G.R. No. L-27084 December 31, 1927
chanroblesvirtualawlibrary chanrobles virtual law
AMBROSIO T. ALOJADO, as administrator of the intestate
estate of the deceased Juana Mabaquiao, Plaintiff-Appellant,
vs. M. J. LIM SIONGCO, ET AL., Defendant-Appellees.
Araneta and Zaragoza for appellant.
Soriano and Nepomuceno for appellees.
AVANCEÑA, C. J.: chanrobles virtual law library
On October 12, 1907 Juana Mabaquiao sold the land
described in the complaint to Nicolas Alegata for the sum of
P7,744. After the death of Nicolas Alegata, proceeding for the
settlement of his estate was instituted, and on October 23,
1913 his property, which included that purchased from Juana
Mabaquiao, was adjudicated to Lim Kang Sang and Lim Eng
Teeng, his only heirs. On November 11, 1913 they sold this
land to Lim Ponso & Co., with the right to repurchase for the
period of one year, which period expired without this right
having exercised. On February 15, 1918 Lim Ponso & Co.
transferred this land unconditionally to Lim Siongco and Lim
Kingko.chanroblesvirtualawlibrary chanrobles virtual law library
Upon the death of Juana Mabaquiao, proceeding for the
settlement of her intestate estate were also instituted in which
Ambrosio T. Alojado was appointed administrator. The latter, in
said capacity, now brings this action against Lim Sionco, Lim
Kingko and Lim Ponso & Co. and prays that he be declared the
absolute owner of this land with the improvements thereon,
and that the defendants be ordered to restore and respect his
right of ownership, possession and usufruct of the property;
and, moreover, that other pronouncements be made as prayed
for in his complaint. The court absolved the defendants from
the complaint and plaintiff appealed from this
judgment.chanroblesvirtualawlibrary chanrobles virtual law
library
The plaintiff contends that the contract executed by Juana
Mabaquiao with Nicolas Alegata on October 12, 1907 was not
a contract of sale with the right to repurchase, but a contract or
antichrises. This contention is untenable. From the terms of the
contract it is clearly a sale with the right to repurchase. It
speaks in unequivocal terms of a sale and the conveyance of
land with the right to repurchase, and the character of the
contract is that of a sale with the right to repurchase. The
contract is very defective in its wording, especially so where it
refers to the period within which to excercise the right to
repurchase. But examining it as a whole, it clearly appears that
it was the parties' intention that the vendor could repurchase
the land without delay when he had the means to pay the
purchase price. What characterizes a contract or antichresis is
that the creditor acquires the right to receive the fruits of the
property of his debtor with the obligation to apply them to the
payment of interests, if any is due, and then to the principal of
his credit. Nowhere in the contract in question does this
character of a contract of antichresis appear. The only
substantial thing agreed upon between the parties was that
Juana Mabaquiao could repurchase the land when she had the
means. The decision of this court in the case of De la Vega vs.
Ballilos (34 Phil., 683), which the appellant invokes in support
of his contention, is in no way applicable. The case dealt with a
contract called mortgage by the parties and the court held that
in reality it was contract of antichresis. But in the contract in
that case it was agreed that the debtor assigned and transfer
the ownership and possession of the land to the creditor for his
management and enjoyment as a profit from the amount for
which it had been mortgaged. This agreement, which
characterizes the contract of antichresis, does not exist in the
instant case.
library
An attempt was made, by the testimony of Eulogia Espanola,
Juana Mabaquio's granddaughter, to prove that the contract
entered into between Juana Mabaquiao and Nicolas Alegata,
was that Mabaquiao, or any of her heirs, might recover
possession of the land any time upon the payment of P7,744,
and that while this remained unpaid the land would continue in
the possession of Nicolas Alegata, with the obligation to deliver
one-fifth of the products therefrom to Mabaquiao. Eulogia
Espanola testified having been present when the contract was
entered into. Against this declaration the witness Vicente
Gomez was presented, who also stated that he was present at
the time the contract was entered into and contradicted Eulogia
Espanola's testimony and, furthermore, stated that the latter
was not present then. The evidence is of such a character as
not to justify in any manner the alteration of the clear terms of
the document in the sentence that it expresses a contract of
sale.chanroblesvirtualawlibrary chanrobles virtual law library
This action was brought in January, 1922, fifteen years after
the contract was entered into. This being a sale with the right to
repurchase, the question, after this lapse of time, is reduced to
whether or not the title to the land conveyed by Juana
Mabaquiao has been consolidated. The contract, as been
noted, fixes the period for the exercise of the right of
redemption until Juana Mabaquiao, or her heirs has the
means. Whether or not this is considered a period, it is clear
that the title transmitted to Nicolas Alegata has been
consolidated. According to article 1508 of the Civil Code, when
no period of redemption is fixed it shall last four years, and it is
fixed, it shall not exceed ten years. The right of redemption not
having been exercised the period of ten years, the title of
Nicolas Alegata, or his heirs, has by this fact alone been
consolidated any events.chanroblesvirtualawlibrary chanrobles
virtual law library
Considering the case from this point of view, the appellant
argues that, as it was never intention of the parties that, after a
certain period, the land could not be repurchased by the
vendor, the contract cannot be one of sale with the right to
repurchase, because it conflicts with the nature of this contract,
essential of which is the right of the purchaser to consolidate
his title immediately after the period of redemption has
passed.chanroblesvirtualawlibrary chanrobles virtual law library
Another contention of the appellant is that if the right of
redemption in this case is considered null after ten years, this
nullity must likewise affect the sale itself. These questions have
been resolved by this court in the case of Yadao vs. Yadao (20
Phil., 260). In that case the contract contained a stipulation that
the vendor repurchase the land any time he had the money, it
being understood that he could not exercise this right of
redemption after ten years, and not having done so within that
period, the court held that the vendor irrevocably acquired title
to the land. In that case, notwithstanding the fact that the right
of redemption after ten years had been declared null, the sale
itself however, was considered valid and the title acquired
thereunder consolidated; and that is because the stipulation to
repurchase is accidental to a sale and may be made at the will
of the parties. A contract of absolute sale may be made without
this stipulation. It seems logical that if this stipulation is made
and it is declared, null, its nullity cannot affect the sale first
since the latter might be entered into without said stipulation.
The judgment appealed from is affirmed, with the costs against
the appellant. So ordered.
1
ANICETO BANGIS substituted by his heirs, namely:
RODOLFO B. BANGIS, RONNIE B. BANGIS, ROGELIO B.
BANGIS, RAQUEL B. QUILLO, ROMULO B. BANGIS,
ROSALINA B. PARAN, ROSARIO B. REDDY, REYNALDO B.
BANGIS, and REMEDIOS B. LASTRE,
x-------------------------------------------------------------------------
Petitioners, ----------------x

-versus- DECISION

HEIRS OF SERAFIN AND SALUD ADOLFO, namely: LUZ A. PERLAS-BERNABE, J.:

BANNISTER, SERAFIN ADOLFO, JR., and ELEUTERIO
ADOLFO rep. by his Heirs, namely: MILAGROS, JOEL,
MELCHOR, LEA, MILA, NELSON, JIMMY and MARISSA, all
surnamed ADOLFO,

Respondents. Assailed in this Petition for Review on Certiorari under

Rule 45 of the Rules of Court is the March 30, 2009
G.R. No. 190875 Decision[1]of the Court of Appeals Mindanao Station
(CA) and its December 2, 2009 Resolution[2] in CA-G.R.
CV No. 00722-MIN which declared that the transaction
between the parties was a mortgage, not a sale, and
ordered petitioners to surrender the possession of the
disputed lot upon respondents' full payment of their
Present: indebtedness.

THE ANTECEDENT FACTS

PERALTA, J., *Acting Chairperson,
The spouses Serafin, Sr. and Saludada[3]Adolfo were
ABAD, the original registered owners of a 126,622 square
meter lot covered by Original Certificate of Title (OCT)
VILLARAMA, JR.,** No. P-489 issued on December 15, 1954 (derived from
Homestead Patent No. V-34974), located in Valencia,
MENDOZA, and Malaybalay, Bukidnon. This property was mortgaged to
the then Rehabilitation Finance Corporation (now
PERLAS-BERNABE, JJ. Development Bank of the Philippines or DBP) on August
18, 1955,[4]and upon default in the payment of the loan
obligation, was foreclosed and ownership was
consolidated in DBP's name under Transfer Certificate
of Title (TCT) No. T-1152.[5]Serafin Adolfo, Sr., however,
repurchased the same and was issued TCT No.
6313[6]on December 1, 1971, a year after his wife died
in 1970.
Promulgated:
Sometime in 1975, Serafin Adolfo, Sr. (Adolfo) allegedly
mortgaged the subject property for the sum of
P12,500.00 to Aniceto Bangis (Bangis) who immediately
June 13, 2012

2
took possession of the land.[7]The said transaction was,
however, not reduced into writing.[8]
When Adolfo died, his heirs, namely, Luz Adolfo
Bannister, Serafin Adolfo, Jr. and Eleuterio Adolfo (Heirs
of Adolfo), executed a Deed of Extrajudicial Partition
dated December 24, 1997 covering the subject property
and TCT No. T-65152[9]was issued to them. On May 26,
1998, the said property was subdivided and separate
titles were issued in names of the Heirs of Adolfo, as
follows: TCT Nos. T-66562 and T-66563 for Luz Adolfo
Banester[10]; TCT Nos. T-66560 and T-66561 in the
name of Serafin Adolfo, Jr.; and TCT Nos. T-66564 and T-
66565 in favor of Eleuterio Adolfo.[11]
In June 1998, the Heirs of Adolfo expressed their
intention to redeem the mortgaged property from
Bangis but the latter refused, claiming that the
transaction between him and Adolfo was one of sale.
During the conciliation meetings in the barangay,
Bangis' son, Rudy Bangis, showed them a copy of a deed
of sale and a certificate of title to the disputed
lot.[12]The parties having failed to amicably settle their
differences, a certificate to file action[13]was issued by
the barangay.
THE PROCEEDINGS BEFORE THE RTC
On July 26, 2000, the Heirs of Adolfo filed a
complaint[14]before the Regional Trial Court (RTC) for
annulment of deed of sale and declaration of the
purported contract of sale as antichresis, accounting
and redemption of property and damages against
Bangis, docketed as Civil Case No. 2993-00. The
complaint was amended on September 11, 2001 to
include a prayer for the cancellation of TCT No. T-10567
and the tax declarations in the name of Bangis in view
of the manifestation[15]filed by Ex-Officio Register of
Deeds, Atty. Phoebe Loyola Toribio of the Registry of
Deeds, Malaybalay City which states that the said title
was of "dubious" origin since there was no deed of
conveyance upon which the said transfer certificate of
title was based and that its derivative title, TCT No. T-
10566, does not exist in the files of the Registry of
Deeds.[16] On November 12, 2001, the complaint was
again amended to reflect the other certificates of titles
issued in the names of the Heirs of Adolfo and the
amount of P12,500.00 representing the mortgage
debt,[17]followed by another amendment on October
13, 2003 to include the allegation that they have
partitioned the subject lot on December 24, 1997 and
that no copy of the supposed deed of sale in favor of
Bangis can be found in the records of the Provincial
Assessor's Office and the Registrar of Deeds. They
further prayed, in the alternative, to be allowed to
redeem the subject lot under the Homestead Law and
that Bangis be ordered to indemnify them: (a)
P50,000.00 each as moral damages; (b) 20% of the value
of the property as attorney's fees; and (c) P50,000.00 as
litigation expenses as well as the costs of suit.[18]
In his Answer with Counterclaim,[19]Bangis claimed to
have bought the subject property from Adolfo for which
TCT No. T-10567[20]was issued. He also alleged to have
been in open and adverse possession of the property
since 1972 and that the cause of action of the Heirs of
Adolfo has prescribed. On November 11, 2001, Bangis
died and was substituted in this suit by his heirs,
namely, Rodolfo B. Bangis, Ronie B. Bangis, Rogelio B.
Bangis, Raquel B. Quillo, Romulo B. Bangis, Rosalina B.
Paran, Rosario B. Reddy, Reynaldo B. Bangis and
Remedios B. Lastre (Heirs of Bangis).[21]
During the trial, one of the Heirs of Bangis, Rodolfo
Bangis, presented a photocopy of an Extra-Judicial
Settlement with Absolute Deed of Sale dated December
30, 1971[22]for the purpose of proving the sale of the
subject lot by Adolfo and his heirs in favor of his
predecessors-in-interest, Aniceto Bangis and Segundino
Cortel, for the sum of P13,000.00. He also presented a
Promissory Note[23]of even date purportedly executed
by Bangis and Segundino Cortel undertaking to pay the
balance of the purchase price in the amount of
P1,050.00.[24] Both documents were notarized by Atty.
