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12 Lao vs. CA GR 119178, 20 June 1997

Facts: Lim Lim Lao was a junior oicer o !remier "nvestment #ouse in its $inon%o &ranc'. ('e was

aut'ori)e% to si*n c'ec+s or an% in &e'a o t'e cor-oration. "n t'e course o &usiness, s'e met Fr. Arteijo!aijo, -rovincia treasurer o t'e (ociet o t'e /ivine or%. Fr. !aijo was aut'ori)e% to invest %onations

o t'e societ an% 'a% &een investin* t'e societs mone wit' !remiere. Fr. !aijo was issue% c'ec+s in

-ament o interest or t'e societs investments. 'e c'ec+s were %is'onore% or 3insuicienc o un%s.4

Fr. !aijo was on a&e to ac5uire !6,000 or 'is eorts in %eman%in* t'e -ament o t'e c'ec+s. !remiere,su&se5uent, was -ace% un%er receivers'i-. Fr. !aijo ie% a suit a*ainst Lim Lao an% 'is cosi*nator,

eo%uo As-rec, 'ea% o o-erations or vioation o $! 22.

"ssue: 'et'er or ot "n %eterminin* t'e nature o a contract, t'e Court oo+s at t'e intent o t'e -artiesan% not at t'e nomencature use% to %escri&e it.

#e%: "n %eterminin* t'e nature o a contract, t'e Court oo+s at t'e intent o t'e -arties an% not at t'e

nomencature use% to %escri&e it. !ivota to %eci%in* t'is issue is t'e true aim an% -ur-ose o t'e

contractin* -arties as s'own & t'e terminoo* use% in t'e covenant, as we as 3& t'eir con%uct, wor%s,

actions an% %ee%s -rior to, %urin* an% imme%iate ater eecutin* t'e a*reement.4 "n t'is re*ar%, -aroevi%ence &ecomes a%missi&e to -rove t'e true intent an% a*reement o t'e -arties w'ic' t'e Court wi

enorce even i t'e tite o t'e -ro-ert in 5uestion 'as area% &een re*istere% an% a new transer certiicate

o tite issue% in t'e name o t'e transeree.

A--in* t'e -rece%in* -rinci-es to t'e actua miieu o t'is case, we in% t'e a*reement&etween t'e -rivate res-on%ent an% . /omin*o Reat #ousin* Cor-oration, as re-resente% &

-etitioner, maniest one o e5uita&e mort*a*e. First, -ossession o t'e -ro-ert in t'e controvers

remaine% wit' !etitioner ;anue Lao w'o was t'e &eneicia owner o t'e -ro-ert, &eore, %urin* an%

ater t'e ae*e% sae. "t is sette% t'at a 3-acto %e retro sae s'ou% &e treate% as a mort*a*e w'ere t'e, !resi%ent an% C'airman o t'e $oar% o $etter #omes Reat #ousin* Cor-oration. 'e wor%in* o

t'e irst etension is a reres'in* reveation t'at in%ee% t'e -arties rea inten%e% to &e &oun% & a oanwit' mort*a*e, not & a -acto %e retro. "t rea%s, 3?n June 10, 1988, t'is o-tion is eten%e% or anot'er sit

%as to e-ire%

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