ANTICHRESIS

1. Diego vs Fernando
CECILIO DIEGO, Plaintiff-Appellee, v. SEGUNDO FERNANDO, Defendant-Appellant.
Espinosa Law Offices for Appellant.
N. L. Dasig and C. L. Francisco for Appellee.

SYLLABUS

1. CONTRACTS; MORTGAGE NOT ANTICHRESIS; LOAN WITHOUT INTEREST; POSSESSION TRANSFERRED

TO MORTGAGEE; CASE AT BAR. If a contract of loan with security does not stipulate the payment of
interest like in the case at bar, and possession of the mortgaged property is delivered to the mortgagee in
order that the latter may gather its fruits, but without stating that said fruits are to be applied to the
payment of interest, if any, and afterwards that of the principal, the contract is a mortgage and not
antichresis (Legaspi and Salcedo v. Celestial, 66 Phil., 372).
2. ID.; ID.; LEGAL INTEREST; PAYMENT OF. The court did not err in so holding that appellant is liable to
pay legal interest to appellee from the filing of the complaint, because appellant has not up to the present
discharged his indebtedness, and the law (Art. 2209, New Civil Code; Art. 1108, old) allows a creditor, in the
absence of stipulation as to payment of interest, to collect legal interest from the time of the debtors
default.

DECISION

REYES, J. B. L., J.:

Appeal by defendant Segundo Fernando from the judgment of the Court of First Instance of Nueva Ecija in
its Civil Case No. 1694 for foreclosure of mortgage. The appeal was originally brought to the Court of
Appeals, but was certified to us by that tribunal because it raises only questions of law.
The facts are not disputed. On May 26, 1950, the defendant Segundo Fernando executed a deed of
mortgage in favor of plaintiff Cecilio Diego over two parcels of land registered in his name, to secure a loan
of P2,000, without interest, payable within four years from the date of the mortgage (Exhibit "A"). After the
execution of the deed, possession of the mortgaged properties were turned over to the mortgagee.
The debtor having failed to pay the loan after four years, the mortgagee Diego made several demands upon
him for payment; and as the demands were unheeded, Diego filed this action for foreclosure of mortgage.
Defendant Fernandos defense was that the true transaction between him and plaintiff was one of antichresis
and not of mortgage; and that as plaintiff had allegedly received a total of 120 cavans of palay from the
properties given as security, which, at the rate of P10 a cavan, represented a value of P5,200, his debt had
already been paid, with plaintiff still owing him a refund of some P2,720.00.
The Court below, however, found that there was nothing in the deed of mortgage Exhibit "A" to show that it
was not a true contract of mortgage, and that the fact that possession of the mortgaged properties were
turned over to the mortgagee did not alter the transaction; that the parties must have intended that the
mortgagee would collect the fruits of the mortgaged properties as interest on his loan, which agreement is
not uncommon; and that the evidence showed that plaintiff had already received 55 cavans of palay from
the properties during the period of his possession. Whereupon, judgment was rendered for plaintiff in the
amount of P2,000, the loan he gave the defendant, with legal interest from the filing of the action until full
payment, plus P500 as attorneys fees and the costs; and in case of default in payment, for the foreclosure

of the mortgage. From this judgment, defendant took the present appeal.
The main issue raised is whether the contract between the parties is one of mortgage or of antichresis.
Appellant, while admitting that the contract Exhibit "A" shows a deed of mortgage, contends that the
admitted fact that the loan was without interest, coupled with the transfer of the possession of the
properties mortgaged to the mortgagee, reveals that the true transaction between him and appellee was
one of antichresis. As correctly pointed out by appellee and the lower court, however, it is not an essential
requisite of a mortgage that possession of the mortgaged premises be retained by the mortgagor (Legaspi
and Salcedo v. Celestial, 66 Phil., 372). To be antichresis, it must be expressly agreed between creditor and
debtor that the former, having been given possession of the properties given as security, is to apply their
fruits to the payment of the interest, if owing, and thereafter to the principal of his credit (Art. 2132, Civil
Code, Barretto v. Barretto, 37 Phil., 234; Diaz v. De Mendezona, 48 Phil., 666); so that if a contract of loan
with security does not stipulate the payment of interest but provides for the delivery to the creditor by the
debtor of the property given as security, in order that the latter may gather its fruits, without stating that
said fruits are to be applied to the payment of interest, if any, and afterwards that of the principal, the
contract is a mortgage and not antichresis (Legaspi v. Celestial, supra). The court below, therefore, did not
err in holding that the contract Exhibit "A" is a true mortgage and not an antichresis.
The above conclusion does not mean, however, that appellee, having received the fruits of the properties
mortgaged, will be allowed to appropriate them for himself and not be required to account for them to the
appellant. For the contract of mortgage Exhibit "A" clearly provides that the loan of P2,000 was "without
interest within four (4) years from date of this instrument" ; and there being no evidence to show that the
parties had intended to supersede such stipulation when the possession of the mortgaged properties were
turned over to the appellee by another allowing the latter to collect, the fruits thereof as interest on the
loan, the trial court is not authorized to infer from this transfer of possession alone that the parties had
verbally modified their written agreement that the loan was to be without interest for four years, and
substituted another giving appellee the right to receive the fruits of the mortgaged properties as interests.
The true position of appellee herein under his contract with appellant is a "mortgage in possession" as that
term is understood in American equity jurisprudence; that is, "one who has lawfully acquired actual or
constructive possession of the premises mortgaged to him, standing upon his rights as mortgagee and not
claiming under another title, for the purpose of enforcing his security upon such property or making its
income help to pay his debt" (Diaz v. De Mendezona, citing 27 Cyc. 1237, 48 Phil., 666). As such mortgagee
in possession, his rights and obligations are, as pointed out by this Court in Macapinlac v. Gutierrez Repide
(43 Phil., 770), similar to those of an antichretic creditor:
jgc:chanrobles.com .ph