Valentin Murillo who testified to the fact of their
execution.[25]Rodolfo Bangis likewise testified that they
have been paying the taxes due on the property and
had even used the same as collateral for a loan with a
bank.[26]
On rebuttal, one of the Heirs of Adolfo, Luz Adolfo
Bannister, denied the due execution and genuineness of
the foregoing Extra-Judicial Settlement with Absolute
Deed of Sale alleging forgery.[27]
On December 29, 2005, the RTC rendered a
Decision[28]in favor of the Heirs of Adolfo, the
dispositive portion of which reads:
WHEREFORE, the preponderance of evidence being
strongly in favor of the plaintiffs and against the
defendants, decision is hereby rendered:
1. Declaring the contract between the plaintiffs and
defendants as a mere mortgage or antichresis and since
3
the defendants have been in the possession of the
property in 1975 up to the present time enjoying all its
fruits or income, the mortgaged loan of P12,000.00 is
deemed fully paid;
2. Ordering the defendants to deliver the possession of
the property in question and all the improvements
thereon to the plaintiffs peacefully;
3. Declaring TCT No. 10567 in the name of Aniceto
Bangis as NULL AND VOID AB INITIO and directing the
Office of the Register of Deeds to cause its cancellation
from its record to avoid confusion regarding the
ownership thereof; and
4. Declaring all the transfer certificates of title issued in
favor of the plaintiffs namely, Luz Adolfo-Bannister,
Serafin Adolfo, Jr. and Eleuterio Adolfo, as above-
mentioned as the ones valid and issued in accordance
with PD 1529.
SO ORDERED.
Aggrieved, the Heirs of Bangis appealed the foregoing
disquisition to the Court of Appeals (CA).
THE CA RULING
In its assailed Decision, the CA affirmed the RTC finding
that the contract between the parties was a mortgage,
not a sale. It noted that while Bangis was given
possession of the subject property, the certificate of
title remained in the custody of Adolfo and was never
cancelled. The CA also ordered the Heirs of Adolfo to
pay the Heirs of Bangis the mortgage debt of
P12,500.00[29]with twelve (12%) percent interest
reckoned from 1975 until 1998 and to deliver to them
the possession of the property upon full payment.[30]It,
however, deleted the RTC order directing the Register
of Deeds to cancel TCT No. T-10567 in the name of
Bangis for being a collateral attack proscribed under PD
1529.[31]
Dissatisfied, the Heirs of Bangis filed a Motion for
Reconsideration[32]arguing that the CA erred in
disregarding their testimonial and documentary
evidence, particularly, the Extra-Judicial Settlement with
Absolute Deed of Sale (Exh. 2) which purportedly
established the sale in favor of their predecessor-in-
interest, Aniceto Bangis. The said motion was, however,
denied in the Resolution[33]dated December 2, 2009.
THE ISSUE BEFORE THE COURT
Hence, the instant petition for review on certiorari
based on the lone assignment of error[34]that the
transaction between the parties was one of sale and not
a mortgage or antichresis. In support, petitioner Heirs of
Bangis maintain that the CA erred in not giving
probative weight to the Extra-Judicial Settlement with
Absolute Deed of Sale[35]which supposedly bolsters
their claim that their father, Aniceto Bangis, bought the
subject parcel of land from Adolfo. Hence, the
corresponding title, TCT No. T-10567, issued as a
consequence should be respected.
On their part, respondent Heirs of Adolfo averred that
no reversible error was committed by the CA in
upholding that no sale transpired between the parties'
predecessors-in-interest. Moreover, petitioners' TCT
No. T-10567 was not offered in evidence and worse,
certified as of dubious origin per the Manifestation of
the Registrar of Deeds.[36]
THE COURT'S RULING
The petition must fail.
At the outset, it should be emphasized that a petition
for review on certiorari under Rule 45 of the Rules of
Court involves only questions of law and not of facts. A
question of law exists when there is doubt as to what
the law is on a given set of facts while a question of fact
arises when there is doubt as to the truth or falsity of
the alleged facts.[37]
The Heirs of Bangis, in insisting that both the RTC and
the CA erroneously disregarded the evidence of sale
they presented, are effectively asking the Court to re-
evaluate factual issues which is proscribed under Rule
45. "Such questions as to whether certain items of
evidence should be accorded probative value or weight,
or rejected as feeble or spurious, or whether or not the
proofs on one side or the other are clear and convincing
and adequate to establish a proposition in issue, are
without doubt questions of fact."[38]
Nonetheless, the Court perused the records and found
substantial evidence supporting the factual findings of
the RTC, as affirmed by the CA, that the nature of the
transaction between the parties' predecessors-in-
interest was a mortgage and not a sale. Thus, the maxim
that factual findings of the trial court when affirmed by
4
the CA are final and conclusive on the Court[39]obtains
in this case.
THERE WAS NEITHER AN ANTICHRESIS NOR SALE
For the contract of antichresis to be valid, Article 2134
of the Civil Code requires that "the amount of the
principal and of the interest shall be specified in writing;
otherwise the contract of antichresis shall be void." In
this case, the Heirs of Adolfo were indisputably unable
to produce any document in support of their claim that
the contract between Adolfo and Bangis was an
antichresis, hence, the CA properly held that no such
relationship existed between the parties. [40]
On the other hand, the Heirs of Bangis presented an
Extra-Judicial Settlement with Absolute Deed of Sale
dated December 30, 1971[41]to justify their claimed
ownership and possession of the subject land. However,
notwithstanding that the subject of inquiry is the very
contents of the said document, only its
photocopy[42]was presented at the trial without
providing sufficient justification for the production of
secondary evidence, in violation of the best evidence
rule embodied under Section 3 in relation to Section 5
of Rule 130 of the Rules of Court, to wit:
SEC. 3. Original document must be produced;
exceptions. - When the subject of inquiry is the contents
of a document, no evidence shall be admissible other
than the original document itself, except in the
following cases:
(1) When the original has been lost or destroyed, or
cannot be produced in court, without bad faith on the
part of the offeror;
(2) When the original is in the custody or under the
control of the party against whom the evidence is
offered, and the latter fails to produce it after
reasonable notice;
(3) When the original consists of numerous accounts or
other documents which cannot be examined in court
without great loss of time and the fact sought to be
established from them is only the general result of the
whole; and
(4) When the original is a public record in the custody
of a public officer or is recorded in a public office.
SEC. 5. When original document is unavailable. - When
the original document has been lost or destroyed, or
cannot be produced in court, the offeror, upon proof of
its execution or existence and the cause of its
unavailability without bad faith on his part, may prove
its contents by a copy, or by a recital of its content in
some authentic document, or by the testimony of
witnesses in the order stated.
The bare testimony of one of the Heirs of Bangis,
Rodolfo Bangis, that the subject document was only
handed[43]to him by his father, Aniceto, with the
information that the original thereof "could not be
found"[44]was insufficient to justify its admissibility.
Moreover, the identification made by Notary Public
Atty. Valentin Murillo[45]that he notarized such
document cannot be given credence as his conclusion
was not verified against his own notarial
records.[46]Besides, the Heirs of Bangis could have
secured a certified copy of the deed of sale from the
Assessor's Office[47]that purportedly had its custody in
compliance with Section 7, Rule 130[48]of the Rules of
Court.
In sum, the Heirs of Bangis failed to establish the
existence and due execution of the subject deed on
which their claim of ownership was founded.
Consequently, the RTC and CA were correct in affording
no probative value to the said document.[49]
TCT NO. T-10567 IN THE NAME OF ANICETO BANGIS
CANNOT PREVAIL OVER THE TITLES OF THE HEIRS OF
ADOLFO
Records reveal that TCT No. T-10567 purportedly
secured as a consequence of the deed of sale executed
by Adolfo and his heirs in favor of Bangis was not
offered in evidence. A perusal of its copy, however,
shows that it was a transfer from TCT No. T-
10566,[50]which title the Heirs of Bangis unfortunately
failed to account for, and bore no relation at all to
either OCT No. P-489 (the original title of the Spouses
Adolfo) or TCT No. T-6313 (issued to Adolfo when he
repurchased the same property from DBP). The
Manifestation[51]of the Register of Deeds of
Malaybalay City regarding the doubtful origin of TCT No.
T-10567 and the regularity of the titles of the Heirs of
Adolfo are insightful, thus:
That the verification from the office of the original copy
of Transfer Certificate of Title No. T-10567 in the name
of Anecito Bangis is existing in the office. Machine copy
5
of the said title is hereto attached as annex "A" but
nothing in the title whether annotated or attached, any
Deed of Conveyance or other Documents by which said
title was issued or transferred in the name of Anecito
Bangis.
That for the information and guidance of the court
attached herewith is a machine copies [sic] Original
Certificate of Title No. P-489 in the name of Serafin
Adolfo, marked as annex "B" which supposedly the
mother title of Transfer Certificate of Title No. T-10567
as to how this title was transferred in the name of
Anecito Bangis. Nothing will show which will validly
supports [sic] the said transfer, in other words the said
title is dubious.
This Original Certificate of Title No. P-489 in the name
of Serafin Adolfo was mortgage to the Development
Bank of the Philippines and then it was consolidated
and Transfer Certificate of Title No. T-1152 was issued in
the name of Development Bank of the Philippines. From
the Development Bank of the Philippines a Deed of Sale
was executed by the Development Bank of the
Philippines in favor of Serafin Adolfo and Transfer
Certificate of Title No. T-6313 marked annex "B-1" was
issued in the name of Serafin Adolfo.
An Extrajudicial Settlement was now [sic] by the Heirs
of Serafin Adolfo and Transfer Certificate of Title Nos. T-
65152 annex "B-2", T-66560 annex "B-3", T-66561
annex "B-4", T-66562 annex "B-5", T-66563 annex "B-6",
T-66564 annex "B-7", and T-66565 annex "B-8" were
issued to the Heirs.
The titles issued to the Heirs of Serafin Adolfo were
legitimately issued by this office after all its [sic]
requirements and supporting documents were
submitted and proper annotations were reflected at the
back of the title of Serafin Adolfo.
Transfer Certificate of Title No. T-10567 as shown on
the title was derived from Transfer Certificate of Title
No. T-10566 but [sic] title is not existing in this office.
As held in the case of Top Management Programs
Corporation v. Luis Fajardo and the Register of Deeds of
Las Pias City:[52]"if two certificates of title purport to
include the same land, whether wholly or partly, the
better approach is to trace the original certificates from
which the certificates of titles were derived."
Having, thus, traced the roots of the parties' respective
titles supported by the records of the Register of Deeds
of Malaybalay City, the courts a quo[53]were correct in
upholding the title of the Heirs of Adolfo as against TCT
No. T-10567 of Bangis, notwithstanding its earlier
issuance on August 18, 1976[54]or long before the Heirs
of Adolfo secured their own titles on May 26, 1998. To
paraphrase the Court's ruling in Mathay v. Court of
Appeals:[55]where two (2) transfer certificates of title
have been issued on different dates, the one who holds
the earlier title may prevail only in the absence of any
anomaly or irregularity in the process of its registration,
which circumstance does not obtain in this case.
CANCELLATION OF TCT NO. T-10567
The Court cannot sustain the CA's ruling[56]that TCT
No. T-10567 cannot be invalidated because it
constitutes as a collateral attack which is contrary to the
principle of indefeasibility of titles.
It must be noted that Bangis interposed a counterclaim
in his Answer seeking to be declared as the true and
lawful owner of the disputed property and that his TCT
No. T-10567 be declared as superior over the titles of
the Heirs of Adolfo.[57]Since a counterclaim is
essentially a complaint[58]then, a determination of the
validity of TCT No. T-10567 vis-a-vis the titles of the
Heirs of Adolfo can be considered as a direct, not
collateral, attack on the subject titles.[59]
In Pasio v. Monterroyo, the Court has ruled, thus:
It is already settled that a counterclaim is considered an
original complaint and as such, the attack on the title in
a case originally for recovery of possession cannot be
considered as a collateral attack on the title.
