicality and procedural imperfections should thus not serve as bases of decisions. In that way,
the ends of justice would be better served. For, indeed, the general objective of procedure is to facilitate
the application of justice to the rival claims of contending parties, bearing always in mind that procedure is
not to hinder but to promote the administration of justice.
W/N the agreement entered into was one of equitable mortgage

Yes.
Respondent is correct in alleging that the deed of sale with right to repurchase qualifies as an equitable
mortgage under Article 1602. She merely secured the payment of the unpaid car rentals and the amount
advanced by petitioner for the unpaid mortgage.
Article 1602 of the New Civil Code provides that the contract is presumed to be an equitable mortgage in
any of the following cases: (1) When the price of a sale with right to repurchase is unusually inadequate; (2)
When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration
of the right to repurchase another instrument extending the period of redemption or granting a new period
is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor
binds himself to pay the taxes on the thing sold; (6) In any other case where it may be fairly inferred
that the real intention of the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation. In any of the foregoing cases, any money, fruits, or other benefit to
be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the
usury laws.
The Court also appreciated the following circumstances in Its conclusion: (1) the respondent executed the
deed only as they would not be released from custody unless they paid petitioner. When the vendor is in
urgent need of money when he executes the sale, the alleged sale with pacto de retro will be
construed as an equitable mortgage. (2) Petitioner allowed respondent and Salak to retain the
possession of the property despite the execution of the deed. In fact, respondent and Salak were not bound
to deliver the possession of the property to petitioner if they would pay him the amount he demanded; (3)
the deed was executed by reason of: (a) the alleged indebtedness of Salak to petitioner, that is, car rental
payments; and (b) respondent's own obligation to petitioner, that is, reimbursement of what petitioner paid
to the mortgagee. Fact is, the purchase price stated in the deed was the amount of the indebtedness of both
respondent and Salak to petitioner.
Moreover, under Article 1603 of the Civil Code it is provided that: "(i)n case of doubt, a contract purporting
to be a sale with right to repurchase shall be construed as an equitable mortgage."
FALLO
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

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UP Law F2021 [046] Bautista v.

W/N the agreement entered into was one of equitable mortgage

WHEREFORE, the petition is DENIED for lack of merit.

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