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G.R. No. L-13299 July 25, 1960 6.

6. That this lot 550 appears assessed in the names of the spouses Perfecto Adrid
PERFECTO ADRID, ET AL., plaintiff-appellant, and Carmen Silangcruz under Tax Declaration No. 47, Exh. "C', and its yearly
vs. taxes amounting to P17.00 were being paid by Eugenio Morga;
ROSARIO MORGA, ETC., defendant-appellee,
and MAMERTO MORGA, ET AL., intervenors-appellees. 11. That the yearly harvest of palay of this lot No. 550 (is) 30 cavanes net since
its area is 35,844 square meter, as stated in Trans. Cert. of Title No. 10028, and
On August 8, 1938, Perfecto Adrid and his wife Carmen Silangcruz, then owners of No. that the price cavan is P10.00.
550 of the San Francisco Malabon Estate Subdivision, situated in General Trias, Cavite,
execution a document entitled "Sale with Right to Repurchase", Exhibit A, purporting to The Court of First Instance of Cavite on July 15, 1957, rendered a decision, the
sell the lot to Eugenio Morga for the sum of P2,000 with the right to repurchase the same disposition part of which reads as follows:
within two yeas for the same sum of P2,000, plus 12% interest per annum. The vendors
never repurchased said Lot No. 550. But in 1956, Perfecto Adrid and his son, (Carmen In view of the foregoing considerations, this Court is of the opinion and so holds
Silangcruz then being already dead) brought the present action against the administratrix that the contract entered into between the spouses Perfecto Adrid and Carmen
of the deceased Eugenio Morga to recover the same Lot No. 550, offering to pay the Silangcruz on one hand, and the spouses Eugenio Morga and Genoveva
sum of P2,000, and asking for accounting of all the produce of the lot since 1938, this on Vasquez on the other, is a contract of sale with the right to repurchase. The
the theory that the original contract of sale with pacto de retro (Exhibit A) was by acts of plaintiffs having failed to repurchase the land within the stipulated period of two
the parties to the said contract, converted into one of antichresis. The parties plaintiff and years from the date of the execution of the contract, the title of the deceased
defendant instead of presenting evidence, submitted a stipulation of facts with the prayer vendee a retro, Eugenio Morga and Genoveva Vasquez, became consolidated
that decision be rendered on the basis of such facts. For purposes of reference, we by operation of law. . . .
reproduce the pertinent portions of said stipulation of facts:
Wherefore judgment is hereby rendered against the plaintiffs, with costs. They
1. That on August 8, 1938, the spouses Perfecto Adrid and Carmen Silangcruz are likewise ordered to pay the amount of P1,350.00 as attorney's fees.
executed a deed of sale for P2,000.00 with 12% interest per annum with right to
repurchase Lot No. 550 of the Malabon Estate within the period of two (2) years We have carefully studied this case, examined the document entitled "Sale with Right to
from date and covered by Trans. Cert. of Title No. 10028, Exh. "A"; Repurchase" (Exhibit A) and the acts of the parties thereto subsequent to its execution
and we have come to the conclusion that the intention of the parties was merely for
3. That said deed of sale was registered in the office of the Register of Deed of Perfecto and his wife Carmen to borrow the sum of P2,000 from Eugenio Morga, Lot No.
Cavite and inscribed at the back of Trans. Cert. of Title No. 10028, covering lot 550 being given as security. In other words, we have here a clear case of equitable
550, on August 11, 1939, a copy of which is hereto attached as Exh. "B"; mortgage. Otherwise, there would be no reason for the agreement made for the payment
of 12% interest per annum. This interest must refer to the use of P2,000 by the alleged
4. That on August 8, 1938, the date of the execution of said deed of sale with the vendors until the same shall have been paid to Eugenio. The parties to the contract must
right to repurchase, the vendee Eugenio Morga took possession of the land and have contemplated the lot remaining in the possession of the vendors inasmuch as it
benefited himself of the yearly produce of palay, and upon his death on August was considered a mere security. However, after the execution of the contract, the
25, 1952, said possession and yearly harvest of palay were transferred to his creditor, Morga according to the contention of the plaintiff, decision to take possession of
heirs, the herein defendant and intervenors; the land, pending payment of the loan , finding it financially advantageous to receive the
products thereof, valued at P300.00 a year, in lieu of the payment of interest at 12% a
5. That in par. 5 of the national document Exh. "A" there is stipulation which year, which would only be P240.00. But this did not convert, as contended by plaintiffs,
reads: "Should we Perfecto Adrid and Carmen Silangcruz, fail to repurchase the the contract from a sale with pacto de retro to that of antichresis.