"The respective rights and obligations of the parties to a contract of antichresis, under the Civil Code, appear
to be similar and in many respects identical with those recognized in the equity jurisprudence of England
and America as incident to the position of a mortgagee in possession, in reference to which the following
propositions may be taken to be established, namely, that if the mortgagee acquires possession in any
lawful manner, he is entitled to retain such possession until the indebtedness is satisfied and the property
redeemed; that the non-payment of the debt within the term agreed does not vest the ownership of the
property in the creditor; that the general duty of the mortgagee in possession towards the premises is that
of the ordinary prudent owner; that the mortgagee must account for the rents and profits of the land, or its
value for purposes of use and occupation, any amount thus realized going towards the discharge on the
mortgage debt; that if the mortgagee remains in possession after the mortgage debt has been satisfied, he
becomes a trustee for the mortgagor as to the excess of the rents and profits over such debt; and lastly,
that the mortgagor can only enforce his rights to the land by an equitable action for an account and to
redeem. (3 Pom. Eq. Jur. secs. 1215-1218)"
Similarly, in Enriquez v. National Bank, 55 Phil., 414, we ruled that a creditor with a lien on real property
who took possession thereof with the consent of the debtor, held it as an "antichretic creditor with the right
to collect the credit with interest from the fruits, returning to the antichretic debtor the balance, if any, after
deducting the expenses", because the fact that the debtor consented and asked the creditor to take charge
of managing his property "does not entitle the latter to appropriate to itself the fruits thereof unless the
former has expressly waived his right thereto."
In the present case, the parties having agreed that the loan was to be without interest, and the appellant
not having expressly waived his right to the fruits of the properties mortgaged during the time they were in
appellees possession, the latter, like an antichretic creditor, must account for the value of the fruits received
by him, and deduct it from the loan obtained by appellant. According to the findings of the trial court,
appellee had received a net share of 55 cavans of palay out of the mortgaged properties up to the time he

filed the present action; at the rate of P9.00 per cavan (a rate admitted by the parties), the total value of
the fruits received by appellee is P495.00. Deducting this amount from the loan of P2,000 received by
appellant from appellee, the former has only P1,505.00 left to pay the latter.
Appellant also claims that the lower court erred in ordering him to pay legal interest on his indebtedness to
plaintiff from the filing of the action, since the latter is, up to the present, still in the possession of the
properties mortgaged and still enjoying its fruits. The court did not err in so holding, since at the time the
action was filed and up to the present, appellant has not discharged his indebtedness to appellee, and the
law allows the latter, in the absence of stipulation as to payment of interest, legal interest from the time of
the debtors default (Art. 2209, New Civil Code, Art. 1108, old). However, appellee should be made to
account for the fruits he received from the properties mortgaged from the time of the filing of this action
until full payment by appellant, which fruits should be deducted from the total amount due him from
appellant under this judgment.
Wherefore, the judgment of the court below is modified in the sense that the amount of appellees principal
recovery is reduced to P1,505, with an obligation on the part of appellee to render an accounting of all the
fruits received by him from the properties in question from the time of the filing of this action until full
payment, or in case of appellants failure to pay, until foreclosure of the mortgage thereon, the value of
which fruits shall be deducted from the total amount of his recovery. No costs in this instance.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcin, Barrera, and Gutierrez David,JJ.,
concur.

2. Pando vs Gimenez
RECAREDO F. PANDO, plaintiff-appellee,
vs.
ANTONIO GIMENEZ, ET AL., defendants.
ANTONIO GIMENEZ, appellant.
Harvey and O'Brien and Eugenio Angeles for appellant.
Antonio Sanz for appellee.
ROMUALDEZ, J.:
This action was instituted for the purpose of foreclosing a mortgage executed by defendant Antonio
Gimenez. Massy Teague was also impleaded for having purchased at public auction one of the
mortgaged properties.
The answer of the defendant Teague set up a general denial and a special defense, which are not
involved in this appeal.
Defendant Antonio Gimenez also filed a general denial, and raised four special defenses in his
answer, to wit:
As a first special defense said defendant alleges:
1. That on the 27th day of October, 1924, said defendant Gimenez was indebted to the
plaintiff in the sum of P8,000, and to secure the payment of the said amount duly made,
executed and delivered a real estate mortgage in favor of the said plaintiff over the properties

and leasehold rights mentioned in paragraph VIII of the plaintiff's complaint, and which
contract of mortgage is evidenced by the document, Exhibit A attached to the complaint.
2. That owing to the fact that said defendant was leaving the City of Manila in order to attend
to his business in the Province of Cagayan, and at the special instance and request of the
herein plaintiff, said defendant gave to the plaintiff the full control, and complete and absolute
administration of the building and the parcel of land on which said building was erected,
situated in Santa Mesa, District of Santa Mesa, mortgaged to the plaintiff, under the condition
that said plaintiff would attend to the administration, care and preservation of the said
building and the property leased from the Hacienda Tuason on which said building was
erected, the payment of the premium on the insurance of this building, the payment of the
taxes might become due on the said building, the payment to the lessor Hacienda Tuason of
the rents of the leased property, and to collect the rents from the tenants of the said building.
3. That the rents that would be collected from the said building, the plaintiff would apply the
same to the payment of all the expenses necessary for the preservation and maintenance of
the said building, the rents of the leased property, and the balance to be applied in payment
on account of the interest that may become due in favor of the plaintiff under the mortgage.
4. That in accordance with this agreement, the defendant gave, and the plaintiff took
absolute control and possession and entered in the full administration of the said building
and land since October 27, 1924, and up to the present time.
5. That in the course of the administration by the plaintiff of the said building and land leased
from the Hacienda Tuason, said plaintiff failed and neglected to pay to the government of the
City of Manila taxes due for several years on the said building and has also failed and
neglected to pay to the lessor HaciendaTuason the rents due for several years on the land
leased and on which said building was erected.
6. That by reason of this failure, neglect and abandonment by the plaintiff to pay the taxes
due on the said building, the City of Manila, on November 23, 1926, sold at public auction
the said building was sold for the sum of P244.50, and was bought by the other defendant
Massy Teague, and since that time the said building was lost to the defendant Gimenez.
7. That by reason of the failure, neglect and abandonment of the plaintiff to pay
the Hacienda Tuason the rents due for several years on the leased property on which the
building in question is erected, the said lessor cancelled the contract of lease of the
defendant Gimenez, and has brought a suit against the said defendant Gimenez
for desahucio in the municipal court of the City of Manila.
As a second special defense, alleges that the building which was sold to the defendant
Massy Teague is worth P11,000, and the leasehold right of the defendant which was
cancelled by the Hacienda Tuason as above stated is worth P3,000.
As a third special defense, alleges that by reason of the negligence, failure and
abandonment of the plaintiff to properly administer the building and land in question and to