Development Bank of the Philippines v. Court of
Appeals is similar to the case before us insofar as
petitioner in that case filed an action for recovery of
possession against respondent who, in turn, filed a
counterclaim claiming ownership of the land. In that
case, the Court ruled:
Nor is there any obstacle to the determination of the
validity of TCT No. 10101. It is true that the
indefeasibility of torrens title cannot be collaterally
attacked. In the instant case, the original complaint is
for recovery of possession filed by petitioner against
private respondent, not an original action filed by the
latter to question the validity of TCT No. 10101 on
6
which petitioner bases its right. To rule on the issue of
validity in a case for recovery of possession is
tantamount to a collateral attack. However, it should
not [b]e overlooked that private respondent filed a
counterclaim against petitioner, claiming ownership
over the land and seeking damages. Hence, we could
rule on the question of the validity of TCT No. 10101 for
the counterclaim can be considered a direct attack on
the same. A counterclaim is considered a complaint,
only this time, it is the original defendant who becomes
the plaintiff... It stands on the same footing and is to be
tested by the same rules as if it were an independent
action. x x x (Citations omitted) [60]
Besides, the prohibition against collateral attack does
not apply to spurious or non-existent titles, which are
not accorded indefeasibility,[61]as in this case.
THE PRESENT ACTION HAS NOT PRESCRIBED
The claim of the Heirs of Bangis that since they have
been in possession of the subject land since 1972 or for
28 years reckoned from the filing of the complaint in
2000 then, the present action has prescribed is
untenable. It bears to note that while Bangis indeed
took possession of the land upon its alleged mortgage,
the certificate of title (TCT No. 6313) remained with
Adolfo and upon his demise, transferred to his heirs,
thereby negating any contemplated transfer of
ownership. Settled is the rule that no title in derogation
of that of the registered owner can be acquired by
prescription or adverse possession.[62]Moreover, even
if acquisitive prescription can be appreciated in this
case, the Heirs of Bangis' possession being in bad faith is
two years shy of the requisite 30-year uninterrupted
adverse possession required under Article 1137 of the
Civil Code.
Consequently, the Heirs of Bangis cannot validly claim
the rights of a builder in good faith as provided for
under Article 449 in relation to Article 448 of the Civil
Code. Thus, the order for them to surrender the
possession of the disputed land together with all its
improvements was properly made.
LIABILITY FOR THE PAYMENT OF INTEREST
Finally, it is undisputed that the Heirs of Bangis made no
judicial or extrajudicial demand on the Heirs of Adolfo
to pay the mortgage debt. Instead, it was the latter who
signified their intent to pay their father's loan
obligation, admittedly in the amount of
P12,500.00,[63]which was refused. The mortgage
contract therefore continued to subsist despite the
lapse of a considerable number of years from the time it
was constituted in 1975 because the mortgage debt has
not been satisfied.
Following the Court's ruling in the iconic case of Eastern
Shipping Lines, Inc. v. Court of Appeals,[64]the
foregoing liability, which is based on a loan or
forbearance of money, shall be subject to legal interest
of 12% per annum from the date it was judicially
determined by the CA on March 30, 2009 until the
finality of this Decision, and not from 1975 (the date of
the constitution of the mortgage); nor from 1998 (when
an attempt to pay was made) or in 2000 at the time the
complaint was filed, because it was the Heirs of Adolfo
and not Bangis who filed the instant suit[65]to collect
the indebtedness. Thereafter, the judgment award
inclusive of interest shall bear interest at 12% per
annum until its full satisfaction.[66]
WHEREFORE, premises considered, the instant petition
for review on certiorari is DENIED and the assailed
Decision dated March 30, 2009 of the Court of Appeals
Mindanao Station (CA) and its Resolution dated
December 2, 2009 in CA-G.R. CV No. 00722-MIN are
AFFIRMED with MODIFICATION: (1) cancelling TCT No.
T-10567; and (2) ordering respondent Heirs of Adolfo to
pay petitioner Heirs of Bangis the sum of P12,500.00
with legal interest of 12% per annum reckoned from
March 30, 2009 until the finality of this Decision and
thereafter, 12% annual interest until its full satisfaction.
The rest of the Decision stands.
SO ORDERED.
7
G.R. No. L-11933 December 1, 1917
ALBERTO BARRETTO, Plaintiff-Appellee, vs. LEONARDO
F. BARRETTO, ET AL., objector-appellant.
Modesto Reyes and Eliseo Ymzon for appellants.
Williams, Ferrier and Sycip for interveners.
Delgado and Delgado for appellee.
TORRES, J.:
This case was begun in the Court of First Instance of
Zambales by Alberto Barretto, who claimed delivery to
him of a piece of land which was a part of the hacienda
named "Balintagac" together with its fruits or their
value, and also of a lot situated in the same hacienda
together with the rents thereof, and was brought to this
court on appeal, by the bill of exceptions, presented by
the counsel for the defendants and the defendant
interveners from the judgment entered on July 2, 1915,
in the office of the clerk of the said Court of First
Instance, by which, after declaring that the said Alberto
Barretto y Blanco is the owner of the hacienda of
Balintagac described in the complaint, it was ordered
that the defendant Leonardo F. Barretto deliver to the
plaintiff the possession of the piece of land and the lot
withheld, and pay, together with the other defendants,
the costs of the action.chanroblesvirtualawlibrary
chanrobles virtual law library
In his complaint of November 11, 1913, filed in the
Court of First Instance of Zambales, Alberto Barretto
alleges as his first cause of action that he is the owner of
the whole hacienda called Balintagac, situated in the
barrio of the same name, in the municipality of San
Felipe of said province, having an area of about 200
qui_�_ones antiguos, and bounded on the north by the
Anonang River; on the south by the Carmen Mountain;
on the east by the corner of the Balintagac; and on the
west by the Tectec Mountain. That he was in possession
of the said hacienda quietly, peacefully, and
continuously, as were his predecessors since the year
1884 until May, 1912; that on a certain day of the latter
month and year, the defendant Leonardo F. Barretto
alleging himself to be the owner of a certain part of said
hacienda illegally and unduly usurped a portion of land
of the said hacienda on the eastern part situated in
Ilum-Ilog, Santa Maria and Inubo-grande y pequeño,
Santa Maria and Carupisan, bounded on the north by
the Anonang River, on the east by the Golongoro River
and the corner of Balintagac, on the south by the
Balintagac and Inbo mountains, and on the west by the
rest of the hacienda which the plaintiff at present holds;
that since that time the defendant had been receiving
two-thirds of the fruits which the usurped portion
annually produced, which amounted to 33 uyones and
145 and 33 per cent cavanes of rice at P8 per upon and
P2 a cavan, and whose value amounts to the sum P554;
that the defendant refused to return that portion of
land usurped together with the fruits received, or their
value, in spite of the fact that he has been required to
do so in writing by the
plaintiff.chanroblesvirtualawlibrary chanrobles virtual
law library
That, as a second cause of action, the defendant, on the
said month of May, 1912, illegally took possession of a
lot situated in the same hacienda and barrio of
Balintagac, bounded on the front by the provincial road,
on its right, left, and rear sides by lands of the hacienda
belonging to the plaintiff, measuring 18 meters in front
by 48 meters deep, that is, an area of 864 square
meters, which lot should reasonably produce for its use
a monthly rent of P1, and that in spite of the fact that
the plaintiff had requested the defendant to vacate and
to deliver the said lot to him with its rents, he
(defendant) refused to return the said lot or pay the
rents therefor, for which reason the plaintiff prayed
judgment in his favor ordering the delivery or
restitution of the said portion of land and lot, claimed in
his first and second causes of action, together with the
products of rice said to have been received, and those
which in the future may be obtained, or their value, and
the sum of P18 for the reasonable use of the lot since
May, 1912, to October, 1913, and the rent that it should
produce at the rate of P1 a month until the actual
delivery of the lot shall have been made, with the costs
of the action.chanroblesvirtualawlibrary chanrobles
virtual law library
The demurrer to the said complaint having been
overruled, the counsel for the defendant in an answer
dated May 23, 1914, denied each and every one of the
allegations contained in the complaint and alleged that
the defendant is in possession of the land and lot
claimed in the first and second causes of action of the
complaint, as well as of the rest of the hacienda, that is,
that he is in possession of all the hacienda of Balintagac
as the true owner thereof since
1881.chanroblesvirtualawlibrary chanrobles virtual law
library
Upon the permission of the Court, the attorney for
Angelica Barretto, Beatriz Barretto West and her
husband, J. C. West, Maria Teresa Barretto York and her
8
husband Archibald C. York, Carlos Alejandro Barretto,
Bernardo O. Barretto, and Ernesto E. Barretto, filed a
complaint of intervention in this case, alleging among
other things that the hacienda of Balintagac in
controversy was owned and possessed by Juan Antonio
Barretto, Sr.; that on his death in Zambales on
November 21, 1881, he left seven children called Juan
Antonio Barretto, domiciled in Macao, Angelica Maria
Barretto, a resident of Manila, Leonardo F. Barretto, a
resident of San Felipe, Zambales, Francisca Barretto also
domiciled in Macao, Bartolome Barretto, a resident of
Kow Loon, China, and now deceased Jose A. Barretto
and Leopoldo Barretto, and these seven children of the
deceased Juan Antonio Barretto, Sr., were his only heirs
who succeeded him in all his rights and actions and for
this reason they became owners with the right of
possession of the said hacienda of Balintagac, as in fact
they are at present in possession of the same through
their agents and representatives; that one of his
children, Jose A. Barretto on his death in 1893 left three
children, Beatriz Barretto, Amalia Barretto, and Jose
Conde Barretto, who succeeded in all rights of their
father Jose A. Barretto and in the possession of the said
hacienda, as well as the four children of Leopoldo F.
Barretto, who died in 1894, named Maria Teresa
Barretto, Carlos Alejandro Barretto, Ernesto E. Barretto,
and Bernardo O. Barretto, coowners and copossessors
of the said hacienda; that the interveners deny that the
plaintiff Alberto Barretto is the owner of any part of the
said hacienda and the lot mentioned in the complaint,
or that the said plaintiff was in possession of them, or
any portion of the same, and that the defendant
Leonardo F. Barretto is in possession of the said
hacienda Balintagac and the lot described in the
complaint as the representative of the interveners and
the other coheirs, of the estate of the deceased Juan
Antonio Barretto Sr., since the said Leonardo F. Barretto
being one of the coheirs, is not the only owner of the
said hacienda, nor of any part of the same except that
portion which belongs to him as one of the heirs of the
original owner, but without any right to withhold the
possession of the hacienda as against the interveners,
and concluded by asking that they be declared owners
as the heirs of their deceased ascendant Juan Antonio
Barretto, Sr., of their respective undivided shares in the
hacienda and lot mentioned in the complaint, adjudging
to them the possession of the same, with the
costs.chanroblesvirtualawlibrary chanrobles virtual law
library
The counsel for Amalia Barretto Moore and her
husband, J. B. Moore, residents of San Francisco,
California, with the permission of the court filed a
complaint of intervention proclaiming their intention to
unite, take part and reproduced the application for
intervention formerly asked by Angelica Maria Barretto
and others, adopting all the allegations contained in the
former complaint of intervention with the prayers
therein made.chanroblesvirtualawlibrary chanrobles
virtual law library
The demurrer interposed by the plaintiff having been
overruled and the court having ordered Juan Antonio
Barretto, Jr., Amalia Barretto, Jose Conde Barretto,
Francisco Barretto, and Bartolome Barretto to appear
and become parties to this action, with the exception of
the plaintiff, the latter in answer to the complaint of
intervention alleged: that he admits the first three
paragraphs of said complaint and denies generally and
specifically those following, up to paragraph 13, except
the last of these in which it is alleged that Leonardo F.
Barretto was the representative of the interveners and
of the other heirs of Juan Antonio Barretto, Sr., which
part is admitted. As a special defense he alleged that by
a notarial document executed May 16, 1882, Juan
Antonio Barretto Grandpre, Jr., then executor of his
deceased father Juan Antonio Barretto, Sr., declaring
himself to be the absolute owner of all the hacienda of
Balintagac - the boundary of which is expressed and its
area is 200 quiñones - borrowed money in the sum of
P11,000 from Antonio Vicente Barretto for the expenses
of the said hacienda with the obligation to pay P1,000
for delinquency and other causes and interests at 8 per
cent per annum, payable quarterly in advance, and as
guaranty for said loan he mortgaged specifically the
cultivated half of the hacienda and other properties
mentioned in the instrument and to this effect the
brothers of said Juan Antonio Barretto Grandpre
intervened and procured the granting of the loan for
the indicated purpose, inducing the creditor to grant
said loan on the security of the mortgage above
mentioned; that for the failure of the debtor to pay his
debt, the creditor Antonio Vicente Barretto, on April,
1885, brought an action to foreclose the mortgage in
order to recover the money loaned, against Juan
Antonio Barretto Grandpre in his own behalf and as
executor of his father. The trial was at first conducted
against himself and then against Leonardo F. Barretto as
attorney in fact of said Juan Antonio Barretto Grandpre.