abovementioned parcel of land under the stipulations above mentioned, then
Eugenio Morga shall be the complete and absolute owner of the same without Some of the the reasons behind our conclusion that the present case is one of equitable
the necessity of further executing a deed of conveyance or any other document"; mortgage, are the following. Despite the expiration of the two year period for the alleged
repurchase, which should have been done in 1940, neither Morga nor his heir have The complaint, filed in May 1947, is divided into three causes of action and makes the
consolidated their title to the land. The certificate of title remained in the name of the following material averments.
alleged vendors. Not only this, but the tax declaration for the lot also remained in the
name of said vendors, and all these years, Eugenio during his lifetime, and his heirs after Plaintiffs are the widow and daughter, respectively, of Eustaquio Congzon, who owned
his death, continued to pay the real estate tax in the name of the vendors. 1 It is also a with his wife a piece of land with improvements in Catbalogan, Samar. On August 15,
fact that the price of P2,000 would be rather inadequate for the supposed sale of Lot No. 1927, defendant Loecadio S. Tanseco prepared fictitious mortgage of the land in favor of
550 which has an area of about 3 1\2 hectares and has a yearly production of thirty Tan Tay San, which he made Eustaquio Congson sign without consideration. That
cavans of palay valued P10.00 a cavan, that is top say, P300.00 a year. A parcel of land document was subsequently cancelled to be substituted in May 30, 1930 by another
with an annual production of P300.00 would or should command more than P2,000.00 "mortgage"1 for P26,000 in favor of defendant Tan Sun, which Eustaquio Congzon again
for its sale. Besides, the contract provided for the payment of interest which is signed thru fraud and without consideration. On March 30, 1932 Tan Sun transferred all
characteristic of a loan or equitable mortgage.2 his rights to defendant Tan Tay San, who in turn assigned his interests to defendant
Leocadio Tanseco in April, 1936.
The contention of plaintiffs that although the original contract was one of sale with right to
repurchase, it was converted into one of antichresis just because the vendee took For second cause of action the complaint incorporates the pertinent allegations of the
possession of the land, is clearly untenable. There is nothing in the document, Exhibit A, first, and asserts that the buildings on the lot were totally burned in June 1942; that said
nor in the acts of the parties subsequent to its execution to show that the parties had buildings have always been occupied by the mortgagees, and never by Eustaquio
entered into a contract of antichresis. In the case of Alojado vs. Lim Siongco, 51 Phil., Congzon; but that the plaintiffs, who never enjoyed the possession and fruits of their
339 this Court said: land, did satisfy taxes thereon amounting to P39,480.75.

What characterizes a contract of antichresis is that the creditor acquires the right In their third cause of action, the plaintiffs stated that from and after the destruction of the
to receive the fruits of the property of his debtor with the obligation to apply them buildings on June 8, 1942, they were in actual and quiet possession of the lot until June
to the payment of interest, if any is due, and then to the principal of his credit, 1, 1946, when defendant Leocadio Tanseco, thru force, intimidation and strategy, and
and when such a covenant is not made in the contract which speaks without their consent, occupied the property and constructed thereon a house, all to their
unequivocally of a sale with right of repurchase, the contract is a sale with the damage prejudice.
right to repurchase and not an antichresis.
Plaintiffs prayed that they be declared owners of the lot, that the "mortgage" documents
In view of the foregoing, the appealed decision is hereby reversed. The defendants are and assignments be annulled, and that Leocadio Tanseco be ordered to vacate and pay
hereby ordered to give up the possession of the lot in question to the appellants upon the damages and costs.
payment of P2,000. No interest will be paid inasmuch as Eugenio and his heir have
received the products of the land in lieu of the payment of interest. No costs. After some unimportant procedural incidents, the defendants submitted a motion to
dismiss, arguing that it was too late for plaintiff to question the validity of the "mortgage"
G.R. No. L-4135 November 29, 1951 and the assignments (more than ten years had elapsed) and as the said mortgage had
SEVERINA ROSALES AND PUREZA CONGZON, plaintiffs-appellants, not been paid, the sustained the defendants' position. Hence this appeal.
LOECADIO S. TANSECO, ET AL., defendants-appellees. His honor was right in holding that, due to prescription, plaintiffs are precluded from
seeking avoidance of the "mortgage" and its assignments on the ground of fraud or lack
This is an appeal from the order of the Court of First Instance of Samar, dismissing the of consideration.
plaintiffs' complaint mainly on the ground of prescription. The order was issued upon
motion of the defendants, who pointed out that the action sought the annulment of But the second cause of action, although incompletely stated, makes out a good case if
certain documents, the latest of which had been executed in 1936, i.e. more than ten construed in relation to the applicable legal provisions.
years before the institution of the proceedings.
