FACTS:

The case involves the dispute over the ownership of Lot 129 at Penefrancia Avenue, Naga City. Josefa Almeda, the registered owner of the lot, filed a complaint against Asuncion Juanir Vda. de Alvarez for "Recovery of Possession" alleging non-payment of rentals and refusal to vacate the premises. Alvarez, in her answer, claimed that the document she signed was a mortgage, not a sale. The trial court ruled in favor of Almeda's heirs, declaring that the contract was an absolute sale. This decision was affirmed by the Court of Appeals. Alvarez appealed to the Supreme Court, arguing that the contract should be treated as an equitable mortgage based on certain presumptions under the Civil Code. The Supreme Court, however, found no compelling reason to consider the contract as an equitable mortgage and held that it was indeed a contract of sale. The Court noted that Alvarez did not dispute the registration of the sale and only alleged it was a disguised mortgage when sued for recovery of the property. Additionally, Almeda declared the property in her name for tax purposes and Alvarez admitted to receiving rentals for Almeda as the owner of the land in a previous case.

ISSUES:

1. Whether or not the admissions made by the petitioner in her previous pleadings can be used as evidence against her.

2. Whether or not the consideration for the sale of the disputed property is grossly inadequate.

3. Whether the appellate courts erred in rejecting certain documents for not being formally offered as evidence.

4. Whether the price of P80,000.00 in the disputed deed of sale is grossly and unconscionably inadequate.

5. Whether the transaction between the parties is a sale or a contract of mortgage.

6. Whether the amount of the alleged loan should be deemed offset by the rentals received by the buyer from the property.

7. Whether the purchaser's possession of the property gives rise to a presumption of equitable mortgage.

8. Whether the decision of the respondent court has become final and executory.

9. Whether the petitioner failed to comply with Circular 1-88.

RULING:

1. Yes, the admissions made by the petitioner in her previous pleadings can be used as evidence against her. An admission in a pleading in one action may be admitted in evidence against the pleader or his successor-in-interest at the subsequent trial of the same suit or in another action involving the same issue or in which the admission is pertinent to the issues.

2. No, the consideration for the sale of the disputed property is not grossly inadequate. The petitioner failed to present sufficient evidence to prove that the price of P80,000.00 is grossly inadequate. The documents she presented, such as a deed of sale executed in 1987 and a tax declaration issued in 1974, are not reliable evidence of the market value of the land in 1973.

3. The appellate courts did not err in rejecting the documents as evidence since they were not formally offered as required by the Rules of Court.

4. The price of P80,000.00 in the disputed deed of sale is not grossly and unconscionably inadequate.

5. The transaction between the parties is a deed of sale and not an equitable mortgage.

6. The rentals received by the buyer from the property do not offset the alleged loan.

7. The purchaser's possession of the property does not give rise to a presumption of equitable mortgage.

8. The decision of the respondent court has not yet become final and executory.

9. The petitioner has complied with the requirements of Circular 1-88.

PRINCIPLES:

• Admissions made in a pleading can be used as evidence against the pleader or his successor-in-interest in subsequent trials or actions involving the same issue.

• The party making an admission in a pleading is bound by such admission unless he can show that it was made through palpable mistake or that no authority was given to the attorney who made the admission.

• The court shall not consider evidence not formally offered in accordance with the Rules of Court.

• The presumption of equitable mortgage applies only if the consideration is unusually inadequate.

• The existence of a debt or liability on the part of the alleged mortgagor determines whether a transaction is a sale or a mortgage.

• The contract of antichresis requires the specification of the principal and interest in writing.

• Possession of the property by the purchaser does not override a judicial admission of ownership.

• The filing of a motion for new trial or reconsideration within the prescribed period stays enforcement of the judgment.

• Compliance with the requirements of Circular 1-88 is necessary in filing a petition.