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    Dizon vs. Gaborro, 83 SCRA 688, 22 June 1978

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    Bibi Jumpol
    1) Petitioner Jose Dizon owned three parcels of land that he used to secure loans from two banks. He defaulted on the loans and the land was foreclosed on by one of the banks. 2) Dizon then entered into an agreement with Alfredo Gaborro to sell him the land in exchange for Gaborro assuming and paying off Dizon's debts. However, the parties disagreed on the nature of the transaction. 3) The Supreme Court ruled that the agreement was a form of equitable mortgage, allowing Dizon to recover the land by reimbursing Gaborro only the principal amounts paid towards Dizon's bank loans, but not any interest or taxes paid in the interim by Gaborro.

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    © All Rights Reserved
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    Dizon vs. Gaborro, 83 SCRA 688, 22 June 1978

    Uploaded by

    Bibi Jumpol
    109 views2 pages
    1) Petitioner Jose Dizon owned three parcels of land that he used to secure loans from two banks. He defaulted on the loans and the land was foreclosed on by one of the banks. 2) Dizon then entered into an agreement with Alfredo Gaborro to sell him the land in exchange for Gaborro assuming and paying off Dizon's debts. However, the parties disagreed on the nature of the transaction. 3) The Supreme Court ruled that the agreement was a form of equitable mortgage, allowing Dizon to recover the land by reimbursing Gaborro only the principal amounts paid towards Dizon's bank loans, but not any interest or taxes paid in the interim by Gaborro.

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    173. Dizon vs. Gaborro, 83 SCRA 688, 22 June 1978

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    1) Petitioner Jose Dizon owned three parcels of land that he used to secure loans from two banks. He defaulted on the loans and the land was foreclosed on by one of the banks. 2) Dizon then entered into an agreement with Alfredo Gaborro to sell him the land in exchange for Gaborro assuming and paying off Dizon's debts. However, the parties disagreed on the nature of the transaction. 3) The Supreme Court ruled that the agreement was a form of equitable mortgage, allowing Dizon to recover the land by reimbursing Gaborro only the principal amounts paid towards Dizon's bank loans, but not any interest or taxes paid in the interim by Gaborro.

    Copyright:

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

    Dizon vs. Gaborro, 83 SCRA 688, 22 June 1978

    Uploaded by

    Bibi Jumpol
    1) Petitioner Jose Dizon owned three parcels of land that he used to secure loans from two banks. He defaulted on the loans and the land was foreclosed on by one of the banks. 2) Dizon then entered into an agreement with Alfredo Gaborro to sell him the land in exchange for Gaborro assuming and paying off Dizon's debts. However, the parties disagreed on the nature of the transaction. 3) The Supreme Court ruled that the agreement was a form of equitable mortgage, allowing Dizon to recover the land by reimbursing Gaborro only the principal amounts paid towards Dizon's bank loans, but not any interest or taxes paid in the interim by Gaborro.

    Copyright:

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

    Title Dizon vs.

    Gaborro, 83 SCRA 688, 22 June 1978


    Ponente Guerrero, J.
    Doctrine
    Facts Petitioner Jose P. Dizon was the owner of the three (3) parcels of land, subject matter of
    this litigation in Pampanga with an aggregate area of 130.58 hectares.

    He constituted a first mortgage lien in favor of the Development Bank of the Philippines in
    order to secure a loan in the sum of P38,000.00 trial a second mortgage lien in favor of the
    Philippine National Bank to cure his indebtedness to said bank in the amount of P93,831.91.

    Petitioner Dizon having defaulted in the payment of his debt, the Development Bank of the
    Philippines foreclosed the mortgage extrajudicially pursuant to the provisions of Act No.
    3135.

    Sometime prior to October 6, 1959 Alfredo G. Gaborro trial Jose P. Dizon met. Gaborro
    became interested in the lands of Dizon. They entered into a contract of deed of sale with
    assumption of mortgage.

    The second contract executed the same day, October 6, 1959 is called Option to Purchase
    Real Estate

    The sum of P131,813.91 which purports to be the consideration of the sale was not actually
    paid by Alfredo G. Gaborro to the petitioner. The said amount represents the aggregate
    debts of the petitioner with the Development Bank of the Philippines trial the Philippine
    National Bank.

    After the execution of said contracts, Alfredo G. Gaborro took possession of the three
    parcels of land in question.

    Gaborro then wrote to DBP a letter informing them of the executed contracts and
    requested that he be allowed to pay the outstanding obligation under the same terms and
    conditions.

    The Board of Governors of the DBP approved the offer of Gaborro but said Board required
    him to pay 20% of the purchase price as initial payment.

    After the execution of the conditional e to him Gaborro made several payments to the DBP
    and PNB. He introduced improvements, cultivated the kinds raised sugarcane and other
    crops and appropriated the produce to himself. He will paid the land taxes thereon.

    Jose P. Dizon through his lawyer, Atty. Leonardo Abola, wrote a letter to Gaborro informing
    him that he is formally offering reimburse Gaborro Of what he paid to the banks but
    without, however, tendering any cash, and demanding an accounting of the income and of
    the pro contending that the transaction they entered into was one of antichresis.
     
    Jose P. Dizon instituted a complaint in the Court of First Instance of Pampanga, Gaborro,
    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 bet. between the
    parties. Petitioner Dizon, as Plaintiff below, contended that the two deeds constitute in fact
    a single transaction that their real agreement was not an absolute e of the d of 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. 
    Contentions Petitioner Respondent

    Lower Courts
    Appellate
    Court
    Issue What is the contract at bar?
    SC Ruling We find that the agreement between petitioner Dizon and respondent Gaborro is one of
    those inanimate contracts under Art. 1307 of the New Civil Code whereby petitioner
    and respondent agreed "to give and to do" certain rights and obligations respecting the
    lands and the mortgage debts of petitioner which would be acceptable to the bank. but
    partaking of the nature of the antichresis insofar as the principal parties, petitioner Dizon
    and respondent Gaborro, are concerned.

    Mistake is a ground for the reformation of an instrument which there having been a
    meeting of the minds of The parties o a contract, their true intention is not expressed in the
    instrument purporting to embody the agreement, and one of the parries may ask for such
    reformation to the end that such true intention may be expressed. (Art. 1359, New Civil
    code). When a mutual mistake of the parties causes the failure of the instrument to disclose
    their real agreement, said instrument may be reformed. (Art. 1361, New Civil Code.) It was
    a mistake for the parties to execute the Deed of Sale With Assumption of Mortgage and the
    Option to Purchase Real Estate and stand on the literal meaning of the file and stipulations
    used therein.

    The instruments must, therefore, be reformed in accordance with the intention and legal
    rights and obligations of the parties — the petitioner, the respondent and the Banks.

    We agree with the reformation decreed by the trial and appellate courts, but in the sense
    that petitioner Jose P. Dizon has the right to reacquire the three parcels of land within the
    one-year period indicated below by refunding or reimbursing to respondent Alfredo G.
    Gaborro or the Judicial Administratrix of his Estate whatever amount the latter has actually
    paid on account of the principal  only, of the loans of Dizon with the DBP and
    PNB, excluding  the interests and land taxes that may have been paid or may have accrued,
    on duly certified financial statements issued by the said banks.

    Does it include the fruits? Since the SC ruled out the obligation of Dizon to reimburse
    Gaborro of any interests and land taxes that have accrued or been paid, Petitioner Dizon is
    not entitled to an accounting of the fruits, harvests and other income received by
    respondent.

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