As submitted to the court the "mortgage" in favor of Tan Sun contained, in addition to G.R. Nos. L-43673 and 43674 October 24, 1938
ordinary stipulations, the following agreement: LICERIO LEGASPI and JULIAN SALCEDO, plaintiffs-appellants,
"Que el deudor hipotecario no pagara intereses por la cantidad adeudada, cediendo sin DAMASO CELESTIAL, defendant-appellee.
embargo su uso al acreedor hipotecario sin ninguin alquieler, y teniendo diccho acreedor
hipotecario derecho a percibir todos los alquileres de la finca, mientras el deudor The plaintiffs Licerio Legaspi and Julian Salcedo appeal to this court from the judgment
hipotecario no pagare o hiciere pagar a Tan Sun totalmente su deuda." rendered by the Court of First Instance of Cavite in civil cases Nos. 3025 and 3037 of
said court, the dispositive part of which reads as follows:
Therefore the contract although entitled "Escritura de Hipoteca" was in reality a contract
of antichresis.2 Wherefore, judgment is rendered by this court holding that both the so-called
instrument of mortgage Exhibit A and the instrument Exhibit C-1 are really
In a contract of antichresis the creditor is obliged to pay the taxes on the property, unless contracts of antichresis and, consequently, the plaintiffs should render to the
the contract says otherwise (Art. 1882 Civil Code). The contract between Eustaquio defendant an account of the 65 salt beds, which are the subject matter of the two
Congzon and Tan Sun said nothing about taxes. Hence it was the obligation of the cases, as soon this decision becomes final, taking into consideration the sums
creditor or creditors to pay the taxes on the property at issue herein. already paid by the defendant to the plaintiffs.

Now, the second cause of action states that the debtor has paid for taxes on the property The writ of preliminary attachment issued in civil case No. 3037 is set aside,
the amount of P39,480.75. without costs in both cases. It is so ordered.

Bearing in mind that the credit was only P26,000 it is plain to see that under the second In support of their appeal, the appellants assign the following alleged errors as
cause of action the plaintiffs affirmed in effect that they had already discharged their debt committed by the court a quo in its judgment in question, to wit:
(by advancing the taxes which the creditor should have paid) and are entitled to the
return of their property free from all encumbrance. At least there was good ground for 1. The court erred in holding that both the instrument of mortgage Exhibit A and
accounting. Consequently, it was error to dismiss upon a mere motion filed before the the instrument Exhibit C-1 are really contracts of antichresis.
2. The court likewise erred in ordering the plaintiffs to render to the defendant an
Furthermore the third cause of action, posed the question: Where the antichretic debtor account of the fruits produced by the 65 salt beds, which are the subject matter
peacefully in possession of the premises given as guaranty is ejected thru force or of both cases.
strategy by the antichretic creditor does he have a right of action?
3. Lastly, the court erred in not absolving the plaintiffs from the counterclaim and
Under the Civil Code every possessor is entitled to be respected in his possession: and cross-complaint filed by the defendant, with the costs to the latter.
should he be disturbed therein he shall be protected, or possession shall be restored to
him, by the means established by the laws of procedure (Art. 446). And a possessor, On January 17, 1935, the plaintiffs brought an action against the defendant Damaso
however he may acquired thereof without legal proceedings.3Nevertheless we shall not Celestial in the justice of the peace court of Kawit, Cavite, praying that judgment be
further pursue this line of inquiry, being sufficiently convinced that plaintiffs have a valid rendered, ordering said defendant to pay to the abovenamed plaintiffs the sum of
claim under their second cause of action, the allegations of which were provisionally P556.160, plus the corresponding legal interest thereon from the date of the filing of the
admitted by the motion to dismiss. complaint, until fully paid, and the costs.

Wherefore the appealed order will be reversed and the record remanded to the court a The defendant, answering the complaint, admitted the essential facts alleged therein,
quo for further proceedings. Costs against appellees. stating that he was disposed to pay what he should appear still to be indebted and, by
way of counterclaim and cross-complaint, claimed that, the contract entered into between
him and the plaintiffs being an antichresis, the latter were bound to render an account of The plaintiffs, replying to the special defense and cross-complaint, denied each and
the products of the five salt beds, the total production of which was from 300 to 350 every one of the facts alleged therein, stating that the salt gathered from the 60 salt beds
cavans of salt at P1 a cavan. mentioned in the complaint was for the exclusive use, benefit and enjoyment of the
plaintiffs who, under the provisions of Exhibit A and the intention of the parties, were not
After due trial of the case, the justice of the peace court of Kawit, Cavite, on February 5, obliged to submit to the defendant a liquidation of the salt produced and gathered, in
1935, rendered judgment in said case, the dispositive part of which reads as follows: order that the same may be deducted from the principal.