pay the taxes due to the government and the rents due the lessor Hacienda Tuason, and as
a result of which the defendant Gimenez has been deprived of the building, and his
leasehold right was cancelled, said defendant has suffered irreparable damages in the sum
of P14,000.
And as a fourth special defense and by way of counter-claim and set-off against the claim of
the said plaintiff, the defendant Gimenez alleges that he reproduces herein the first three
special defenses heretofore mentioned, and that by reason of the negligent acts committed
by the plaintiff in the administration of the said building and land which caused irreparable
damage and prejudice to the defendant Gimenez, said defendant has suffered damages in
the sum of P14,000.
Wherefore, the defendant Gimenez by the undersigned attorneys, respectfully prays the
court to render judgment in his favor and against the plaintiff, condemning the latter to pay
the former the sum of fourteen thousand pesos (P14,000), as damages suffered by the
defendant Gimenez; and that should this court find that the said defendant Gimenez is liable
to pay to plaintiff any sum of money under the mortgage, that this amount of P14,000 be setoff against the amount that might rightfully be found by the court to be due and owing by the
defendant Gimenez to plaintiff, and that should there be a difference in favor of the
defendant Gimenez that the plaintiff be condemned to pay to the said defendant Gimenez
the amount of such difference and for the costs of this action; and also asks for such other
and further relief as may be proper and equitable under the premises. (Pages 23, 24, 25, 26
and 27, Bill of Exceptions.)
After trial, the Court of First Instance of Manila rendered a decision, dismissing the counterclaim
presented by the defendant Antonio Gimenez, the dispositive part of which reads as follows:
For the foregoing considerations, the court renders judgment, ordering Antonio Gimenez to
pay Recaredo Pando eight thousand pesos (P8,000), Philippine currency, with annual
interest at twelve per centum from June 1, 1928, until fully paid; two thousand three hundred
and forty-four pesos and sixty centavos (P2,344.60) as accrued interest with legal interest
thereon from the date of the complaint, May 19, 1928, until fully paid; and eight hundred
pesos (P800) as the stipulated attorney's fees, and the costs; all of said sums to be paid
within three months from the date hereof.
Defendant Massy Teague is hereby authorized to pay to the plaintiff the amounts set forth in
the preceding paragraph, if he so desires, in order to obtain the cancellation of the plaintiff's
mortgage, and to acquire the properties of defendant Gimenez free of all liens and
encumbrances, within the same three-month period from the date hereof.
In case neither of the defendants pay to the plaintiff the foregoing amounts within the period
named, the mortgaged properties shall be sold at public auction in accordance with the law,
and from the proceeds of the sale, the aggregate sum of the aforementioned amounts shall
be paid to the plaintiff, and the balance, if any, delivered to defendant Massy Teague, the
present owner of the mortgaged property. (Pages 40 and 41, Bill of Exceptions.)

Antonio Gimenez, defendant, appealed from this decision and now makes the following assignments
of error:
I. The lower court erred in not finding that, after the execution of the contract of mortgage,
Exhibit A, and just before the time said mortgage matured, the appellee and the appellant
entered into an agreement by virtue of which:
(a) The appellee assumed and took over the general administration (administracion
directa) of the house No. 655 Santa Mesa, Manila, with the right to collect the rents
of the said house;
(b) But with the duty and obligation, that said appellee should pay the taxes owing or
accruing on the said house to the City of Manila;
(c) Should pay the rentals owing or accruing on the land occupied by said house to
the owners of said land the "Hacienda de Santa Mesa y Diliman", in accordance with
the terms of the contract of lease; and
(d) Should pay all other expenses necessary for the proper preservation and
maintenance of said house, such as repairs and so forth, including the premium of
the policy of insurance thereon and that the balance of said rents should be applied
by him toward the liquidation of interest accruing under the mortgage.
II. The lower court erred in not finding that the appellee violated his duty by neglecting and
failing to pay the taxes on the house No. 655 Santa Mesa, to the Government of the City of
Manila, which became due during the years 1925 and 1926, while said house was under his
general administration, and that by reason of that failure to pay said taxes, said house was
sold by public auction by the City of Manila to satisfy said taxes, and finally adjudicated to the
defendant Massy Teague, the immediate consequence thereof being the loss to the
appellant of all his rights, legal and equitable in the said house.
III. The lower court erred in not finding that the appellant had suffered damages for the loss
of his said house No. 655 Santa Mesa, and that the appellee should be responsible to the
appellant for all damages suffered by him.
IV. The lower court erred in not finding that the appellee violated his duty by neglecting and
failing to pay the rentals for the land occupied by said house No. 655 Santa Mesa, to the
owners thereof, which rentals became due during the years 1925, 1926, 1927 and 1928,
while the said land and house were under his general administration, and that by reason of
that failure to pay said rentals, the owners of the land cancelled the contract of lease of the
appellant, the immediate consequence thereof being that the appellant lost all his rights, use
and enjoyment of said land for the remaining unexpired period of 26 years.
V. The lower court erred in not finding that the appellant had suffered damages for the loss of
his leasehold right, the improvements on the land and the use and enjoyment of said land for

the remaining unexpired period of 26 years, and that the appellee should be responsible to
the appellant for all damages suffered by him.
VI. The lower court erred in not rendering judgment in favor of the appellant and against the
appellee on the counterclaim for the damages suffered by the appellant for the total amount
proven.
VII. The lower court erred in not granting the motion for new trial.
In order to secure the payment of P8,000 which the defendant Gimenez owed the plaintiff, he
mortgaged the house at No. 655 Santa Mesa, Manila, and the leasehold right on the lot upon which
it stands (Exhibit A). It was agreed between them that the plaintiff would collect the rents of said
house, in order to apply them to the payment of interest on the amount of the indebtedness. This
was payable on October 27, 1925, but, in spite of nonpayment, the creditor, who is the plaintiff
herein, did not foreclose the mortgage.
For default in the payment of taxes for the years 1925 and 1926, the house was on November 23,
1926 sold at public auction, and, for failure to exercise the right of legal redemption, the City of
Manila, the attachment creditor and vendor of the property, executed a final deed of sale in favor of
the purchaser, the other defendant Massy Teague. Furthermore, for default in the payment of the
rents due on the lot of said house for the years 1925 to 1928, the Santa Mesa estate, the lessor of
said land, cancelled the lease on July 13, 1928, pursuant to the terms of the contract.
The appellant Gimenez contends that the plaintiff was responsible for the delinquency in the
payment of both the tax on the house and the rent of the lot, which caused him the loss of the said
house and the leasehold right on the lot, because the plaintiff was at that time in charge of the
administration of the premises with the obligation to attend to the payment of the tax and the rents.
The plaintiff denied that he had such obligation, alleging that his duties were confined to the
collection of the rents of the house in order to apply them to the payment of the interest on the
mortgage.
Such was in fact the original agreement; but the appellant asserts that it was modified by the letter
Exhibit 1, quoted below:
MANILA, October 29, 1925
Mr. ANTONIO GIMENEZ
A. Luna, San Juan del Monte
ESTEEMED DON ANTONIO: Yesterday Mrs. Xaudaro came to pay me the rents for the
months of July and August, and forty pesos on account of September, saying that she did not
pay the balance of the rent for that month and the rent for the whole of October, because
your wife had demanded the delivery of the difference, or P90. I am surprised at such a
procedure, since you yourself authorized me one year ago to collect the rent from Mr.
Xaudaro, and I have done so up to date.