Half of the mortgaged hacienda was levied upon and a
judgment to sell the property was rendered, but said
half of the attached hacienda could not be sold in spite
of the fact that it was placed at auction three times, its
price in the last two having been reduced; then the
creditor, about May, 1888, prayed for the adjudication
of all the property attached to the payment of his credit
9
of P7,648 to which adjudication and conveyance in part
payment the defendant Leonardo F. Barretto voluntarily
agreed and consented as attorney in fact of Juan
Antonio Barretto Grandpre. The Juan Antonio Barretto,
Jr., and his brothers, not being able to pay the debt,
interests, and costs delivered and conveyed all the
hacienda of Balintagac to the creditor about the year
1889 or 1890. That from these years the brothers of
Juan Antonio Barretto Grandpre named Leonardo F.
Barretto, Jose Barretto, Leopoldo Barretto, and
Bartolome Barretto administered, by the appointment
and exclusive account of Antonio Vicente Barretto, the
entire hacienda, acknowledging him as the owner of all
of it and delivering to him all its products till April, 1896.
That in this month of that year Antonio Vicente Barretto
leased the whole hacienda for P900 annually to Luis
Bonifacio Barretto who administered it till his death in
1902 with the knowledge and without the objection of
Leonardo F. Barretto, the attorney in fact and
representative of his brothers and coheirs. That on the
death of Antonio Vicente Barretto and his children
Antonio Maria Barretto y Rocha, Ricardo Esteban
Barretto y Rocha and Guadalupe Barretto y Rocha
succeeded him, about the year 1902 they appointed
Antonio T. Barretto y Blanco as administrator of the
entire hacienda with its annual rent of P225 and he
administered it continuously without any interruption
whatsoever till May or June, 1912, when Leonardo F.
Barretto illegally took possession of two portions of the
said hacienda the area and boundaries of which are
described in the complaint. That on March 31, 1913,
Antonio and Ricardo Barretto y Rocha by means of a
notarial document, sold to the plaintiff Alberto Barretto
y Blanco the two-thirds part which belonged to them as
heirs of the creditor Antonio Vicente Barretto. That
about June, 1902, Guadalupe Barretto y Rocha with the
consent of her husband donated all her rights and
interests as heir of Antonio Vicente Barretto, on
condition that the donee should deliver to every one of
his brothers or the latter's children one eight part of
what the donation consisted, and Alberto Barretto,
having acquired the rights which Ricardo, Antonio
Barretto having acquired the rights which Ricardo,
Antonio Maria, and Guadalupe Barretto y Rocha had as
successors of Antonio Vicente Barretto over the whole
of the said hacienda, the plaintiff has possessed the
same quietly, publicly, and peacefully as its owner until
May or June, 1912, when Leonardo F. Barretto usurped
and retained certain portions of the property and its
land tax (with the sworn declaration of ownership since
it was introduced up to the present) as been paid by
him in the name and on the account of the heirs of
Antonio Vicente Barretto.chanroblesvirtualawlibrary
chanrobles virtual law library
As a special defense and as an estoppel he (plaintiff)
alleged that Juan Antonio Barretto, Jr., and his brothers
Leonardo F. Barretto, Bartolome Barretto, Jose Barretto,
and Leopoldo Barretto by their own acts induced
Antonio Vicente Barretto intentionally and deliberately
to believe that Juan Antonio Barretto, Jr., had full and
absolute power to dispose of all the hacienda of
Balintagac, by reason of which the creditor executed the
loan on the security of the said property and then his
brothers by their own acts acknowledged Antonio
Vicente Barretto as the owner of the whole hacienda,
and Leonardo F. Barretto, on his part, as attorney in fact
of Juan Antonio Grandpre, Jr., and as representative of
his coheirs agreed to the adjudication of the attached
and cultivated half of the hacienda in favor of Antonio
Vicente Barretto in payment of the sum of P7,648.
Lastly and likewise as a special defense he (plaintiff)
alleged prescription for the reason that Antonio Vicente
Barretto in his own behalf and in that of his successors
and through his representatives, administrators, lessees
and grantees, since 1889 and 1890 had been in
possession of the hacienda publicly, quietly and
peacefully till May or June, 1912, without any
interruption and as owner of the whole of said hacienda
by means of which possession they had acquired the
dominion and ownership of all the said hacienda by
acquisitive prescription, and at the same time all rights
and actions which Leonardo F. Barretto and the
interveners could have or might allege as to all part of
it, have prescribed; and, therefore, Alberto Barretto
asked the court to dismiss the complaint of
intervention, declaring him the owner of all the
hacienda of Balintagac, with costs to the defendants
and interveners.chanroblesvirtualawlibrary chanrobles
virtual law library
The counsel for the interveners in answer to the special
defenses alleged in the preceding pleading, said that he
denies generally and specifically all that was alleged in it
by the plaintiff, defendant in the
intervention.chanroblesvirtualawlibrary chanrobles
virtual law library
After the trial and the introduction of evidence on both
sides, the exhibits being attached to the record, the
court by judgment recorded in the office of the clerk of
the Court of First Instance of Zambales July 2, 1915,
rendered the decision above mentioned, against which
the defendants and the interveners excepted and asked
for a new trial, which was denied and exception was
10
taken to the ruling by them. The corresponding bill of
exceptions having been presented, the same was
approved and forwarded to this court together with the
document and transcript of the stenographic notes and
other proceedings which constitute the evidence
adduced by the parties in the
action.chanroblesvirtualawlibrary chanrobles virtual law
library
The fact is uncontroverted and fully proved in the
record that Antonio Vicente Barretto as creditor - not
being able to collect his credit of P11,000 and interest at
8 per cent, nor obtain the adjudication in his favor of
half of hacienda of Balintagac which was mortgaged for
the security of the debt, and there having been no
bidders on the three occasions in which it was offered
for public auction - took possession, in 1888 or 1889, of
all the hacienda and from that time on received through
his administrators the products of the same for the
purpose of collecting his credit interests, and on the lack
of proof to contrary it may be established that he took
possession of said hacienda by virtue of voluntary
assignment with the express consent of heirs of the
deceased Juan Antonio Barretto, Sr., owner of one-half
of the hacienda and of Juan Antonio Barretto Grandpre,
Jr., owner of the other half.chanroblesvirtualawlibrary
chanrobles virtual law library
It does not fully appear which contract has been
entered into between the creditor and the said heirs of
the deceased Juan Antonio Barretto, Sr., and his son
Juan Antonio Barretto Grandpre; but from the facts that
have been fully established it is inferred that since the
years 1888-1889, once the foreclosure proceedings
brought by the creditor Antonio Vicente Barretto,
against Juan Antonio Barretto Jr., were suspended,
because the creditor had not been able to obtain the
adjudication of the hacienda in his favor, the creditor
took possession of the hacienda of Balintagac, and held
it in usufruct with the knowledge and express consent
of its legitimate owners; thenceforth there has not been
any opposition or protest against the possession which
by usufruct the creditor and his successors enjoyed,
aside from the usurpation of two small portions of that
property effected by the defendant Leonardo F.
Barretto in 1912.chanroblesvirtualawlibrary chanrobles
virtual law library
Considering that from the facts proved, which refer to
the possession and usufruct enjoyed by Antonio Vicente
Barretto while living, and then by his successors among
whom was the plaintiff, Alberto Barretto y Blanco, it is
logically deduced that such facts were accomplished by
virtue of a verbal contract, and not by written one,
entered into between the owners of the hacienda and
the creditor Antonio Vicente Barretto. Since from the
documentary and oral evidence on record it is not
shown that the debtors have delivered the whole
hacienda to the creditor by assignment of the property,
in payment of the debt that weighed down, as it were,
the half which secures the payment of the debt it is to
be presumed with founded and just reason that the
debtors delivered not only one half, but the whole
hacienda with a view that the creditor might collect by
usufruct his credit with the accrued
interests.chanroblesvirtualawlibrary chanrobles virtual
law library
Even when it cannot possibly be doubted that the
assignment of the hacienda to Antonio Vicente Barretto
was not made in payment of his credit, as shown by the
evidence adduced at the trial, nevertheless, in spite of
the fact that the agreement between the creditor and
the debtors was not set down in any document, due to
the relationship which exists between them, it may
safely be asserted, assuming the facts that took place,
that the debtors have limited themselves to give to the
creditor the right to collect his credit from the fruits of
the hacienda of Balintagac, conferring upon him the
possession of the property, but not transferring to him
the dominion of the same, since such transfer does not
in any way appear to be proved in the present
action.chanroblesvirtualawlibrary chanrobles virtual law
library
The agreement or verbal stipulation which lead to the
facts proved deserves in law the name of antichresis as
defined by the Civil Code in its article 1881, which says:
By the antichresis a creditor acquires a right to receive
the fruits of real property of his debtor, with the
obligation to apply them to the payment of the interest,
if due, and afterwards to the principal of his credit.
The perusal of the following articles, 1882 to 1886, of
the Code, shows in a convincing way that the possession
of the hacienda enjoyed by the creditor Antonio Vicente
Barretto while living and later on by his successors up to
the present time was conferred to them by virtue of the
stated contract or agreement in antichresis; thus, one of
the administrators of the hacienda, Luis Barretto, was
the one who presented the sworn declaration of
ownership of the same for the purposes of the
assessment tax and paid the land tax in the name of the
creditor who possessed and held the hacienda in
usufruct, as it is duly established in the
11
record.chanroblesvirtualawlibrary chanrobles virtual
law library
Although article 1884 of the same Code states that the
creditor does not acquire through possession the
ownership of the real property delivered by virtue of an
antichresis, for failure to pay the debt within the
stipulated time - any agreement to the contrary being
void - nevertheless, the debtor according to the
preceding article 1883 cannot recover the use of the
real property given in antichresis to the creditor,
without previously fully paying the creditor, who in case
of insolvency may ask for the sale of the real property
which he possesses by virtue of the covenant in
antichresis, unless the pending debt be
paid.chanroblesvirtualawlibrary chanrobles virtual law
library
It appears to be duly proved in the record that in 1912
the defendant Leonardo F. Barretto, by himself and for
himself and without the consent of the present
possessor now the plaintiff, took over and usurped a
portion of land of the hacienda and a lot included in it,
withholding and refusing to deliver them to the creditor
in antichresis on the pretext that he is the owner of the
whole hacienda; and as it does appear in any way that
the debt, for the payment of which the whole hacienda
of Balintagac was delivered in antichresis, has been
paid, it is doubtless that the defendant Leonardo F.
Barretto, when he effected the usurpation, acted
without just reason and in contravention of the
provisions of the said article 1883 of the Civil Code. It is
known that the action to recover a thing, where a
legitimate possessor has been deprived of his
possession, takes place in accordance with the law,
even against the owner himself, who wrested the
possession, since the despoiler can never be protected
by the law even on his right of ownership, without first
restoring what he acquired through his authority by an
illegal act of dispossession.chanroblesvirtualawlibrary
chanrobles virtual law library
It is to be inferred from the facts and the foregoing
statements that though the plaintiff Alberto Barretto
has no title of ownership over the hacienda of
Balintagac, and therefore, he can not be declared owner
of the same, nevertheless, his claim that a judgment be
rendered ordering the return to him of the portion
usurped by the defendant Leonardo F. Barretto which
refers to the first cause of action of his complaint, as
well as the lot described in the second cause of the
action of the same, which is withheld by said defendant,
is in conformity with the law and is in accordance with
the merits of the present action. The plaintiff being in
the legitimate possession and use of all the hacienda of
Balintagac which was voluntarily delivered to him by
Juan Antonio Barretto Grandpre, Jr., and his coheirs as
the successors of the deceased Juan Antonio Barretto,
Sr., with the object that the creditor Antonio Vicente
Barretto might collect the capital and interests which
they owed and still owe him - a lawful contractual act
called by law a covenant or agreement in antichresis -
the debtors, or any of them, can under no
circumstances while the debt exists and is not fully paid,
recover or reacquire, as the mentioned article 1883
provides, the possession and use of the real property
delivered to the creditor, without the latter giving his
consent; consequently, the defendant Leonardo F.