Premises considered, judgment hereby rendered ordering the defendant to pay On February 25, 1935, the parties to civil case No. 3025 submitted the following
the herein plaintiffs the sum of P556.60 with interest at the legal rate from stipulation to the court, to wit:
January 17, 1935, and to pay the costs of suit. It is so ordered.
Come now the parties to this case, assisted by their respective attorney, and
From the foregoing judgment, the defendant appealed to the Court of First Instance of respectfully submit the following stipulation:
1. That, aside from this case, the same plaintiffs had instituted against the
On January 30, 1935, the same plaintiffs filed a complaint in civil case No. 3025 of said same defendant in the justice of the peace court of Kawit, Cavite, civil
Court of First Instance, praying that the same defendant Damaso Celestial be ordered to case No. 165, for the recovery of the sum of P556.60 representing a loan
pay them the sum of P7,637, with the legal interest thereon from the date of the filing of made by the plaintiffs on a portion of the same parcel of land which is the
the complaint, until fully paid, and the costs of the suit, and that, upon his failure to do so, subject matter of the mortgage in this case before this Honorable Court of
the mortgage constituted by said defendant in their favor to secure the payment of the First Instance, as evidenced by another notarial document dated August
loan in question be ordered foreclosed. lwphi1.nt
13, 1932. And in this stipulation, said case shall be understood to be
consolidated with the present one.
The defendant, answering the complaint, admitted the material facts alleged therein as
well as the conditions set forth in the documents Exhibit "A" attached thereto, stating that 2. That the defendants agrees and is disposed to make immediate
he had never refused to pay any balance of the debt resulting after a rendition of delivery to the plaintiffs of the total amount of P8,193.60, without
accounts by the plaintiffs and a liquidation; and by way of counterclaim and cross- prejudice to his right to prosecute the case in connection with his
complaint, alleged that the sixty-five salt beds administered by the plaintiffs, by virtue of contention of their administration. In must render to him an account of
the above-stated documents, yielded a net produced of a about 6,500 cavans of salt their administration. In consideration hereof, the plaintiffs, in turn, agree
every six months at P1 a cavan; that the plaintiffs should render to the defendant an and bind themselves now to secure the amount in question, or the receipt
account of said products so that they may be applied to the payment of his loan or debt; thereof, for the due compliance with the judgment to be rendered by the
that the approximate total value of half of the number of cavans of salt reaped and court on said rendition of accounts, with sufficient property of their own
availed of by the plaintiffs from the sixty-five salt beds administered by them during three worth not less than the 14th instant,; and likewise forthwith to respect,
years and eleven months, that is, from February 23, 1931, to February 8, 1935, the date turn over and restore now, as they hereby do so, to the defendant or his
of the filing of the answer, was P13,000; that after deducting from said P13,000 the total assignees, the conclusive possession, administration, benefit and use of
amount of the defendant's debt to the plaintiffs under the above-stated contracts, that is, the mortgaged property in question, particularly the sixty-five salt beds
P8,193.60, there would still remain a balance in favor of the defendant in the sum of administered by said plaintiffs to date.
P4,806.40, which he is entitled to collect from the plaintiffs. He prayed that judgment be
rendered, ordering the plaintiffs to render an account of their administration and to pay Wherefore, both parties sign this stipulation and pray this honorable court to
jointly and severally the sum of P4,806.40, with the legal interest thereon, plus the render its decision in accordance herewith, upon acting on the motion of the
damages that would result if the contract of mortgage already perfected with Melchor de defendant, dated February 7, 1935.
Lara should be frustrated and should he fail to find another to execute said contract of
mortgage in the sum of P25,000. Cavite, Cavite, February 9, 1935.