Mrs. Xaudaro has also informed me that, upon your demand, they would leave the chalet
next month and it appears that this, too, was done using me as a shield, which is another
surprise to me.
I believe, Mr. Gimenez, that the best thing would be for you to turn over the chalet to me,
since the period has expired, so that I may take direct charge of the administration of the
premises.
Yours very truly,
(Sgd.) R. PANDO
(Page 63, record.)
The appellant testified further, that when he turned over the administration of the property to the
plaintiff, it was agreed that the plaintiff "would keep the property in good condition of repair, pay the
insurance and other expenses inherent in the preservation of the building, such as land taxes," and
"would pay the rents of the land upon which the property is situated" (transcript of the stenographic
notes, page 6). These points have not been contradicted by the plaintiff.
Taking into account the language of the letter Exhibit 1 and the appellant's unimpeached testimony,
we are constrained to hold that it has been proved by a preponderance of evidence, that even
though at first the plaintiff had only undertaken to collect the rents of the house, later on, towards the
end of October, 1925, he assumed the obligation to pay both the tax on the house, and the rent of
the lot.
As to the consideration contained in the judgment appealed from to the effect that, in view of the
reduction of the rent of the house in May, 1926, the plaintiff would not have accepted the
administration under the conditions alleged by the defendant-appellant, it must be remembered that
the plaintiff took over such complete administration months before such reduction of rents, and it
does not appear that the reduction was foreseen.
From all these circumstances it follows that the administration of the property in question assumed
by the plaintiff toward the end of October, 1925 is antichretic in character, and therefore justice and
equity demand that application be here made of the Civil Code provisions touching the obligations of
the antichretic creditor, to wit:
The creditor is obliged to pay the taxes and charges which burden the estate, in the absence
of an agreement to the contrary.
He shall also be obliged to pay any expenses necessary for its preservation and repair.
Any sums he may expend for such purposes shall be chargeable against the fruits. (Art.
1882, Civil Code.)

These obligations arise from the very nature of the covenant, and are correlated with the plaintiff's
acquired right to take charge of the property and collect the fruits for himself. Hence, the illustrious
Manresa, explains the basis of this article 1882 in the following terms:
The right which the creditor acquires by virtue of antichresis to enjoy the fruits of the property
delivered to him, carries two obligations which are a necessary consequence of the contract,
because they arise from its very nature.
And the plaintiff having failed in his obligation to pay the tax on the house and the rent of the lot, he
is by law required to pay indemnity for damages (article 1101, Civil Code).
Considering the evidence of record as to the value and condition of the house and the improvements
made by the appellant upon said lot, as well as the other circumstances of the case the total amount
of the damages sustained by said appellant must be fixed at P5,000.
Wherefore, the judgment appealed from is modified, and it is held that the appellant, Antonio
Gimenez, is entitled to recover from the plaintiff the sum of P5,000 and it is so ordered; and the
judgment appealed from is hereby affirmed in all respects consistent with the present decision,
without express pronouncement of costs.
Johnson, Street, Malcolm and Ostrand, JJ., concur.
Villamor, Johns and Villa-Real, JJ., dissent.
JOSE C. MACAPINLAC, plaintiff-appellant,
vs.
FRANCISCO GUTIERREZ REPIDE, ET AL., defendants
FRANCISCO GUTIERREZ REPIDE, defendant-appellee.
J. F. BOOMER, defendant-appellant.
J. F. Boomer in his own behalf.
Ramon Diokno and Jose Varela Calderon for appellant.
Eduardo Gutierrez Repide for appellee.
STREET, J.:
This action was instituted on June 27, 1921, in the Court of First Instance of the Province of
Pampanga by Jose C. Macapinlac, for the purpose of securing a decree declaratory of the rights of
the plaintiff as owner of a valuable estate located in the municipality of Porac, Pampanga, known as
the Hacienda Dolores; to nullify a transfer of the Torrens certificate now appearing in the name of the
Torrens certificate now appearing in the name of the defendant Francisco Gutierrez Repide, with
certain remedial measure incident to said to said relief; and to recover said estate from the
possession of said defendant, with damages; and to secure general relief. In addition to Francisco
Gutierrez Repide several other parties are named as defendants in the complaint, for the alleged
reason that they have been at one time or another holders of liens , now cancelled, upon said
property, and it was deemed proper to join them as defendants in order to give them an opportunity
to show cause, if any they have, whey their respective liens should not be cancelled in the registry.