Barretto without the knowledge or consent of the
plaintiff Alberto Barretto who succeeded by singular
title in the possession and use of the hacienda in
question, could not have recovered by usurpation the
possession and use of a portion of the
same.chanroblesvirtualawlibrary chanrobles virtual law
library
Although the plaintiff affirms in his complaint that he is
the sole owner of the said hacienda and as such he
claims in his complaint the delivery of the portion of the
land and the lot withheld by the defendant, his
complaint is not, even then, explicit enough to affirm
that the action brought thereby is a technical one and
precisely that of recovery of possession (
reivindicatoria). In a complaint whereby the " accion
publiciana" is brought, also called in law a plenary
action of possession, the restitution and delivery of the
thing or real property of the possession of which the
plaintiff has been illegally deprived is equally asked for.
Therefore, it should not be understood that, because
the plaintiff Barretto asks for the delivery of the portion
of land and lot claimed in his complaint, the action
brought is that of recovery of ownership and possession
( reivindicatoria): it should be understood, instead, that
he seeks to recover the portion of land, of the legal
possession of which he has been improperly deprived
by the usurper, Leonardo F. Barretto; since the facts
should be established in the suit as grounds for decision
in accordance with the results of the evidence adduced
at the trial. When the defendants denied the ownership
which the plaintiff pretends to have over the said
hacienda, they have not denied nor could they deny the
existence and the certainty of the debt guaranteed by
the mortgage of one-half of the hacienda of Balintagac
in favor of the creditor, now deceased, Antonio Vicente
Barretto; nor could they allege and prove that the debt
has been entirely paid, so that they may reacquire and
12
recover the possession and use of the hacienda which
was delivered to the original creditor, the predecessor
of the plaintiff.chanroblesvirtualawlibrary chanrobles
virtual law library
The preceding facts in this case are beyond discussion,
since it appears duly proved in the record that the
original owner of the hacienda of Balintagac, according
to the composition title issued by the State, Exhibit A,
on July 9, 1858, was Antonio Lorenzo Barretto, now
deceased, from whom Juan Antonio Barretto, Sr.,
acquired one-half of said hacienda, on March, 1881
(Exhibit C), and Juan Antonio Barretto Jr., had acquired
the other half from the said original owner Antonio
Lorenzo Barretto, on November,
1881.chanroblesvirtualawlibrary chanrobles virtual law
library
After the death of Juan Antonio Barretto, Sr., his son
Juan Antonio Grandpre, in his own behalf and as the
executor of his father, mortgaged, on May 16,1882, the
cultivated half of said hacienda in favor of Antonio
Vicente Barretto as security for the amount of P11,000
which the latter loaned to him, according to the
document, Exhibit F, recorded in the
registry.chanroblesvirtualawlibrary chanrobles virtual
law library
In order to show how and in what manner the plaintiff
Alberto Barretto succeeded to the rights acquired by
the creditor Antonio Vicente Barretto to whom the
hacienda was delivered in 1888 or 1889, that he might
collect his credit from the products of the property, it is
stated that on the death of the said creditor his three
children and heirs Antonio Ma Barretto, Ricardo
Esteban Barretto, and Guadalupe Barretto came to
succeed him. The last one by means of a document,
Exhibit 1, executed July 5, 1902, made a donation inter
vivos in favor of the plaintiff Alberto Barretto of the
undivided one-third part of the hypothecary credit and
of the rights belonging to her deceased father Antonio
Vicente Barretto, assigning to the donee all the rights
and actions which she might have in the foreclosure
proceedings exhibited at the trial of the present action,
on the condition that as soon as the donee Alberto
Barretto could collect the said one-third part of the
credit or should obtain the assignment of the property
of the debtor, he would divide what was donated, into
nine equal parts among the donee himself and six living
brothers and the heirs of their two brothers now dead,
each receiving one-ninth
part.chanroblesvirtualawlibrary chanrobles virtual law
library
In the public documents, Exhibits J, J-1, J-2, J-3, J-4, J-5,
and J-6, it appears to be established that the plaintiff
Alberto Barretto, complying with the condition imposed
in said document of the donation executed by the
donor Guadalupe Barretto, paid to each of his brothers
and nephews, the latter by right of the representation,
the sum of P875 as the price of one-eight part of one
third of the said hacienda and in exchange for the sums
received as such price his co-donees assigned and
conveyed to him one-eight part of the third of the said
hacienda and whatever rights and interests the grantors
might have by virtue of the said donation in favor of the
plaintiff Barretto. It is to be noted that the plaintiff
bought one-eight undivided part of the third of the
whole hacienda of Balintagac and paid to every claimant
P875 as the price of the eight part sold to him, and,
without these statements appearing in the said seven
documents Exhibit 1, it may be understood that the
third part of the ownership of the hacienda was
transferred to the plaintiff by the donor Guadalupe
Barretto.chanroblesvirtualawlibrary chanrobles virtual
law library
In fact, with the mutual purpose on the part of the
brothers Antonio M.a Barretto and Ricardo Esteban
Barretto and of that of Alberto Barretto of transferring
to the latter the rest of the two-thirds part of the
hypothecary credit and of the right to collect its value
from the fruits of the hacienda of Balintagac, the
notarial document, Exhibit K, was executed and after
reciting in it that one undivided half of said hacienda
was in May, 1882, mortgaged to secure the sum of
P11,000, at 8 per cent per annum, which Juan Vicente
Barretto Grandpre received from his uncle Antonio
Vicente Barretto, and for neither having paid the debt
nor having sold the said half of the mortgaged hacienda
on the three occasions in which it was offered for public
auction, the whole hacienda was delivered to the
creditor in order that he might collect his credit and
interests. From that time on the said Antonio Vicente
Barretto and later on his successors have been in
possession of the hacienda, receiving the fruits of the
property, paying the expenses and the corresponding
taxes, the outcome being that the debt, capital and
interests, up to March 31, 1813, according to the
liquidation, amounted to about one hundred thousand
pesos. It is further stated that by virtue of the same, the
grantors, the brothers Antonio M.a Barretto and
Ricardo Esteban Barretto, sold and conveyed all their
rights and actions included and derived from the said
hypothecary credit for the price of P14,000 which would
be paid by the grantee and vendee by installments and
13
in the manner prescribed in the said deed, assigning to
him, besides, all the rights which the said brothers had
over the two-third parts of the said
hacienda.chanroblesvirtualawlibrary chanrobles virtual
law library
The contents of this documents, which is public in
nature, as well as those of another deed, Exhibit 1,
conclusively prove that the plaintiff did not obtain by
assignment, sale, or transfer, as expressed in said
deeds, the ownership of the said hacienda of Balintagac,
but only the hypothecary credit which the heirs of the
deceased creditor Antonio Vicente Barretto had
inherited from the latter, after the plaintiff had
obtained from his other brothers the conveyance of
their respective rights to the
donation.chanroblesvirtualawlibrary chanrobles virtual
law library
The rights acquired by the creditor were transmitted by
hereditary title through operation of law to the heirs of
the same Antonio M.a, Ricardo Esteban, and
Guadalupe, Barretto y Rocha and these in turn assigned,
sold and transferred the credit with all their rights as
hypothecary creditors, as well as the right to the
usufruct of all the hacienda of Balintagac to the plaintiff
Alberto Barretto, without it being ever understood that
the right of ownership over the same was transferred
for the reason that neither the original creditor Antonio
Vicente Barretto nor his three heirs had acquired such
right of ownership but merely the right to receive the
products of the hacienda in order to cover the credit
which the owners of the hacienda
owed.chanroblesvirtualawlibrary chanrobles virtual law
library
If the fact were not certain that the hacienda was
delivered by its owners to the creditor Antonio Vicente
Barretto, it cannot be understood why it is that in the
long course of this action the defendant and the
interveners could not explain how and in what manner
Antonio Vicente Barretto took possession of the
hacienda in 1888 or 1889 after the termination of the
said foreclosure proceedings, nor could they explain
how and why several of the coowners of the said
hacienda had acted as administrators of the same in the
name and representation of the creditor Antonio
Vicente Barretto.chanroblesvirtualawlibrary chanrobles
virtual law library
It appears from the record without any contradiction
whatsoever that the first who administered the said
hacienda in the name and by direction of Antonio
Vicente Barretto was the defendant Leonardo F.
Barretto himself till the year 1890 in which year the
latter voluntarily left by the direction of the creditor and
was succeeded by his brother Jose Barretto till 1893,
when Leopoldo Barretto entered as administrator
relieving Jose Barretto by order of Antonio Vicente
Barretto himself, till 1894. In this year the defendant
Leonardo F. Barretto himself returned to act as
administrator by direction and in the name of the
creditor Antonio Vicente Barretto, till the year 1895,
when according to the letter of Leonardo, Exhibit L, and
the letter, Exhibit M, of Antonio Vicente Barretto by
direction of the latter the defendant Leonardo F.
Barretto delivered the hacienda to his brother
Bartolome Barretto. It is to be noted that in the said
letter, Exhibit M, Antonio Vicente Barretto advised the
defendant Leonardo to tell the tenants of the hacienda
to transact their business with Bartolome as the
administrator. In 1896, because of the death of
Bartolome Antonio Barretto, Luis Bonifacio Barretto
succeeded him as administrator, who managed the
hacienda in the name of the same creditor. After the
death of the latter, he (Luis) dealt with Antonio M.a
Barretto, one of the heirs of the deceased creditor. On
August, 1902 because of the death of the above-
mentioned Luis Bonifacio Barretto, his brother Antonio
T. Barretto succeeded him in the administration of the
hacienda in the name and account of the heirs of the
deceased Antonio Vicente Barretto and the said Antonio
T. Barretto continued to act as administrator of the
hacienda in the name of the plaintiff Barretto, who
acquired the rights of the heirs of the deceased creditor
Antonio Vicente Barretto, until the beginning of the
present action.chanroblesvirtualawlibrary chanrobles
virtual law library
These facts which have been fully established show that
the whole hacienda was delivered to Antonio Vicente
Barretto so that he might collect his credit, and this is
corroborated by the letters which have been exchanged
between Juan Antonio Barretto Grandpre, Jr., residing
abroad and Antonio Vicente Barretto, as well as by the
account, Exhibit 3, rendered to Juan Antonio Barretto,
Jr., by Antonio Vicente Barretto up to December 31,
1888, in which the hypothecary credit of P11,000 with
its interests amounting to P16,255.70 still appear
existing and complete. Such facts cannot in any way
prove that Antonio Vicente Barretto took possession of
the hacienda in the character of the owner although he
had been appointing administrators until his death in
1897 and the administrators had dealt with him while
living for the determination of the rent of the hacienda
and other particulars, as well as the fact that the
14
declaration of ownership of the assessment of the
property was made in his name and the payment of the
land tax due was made on his account, for the reason
that he acted as creditor in antichresis, and not as a
owner and proprietor of the hacienda, which fact does
not appear to be proved by the oral evidence, whole the
contrary has been fully established by the documentary
evidence attached in the
record.chanroblesvirtualawlibrary chanrobles virtual
law library
That the said verbal contract of antichresis was not set
out in some document is not contrary to what has been
said, since the same, being a consensual contract, has
the elements enumerated in article 1261 of the Civil
Code and was complied with and carried into effect
without any difficulty whatsoever from the year 1888
until 1912, that is, during more than 24 years, without
any protest or objection on the part of any of those who
could and probably had the right to impugn it; but, on
the contrary, several of the coowners of the hacienda
usufructed by the creditor submitted themselves to the
discretional orders of the latter in the exercise of his
right as creditor in antichresis, the former acting
successively as administrators of the very hacienda of
which they were coowners; and they only dared to
oppose and to overlook the facts whose realization
many of them have helped, from the time the
defendant Leonardo F. Barretto, who on two occasions
administered the hacienda in the name and on the
account of the creditor Antonio Vicente Barretto, dared
to usurp a portion of the hacienda and to deny the
unquestioned rights of the plaintiff which were directly
derived from the said creditor, now dead, taking
possession of two portions of the hacienda in usufruct,
in his own behalf, while the whole debt, or part of it,
still exists for the payment of which the right of usufruct
is at present exercised.chanroblesvirtualawlibrary
chanrobles virtual law library
In other respects, the proceedings in the present action
do not offer any legal cause or reason by virtue of which
it can be established that the plaintiff has acquired the
ownership of the said hacienda by prescription, since
the original possessor entered into possession of the
same with the consent of the owners and not as owner,
but as a creditor with the right only to collect his credit
on the fruits of the said hacienda, and the plaintiff could
not acquire better rights than those which had been
conferred upon him by his predecessors in possession.