In view of the foregoing stipulation, the court a quo rendered contracts entered into stipulated that the net produce of the salt beds shall first be applied to the payment of the
between the plaintiffs Licerio Legaspi and Julian Salcedo, on the one hand, and Damaso interest, if any, and afterwards to that of the principal of their credit. Both contracts
Celestial, on the other hand, appearing in the instruments Exhibits A and C-1 are of merely provide that the creditors shall keep one-half of the products. Therefore, they are
mortgage or antichresis. not contracts of antichresis, as defined by article 1881 of the Civil Code. In a contract of
mortgage, the mortgagor, as a general rule, retains the possession of the property
The contracts Exhibit C-1, entitled "Contract of Antichresis", contains the following mortgaged as security for the payment of the sum of money borrowed from the
stipulation: mortgagee, and pays the latter a certain per cent thereof as interest on his principal by
way of compensation for his sacrifice in depriving himself of the use of said money and
That during the existence of this Contract, the Party of the SECOND PART the enjoyment of its fruits, in order to give them to the mortgagor. Inasmuch as it is not an
(Licerio Legaspi and Julian Salcedo) or their representative shall administer and essential requisite of the contract of mortgage that the property mortgaged remain in the
enjoy the benefits and fruits gathered and harvested thereon; and that the Party possession of the mortgagor (article 1857 of the Civil Code), the latter may deliver said
of the FIRST PART (Damaso Celestial) shall give and turn over to the Party of property to the mortgagee, without thereby altering the nature of the contract. It not being
the SECOND PART the administration and to possession of the said 5 salt beds an essential requisite of said contract of mortgage that the principal of the mortgage
during the term of this contract. credit bear interest, or that the interest, as compensation for the use of the principal and
enjoyment of its fruits, be in the form of a certain per cent thereof, such interest may be
In the contract Exhibit A, the parties stipulated the following: in the form of fruits of the property mortgage, without the contract's longing thereby its
character of a mortgage contract. It is stipulated in the contracts under consideration
(a) The term of this mortgage is three (3) years to be counted from February 23, that, during the term thereof and while the total amount of the loan remains unpaid by the
1931, and should the party of the first part, after the expiration of this term, fail to debtor, the salt beds constituted as security for the payment of said loan, shall be
pay to the party of the second part the amount of this mortgage, this contract administered by the creditors who shall destine one-half of the products thereof for the
shall subsist in full force and effect and continue the debt or amount of the maintenance and support of the croppers and the improvements of the property, keeping
mortgage is fully paid. the other half for themselves. It appears, therefore, that the debtor, instead of paying a
certain per cent of the principal of the loan as compensation for the sacrifice made by the
creditors in depriving themselves of the use of their principal and the enjoyment of its
(b) During the term of the mortgage, the party of the second part of the
fruits, so as to give them to the debtor, has delivered to them the property constituted as
mortgagees shall administer or take charge of the work and harvest of the 60 salt
a security for the payment of the loan, so that they may administer and use it, enjoying its
beds and pay for the maintenance of the croppers and defray the expenses for
fruits, by way of compensation for their said sacrifice in lending said debtor their money.
the improvement thereof; and the party of the first part shall turn over to the party
Therefore, the contracts, which are the subject matter of this action, have all the
of the second part the administration of the sixty salt beds mortgaged for the
essential requsites of a mortgage, enumerated in article 1857 of the Civil Code and,
duration of the stipulation contract.
consequently, are mortgage contracts.
(c) The crop from the sixty salt beds shall be shared equally by the croppers and
With respects to the second assignment of alleged error, this court, having arrived at the
the party of the second part, after deducting the expenses paid by the party of
conclusion that the contracts entered into between the plaintiffs and the defendant are
the second part during each harvest period and throughout the existence of this
contracts of mortgage and not of antichresis, finds the same to be well founded.

This court likewise finds the third assignment of alleged error to be well founded.
It should be noted that the contract Exhibit C-1 is entitled "Contract of Artichresis" while
the contract Exhibit A is entitled "Contract of Mortgage". Both in the contract Exhibit C-1
and in the contract Exhibit A, the defendant Damaso Calestial, as debtor, agrees to turn From the foregoing considerations, this court is of the opinion and so holds, that when a
over to the plaintiffs, as creditors, the possession of the salt beds so that the latter, after contracts of loan with security does not stipulate the payment of interest but provides for
paying the expenses for the production, administration and harvest of the salt with one- the delivery to the creditor by the debtor of the real property constituted as security for
half of the produce, may keep the other half of the use, benefit and enjoyment. It is not the payment thereof, in order that the creditor may administer the same and avail himself
of its fruits, without stating that said fruits are to be applied to the payment of interest, if building and the property leased from the Hacienda Tuason on which said
any, and afterwards to that of the principal of the credit, the contract shall be considered building was erected, the payment of the premium on the insurance of this
to be one of mortgage and not of antichresis. building, the payment of the taxes might become due on the said building, the
payment to the lessor Hacienda Tuason of the rents of the leased property, and
Wherefore, the appealed judgment is reversed, and the defendant's debt to the plaintiffs to collect the rents from the tenants of the said building.
is declared paid and the deeds of security executed by both parties cancelled, dismissing
the counterclaim and cross-complained filed by said defendant and appellee Damaso 3. That the rents that would be collected from the said building, the plaintiff would
Celestial, with costs to the latter. So ordered. apply the same to the payment of all the expenses necessary for the
preservation and maintenance of the said building, the rents of the leased
G.R. No. L-31816 February 15, 1930 property, and the balance to be applied in payment on account of the interest that
RECAREDO F. PANDO, plaintiff-appellee, may become due in favor of the plaintiff under the mortgage.