Soon after the action was instituted Francisco Gutierrez Repide died; and his executrix, Da. Maria
Sanz, was admitted as defendant in his stead.
To the original complaint the attorneys for the executrix in due time demurred, while the defendant J.
F. Boomer interposed an answer and a cross-complaint directed mainly against Jose C. Macapinlac
and his codefendant Repide. To this cross-complaint Jose C. Macapinlac answered with a general
denial, while the representation of Repide merely demurred. By this means the case, as it reaches
this court, presents itself in two branches, namely, first, that which has relation to the controversy
between the plaintiff and Francisco Gutierrez Repide and, secondly, that which has relation to the
controversy between the defendant Boomer and the two principal litigants. For convenience of
treatment in this opinion, we first give attention to the controversy between the plaintiff and the
defendant Repide, a course which is the more proper for the reason that cause of action stated in
Boomer's cross-bill in great measure depends upon the questions arising upon the other
controversy.
By an order of October 29, 1921, entered in the lower court the demurrer interposed to the complaint
in behalf of the defendant Repide was sustained, and at the same time the complaint was dismissed
with costs against the plaintiff. From this order the plaintiff appealed.
A preliminary point arises with respect to the conditions under which the appeal has been
prosecuted, which must be disposed of before we enter into a consideration of the legal questions
involved in the allowance of the demurrer; and in this connection it is suggested by the attorneys for
the appellee that the appeal is premature.
The point is clearly not well taken. While it is of course undeniable that an order merely sustaining a
demurrer is not forthwith appealable, and an appeal in such case is premature (Serrano vs. Serrano,
9 Phil., 142), the same cannot be said of an order sustaining a demurrer and at the same time
actually dismissing the complaint. Such an order is definitive and "final" in the sense necessary to
justify the taking of an appeal, and if an appeal had not in fact been prosecuted from the order in this
case, the plaintiff would have been completely and forever out of court. This is self-evident.
On the other hand, the trial court committed manifest error when it entered the order dismissing the
complaint at the same time that it sustained the demurer, without allowing the plaintiff an opportunity
to amend his complaint, if he had elected to amend. Section 101 of the Code of Civil Procedure
expressly provides that the plaintiff shall have this election; and it has been repeatedly held to be
reversible error on the part of a Court of First Instance to dismiss a cause immediately upon
sustaining a demurrer, without giving the plaintiff an opportunity to amend, it he so desires. (Molina
vs. La electricista, 6 Phil., 519; Ibaez de Aldecoa vs. Fortis, 17 Phil., 82.) To the action thus taken
by the trial court the plaintiff has duly assigned error, and said error (No. VIII, in the appellant's
assignment of errors) is without doubt well taken.
As to the extent of the review which may be had at the instance of the appellant in this court, it
should be noted that by the express terms of section 143 of the Code of Civil Procedure a party
appealing by bill of exceptions to this court is entitled to a review of all rulings, orders, and judgments
made in the action to which he has duly excepted; and this means, as applied to the present case,
that the appellant is entitled to a review of the decision of the lower court not only upon the error

committed in peremptorily dismissing the cause demurrer, without giving the appellant opportunity to
amend, but upon any error that may have been committed by said court in sustaining the demurrer.
(Cancino vs. Valdez, 3 Phil., 429; Balderrama vs. Compaia General de Tabacos, 13 Phil., 609.) Of
course if the only point subject to exception had been that which relates to the right to amend, and
the plaintiff had not here insisted upon the sufficiency of his complaint in point of law, the appealed
judgment would merely be reversed and the cause would be remanded by us with direction that the
plaintiff be allowed to amend, as was done in Molina vs. La Electricista, supra. But such is not the
situation now before us; and we accordingly proceed to consider the question whether the trial judge
erred in sustaining the demurrer.
Turning then to the complaint and assuming, for the purposes of this decision only, that all material
facts stated therein, and well pleaded, are true, we find that the case made in the complaint is
substantially this:
On and prior to August 22, 1916, the plaintiff was the owner of the Hacienda Dolores, a property
located in the municipality of Porac, Pampanga, and assessed upon the tax books at P288,000, but
having an actual value of no less than P800,00, encumbered, however, with certain debts and
charges which need not be here enumerated. This property had been registered under Act No. 496,
as amended, and upon May 13, 1916, a Torrens certificate of title covering the same had been
issued to the plaintiff.
On the date above stated, or August 22, 1916, the said plaintiff was indebted to the Bachrach
Garage & Taxicab Company, of Manila, later organized under the name of Bacharch Motor
Company, for the price of an automobile, previously purchased upon credit, and certain automobile
accessories; and as evidence of this indebtedness the plaintiff executed on said dated a series of
fourteen promissory notes payable to the Bachrach Garage & Taxicab Company, and amounting in
all to the sum of P12,960, falling due respectively upon the second of each month beginning on
September 2, 1916, and ending on October 2, 1917. Each of these notes was drawn in the amount
of P1,000, except the last two which together amounted to P960. On September 1, 1916, eleven of
these notes were discounted by the Bachrach Garage & Taxicab Company, through its manager E.
M. Bachrach, at the Philippine National Bank. The other three votes, amounting to P2,277.70,
remained in the hands of the payee corporation and were subsequently paid in full by the plaintiff.
Contemporaneously with the delivery of said notes, or on August 16, 1916, and as a security or
guaranty for the payment of said notes, the plaintiff executed what on its face purports to be a deed
of sale, with privilege of repurchase, to be exercised on or before October 2, 1917. This transfer
comprises all the property covered by Torrens certificate No. 427 (which includes the Hacienda
Dolores), subjects to the encumbrances noted thereon; and the conveyance to which reference is
now made was itself extended on the back of said certificate. In this conveyance E. M. Bachrach is
named as transferee, instead of the alleged real creditor, the Bachrach Garage & Taxicab Company.
Upon the circumstance of the nonconformity of the promissory notes and the deed of sale as
regards creditor and beneficiary, the complaint alleges that the deed of sale is void for lack of
consideration as between the plaintiff and E. M. Bachrach, the nominal beneficiary; but to this
suggestion, for obvious reasons, we attach little importance.