Thus, article 1884 of the Civil Code declares that the
creditor cannot acquire the ownership of the real
property for failure to pay the debt within the time
agreed upon. Any stipulation to the to the contrary shall
be void.chanroblesvirtualawlibrary chanrobles virtual
law library
It is, therefore, clear and beyond all discussion that the
possession enjoyed by the predecessors of the plaintiff
has not been conferred by the owners of the hacienda
to the creditor that the latter might acquire the
ownership of the property, but merely that from its
products he might collect the existing debt.
Consequently, the possession exercised by the creditor
Antonio Vicente Barretto, not being under title of
ownership because no right of ownership could have
taken place, the present possession of the hacienda can
not possibly turn into title of acquisitive prescription of
the property.chanroblesvirtualawlibrary chanrobles
virtual law library
Furthermore, it does not appear that the donation
made by Guadalupe Barretto and the sales or
assignment made by Antonio M.a Barretto and Ricardo
Esteban Barretto were that of the ownership or
dominion of the hacienda, but the hypothecary credit
and whatever right the donor and the assignor and
vendors had against the owners of the hacienda, as it is
clearly expressed in the documents Exhibit 1, and K
above referred to. The rights acquired by the plaintiff
Alberto Barretto consist, without any doubt
whatsoever, of what the said three brothers of the
creditor Antonio Vicente Barretto had transferred to
him and under no circumstance could it be understood
that they transferred the dominion and the ownership
of the said hacienda.chanroblesvirtualawlibrary
chanrobles virtual law library
As the extinguishment of the right of the creditor and
the termination of the use and possession of the real
property depend upon the entire payment of the debt
and its interest, it is proper - the liquidation of accounts
having been made - to fix definitely the sums of the
amount which the debtors had paid on account of the
capital and interests and which had been really received
by the creditor.chanroblesvirtualawlibrary chanrobles
virtual law library
For these considerations, whereby some of the errors,
assigned against the sentence appealed from as
notoriously opposed to the foundation of right and
justice laid down in this decision, are deemed to have
been refuted, holding the plaintiff to be in legitimate
possession of the said hacienda, the defendant
Leonardo F. Barretto should be sentenced and we
sentence him to vacate and release immediately -
15
otherwise subject to an order of ejectment - the portion
of land and lot included within the boundary of the
hacienda Balintagac, and place same at the disposal of
the plaintiff Alberto Barretto, or of his representatives;
it being understood that before liquidation, the actual
amount of the debt be fixed, which debt, in the form of
capital and interest, is collectible from the products of
the hacienda, by the adjustment of the amounts paid
and received on their account to cover the debt. There
is no special finding as to costs in both instances; thus,
that part of the judgment appealed from, which is in
conformity with this decision is affirmed and that
contrary to it is reversed. So ordered.

16
G.R. No. 18574 September 20, 1922
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; Ibañez 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
17
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. Compañia 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
18
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
19
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
20
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
21
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
22
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.
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 cross-complaint 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 cross-complaint
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.

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

23
G.R. No. 219071
SPOUSES CHARITO M. REYES and ROBERTO REYES, and
SPOUSES VILMA M. MARAVILLO and DOMINGO
MARAVILLO, JR. , Petitioners,
vs.
HEIRS OF BENJAMIN MALANCE,* namely: ROSALINA M.
MALANCE, BERNABE M. MALANCE, BIENVENIDO M.
MALANCE, and DOMINGA** M. MALANCE, represented
by BIENVENIDO M. MALANCE, Respondents.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a petition for review on
certiorari1assailing the Decision2 dated July 23, 2013
and the Resolution3 dated June 18, 2015 of the Court of
Appeals (CA) in CA-G.R. CV No. 95984, which directed
petitioners Charito M. Reyes and Vilma M. Maravillo
(the Magtalas sisters) to surrender and tum-over the
physical possession of the subject land to respondents
Heirs of Benjamin Malance, namely: Rosalina M.
Malance, Bernabe M. Malance, Bienvenido M. Malance,
and Dominga M. Malance, represented by Bienvenido
M. Malance (the Malance heirs) upon payment of the
amount of ₱4,320.84.
The Facts
Benjamin Malance (Benjamin) was the owner of a
1.4017-hectare parcel of agricultural land covered by
Emancipation Patent No. (EP) 615124 4 situated at
Dulong Malabon, Pulilan, Bulacan5 (subject land).
During his lifetime, Benjamin obtained from the
Magtalas sisters, who are distant relatives,6 a loan in
the amount of ₱600,000.00, as evidenced by a
Kasulatan Ng Ukol sa Utang7dated June 26, 2006
(Kasulatan). Under the Kasulatan, the Magtalas sisters
shall have the right to the fruits of the subject land for
six (6) years or until the loan is fully paid. 8
After Benjamin passed away on September 29, 2006,9
his siblings, the Malance heirs, inspected the subject
land and discovered that the Magtalas sisters, their
respective husbands, Roberto Reyes and Domingo
Maravillo, Jr. (petitioners), and their father, Fidel G.
Magtalas (Fidel), 10 were cultivating the same on the
basis of the Kasulatan. 11 Doubting the authenticity of
the said Kasulatan, the Malance heirs filed a Complaint
for Recovery of Possession, Declaration of Nullity of the
Kasulatan and Damages with Prayer for Writ of
Preliminary Injunction and Temporary Restraining
Order12 against petitioners, before the Regional Trial
Court of Malolos City, Bulacan (RTC), Branch 84,
docketed as Civil Case No. 748-M-2006, which the
Malance heirs subsequently amended. 13 They claimed
that: (a) during his lifetime, Benjamin accumulated
enough wealth to sustain himself, was unmarried and
had no children to support; 14 (b) the Kasulatan was
executed during the time when Benjamin was seriously
ill and mentally incapacitated due to his illness and
advanced age; and (c) the Kasulatan was simulated as
the signature of Benjamin appearing thereon was not
his signature. 15
In their answer, 16 petitioners denied that Benjamin
had accumulated enough wealth to sustain himself as
his only source of income was his farm, and averred,
inter alia, that: (a) when Benjamin became sickly in
2000, he leased the subject land to different people
who cultivated the same with their (petitioners') help;
17 (b) the Kasulatan was executed before a notary
public at the time when Benjamin was of sound mind,
though sickly; (c) they were cultivating the subject land
in accordance with the said Kasulatan; 18 (d) the case
involved an agrarian conflict within the jurisdiction of
the Department of Agrarian Reform Adjudication Board;
and (e) the Malance heirs must pay Benjamin's
indebtedness prior to recovery of possession. 19
The complaint was initially dismissed for lack of
jurisdiction,20 but was subsequently reinstated21 and
re-raffled to Branch 9 of the same RTC.22
The RTC Ruling
In a Decision23 dated August 31, 2010, the RTC
dismissed the complaint for failure of the Malance heirs
to substantiate their claim that Benjamin's signature
was forged, and upheld the validity of the Kasulatan on
the ground that it is a notarized document which enjoys
the presumption of regularity in its execution. It
declared the Kasulatan as a contract of antichresis
binding upon Benjamin's heirs - the Malance heirs - and
conferring on the Magtalas sisters the right to retain the
subject land until the debt is paid.24
Aggrieved, the Malance heirs appealed to the CA.25
The CA Ruling
In a Decision26 dated July 23, 2013, the CA upheld the
RTC's findings and declared that: (a) the mere allegation
of forgery will not suffice to overcome the positive
value of the Kasulatan, a notarized document which has
24
in its favor the presumption of regularity and is
conclusive as to the truthfulness of its contents;27 and
(b) the contract between the parties was a contract of
antichresis.28 However, it ruled that only the amount of
₱218,106.84 was actually received by Benjamin as
expenses for his medical treatment and the cost of his
funeral service/memorial lot, 29 while the rest was kept
in the custody of the Magtalas sisters' father, Fidel.30
Considering petitioners' evidence that the subject land
has an average annual production of 107 cavans of
palay valued at ₱600.00/cavan, with half of the income
expended for costs, and that they had been cultivating
the subject land for 6.66 years, the CA ruled that the
outstanding amount of the loan is only ₱4,320.84.31
Consequently, it directed the Magtalas sisters to
surrender and turn-over the physical possession of the
subject land to the Malance heirs upon payment by the
latter of the outstanding loan.32
Dissatisfied, petitioners moved for reconsideration,33
contending that: (a) the CA should have imposed
interest on Benjamin's loan despite the absence of
express stipulation, and applied the fruits from the
subject land thereto, and thereafter, to the principal;34
and (b) the available receipts for Benjamin's
hospitalization were adduced for the purpose of proving
that he had valid reason to obtain a loan for his
personal use, and should not have been considered as
the only proceeds received by him. 35 The same was,
however, denied in a Resolution36 dated June 18, 2015;
hence, this petition.
The Issues Before the Court
The essential issues for the Court's resolution are
whether or not: (a) the CA committed reversible error in
ruling that the amount of ₱218,106.84, representing the
duly receipted expenses for Benjamin's medical
treatment and the cost of the funeral service/memorial
lot, was the only proceeds received from the
₱600,000.00 loan obligation; and (b) legal interest is due
despite the absence of express stipulation.
The Court's Ruling
Prefatorily, it should be mentioned that the remedy of
appeal by certiorari under Rule 45 of the Rules of Court
contemplates only questions of law, not of fact. While it
is not the function of the Court to re-examine, winnow
and weigh anew the respective sets of evidence of the
parties,37 there are, however, recognized exceptions,38
among which is when the inference drawn from the
facts was manifestly mistaken, as in this case.
Here, the CA upheld the validity of the Kasulatan
between Benjamin and the Magtalas sisters for failure
of the Malance heirs to prove their challenge against its
due execution and authenticity, ruling further that being
a notarized document, it has in its favor the
presumption of regularity and is conclusive as to the
truthfulness of its contents.39
Generally, a notarized document carries the evidentiary
weight conferred upon it with respect to its due
execution, and documents acknowledged before a
notary public have in their favor the presumption of
regularity which may only be rebutted by clear and
convincing evidence. However, the presumptions that
attach to notarized documents can be affirmed only so
long as it is beyond dispute that the notarization was
regular. A defective notarization will strip the document
of its public character and reduce it to a private
document. Consequently, when there is a defect in the
notarization of a document, the clear and convincing
evidentiary standard normally attached to a duly-
notarized document is dispensed with, and the measure
to test the validity of such document is preponderance
of evidence. 40
In this case, the Court observes that the Kasulatan was
irregularly notarized since it did not reflect any
competent evidence of Benjamin's identity, such as an
identification card (ID) issued by an official agency
bearing his photograph and signature, but merely
indicated his Community Tax Certificate Number
despite the express requirement41 of the 2004 Rules on
Notarial Practice.42 Consequently, having failed to
sufficiently establish the regularity in the execution of
the Kasulatan, the presumption accorded by law to
notarized documents does not apply and, therefore, the
said document should be examined under the
parameters of Section 20, Rule 132 of the Rules of Court
which provides that "[b]efore any private document
offered as authentic is received in evidence, its due
execution and authenticity must be proved either: (a)
[by] anyone who saw the document executed or
written; or (b) [by] evidence of the genuineness of the
signature or handwriting of the maker."
The burden falls upon petitioners to prove the
authenticity and due execution of the
Kasulatan,43which they were, nonetheless, able to
discharge. Records show that while the notary public,
Atty. Cenon Navarro (Atty. Navarro),44 did not require
an ID when he notarized the Kasulatan, when
confronted with Benjamin's ID issued by the Office of
25
Senior Citizens Affairs of Pulilan, Bulacan (Senior Citizen
ID), he identified the person in the picture as the person
who signed the Kasulatan, and received money from the
Magtalas sisters in his presence.45
On the other hand, respondent Bienvenido Malance's
self-serving and uncorroborated testimony that
Benjamin's signature on the Kasulatan was forged
purportedly because he does not know how to write46
was contradicted by the Malance heirs' own
manifestation that Benjamin has a Senior Citizen ID and
that the signature affixed thereon is different from his
signature appearing on the Kasulatan. 47The said ID,
however, was not offered in evidence48 as to enable
the RTC, the CA, and the Court to make an examination
of the signature thereon vis-a-vis that on the Kasulatan.