ANTONIO GIMENEZ, ET AL., defendants. 4. That in accordance with this agreement, the defendant gave, and the plaintiff
ANTONIO GIMENEZ, appellant. took absolute control and possession and entered in the full administration of the
said building and land since October 27, 1924, and up to the present time.
This action was instituted for the purpose of foreclosing a mortgage executed by
defendant Antonio Gimenez. Massy Teague was also impleaded for having purchased at 5. That in the course of the administration by the plaintiff of the said building and
public auction one of the mortgaged properties. land leased from the Hacienda Tuason, said plaintiff failed and neglected to pay
to the government of the City of Manila taxes due for several years on the said
The answer of the defendant Teague set up a general denial and a special defense, building and has also failed and neglected to pay to the lessor Hacienda Tuason
which are not involved in this appeal. the rents due for several years on the land leased and on which said building
was erected.
Defendant Antonio Gimenez also filed a general denial, and raised four special defenses
in his answer, to wit: 6. That by reason of this failure, neglect and abandonment by the plaintiff to pay
the taxes due on the said building, the City of Manila, on November 23, 1926,
As a first special defense said defendant alleges: sold at public auction the said building was sold for the sum of P244.50, and was
bought by the other defendant Massy Teague, and since that time the said
1. That on the 27th day of October, 1924, said defendant Gimenez was indebted building was lost to the defendant Gimenez.
to the plaintiff in the sum of P8,000, and to secure the payment of the said
amount duly made, executed and delivered a real estate mortgage in favor of the 7. That by reason of the failure, neglect and abandonment of the plaintiff to pay
said plaintiff over the properties and leasehold rights mentioned in paragraph VIII the Hacienda Tuason the rents due for several years on the leased property on
of the plaintiff's complaint, and which contract of mortgage is evidenced by the which the building in question is erected, the said lessor cancelled the contract of
document, Exhibit A attached to the complaint. lease of the defendant Gimenez, and has brought a suit against the said
defendant Gimenez for desahucio in the municipal court of the City of Manila.
2. That owing to the fact that said defendant was leaving the City of Manila in
order to attend to his business in the Province of Cagayan, and at the special As a second special defense, alleges that the building which was sold to the
instance and request of the herein plaintiff, said defendant gave to the plaintiff the defendant Massy Teague is worth P11,000, and the leasehold right of the
full control, and complete and absolute administration of the building and the defendant which was cancelled by the Hacienda Tuason as above stated is worth
parcel of land on which said building was erected, situated in Santa Mesa, P3,000.
District of Santa Mesa, mortgaged to the plaintiff, under the condition that said
plaintiff would attend to the administration, care and preservation of the said
As a third special defense, alleges that by reason of the negligence, failure and Defendant Massy Teague is hereby authorized to pay to the plaintiff the amounts
abandonment of the plaintiff to properly administer the building and land in set forth in the preceding paragraph, if he so desires, in order to obtain the
question and to pay the taxes due to the government and the rents due the cancellation of the plaintiff's mortgage, and to acquire the properties of defendant
lessor Hacienda Tuason, and as a result of which the defendant Gimenez has Gimenez free of all liens and encumbrances, within the same three-month period
been deprived of the building, and his leasehold right was cancelled, said from the date hereof.
defendant has suffered irreparable damages in the sum of P14,000.