On November 8, 1917, Francisco Gutierrez Repide acquired, for the sum of P5,000, all the rights of
E. M. Bachrach in the property which had been thus conveyed to the later; and at this time Francisco
Gutierrez Repide, so that complaint alleges, was well aware that the transfer to Bachrach had been
made by the plaintiff for the purpose of securing a debt owing to the Bachrach Company, and he was
furthermore aware that part of said debt has been paid and that the balance really due from the
plaintiff to said company was less than one-half of the sum of P12,960, expressed in the fourteen
promissory notes.
After Francisco Gutierrez Repide had acquired the interest above described in the hacienda in
question, he addressed himself to the problem of procuring the certificate of title to be transferred to
this own name. To accomplish this is was necessary to make it appear that the contract of sale
with pacto de retro noted in the original Torrens certificate was really and truly what it appeared to
be, that is, a contract of sale, not a mere mortgage, and that the ownership had consolidated in the
purchaser by reason of the failure of the seller to repurchase the property before the expiration of the
time allowed for redemption. When this question was raised, it was referred for decision to the judge
of the Court of First Instance of Pampanga, who was of the opinion that the conveyance to Bachrach
was a straight contract of sale with pacto de retro; and inasmuch as it appeared that the ownership
had then consolidated in the purchaser, he directed the register of deeds of Pampanga to register
the property in the name of Francisco Gutierrez Repide and to issue to him a new certificate of
transfer, which was accordingly done. The order here referred to was in fact entered in case No. 104
of the Court of First Instance of Pampanga, this being the same land registration proceedings in
which the title had been registered in the name of the plaintiff, and in which judicial proceedings had
already been terminated.
Though not plainly so stated in the complaint, it is to be inferred that one of the decisive
considerations that operated upon the mind of the judge of the Court of First Instance in making the
order above alluded to was the fact that the plaintiff himself had made an affidavit which directly
sustained the contention of Repide, and this affidavit was submitted to the court in support of
Repide's contention. Certain it is that the inscription of the property in the name of Francisco
Gutierrez Repide was accomplished with the external approval of the plaintiff and by means of his
assistance or collusion.
In the complaint now before us the plaintiff alleges that his apparent acquiescence in the transfer of
title to Francisco Gutierrez Repide, under the circumstances above set forth, was due to fraudulent
practices on the part of said Repide and to the undue influence exerted over the plaintiff by that
person. In this respect the complaint contains a very full and complete narrative of facts, which, if
true as they must here be taken to be would undoubtedly justify any court in relieving a party
from the effects of fraudulent practices, duress, or undue influence; and it seems unnecessary for us
here to recount these charges in detail, more especially for the reason that the sufficiency of these
allegations, considered as stating a case of fraud, has not bee questioned, the defense at this point
being rested on the ground that the Torrens certificate is unimpeachable in the hands of Repide and
that the plaintiff's remedy to obtain relief, supposing the transfer of title to have been procured by
fraud, has prescribed.
It appears from the complaint that, at the time of the filing of this complaint, the defendant Repide
was in actual possession of the property in question, and that he had in effect been enjoying

possession since august 24, 1917, to the alleged prejudice of the plaintiff in the sum of no less than
P200,000 per annum.
The sketch above given contains, we believe, the substance of the essential allegations of the
lengthy complaint in this cause, and it will at least serve as the necessary basis for a discussion of
the legal problems here requiring solution. In taking up these problems we begin with the situation
created by the execution of the contract of sale with pacto de retro between the plaintiff, Jose C.
Macapinlac, and E. M. Bachrach Company, assuming, as we do, that the personality of the second
party to that contract is a matter of indifference. In this connection the first and most obvious
proposition to be laid down is that inasmuch as said conveyance is alleged to have been executed
as security for a debt owing by the plaintiff to the Bachrach Company, it follows that in equity said
conveyance must be treated as a mere security or substantially as a mortgage, that is, as creating a
mere equitable charge in favor of the creditor or person named as the purchaser therein. This
conclusion is fully supported by the decision in Cuyugan vs. Santos (34 Phil., 100), where this court
held that a conveyance in the form of a contract of sale with pacto de retro will be treated as a ere
mortgage, if really executed as security for a debt, and that this fact can be shown by oral evidence
apart from the instrument of conveyance, a doctrine which has been followed in the later cases
of Villa vs. Santiago (38 Phil., 157), and Cuyugan vs. Santos (39 Phil., 970).
In view of the lengthy discussion contained in the first decision of Cuyugan vs. Santos, supra, it
might seem superfluous to add to what is there said, but the importance of the subject and the
paucity of our own jurisprudence on this topic apart from that case and its two successors,
must serve as our justification for here collating a few additional passages relative to the same
subject, taken from Mr. Pomeroy's treatise on Equity Jurisprudence, recognized as the leading work
on this subject in all jurisdiction where the common law prevails.
Speaking then with referrence to the conditions under which a conveyance absolute on its face may
be treated as a mortgage, this distinguished writer says:
Any conveyance of land absolute on its face, without anything in its terms to indicate that it is
otherwise than an absolute conveyance, and without any accompanying written defeasance,
contract of repurchase, or other agreement, may, in equity, by means of extrinsic and parol
evidence, be shown to be in a reality a mortgage as between the original parties, and as
against all those deriving title from or under the grantee, who are not bona fide purchasers
for value and without notice. The principle which underlies this doctrine is the fruitful source
of any other equitable rules; that it would be a virtual fraud for the grantee to insist upon the
deed as an absolute conveyance of the title, which had been intentionally given to him, and
which he had knowingly accepted, merely as a security, and therefore in reality as a
mortgage. The general doctrine is fully established, and certainly prevails in a great majority
of the states, that the granter and his representatives are always allowed in equity to show,
by parol evidence, that a deed absolute on its face was only intended to be a security for the
payment of a debt, and thus to be a mortgage, although the parties deliberately and
knowingly executed the instrument in its existing form, and without any allegations of fraud,
mistake, or accident in its mode of execution. As in the last preceding case, the sure test and
the essential requisite are the continued existence of a debt. (3 Pom. Eq. Jur., sec. 1196.)

And, Speaking particularly of the contract of sale with pacto de retro, he adds:
Whether any particular transaction does thus amount to a mortgage or to a sale with a
contract of repurchase must, to a large extent, depend upon its own special circumstances;
for the question finally turns, in all cases, upon the real intention of the parties as shown
upon the face of the writings, or as disclosed by extrinsic evidence. A general criterion,
however, has been established by an overwhelming consensus of authorities, which
furnishes a sufficient test in the great majority of cases; and whenever the application of this
test still leaves a doubt, the American courts, from obvious motives of policy, have generally
leaned in favor of the mortgage. This criterion is the continued existence of a debt or liability
between the parties, so that the conveyance is in reality intended as a security for the debt or
indemnity against the liability. If there is an indebtedness or liability between the parties,
either a debt existing prior to the conveyance, or a debt arising from a loan made at the time
of the conveyance, or from any other cause, and this debt is still left subsisting, not being
discharged or satisfied by the conveyance, but the granter is regarded as still owing and
bound to pay it at some future time, so that the payment stipulated for in the agreement to
reconvey is in reality the payment of this existing debt, then the whole transaction amount to
a mortgage, whatever language the parties may have used, and whatever stipulations they
may have inserted in the instruments. (3 Pom. Eq. Jur., sec. 1195.)
Again says he:
. . . The doctrine has been firmly established from an early day that when the character of a
mortgage has attached at the commencement of the transaction, so that the instrument,
whatever be its form, is regarded in equity as a mortgage, that character of mortgage must
and will always continue. If the instrument is in its essence a mortgage, the parties cannot by
any stipulations, however express and positive, render it anything but a mortgage, or deprive
it of the essential attributes belonging to a mortgage in equity. The debtor or mortgagor
cannot, in the inception of the instrument, as a part of or collateral to its execution, in any
manner deprive himself of his equitable right to come in after a default in paying the money
at the stipulated time, and to pay the debt and interest, and thereby to redeem the land from
the lien and encumbrance of the mortgage; the equitable right of redemption, after a default
is preserved, remains in full force, and will be protected and enforced by a court of equity, no
matter what stipulations the parties may have made in the original transaction purporting to
cut off this right. (3 Pom. Eq. Jur., sec. 1193.)
And finally, concerning the legal effects of such contracts, the same author observes:
. . . Whenever a deed absolute on its face is thus treated as a mortgage, the parties are
clothed with all the rights, are subject to all the liabilities, and are entitled to all the remedies
of ordinary mortgagors and mortgagees. The grantee may maintain an action for the
foreclosure of the grantor's equity of redemption; the grantor may maintain an action to
redeem and to compel a reconveyance upon his payment of the debt secured. If the grantee
goes into possession, he is in reality a mortgagee in possession, and as such is liable to
account for the rents and profits. (3 Pom. Eq. Jur., sec. 1196.)