It is important to note that a finding of forgery does not
depend exclusively on the testimonies of expert
witnesses and that judges must use their own
judgment, through an independent examination of the
questioned signature, in determining the authenticity of
the handwriting.49
Hence, the evidence as to the genuineness of
Benjamin's signature, and the consequent due
execution and authenticity of the Kasulatan
preponderate in favor of petitioners, who were likewise
able to prove Benjamin's receipt of the amount of
₱600,000.00 reflected in the Kasulatan. Atty. Navarro
testified having prepared the Kasulatan according to the
agreement of the parties, 50 and that he witnessed the
exchange of money between the parties to the
Kasulatan. 51As such, it was erroneous for the CA to
conclude that the amount of ₱218, 106.84, representing
the duly receipted expenses for Benjamin's medical
treatment and the cost of the funeral service/memorial
lot, was the only proceeds received from the
₱600,000.00 loan obligation. Notably, the purpose
indicated for the Malance heirs' formal offer of the
records and receipts of hospitalization, medicines, and
burial expenses of Benjamin was merely "to show proof
of expenses incurred by x x x Benjamin x x x relative to
his sickness and x x x where he spent the loan he
obtained"52 from the Magtalas sisters.
The Court, however, concurs with the RTC's finding, as
affirmed by the CA, that the Kasulatan is a contract of
antichresis.1âwphi1 Article 2132 of the Civil Code
provides:
Art. 2132. By the contract of antichresis the creditor
acquires the right to receive the fruits of an immovable
of his debtor, with the obligation to apply them to the
payment of the interest, if owing, and thereafter to the
principal of his credit.
Thus, antichresis involves an express agreement
between parties whereby : (a) the creditor will have
possession of the debtor's real property given as
security; (b)such creditor will apply the fruits of the said
property to the interest owed by the debtor, if any, then
to the principal amount;53(c) the creditor retains
enjoyment of such property until the debtor has totally
paid what he owes;54and (d) should the obligation be
duly paid, then the contract is automatically
extinguished proceeding from the accessory character
of the agreement. 55
Bearing these elements in mind, the evidence on record
shows that the parties intended to enter into a contract
of antichresis. In the Kasulatan, Benjamin declared:
Na, aka ay tumanggap ng halagang ANIMNARAANG
LIBONG PISO (₱600,000.00) salaping Pilipino buhat kina
CHARITO M. REYES kasal kay Roberto Reyes at VILMA
MARAVILLO kasal kay Domingo Maravilla, Jr., pawang
mga sapat na gulang, Pilipino at nagsisipanirahan sa
Dulong Malahan, Pulilan, Bulacan, bilang UTANG;
Na, ako ay nangangakong babayaran ang halagang aking
inutang sa nasabing sina CHARITO M. REYES at VILMA
MARAVILLO, sa kanilang tagapagmana, makakahalili at
paglilipatan sa loob ng anim (6) na taon;
Na, upang mapanagutan ang matapat na pagbabayad sa
aking pagkakautang ay aking IPINANAGOT ang aking ani
ng lupa na matatagpuan sa Dulong Malabon, Pulilan,
Bulacan, may sukat na 1 ektarya at kalahati (1½)
humigi’t kumulang;
Na, kung sa loob ng taning na panahon na nabanggit ay
mabayaran na ang halaga ng aking inutang sa nasabing
sina CHARITO M. REYES at VILMA MARAVILLO at sa
kanilang mga tagapagmana, makakahalili at paglilipatan,
ang kasulatang ito ay kusang mawawalan ng bisa, tibay
at lakas, ngunit kung hindi mabayaran ang halaga ng
aking inutang ang kasulatang ito ay mananatiling
mabisa, matihay at maaaring ipatupad ayon sa umiiral
na batas.56
As aptly observed by the CA:
The language of the Kasulatan leaves no doubt that the
[₱]600,00.00 was a loan secured by the fruits or ani of
the landholding beneficially owned by Benjamin. The
document specifically authorizes [the Magtalas sisters]
26
to receive the fruits of the subject landholding with the
obligation to apply them as payment to his
[₱]600,000.00 principal loan for a period of six (6) years.
The instrument provides no accessory stipulation as to
interest due or owing the creditors, x x x. No mention of
interest was ever made by the creditors when they
testified in court. This could only be interpreted that the
[Magtalas sisters] have no intention whatsoever to
charge Benjamin of interest for his loan. We note also
that the Kasulatan is silent as to the transfer of
possession of the subject property. However, [the
Magtalas sisters] admitted taking possession of
Benjamin's landholding after his death on September
29, 2006 and that they have been cultivating it since
then. They rationalize that their action is in accord with
their agreement with Benjamin when the latter was still
alive. They assure the return of the subject property
upon full payment of Benjamin's loan by [the Malance
heirs], the successors-in-interest of Benjamin. 57
While the Kasulatan did not provide for the transfer of
possession of the subject land, the contemporaneous
and subsequent acts of the parties show that such
possession was intended to be transferred. Atty.
Navarro testified that while the Kasulatan only shows
that the harvest and the fruits shall answer for
Benjamin's indebtedness, the parties agreed among
themselves that the lenders would be the one to take
possession of the subject land in order for them to get
the harvest.58 Indeed, such arrangement would be the
most reasonable under the premises since at that time,
Benjamin's medical condition necessitated
hospitalization, hence, his physical inability to cultivate
and harvest the fruits thereon.59
As antichretic creditors, the Magtalas sisters are
entitled to retain enjoyment of the subject land until
the debt has been totally paid. Article 2136 of the Civil
Code reads:
Art. 2136. The debtor cannot reacquire the enjoyment
of the immovable without first having totally paid what
he owes the creditor.
In the present case, the CA deemed the amount of
₱600.00 as reasonable cost of a cavan of palay from the
subject land, which yields an annual harvest of 107
cavans, or a gross income of ₱64,200.00;60 half of the
income is expended for expenses, resulting to an annual
net income of ₱32,100.00.61 This, both parties failed to
refute. Thus, from June 2006 up to the date of this
Decision, only the amount of ₱326,351.07 is deemed to
have been paid on Benjamin's loan, leaving an unpaid
amount of ₱273,648.93, computed as follows:
Amount of indebtedness ₱600,000.00
Less: Amount deemed paid
Annual net income
₱32,100.00
From June 2006 to August 2016
x 10.1667
326,351.07
Outstanding balance ₱273,648.93
The debt not having been totally paid, petitioners are
entitled to retain enjoyment of the subject land.
Consequently, the Malance heirs' complaint for
recovery of possession, declaration of nullity of the
Kasulatan, and damages against petitioners must be
dismissed.
As a final matter for resolution, the Court likewise
dismisses petitioners' counterclaim for the payment of
Benjamin's principal debt, including interest,
considering that the same was not yet due and
demandable at the time the claim therefor was filed.
Particularly, petitioners' counterclaim was prematurely
filed on January 4, 2007,62 which was well within the
six-year payment period under the Kasulatan, and
hence, should be dismissed. Nonetheless, it should be
noted that the dismissal of petitioners' counterclaim is
without prejudice to the proper exercise of the
Magtalas sisters' rights under Article 2137 of the Civil
Code63 now that Benjamin's debt is due and
demandable. In the meantime, the Magtalas sisters, as
antichretic creditors, are directed to henceforth render
an annual accounting64 to the Malance heirs, as
represented by Bienvenido Malance, of the annual net
yield from the subject land, until such time that they
have completely collected the outstanding balance of
said debt.
WHEREFORE, the Decision dated July 23, 2013 and the
Resolution dated June 18, 2015 of the Court of Appeals
in CA-G.R. CV No. 95984 are hereby MODIFIED: (a)
declaring that the unpaid loan balance of Benjamin
Malance's (Benjamin) to petitioners Charito M. Reyes
and Vilma M. Maravillo (the Magtalas sisters) is
₱273,648.93 as herein computed; (b) dismissing the
counterclaim of petitioners the Magtalas sisters and
their respective husbands, Roberto Reyes and Domingo
Maravillo, Jr., on the ground of prematurity, without
prejudice; and (c) directing the Magtalas sisters, as
27
antichretic creditors, to henceforth render an annual
accounting to respondents Heirs of Benjamin Malance,
namely: Rosalina M. Malance, Bernabe M. Malance,
Bienvenido M. Malance, and Dominga M. Malance, as
represented by Bienvenido Malance, of the annual net
yield from the subject land, until such time that they
have completely collected the outstanding loan balance
of Benjamin's debt.

SO ORDERED.

28
G.R. No. L-38185 September 24, 1986
HILARIO RAMIREZ and VALENTINA BONIFACIO,
petitioners,
vs.
HONORABLE COURT OF APPEALS, FRANCISCA MEDINA,
MATILDE MARTIN, EMILIO MARTIN, DELFIN GUINTO,
TEOFILO GUINTO, PRUDENCIO GUINTO and MARGARITA
GUINTO, respondents.
Castro, Makalintal, Mendoza & Associates for
petitioner.
Flores, Ocampo, Dizon & Domingo Law Office for
respondents.
GUTIERREZ, JR., J.:
This is an appeal from the decision of the Court of
Appeals which affirmed in toto the decision of the then
Court of First instance of Rizal rendered in the petition
for review of the decree of registration issued in Land
Registration Case No. N-2597, L.R.C. Record No. N-
17939.
On September 15,1959, petitioners-spouses Hilario
Ramirez and Valentina Bonifacio filed an application for
registration of a parcel of riceland in Pamplona, Las
Pinas Rizal. After notice and publication nobody
appeared to oppose the application. An order of general
default was issued and the court allowed the petitioners
to present evidence in support of their claim.
Thereafter, the petitioners presented parol evidence
that they acquired the land in question by purchase
from Gregorio Pascual during the early part of the
American regime but the corresponding contract of sale
was lost and no copy or record of the same was
available.
On January 30, 1960, the court ordered the issuance of
the decree of registration and consequently: Original
Certificate of Title No. 2273 of the Registry of Deeds of
Rizal was issued in the petitioners names.
On March 30, 1960, the private respondents Francisca
Medina, Basilio Martin, Matilde Martin, Delfin Guinto,
Teofilo Guinto, Prudencio Guinto and Margarita Guinto,
petitioners' nephews and nieces, filed a petition to
review the decree of registration on the ground of
fraud. The private respondents based their claim to the
land on the following allegations: that they are the legal
heirs of the deceased Agapita Bonifacio who died
intestate on March 11, 1936; that Valentina Bonifacio is
a sister of the deceased Agapita Bonifacio, they being
the children of one Gregoria Pascual; that Gregoria
Pascual previously owned the land in question as
evidenced by Tax Declaration No. 6611 of Las Pinas Rizal
issued on December 8, 1920; that Agapita Bonifacio
acquired the property in question by purchase from
Gregoria Pascual for which reason Tax Declaration No.
8777 was issued in her name on May 21, 1928; that
Gregoria Pascual during her lifetime, from 1916,
possessed the said property in the concept of owner,
publicly and uninterruptedly, which possession was
continued by Agapita Bonifacio in 1928; that in 1938
respondents obtained a loan of P400.00 from the
petitioners which they secured with a mortgage on the
land in question by way of antichresis; that for this
reason, Tax Declaration No. 8777 was cancelled and
substituted by Tax Declaration Nos. 9522 and 2385
issued in the names of the petitioners; that, thereafter,
the petitioners began paying taxes on the land; that
after several attempts to redeem the land were refused
by the petitioners, the respondents filed a complaint in
the Court of First Instance of Pasay City docketed as
Civil Case No. 272-R for the recovery of the possession
and ownership of the said property; that when they
learned of the issuance of the certificate of title to the
land in the petitioners' names, they also filed the instant
petition for review. The previous complaint, Civil Case
No. 272-R, was subsequently dismissed on a joint
petition filed by the parties after they agreed to have
the determination of the question of ownership
resolved in the registration proceedings.
In their answer, the spouses Ramirez denied the
material allegations of the petition, they based their
claim to the land on two deeds of sale allegedly
executed on April 15, 1937 and April 23, 1937 which
they allegedly found accidentally in March 1960.
After trial, the court found that deeds of sale spurious.
It further found that the respondents took possession of
the land as owners after the death of Agapita Bonifacio
and in 1938, mortgaged it to the spouses Ramirez to
secure the payment of a loan in the amount of P400.00.
