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Alano V Babasa Digest

The plaintiff's father had taken out a loan of 1,030 pesos from Fulgencio Babasa and Maria Cantos and pledged land as collateral, allowing the creditors to use the land until the debt was repaid. After the creditors died, the plaintiff sought to redeem the land from the defendant Jose Babasa, who now held the land. The defendant initially agreed to redemption but then demanded more money. The court ruled that the original agreement was a contract of sale with the right to repurchase, not a loan, and was valid though not in writing. The plaintiff was entitled to redeem the land per the terms of the original agreement.

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148 views1 page

Alano V Babasa Digest

The plaintiff's father had taken out a loan of 1,030 pesos from Fulgencio Babasa and Maria Cantos and pledged land as collateral, allowing the creditors to use the land until the debt was repaid. After the creditors died, the plaintiff sought to redeem the land from the defendant Jose Babasa, who now held the land. The defendant initially agreed to redemption but then demanded more money. The court ruled that the original agreement was a contract of sale with the right to repurchase, not a loan, and was valid though not in writing. The plaintiff was entitled to redeem the land per the terms of the original agreement.

Uploaded by

Abigail Tolabing
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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LCP

SUBJECT: Contracts
TOPIC: Forms of Contracts

Alano v Babasa
G.R No L-274, March 23, 1908

GENERAL RULE OF LAW/DOCTRINE

FACTS
Juana Cantos and Jose Alano, filed an amended complaint alleging that her legitimate father had contracted a debt
of P1,030 in favor of Fulgencio Babasa and Maria Cantos, the parents of the defendant Jose Babasa, and that in
order to guarantee said debt he had pledged a parcel of land upon condition that the creditors should enjoy the
usufruct of said land from the date of the contract, July 18, 1883, and for such purpose they took possession of the
property during seven years, after which time the debtor would be entitled to redeem it at any time by paying his
debt; and on account of the death of the said creditors, the plaintiff's husband, in her name, spoke personally and
through other persons to the defendant, Babasa, who now holds and enjoys the usufruct of the land, seeking to
redeem the same.
Although the defendant in the beginning engaged to permit its redemption, later on he offered to definitely sell
the land at an increase of P1,370 in the price, but as the plaintiff did not agree to this, he then absolutely declined
to permit the redemption to which Juana was entitled, and she therefore asked that judgment be entered in her
favor ordering that the defendant, in compliance with what had been agreed to, permit the land in question to be
redeemed for said amount, or by some other means under the law, and directing that the land be returned to her
without payment for the reason that the defendant had enjoyed its fruits during so many years of possession of
the property, and that he be sentenced to pay the costs.
ISSUES AND RULINGS

Issue
Whether the contract was a contract of loan with mortgage or a real contract of sale with right to repurchase.

Ruling
Because of its form and the terms in which the document has been prepared, the stipulated contract is in no way a
contract of loan with mortgage, but a real contract of sale with right to repurchase, treated of in Article 1507  et
seq. of the Civil Code.
It is valid, perfect, and efficient, because the three requisites prescribed by article 1261 of the Civil Code are
present therein, and is binding notwithstanding the fact that it had been drawn up as a private document, in
accordance with the provisions of article 1278 of said code, inasmuch as the legalization of a contract by means of
a public writing and its entry in the register are not essential solemnities or requisites for its validity and efficacy as
between the contracting parties, but conditions of form which the law imposes, and that a publicly executed and
recorded agreement may be respected by the latter.

RELEVANT LAWS APPLICABLE

1
Obligations and Contract

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