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REYES v.

SIERRA Facts: Vicente Reyes sought to register under his name a parcel of land located in Antipolo, Rizal opposed by Sierra et al TC approved Reyes application, declaring him owner of said land owing to his and his predecessor-in-interests constructive possession of the same, particularly because they had been paying the realty taxes thereon since 1926 until 1961 Origin of the dispute over land was because in 1926, the Sierras predecessor, Basilia Beltran, borrowed P100 from Vicente Reyes, Sr. and secured the loan with the said piece of land. In so doing, Basilias children executed together with her a document (katibayan ng papgpapahintulot sa aming ina na ipananagutan kay Vicente Reyes sa inutang na halagang P100) Beltran, however, died in 1938 without being able to pay the loan and Vicente Reyes, Jr. continued in possession thereof, believing that the document executed was a contract of sale and not of mortgage Oppositors Sierra et al now claiming that the words sangla, ipinanagutan sa halagang isangdaang piso manifest that the document was one of mortgage

Issue: What was the nature of the document? determinative of the lands ownership Held/Ratio: It is a mortgage contract. The intention of the parties at the time it was executed must prevail, i.e., the borrowing and lending of money with security. The terms indicate a debt and the creation of a creditor-debtor relationship, where the land was used to secure repayment of the loan. Following established doctrine, once a mortgage attaches to a transaction, its character as a mortgage will always continue. The parties cannot by any stipulation deprive it of the essential attributes of a mortgage in equity. Civil Code itself provides: The creditor cannot appropriate the things given by way of mortgage Act of Vicente Reyes in registering the property in his name after failure of mortgagor to redeem the property constitutes a pactum commisorium which is against good morals and public policy. Court also declared that possession by Reues has not been continuous (they had only used the property to spend some vacation time there, but this was discontinued for the last 23 years). Moreover, mere failure of owner to pay taxes does not necessarily imply abandonment of a right to property; and on the other hand, payment of realty taxes by itself does not constitute sufficient evidence of title. Application by Reyes for registration should therefore be dismissed. Oppositors directed to pay back the P100 debt plus interest (6% p.a.) from 1926 until paid.