ISAGUIRRE V DE LARA

Respondent, Alejandro de Lara was the original applicant-claimant for a Miscellaneous Sales Application over a parcel of land on Guianga Cadastre filed with the Bureau of Lands on January 7, 1942. Upon his death, his wife, Felicitas, succeeded him as claimant. Later on the Undersecretary of Agriculture and Natural Resources amended the sales application to cover only 1,600 square meters. Then on November 3, 1961 by virtue of a decision rendered by Secretary of Agriculture and Natural Resources dated Nevember 19, 1954, as subdivision was made and the area was reduced to 1,000 square meters. On this lot resides the respondent's sons on an apartment. Later on, respondents loaned several times from PNB. When she encountered financial problems, she approached to the petitioner, Cornelio M. Isaguirre who was married to her niece for assistance. A document of Deed of Sale and Special Cession of Rights and Interest was executed by them wherein the former sold his lot along with the two-story commercial and residential structure standing thereon in consideratiomn of 5,000. Apolonio and Rodolfo then filed a complaint against petitioner for recovery of ownership and possession of the two-strory building which was later dismissed for lack of jurisdiction. Petitioner then filed a sales application over the subject property on the basis of sale of deed of sale, then it was approved which resulted to the issuance of title in the name of the petitioner. Meanwhile, the sales application of respondent over the 1,000 square meter of subjecyt property was also given due course, resulting in the issuance of OCT on June 19,1989. Due to the overlapping of titles, petitioner filed an action for quieting of title and damages with RTC against the respondent. RTC granted, and the cocurt declared him to be the lawful owner, however CA reversed, contending that the transaction entered into by the parties as evidenced by their contract was an equitable mortgage, not a sale. The court verdict was based on the inadequacy of the consideration agreeed by the parties, on its finding that the payment of a large portion of the purchase price was made afty=er the execution of the deed of sale in several installments of minimal amounts, and the fact that petitioner did not take steps to confirm his rights to obtain the title over the property for several years after the excecution of the deed of sale. So CA declared that the OCT issued to the petitioner is voil. This court affirmed the CA decision and MFR for the petitioner was denied. Respondent then filed a motion for execution with TC praying the immediate delivery od possession of the subject property which was later on granted. Respondent also moved for a writ of possession, invoking the p[revious ruling. Petitioner then opposed the motion asserting that he had the right of retention of property unti payment of the loan and the value of the improvements he had introduced on the property. TC granted respondent's motion for writ of possession while petitioners MFR was denied by TC. A writ of possession together with thje Sheriff's Notice to Vacate was served upon petitioenr. Petitioner filed to CA a special civil action for certiorari and prohibition with prayer for TRO to annul and set aside rhe TC orders including writ of possession and the sheriff's notice to vacate the premises. Appelate court raised the issues.

1. whether or nor the mortgagee in an equitable mortgage has the right to retain possession of the property pending actual payment to him of the amount of indebtedness by the mortgagor. 2. whether or not petitioner can be considered a builder in good faith with resppect to the improvements he made on the property before the transaction was declared to be an equitable mortgage.

CA held that the petitioner was not entitled to retain possession of the subject property