Practice question
A document is called a sale with right to repurchase. The apparent vendor remains in possession, expressly undertakes to pay the property's taxes, and the evidence supports an intention to secure a debt. The apparent buyer says a sale label makes the equitable-mortgage rules irrelevant. What is the proper analysis?
- The title alone conclusively proves a true sale.
- The proved facts engage Article 1602's equitable-mortgage presumption despite the label.
- The court must ignore the possession and tax terms.
- The arrangement automatically becomes a gratuitous loan with no debt.
- The debtor's obligation automatically disappears merely because security is involved.
Legal references
- https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html — Civil Code, Article 1602(2), (5)–(6).
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