In case neither of the defendants pay to the plaintiff the foregoing amounts within
And as a fourth special defense and by way of counter-claim and set-off against the period named, the mortgaged properties shall be sold at public auction in
the claim of the said plaintiff, the defendant Gimenez alleges that he reproduces accordance with the law, and from the proceeds of the sale, the aggregate sum
herein the first three special defenses heretofore mentioned, and that by reason of the aforementioned amounts shall be paid to the plaintiff, and the balance, if
of the negligent acts committed by the plaintiff in the administration of the said any, delivered to defendant Massy Teague, the present owner of the mortgaged
building and land which caused irreparable damage and prejudice to the property. (Pages 40 and 41, Bill of Exceptions.)
defendant Gimenez, said defendant has suffered damages in the sum of
P14,000. Antonio Gimenez, defendant, appealed from this decision and now makes the following
assignments of error:
Wherefore, the defendant Gimenez by the undersigned attorneys, respectfully
prays the court to render judgment in his favor and against the plaintiff, I. The lower court erred in not finding that, after the execution of the contract of
condemning the latter to pay the former the sum of fourteen thousand pesos mortgage, Exhibit A, and just before the time said mortgage matured, the
(P14,000), as damages suffered by the defendant Gimenez; and that should this appellee and the appellant entered into an agreement by virtue of which:
court find that the said defendant Gimenez is liable to pay to plaintiff any sum of
money under the mortgage, that this amount of P14,000 be set-off against the (a) The appellee assumed and took over the general administration
amount that might rightfully be found by the court to be due and owing by the (administracion directa) of the house No. 655 Santa Mesa, Manila, with
defendant Gimenez to plaintiff, and that should there be a difference in favor of the right to collect the rents of the said house;
the defendant Gimenez that the plaintiff be condemned to pay to the said
defendant Gimenez the amount of such difference and for the costs of this (b) But with the duty and obligation, that said appellee should pay the
action; and also asks for such other and further relief as may be proper and taxes owing or accruing on the said house to the City of Manila;
equitable under the premises. (Pages 23, 24, 25, 26 and 27, Bill of Exceptions.)
(c) Should pay the rentals owing or accruing on the land occupied by said
After trial, the Court of First Instance of Manila rendered a decision, dismissing the house to the owners of said land the "Hacienda de Santa Mesa y
counterclaim presented by the defendant Antonio Gimenez, the dispositive part of which Diliman", in accordance with the terms of the contract of lease; and
reads as follows:
(d) Should pay all other expenses necessary for the proper preservation
For the foregoing considerations, the court renders judgment, ordering Antonio and maintenance of said house, such as repairs and so forth, including
Gimenez to pay Recaredo Pando eight thousand pesos (P8,000), Philippine the premium of the policy of insurance thereon and that the balance of
currency, with annual interest at twelve per centum from June 1, 1928, until fully said rents should be applied by him toward the liquidation of interest
paid; two thousand three hundred and forty-four pesos and sixty centavos accruing under the mortgage.
(P2,344.60) as accrued interest with legal interest thereon from the date of the
complaint, May 19, 1928, until fully paid; and eight hundred pesos (P800) as the II. The lower court erred in not finding that the appellee violated his duty by
stipulated attorney's fees, and the costs; all of said sums to be paid within three neglecting and failing to pay the taxes on the house No. 655 Santa Mesa, to the
months from the date hereof. Government of the City of Manila, which became due during the years 1925 and
1926, while said house was under his general administration, and that by reason
of that failure to pay said taxes, said house was sold by public auction by the City Teague. Furthermore, for default in the payment of the rents due on the lot of said house
of Manila to satisfy said taxes, and finally adjudicated to the defendant Massy for the years 1925 to 1928, the Santa Mesa estate, the lessor of said land, cancelled the
Teague, the immediate consequence thereof being the loss to the appellant of all lease on July 13, 1928, pursuant to the terms of the contract.
his rights, legal and equitable in the said house.
The appellant Gimenez contends that the plaintiff was responsible for the delinquency in
III. The lower court erred in not finding that the appellant had suffered damages the payment of both the tax on the house and the rent of the lot, which caused him the
for the loss of his said house No. 655 Santa Mesa, and that the appellee should loss of the said house and the leasehold right on the lot, because the plaintiff was at that
be responsible to the appellant for all damages suffered by him. time in charge of the administration of the premises with the obligation to attend to the
payment of the tax and the rents. The plaintiff denied that he had such obligation,
IV. The lower court erred in not finding that the appellee violated his duty by alleging that his duties were confined to the collection of the rents of the house in order
neglecting and failing to pay the rentals for the land occupied by said house No. to apply them to the payment of the interest on the mortgage.
655 Santa Mesa, to the owners thereof, which rentals became due during the
years 1925, 1926, 1927 and 1928, while the said land and house were under his Such was in fact the original agreement; but the appellant asserts that it was modified by
general administration, and that by reason of that failure to pay said rentals, the the letter Exhibit 1, quoted below:
owners of the land cancelled the contract of lease of the appellant, the immediate
consequence thereof being that the appellant lost all his rights, use and MANILA, October 29, 1925
enjoyment of said land for the remaining unexpired period of 26 years.
