Macapinlac v. Repide, et. al.

G.R. No. 18574. September 20, 1922.

FACTS: Plaintiff Jose Macapinlac, owner of Hacienda Dolores, purchased an automobile and
accessories on credit from Bachrach Motor Company and executed 14 promissory notes in the
amount of P12,960.00. Upon delivery of the notes, Macapinlac executed what on its face
purports to be a deed of sale with a right to repurchase as a security or guaranty for payment
of said notes. This transfer included Hacienda Dolores and named E.M. Bachrach as transferee.
On November 8, 1917, defendant Francisco Repide acquired all the rights of E.M. Bachrach in
the property with knowledge that the transfer of Title was to secure the debt owing to Bachrach
by Macapinlac and that the debt had been paid in half. To transfer the certificate of title to his
own name, it was necessary to make it appear that the contract of sale with pacto de retro
noted in the original Torrens certificate was truly what it appeared to be, that is, a contract of
sale, not a mere mortgage. Title was issued in favor of Repide.
Macapinlac then filed a complaint to secure a decree declaratory rights as owner of Hacienda
Dolores; to nullify the transfer to Repide; and to recover possession from Repide. He claims that
the transfer to Repide was due to fraudulent practices. CFI dismissed the complaint.
ISSUE: Whether the conveyance is a pacto de retro sale or a mortgage
RULING: The conveyance executed by Macapinlac is a mortgage.
Inasmuch as said conveyance is alleged to have been executed as security for a debt owing by
Macapinlac to the Bachrach Company, it follows that in equity said conveyance must be treated
as a mere security or substantially as a mortgage. A conveyance in the form of a contract of
sale with pacto de retro will be treated as a mere mortgage, if really executed as security for a
debt which can be shown by oral evidence.
Further, when a mortgagee of real property acquires possession with the consent of the
mortgagor, the rights of the parties are to be determined by the rules applicable to the contract
of antichresis. While the contract of antichresis non-payment of the debt does not vest the
ownership of the mortgaged 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 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.