In Cuyugan vs. Santos, supra, the action to enforce the right of redemption was brought was brought
directly against the immediate grantee in the conveyance there held to be a mortgage, and no
account had to be there taken of the situation resulting from a transfer of the property to a stranger.
In the present case the rights of the immediate grantee (E. M. Bachrach) passed by transfer for a
valuable consideration to Francisco Gutierrez Repide and this transfer had been effected before the
action in this case was began. But is obvious that this circumstance cannot be any obstacle to the
enforcement of any rights that the plaintiff my have had as against Bachrach (or the Bachrach
Company) since it is alleged that at the time Repide acquired the interest of Bachrach, he was fully
aware of the nature of the transaction between Bachrach and the plaintiff and knew that part of the
debt secured by the conveyance of August 22, 1916, had been paid.
In this connection the cardinal rule is that a party who acquires any interest in property with notice of
an existing equity takes subject to that equity. "The full meaning of this most just rule," says Mr.
Pomeroy, "is, that the purchaser of an estate or interest, legal or equitable, even for a valuable
consideration, wit notice of any existing equitable estate, interest, claim, or right, in or to the same
subject-mater, held by a third person, is liable in equity to the same extend and in the same manner
as the person from whom he made the purchase; his conscience is equally bound with that of his
vendor, and he acquires only what his vendor can honestly transfer." (2 Pom. Eq. Jur., sec. 688.)
In other words, having acquired the interest of Bachrach in the Hacienda Dolores, with knowledge
that the contract of August 22, 1916, has been executed as security for a debt, Francisco Gutierrez
Repide or his estate, now that Repide is a dead must be understood to stand towards the
present plaintiff in exactly the same position that would have been occupied by Bachrach, if the
transfer to Repide had never been effected.
But it is insisted that the title of Repide has become indefeasible, owing to the fact that the
conveyance of the land to him has been followed by the issuance of a transfer certificate of title in
his name, and the original certificate in the name of the plaintiff has been cancelled, all of which
had been accomplished more than one year before the present action was begun. The unsoundness
of this contention can be easily demonstrated from several different points of view.
In the first place, it must be borne in mind that the equitable doctrine which has been so fully stated
above, to the effect that any conveyance intended as security for a debt will be held in effect to be a
mortgage, whether so actually expressed in the instrument or not, operates regardless of the form of
the agreement chosen by the contracting parties as the repository of their will. Equity looks through
the form and considers the substance; and no kind of engagement can be adopted which will enable
the parties to escape from the equitable doctrine to which reference is made. In other words, a
conveyance of land, accompanied by registration in the name of the transferee and the issuance of a
new certificate, is no more secured from the operation of this equitable doctrine than the most
informal conveyance that could be devised.
In the second place, the circumstance that the land has been judicially registered under the Torrens
system does not change or affect civil rights and liabilities with respect thereto except as expressly
provided in the Land Registration Act (see sec. 70); and as between the immediate parties to any
contract affecting such lands their rights will generally be determined by the same rules of law that
are applicable to unregistered land. A judicial decree of registration admittedly has the effect of

binding the land and quieting the title thereto, to the extent and with the exceptions stated in section
38 of the Land Registration Act. But an ordinary transfer of land, effected in any of the ways allowed
by law, even when followed by registration and that issuance of a new certificate, as contemplated in
sections 50 to 55, inclusive, of the Land Registration Act, has a different character.
One of the differences between an original decree of registration and the subsequent registration by
transfer of the certificate of title, pertinent to the present controversy, is that which may be noted in
regard to the period within which relief may be obtained from fraud. Thus, under section 38 of Act
No. 496, any person deprived of land by a decree of registration procured by fraud is limited to the
period of one year after the entry of the decree within which to file a petition for review, and even this
remedy is unavailable if any innocent purchaser for value has acquired the property; while under
section 55, if a subsequent transfer is infected with fraud or the title is procured by any fraudulent
means to be registered in the name of the transferee, the injured party may pursue all his legal and
equitable remedies against the party, or parties, to such fraud, saving the rights of any innocent
holder of the tittle for value. This means of course that the person thus defrauded may bring any
appropriate action to be relieved within the ordinary period of limitation applicable in other cases of
fraud, or within the four-year period prescribed in subsection 4, of section 43 of the Code of Civil
Procedure.
Applying said provision to the facts of the present case it must follow that the cause of action of the
present plaintiff to annul the registration of this property in the name of Francisco Gutierrez Repide
did not prescribe at one year, as the trial judge erroneously supposed, and the plaintiff's cause of
action upon this branch of the case had not in fact been barred at all when the present action was
begun.
Before leaving the topic of this alleged fraud committed by Repide in procuring a Torrens certificate
to be issued in his own name, thereby making it appear that the absolute and indefeasible title had
become vested in himself, it will be well to point out that the complaint reflect a mistaken point of
view as to the consequences of that act. Upon perusal of the compliant it will be noted that it
proceeds upon the assumption that, if the alleged fraud should be proved, the plaintiff will be entitled
to have the premises at once restored to himself, with an accounting for profits, and an award of
damages adequate to compensate the plaintiff for the wrong supposed to have been done. But the
circumstance must not be overlooked that the supposed fraud relates only to the registration of the
title in the name of Repide, and even supposing that this act had never been accomplished, the
Repide estate would merely be in the position occupied by Repide after he had acquired the interest
of Bachrach in the property, without prejudice to the rights acquired by that purchase. But of course
in the case supposed the plaintiff would be entitled to have the certificate of title cancelled and other
issued in such form as to show the correct state of facts with respect to the ownership and
incumbrance of the property.
The preceding discussion conducts us to the conclusion that, so far as this case is concerned, the
estate of Francisco Gutierrez Repide occupies substantially the position of a mortgagee in
possession. The question then arises as to what are the legal rights of the plaintiff as against the
Repide estate, judged by the facts alleged and relief sought in the complaint as at present framed,
and in this connection the circumstances is not to be ignored that the complaint contains in usual
form the prayer for general.

