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    3 Lacorte Vs CA

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    Odiu Mix
    The heirs of Maria Inocencio Lacorte owned land that was foreclosed by a bank and sold to Jose Icaca with an agreement that the heirs could repurchase it within a year. Without the heirs' knowledge or consent, Icaca executed a Deed of Reconveyance transferring the land to Peregrino and Adela Lacorte before the year expired. The heirs filed to annul the deed. The Court of Appeals ruled the heirs had no standing. The Supreme Court held that the original agreement was an equitable mortgage, so the heirs did have a right to bring an action for annulment or rescission of the subsequent deed because it prejudiced their property rights under the prior agreement.

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    3 Lacorte Vs CA

    Uploaded by

    Odiu Mix
    48 views2 pages
    The heirs of Maria Inocencio Lacorte owned land that was foreclosed by a bank and sold to Jose Icaca with an agreement that the heirs could repurchase it within a year. Without the heirs' knowledge or consent, Icaca executed a Deed of Reconveyance transferring the land to Peregrino and Adela Lacorte before the year expired. The heirs filed to annul the deed. The Court of Appeals ruled the heirs had no standing. The Supreme Court held that the original agreement was an equitable mortgage, so the heirs did have a right to bring an action for annulment or rescission of the subsequent deed because it prejudiced their property rights under the prior agreement.

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    3 Lacorte vs CA

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    The heirs of Maria Inocencio Lacorte owned land that was foreclosed by a bank and sold to Jose Icaca with an agreement that the heirs could repurchase it within a year. Without the heirs' knowledge or consent, Icaca executed a Deed of Reconveyance transferring the land to Peregrino and Adela Lacorte before the year expired. The heirs filed to annul the deed. The Court of Appeals ruled the heirs had no standing. The Supreme Court held that the original agreement was an equitable mortgage, so the heirs did have a right to bring an action for annulment or rescission of the subsequent deed because it prejudiced their property rights under the prior agreement.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    48 views2 pages

    3 Lacorte Vs CA

    Uploaded by

    Odiu Mix
    The heirs of Maria Inocencio Lacorte owned land that was foreclosed by a bank and sold to Jose Icaca with an agreement that the heirs could repurchase it within a year. Without the heirs' knowledge or consent, Icaca executed a Deed of Reconveyance transferring the land to Peregrino and Adela Lacorte before the year expired. The heirs filed to annul the deed. The Court of Appeals ruled the heirs had no standing. The Supreme Court held that the original agreement was an equitable mortgage, so the heirs did have a right to bring an action for annulment or rescission of the subsequent deed because it prejudiced their property rights under the prior agreement.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    LACORTE vs.

    COURT OF APPEALS
    Equitable Mortgage

    Facts:
    Petitioners herein and private respondent Peregrino Lacorte are the heirs of Maria
    Inocencio Lacorte who was the original owner of a 14,556 square meters parcel of land. The
    subject property was foreclosed by the bank, which after consolidating its ownership therefor
    subsequently sold the same to herein private respondent Jose Icaca. Icaca and Simon Lacorte (as
    representative of the heirs herein) entered into an agreement whereby the former was authorized
    to purchase the subject property from the bank provided that the heirs shall be given the right to
    repurchase the same within the period of one year. However, without the knowledge and consent
    of herein petitioners, and before the expiration of the grace period, spouses Perigrino and Adela
    Lacorte purchased the land in their names by virtue of a Deed of Reconveyance executed by Jose
    Icaca.

    Issue:
    W/N petitioners have also the right to bring an action for annulment and/or recision of the subject
    Deed of Reconveyance

    Arguments:
    Petitioners –
     They filed an action for annulment of the contract on the ground that the same was
    entered into in evident bad faith and in violation of the previous agreements between the
    parties, thereby resulting in prejudice to their property rights. The trial court ordered the
    rescission of the Deed of Reconveyance executed in favor of respondent spouses, as well
    as the tax declarations issued in their names, and for Jose Icaca to sell the land in question
    to all the petitioners and to the respondent spouses.
    Respondent court –
     The Court of Appeals reversed the order of the trial court and ruled that petitioners have
    no cause of action against private respondents since the former were not parties either to
    the Deed of Reconveyance sought to be annulled or to the Deed of Absolute Sale executed
    between the bank and Jose Icaca.

    Ruling:
    YES. In determining whether the petitioner may bring the action for annulment and/or
    reconveyance, the nature of the agreements entered into by the petitioner must be determined.
    Upon examination of the agreements, it has been held that the contract is an equitable mortgage
    as evidenced by the Agreement itself. A contract of reconveyance, therefore presupposes the
    existence of a prior agreement wherein a party to whom property was conveyed undertakes to
    reconvey the same to the other party under certain terms and condition.
    In fine, a contract of reconveyance is but a necessary consequence of the exercise of a
    party’s right to repurchase the property subject of a contract of sale with a right of repurchase or
    of an equitable mortgage. A contract is presumed to be an equitable mortgage when the vendor
    remains in possession as lessee or otherwise, or 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.
    It is not disputed that petitioners' mother, Maria Lacorte, and two of her children, herein
    petitioners Rosario and Jerosalina, remained in possession of the property despite the existence of
    the Agreement hereinbefore quoted, and they continue to do so up to the present time. Further,
    prior to the expiration of that Agreement of October 17, 1983, another one was entered into
    between the same parties extending the period of redemption up to and until March, 1987. The
    court declared that the petitioners are entitled to bring an action to annul the contract because
    they stand to be prejudiced by the enforcement of the Deed of Reconveyance. According to the
    Court, the petitioners have also the right to ask for the reformation of the instrument. This is
    because petitioners should have been made parties to the Deed of Reconveyance were it not for
    the fact that Adela Lacorte had fraudulently excluded their names therefrom.

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