G.R. No.

L-13299 July 25, 1960

PERFECTO ADRID, ET AL., plaintiff-appellant,

vs.
ROSARIO MORGA, ETC., defendant-appellee,
and MAMERTO MORGA, ET AL., intervenors-appellees.

FACTS:

Sps. Perfecto and Carmen Adrid, then owners of a lot situated in Cavite, executed a Sale with a
right to Repurchase, purporting to sell the lot to Eugenio Morga for the sum of P2,000, plus 12% interest
per annum. The vendors never repurchased the lot. Later, Perfecto Adrid and his son, brought the
present action against the administratix of the deceased Eugenio Morga to recover the lot, offering to pay
P2,000 and asking for accounting all the produce of the lot, this on the theory that the said contract,
converted into one antichresis. The plaintiff and defendant instead of presenting evidence, submitted a
stipulation of facts with a prayer that decision be rendered on the basis of such facts.

The CFI of Cavite rendered its judgment against the spouses, with costs. It held that the contract
entered into by the parties, is a contract of sale with a right to repurchase. The spouses having failed to
repurchase the land within the stipulated period, the title of the deceased vende a retro, Morga and
Vasquez, became consolidated by operation of law.

ISSUE: WON the agreement had been converted into an antichresis.

HELD:

No. The SC concluded that the intention of the parties was merely for the Sps.Adrid to borrow the
sum of P2,000 from Eugenio Morga, the lot being given as security. In other words, it is a clear case of
equitable 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 vendors until the
same shall have been paid to Eugenio. The parties to the contract must have contemplated the lot
remaining in the possession of the vendors inasmuch as it was considered a mere security. This did not
convert, as contended by plaintiffs, the contract from a sale with pacto de retro to that of antichresis.

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 possession of the
land, is clearly untenable. There is nothing in the document, Sale with a Right to Repurchase nor in the
acts of the parties subsequent to its execution to show that the parties had entered into a contract of
antichresis. In a case decided by the SC (Alojado vs. Lim Siongco, 51 Phil., 339) the SC said that:

What characterizes a contract of 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 interest, if
any is due, and then to the principal of his credit, and when such a covenant is not made in the
contract which speaks unequivocally of a sale with right of repurchase, the contract is a sale with
the right to repurchase and not an antichresis.

2. G.R No. L-4135 November 29,1951

Severina Rosales and Pureza Congzon vs Loecadio Tanseco,et.al.

FACTS:

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 The plaintiffs herein are the widow and daughter, respectively, of Eustauqio Congzon, who owned
with his wife a piece of land. Defendant, Loecadio Tanseco prepared a fictitious mortgage of the land in
favor of Tan Tay San, which he made Eustaquio Congson sign without consideration. That document was
subsequently cancelled and replaced by another mortgage for P26,000 in favor of defendant Tan Sun,
which Congzon again signed thru fraud and without consideration. Tan Sun transferred all his rights to
defendant Tan Tay San, who in turn assigned his interests to defendant Tanseco. The plaintiffs assert
that possession of the buildings on the lot have always been with the mortgagees and never by Eustaquio
Congzon. Despite the fact that the plaintiffs never enjoyed the possession and fruits of the land, they
nonetheless paid the taxes on the land amounting to P39,480.75.

ISSUE: WON there is a contract of antichresis.

HELD:

Yes. The mortgage in favor of Tan Sun contained, in addition to ordinary stipulations, the
agreement that the mortgage debtor will not pay interest for the amount owed, but will nevertheless
assign its use to the mortgagee, and the mortgagee will have the right to receive all the rent of the
property, as long as the mortgage debtor does not pay the debt. Therefore the contract although entitled
Escritura de Hipoteca or Mortgage Deed is in fact a contract of antichresis.

In a contract of antichresis, the creditor is obliged to pay the taxes, unless the contract says
otherwise(Art. 1882 of the Civil Code). The contract between Eustaquio Congzon and Tan Sun said
nothing about taxes on the property at issue herein. Therefore, it is the obligation of the creditor to pay the
taxes on the property at issue herein. The debtor has already paid for taxes amounting to 39,480.75,
while the credit was only for P26, 000. In effect, therefore, the debt is already discharged when the debtor
paid the taxes which the creditor should have paid, and they are entitled to the return of their property free
from all encumbrances.

3. Legaspi vs Celestial

G.R. Nos. L-43673 and 43674

October 24, 1938

Facts:

On January 17, 1935, the plaintiffs brought an action against the defendant Damaso Celestial in the
justice of the peace court of Kawit, Cavite, praying that judgment be rendered, ordering said defendant to
pay to the abovenamed plaintiffs the sum of P556.160, plus the corresponding legal interest thereon from
the date of the filing of the complaint, until fully paid, and the costs.The defendant, answering the
complaint, admitted the essential facts alleged therein, 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 products of the five salt beds, the total production of which was from 300 to 350 cavans
of salt at P1 a cavan.Legaspi et al brought an action against Celestial to pay a certain obligation plus the
interests. Celestial, contends, among others, that the contract entered into between them was an
antichresis, thus, Legaspi et al are bound to render an account of the products.

Issue:

Whether or not the contract was an antichresis.

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Held:

No. It was a mortgage. It appears 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 fruits, so as to give them to the debtor, has delivered to them the
property constituted as a security for the payment of the loan, so that they may administer and use it,
enjoying its fruits, by way of compensation for their said sacrifice in lending said debtor their money.
Therefore, the contracts, which are the subject matter of this action, have all the essential requsites of a
mortgage, enumerated in article 1857 of the Civil Code and, consequently, are mortgage contracts. When
a contracts of loan with security does not stipulate the payment of interest but provides for the delivery to
the creditor by the debtor of the real property constituted as security for 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 any, and afterwards to that of the principal of the credit, the contract
shall be considered to be one of mortgage and not of antichresis.

4. G.R. No. L-31816

PANDO vs GIMENEZ

FACTS

Gimenez was indebted to Pando for P8000 and executed and delivered a real estate mortgage over a
building located in Sta. Mesa as well as the leasehold rights on the lot upon which the building was
erected, Hacienda Tuason being the lessor. When Gimenez was about to leave Manila to attend to his
business in Cagayan, he gave Pando full control and absolute administration over the property with
conditions as to the preservation of the property including payment of rents to the lessor and taxes. In the
course of his administration, he failed and neglected to pay the taxes and rents due for several years.
Because of this, the building was sold at a public auction. Moreover, lessor Hacienda Tuason cancelled
the contract of lease of Gimenez, and brought a suit against him for desahucio (eviction) in the municipal
court of Manila.

Gimenez claims that Pando, being in charge of the administration of the premises, had the obligation to
attend to the payment of taxes and rents. Pando denies that he had such obligation, alleging that his
duties were confined to the collection of rents on the house in order to apply them to the payment of the
interest on the mortgage.

ISSUE

Whether or not Pando was obliged to pay taxes, charges and other necessary expenses

HELD

YES. The Court held that the administration of the property in question assumed by the plaintiff is
antichretic in character and therefore justice and equity demand that application be made of the Civil
Code provisions touching the obligations of the antichretic creditor specifically Article 1882 (now Art.
2135) thereof. It states that 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

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for its preservation and repair, any sums he may expend for such purposes shall be chargeable against
the fruits.

Such obligation arises from the very nature of the covenant, and is correlated with the antichretic
creditors acquired right to take charge of the property and collect the fruits for himself. Moreover, the
plaintiff having failed in his obligation to pay the tax on the house and the rent of the lot, he is by law
required to pay indemnity for damages (article 1101, Civil Code).