The solution of this problem is to be found in the application of the doctrine formulated by this court
in Barretto vs. Barretto (37 Phil., 234). In that case the heirs of a mortgagee of an estate were found
in possession of mortgaged property more than thirty years after the mortgage had been executed;
and it was shown that the mortgage had never been foreclosed. Upon this state of facts it was in
effect held that the rights of the parties, heirs respectively of the mortgagor and mortgagee, were
essentially the same as under the contract of antichresis.
By reference to the appropriate provisions of the Civil Code (arts. 1881-1884), in the chapter dealing
with antichresis, it will be at once seen that while non-payment of the debt does not vest the
ownership of the property in the creditor, nevertheless the debtor cannot recover the enjoyment of
the property without first paying in full what he owes to his creditor. At the same time, however, the
creditor is under obligation to apply the fruits derived from the estate in satisfaction, first, of the
interest on the debt, if any, and, secondly, to the payment of the principal. From this is necessarily
deduced the obligation of the creditor to account to the debtor for said fruits and the corresponding
right of the debtor to have the same applied in satisfaction of the mortgage debt, as recognized
in Barretto vs. Barretto, supra.
The respective rights and obligations of the parties to a contract of antichresis, under the Civil Code,
appear to be similar and in many respects identical with those recognized in the equity jurisprudence
of England and American as incident to the position of a mortgagee in possession, in reference to
which the following propositions may be taken to be established, namely, that if the mortgagee
acquires possession in any lawful manner, he is entitled to retain such possession until the
indebtedness is satisfied and the property redeemed; that the non-payment of the debt within the
term agreed does not vest the ownership of the property in the creditor; that the general duty of the
mortgagee in possession towards the premises is that of the ordinary prudent owner' that the
mortgagee must account for the rents and profits of the land, or its value for purposes of use and
occupation, any amount thus realized going towards the discharge of the mortgage debt; that if the
mortgagee remains in possession after the mortgage debt has been satisfied, he becomes a trustee
for the mortgagor as to the excess of the rents and profits over such debt; and, lastly, that the
mortgagor can only enforce his rights to the land by an equitable action for an account and to
redeem. (3 Pom. Eq. Jur., sex. 1215-1218.)
From the complaint it appears that, even before acquiring the interest of Bachrach in the Hacienda
Dolores, the defendant Francisco Gutierrez Repide had taken over from the Archbishop of Manila a
mortgage on the property in favor of said Archbishop, paying therefor the sum of P35,000; and we
infer from the complaint that Repide had probably discharged other liens on the property either
before or after he acquired the interest of Bachrach. If so, his executrix will be entitled to charge the
plaintiff with the amount paid to free the property from such liens, and to retain possession until all
valid claims against the estate are satisfied, in obedience to the maxim that he who seeks equity
must do equity.
A question has been made as to whether, in an action like this, it is necessary for the plaintiff to
tender the amount necessary to effect the redemption of the property; and we note that in paragraph
XII of the complaint it is alleged that the plaintiff had made a written offer to the defendant Repide to
pay all debts and charges held by Repide against the property, which offer said defendant had
refused to accept. this paragraph of the complaint was doubtless inserted in view of section 347 of

the Code of Civil Procedure which declares that a written offer to pay a particular sum of money is, if
rejected, equivalent to the actual tender of the money. The allegation contained in paragraph XII of
the complaint is not sufficient to comply with the provisions of the section cited, for the reason that it
does not appear that the written offer mentioned a particular sum as the amount to be paid. There
was therefore no valid tender.
But the case is not one where a tender is necessary, because the amount actually due cannot be
known until an accounting is had and the extent of the plaintiff's indebtedness reduced to certainty.
When this had been accomplished, it will become the duty of the court, upon such amendment of the
complaint as may appear desirable, to make the proper decree, allowing the plaintiff to redeem and
requiring the executrix of Francisco Gutierrez Repide to surrender the property in question to the
plaintiff.
In what has preceded we have demonstrated the error of the trial judge in sustaining the demurrer
interposed to the original complaint on behalf of the Repide estate, and we have at the same time
indicated the character of the relief to which the plaintiff appears to be entitled on the showing made
in the complaint. It is hardly necessary to add that we must not be understood as defining the rights
of the parties further than is necessary to dispose of the case as presented to us upon demurrer;
and it is obvious that if the litigation proceeds further, many questions will be presented which cannot
and should not here be anticipated.
Directing our attention now to the appeal of the defendant Boomer, we not that this litigant by way of
cross-complaint a right to the Hacienda Dolores hostile to both Jose C. Macapinlac and Francisco
Gutierrez Repide, basing his claim upon a contract (Exhibit 1) between Macapinlac and Boomer, of a
date anterior to the contract of sale with pacto de retro of August 22, 1916. It is unnecessary her to
enter into the details of Boomers contention. Suffice it to say that, if the allegations of the crosscomplaint are true, as is to be assumed upon demurrer, it shows a cause of action proper to be
ventilated in this suit. The trial judge, however, sustained the demurrer to the cross-complaint,
apparently for the reason that this Honor believed that the transfer of certificate of title to the name of
Repide constituted an insuperable obstacle to the cross-action. This point has been fully discussed
by us in connection with the controversy between the two principal litigants, and for the rest it may
be said that the action of the trial judge in sustaining the demurrer to Boomer's cross-complaint
involves the same errors that were committed in the other branch of the case.
From what has been said it follows that the action of the trial judge in sustaining the two demurrers
interposes in behalf of Francisco Gutierrez Repide to the original complaint and to Boomer's crosscomplaint must be reversed and said demurrers are hereby overruled, with costs; and the cause will
be returned to the lower court with directions to require the appellee to answer within the time
allowed by the rules. So ordered.
Araullo, C.J., Malcolm, Avancea, Villamor, Ostrand, Johns and Romualdez, JJ., concur.
Johnson, J, dissents.

3.