It was agreed that the respondents could not redeem
the property within a period of five years and that the
petitioners would take possession of the land, enjoy its
fruits, and pay the land taxes thereon. The written
agreement was kept by the petitioners as creditors. The
trial court appreciated the fact of the petitioners'
failure, despite formal request, to produce the
document in court in favor of the respondents. Finding
the claims of the herein respondents sustained by the
29
evidence, it ordered the reconveyance of the property
in the following manner:
WHEREFORE, judgment is hereby rendered in favor of
petitioners and against applicants as follows:
1) Setting aside its decision dated December 28,
1959 insofar as it found and declared applicants to be
the owners of the parcel of land described in Exhibits A,
B and C and insofar as it ordered the registration
thereof in their names;
2) Declaring the petitioners, all Filipinos, all of legal
age, and all residents of Ligas Bacoor, Cavite, to be the
true and absolute owners pro indiviso of the said parcel
of land described in Exhibits A, B and C in the following
proportions:
a. Francisca Medina, married to Tomas de Leon,
one-third (1/3) thereof;
b. Emilio Martin, married to Dolores Antonio, and
Matilde Martin, married to Federico Torres, one-third
(1/3) thereof-,
c. Teofilo Guinto, married to Rocila de la Cruz,
Delfin Guinto, married to Gregoria Pamaran, Prudencio
Guinto, married to Ana Guinto, and Margarita Guinto,
married to Felix Calacala one- third (1/3) thereof;
3) Ordering the registration of the said parcel of
land described in Exhibits A, B and C in the names of
petitioners;
4) Setting aside its order for the issuance of the
decree of registration in favor of applicants dated
January 30, 1959, and ordering the issuance of the
decree of registration in the names of petitioners;
5) Cancelling Original Certificate of Title No. 2273
of the Register of Deeds of Rizal in the names of
applicants and the issuance in lieu thereof of another
original certificate of title in the names of petitioners in
the proportion of their ownership of the property as
stated in paragraph 2 above;
6) Ordering applicants to pay P3,000.00 to
petitioners as and for attorney's fees;
7) Ordering applicants to pay the costs of this suit.
The decision was affirmed by the Court of Appeals. On a
motion for reconsideration filed by the petitioners, the
same appellate court, but with a new member,
promulgated a resolution setting aside the original
decision. On a motion for reconsideration filed by the
private respondents, this resolution was set aside and
the original decision was reinstated.
The petitioners went to this Court in a petition for
review on certiorari with the following questions:
ONE-HAS THE COURT OF FIRST INSTANCE, ACTING AS A
LAND REGISTRATION COURT, THE JURISDICTION TO
GIVE DUE COURSE TO A PETITION FOR REVIEW OF
DECREE UNDER SEC. 38 OF ACT 496 AND TO RE-OPEN
THE ORIGINAL PROCEEDINGS WHEN THE PETITION IS
ACTUALLY ONE OF RECONVEYANCE AND NOT BASED ON
ACTUAL OR EXTRINSIC FRAUD?
TWO-DOES SEC. 38 OF ACT NO. 496 APPLY ON ALL
FORES (SIC) TO ORIGINAL LAND REGISTRATION
PROCEEDINGS HAD UNDER PARAGRAPH B, SECTION 48
OF COM. ACT NO. 141 AS AMENDED BY REP. ACT NO.
1942 WHEREIN THE LAND INVOLVED IS PUBLIC
AGRICULTURAL LAND?
THREE-HAS THE COURT OF FIRST INSTANCE, ACTING AS
A LAND REGISTRATION COURT, THE POWER AND
AUTHORITY TO VEST TITLE ON THE LAND INVOLVED TO
HEREIN PRIVATE RESPONDENTS AND ORDER EVEN ITS
PARTITION AMONGST THEM IN THE FACE OF THE
ADMITTED FACT THAT THE LAND IS IN ACTUAL
POSSESSION OF PETITIONERS WHILE PRIVATE
RESPONDENTS HAD NOT POSSESSED THE SAME AT ALL?
FOUR-DO THE PRIVATE RESPONDENTS HAVE THE LEGAL
CAPACITY AND QUALIFICATION TO ACQUIRE AND BE
VESTED BY THE COURT WITH TITLE TO THE LAND IN
QUESTION?
We find the petition without merit.
The first question does not warrant favorable
consideration. The issue was submitted to the appellate
court and in our opinion, correctly resolved therein. The
Court of Appeals stated:
... The petition alleged that 'the applicants Hilario
Ramirez and Valentina Bonifacio willfully and
fraudulently suppressed the facts that the petitioners
are the legal and rightful owners of the ricefield in
question and that they possess the said ricefield merely
as antichretic creditors as security for the loan of
P400.00; that the applicants are guilty of fraudulent
misrepresentation and concealment when they
30
declared in their application, in the case at bar, that no
other person had any claim or interest in the said land.'
These we believe are sufficient allegations of extrinsic
fraud.
In the applicant's application for registration, which
followed the form required by the Land Registration
Act, the applicants alleged that 'to the best of our
knowledge and belief, there is no mortgage or
incumbrance of any kind whatsoever affecting said land,
nor any other person having any estate or interest
therein, legal or equitable, in possession, remainder,
reversion or expectancy.' This allegation is false and
made in bad faith, for, as We have found, the applicants
are not the owners of the land sought to be registered
and they are in possession thereof only as antichretic
creditors.
The averments in the petition for review of the decree
of registration constitute specific and not mere general
allegations of actual and extrinsic fraud. Competent
proof to support these allegations was adduced. We
find no compelling reason to disturb the findings of the
two courts below.
The petitioners in this case did not merely omit a
statement of the respondents' interest in the land. They
positively attested to the absence of any adverse claim
therein. This is clear misrepresentation. The omission
and concealment, knowingly and intentionally made, of
an act or of a fact which the law requires to be
performed or recorded is fraud, when such omission or
concealment secures a benefit to the prejudice of a
third person (Estiva v. Alvero, 37 Phil. 497).
In the case of Libundan v. Palma Gil (45 SCRA 17), this
Court held:
The purpose of the law in giving aggrieved parties,
deprived of land or any interest therein, through fraud
in the registration proceedings, the opportunity to
review the decree is to insure fair and honest dealing in
the registration of land. But the action to annul a
judgment, upon the ground of fraud, would be
unavailing unless the fraud be extrinsic or collateral and
the facts upon which it is based have not been
controverted or resolved in the case where the
judgment sought to be annulled was rendered. Extrinsic
or collateral fraud, as distinguished from intrinsic fraud,
connotes any fraudulent scheme executed by a
prevailing litigant 'outside the trial of a case against the
defeated party, or his agents, attorneys or witnesses,
whereby said defeated party is prevented from
presenting fully and fairly his side of the case.' But
intrinsic fraud takes the form of 'acts of a party in a
litigation during the trial, such as the use of forged
instruments or perjured testimony, which did not affect
the presentation of the case, but did prevent a fair and
just determination of the case.
Thus, relief is granted to a party deprived of his interest
in land where the fraud consists in a deliberate
misrepresentation that the lots are not contested when
in fact they are, or in applying for and obtaining
adjudication and registration in the name of a co-owner
of land which he knows had not been alloted to him in
the partition, or in intentionally concealing facts, and
conniving with the land inspector to include in the
survey plan the bed of a navigable stream, or in willfully
misrepresenting that there are no other claims, or in
deliberately failing to notify the party entitled to notice,
or in inducing him not to oppose an application, or in
misrepresenting about the indentity of the lot to the
true owner by the applicant causing the former to
withdraw his opposition. In all these examples the
overriding consideration is that the fraudulent scheme
of the prevailing litigant prevented a party from having
his day in court or from presenting his case, The fraud,
therefore, is one that affects and goes into the
jurisdiction of the court.
The second question assigned as an error must also be
resolved against the petitioners.
Section 122 of Act No. 496 otherwise known as the Land
Registration Act provides:
SEC. 122. Whenever public lands in the Philippine
Islands belonging to the Government of the United
States or to the Government of the Philippine Islands
are alienated, granted, or conveyed to persons or the
public or private corporations, the same shall be
brought forthwith under the operation of this Act and
shall become registered lands. It shall be the duty of the
official issuing the instrument of alienation, grant, or
conveyance in behalf of the Government to cause such
instrument before its delivery to the grantee, to be filed
with the register of deeds for the province where the
land lies and to be there registered like other deeds and
conveyances, whereupon a certificate shall be entered
as in other cases of registered land, and an owner's
duplicate certificate issued to the grantee. The deed,
grant, or instrument of conveyance from the
Government to the grantee shall not take effect as a
conveyance or bind the land, but shall operate only as
contract between the Government and the grantee and
31
as evidence of authority to the clerk or register of deeds
to make registration. The act of registration shall be the
operative act to convey and affect the land, and in all
cases under this Act, registration shall be made in the
office of the register of deeds for the province where
the land lies. The fees for registration shall be paid by
the grantee. After due registration and issue of the
certificate and owner's duplicate, such land shall be
registered land for all purposes under this Act.
The law is clear. We can apply it to the facts without
need for judicial interpretation. Once the deed, grant,
or instrument of conveyance of public land is registered
with the Register of Deeds and the corresponding
certificate and owner's duplicate title is issued, such
land is deemed registered land. It is brought within the
scope and operation of the Land Registration Law. This
is the doctrine laid down by this Court in a long line of
cases. (See Heirs of Deogracias Ramos v. Court of
Appeals, 139 SCRA 293; Lahora v. Dayanghirang 37 SCRA
346; Ramirez v. Court of Appeals, 30 SCRA 297; Director
of Lands v. Jugado 2 SCRA 32; Nelayan v. Nelayan, 109
Phil. 183; Republic v. Heirs of Carle 105 Phil. 1227; El
Hogar Filipino v. Olviga, 60 Phil. 17; Manolo v. Lukban,
48 Phil. 973). The land in this case having been
registered and covered by an original certificate of title
issued by the Register of Deeds of Rizal, it is within the
provisions of the Land Registration Act. Thus, the decree
of registration granted by the lower court in favor of the
petitioners may be reviewed on the ground of actual
and extrinsic fraud pursuant to Section 38 of the same
Act.
There is likewise no merit in the third assigned error.
While there was an admission that the petitioners have
been in actual possession of the disputed land since
1938, it was made to show and prove the fact that the
petitioners are only antichretic creditors. The
respondents never admitted that they have not
possessed the land at all. On the contrary, they alleged
that they and their predecessors-in-interest namely
Gregoria Pascual and Agapita Bonifacio have been in
possession of the land since time immemorial and that
the petitioners were placed in possession of the land
pursuant to a contract of antichresis.
The court below found that the petitioners are merely
antichretic creditors. This finding and its factual bases
were affirmed by the Court of Appeals. On the basis of
the evidence supporting this conclusion, this finding is
binding on us as it is not our duty to weigh evidence on
this point all over again. This court has on several
occasions held that the antichretic creditor cannot
ordinarily acquire by prescription the land surrendered
to him by the debtor (Trillana v. Manansala, et al., 96
Phil. 865; Valencia v. Acala, 42 Phil. 177; Barreto v.
Barreto, 3 Phil. 234). The petitioners are not possessors
in the concept of owner but mere holders placed in
possession of the land by its owners. Thus, their
possession cannot serve as a title for acquiring
dominion (See Art. 540, Civil Code).
The fourth issue raised by the petitioners is answered
by a referral to the detailed factual findings and
conclusions of the trial court. Ten pages of the record
on appeal (Record on Appeal, CA-G.R. No. 40425-R, pp.
56-66) state in convincing detail the portion of the trial
court's decision which support its conclusion that Hilario
Ramirez and Valentina Bonifacio are not the owners of
the disputed land and have no registrable right over it
and that the respondents herein have established their
ownership by a strong preponderance of evidence. The
respondents were declared the true and real owners
and entitled to registration in their names. The final
resolution of the Court of Appeals affirmed the trial
court's decision in toto. We see no reversible error in
this finding.
The argument of laches is explained and countered by
the close relationship of the parties and the nature of a
contract of antichresis. The private respondents are
nephews and nieces, with their spouses, of the
petitioners. Moreover, there is evidence to show that
long before the filing of the cases, there had been
attempts to recover the property.
In view of the foregoing, we are constrained to affirm
the appellate court's decision. We note, however, that
in spite of the finding of an existing contract of
antichresis between the parties, the two courts below
did not order the payment of the principal amount of
mortgage. Under Article 2136 of the Civil Code, the
debtor cannot reacquire the enjoyment of the
immovable without first having totally paid what he
owes the creditor.
WHEREFORE, the decision appealed from is hereby
AFFIRMED with a modification that the respondents are
ordered to pay the petitioners the amount of P 400.00
as principal for the contract of antichresis, the fruits
obtained from the possession of the land having been
applied to the interests on the loan.
SO ORDERED.
32