V. The lower court erred in not finding that the appellant had suffered damages A. Luna, San Juan del Monte
for the loss of his leasehold right, the improvements on the land and the use and
enjoyment of said land for the remaining unexpired period of 26 years, and that ESTEEMED DON ANTONIO: Yesterday Mrs. Xaudaro came to pay me the rents
the appellee should be responsible to the appellant for all damages suffered by for the months of July and August, and forty pesos on account of September,
him. saying that she did not pay the balance of the rent for that month and the rent for
the whole of October, because your wife had demanded the delivery of the
VI. The lower court erred in not rendering judgment in favor of the appellant and difference, or P90. I am surprised at such a procedure, since you yourself
against the appellee on the counterclaim for the damages suffered by the authorized me one year ago to collect the rent from Mr. Xaudaro, and I have
appellant for the total amount proven. done so up to date.

VII. The lower court erred in not granting the motion for new trial. Mrs. Xaudaro has also informed me that, upon your demand, they would leave
the chalet next month and it appears that this, too, was done using me as a
In order to secure the payment of P8,000 which the defendant Gimenez owed the shield, which is another surprise to me.
plaintiff, he mortgaged the house at No. 655 Santa Mesa, Manila, and the leasehold right
on the lot upon which it stands (Exhibit A). It was agreed between them that the plaintiff I believe, Mr. Gimenez, that the best thing would be for you to turn over the
would collect the rents of said house, in order to apply them to the payment of interest on chalet to me, since the period has expired, so that I may take direct charge of the
the amount of the indebtedness. This was payable on October 27, 1925, but, in spite of administration of the premises.
nonpayment, the creditor, who is the plaintiff herein, did not foreclose the mortgage.
Yours very truly,
For default in the payment of taxes for the years 1925 and 1926, the house was on
November 23, 1926 sold at public auction, and, for failure to exercise the right of legal (Sgd.) R. PANDO
redemption, the City of Manila, the attachment creditor and vendor of the property, (Page 63, record.)
executed a final deed of sale in favor of the purchaser, the other defendant Massy
The appellant testified further, that when he turned over the administration of the property Any sums he may expend for such purposes shall be chargeable against the
to the plaintiff, it was agreed that the plaintiff "would keep the property in good condition fruits. (Art. 1882, Civil Code.)
of repair, pay the insurance and other expenses inherent in the preservation of the
building, such as land taxes," and "would pay the rents of the land upon which the These obligations arise from the very nature of the covenant, and are correlated with the
property is situated" (transcript of the stenographic notes, page 6). These points have not plaintiff's acquired right to take charge of the property and collect the fruits for himself.
been contradicted by the plaintiff. Hence, the illustrious Manresa, explains the basis of this article 1882 in the following
Taking into account the language of the letter Exhibit 1 and the appellant's unimpeached
testimony, we are constrained to hold that it has been proved by a preponderance of The right which the creditor acquires by virtue of antichresis to enjoy the fruits of
evidence, that even though at first the plaintiff had only undertaken to collect the rents of the property delivered to him, carries two obligations which are a necessary
the house, later on, towards the end of October, 1925, he assumed the obligation to pay consequence of the contract, because they arise from its very nature.
both the tax on the house, and the rent of the lot.
And the plaintiff having failed in his obligation to pay the tax on the house and the rent of
As to the consideration contained in the judgment appealed from to the effect that, in the lot, he is by law required to pay indemnity for damages (article 1101, Civil Code).
view of the reduction of the rent of the house in May, 1926, the plaintiff would not have
accepted the administration under the conditions alleged by the defendant-appellant, it Considering the evidence of record as to the value and condition of the house and the
must be remembered that the plaintiff took over such complete administration months improvements made by the appellant upon said lot, as well as the other circumstances of
before such reduction of rents, and it does not appear that the reduction was foreseen. the case the total amount of the damages sustained by said appellant must be fixed at
From all these circumstances it follows that the administration of the property in question
assumed by the plaintiff toward the end of October, 1925 is antichretic in character, and Wherefore, the judgment appealed from is modified, and it is held that the appellant,
therefore justice and equity demand that application be here made of the Civil Code Antonio Gimenez, is entitled to recover from the plaintiff the sum of P5,000 and it is so
provisions touching the obligations of the antichretic creditor, to wit: ordered; and the judgment appealed from is hereby affirmed in all respects consistent
with the present decision, without express pronouncement of costs.
The creditor is obliged to pay the taxes and charges which burden the estate, in
the absence of an agreement to the contrary.

He shall also be obliged to pay any expenses necessary for its preservation and