G.R. No. L-28658 October 18, 1979
VICENTE C. REYES, applicant-appellee, vs. FRANCISCO SIERRA, EMILIO SIERRA, ALEJANDRA SIERRA, FELIMON SIERRA, AURELIO SIERRA, CONSTANCIO SIERRA, CIRILO SIERRA and ANTONIA SANTOS, oppositors-appellants.

FACTS

Applicant Vicente Reyes filed for registration of a parcel of land in Antipolo, Rizal, claiming ownership by inheritance from his father, Vicente Reyes, Sr. He asserted that his father purchased the land from Basilia Beltran in 1926, as evidenced by a document (Exhibit “D”), and that they had since paid the real estate taxes. The oppositors, heirs of Basilia Beltran, contested the application, arguing that Exhibit “D” was not a deed of sale but a mortgage contract securing a loan of P100.00. They claimed that the property, originally owned by Basilia’s parents, was merely encumbered and never sold.
The trial court granted Reyes’s application, declaring him the rightful owner. It held that the continuous payment of taxes by Reyes and his father since 1926 constituted strong evidence of adverse possession. The court also applied provisions of the New Civil Code on prescription, suggesting the oppositors’ failure to redeem the property or pay taxes indicated abandonment of their rights. The oppositors appealed this decision.

ISSUE

The core issue is whether the applicant, Vicente Reyes, has established a registrable title to the land, which hinges on the correct interpretation of Exhibit “D” and the nature of the possession exercised by Reyes and his predecessor.

RULING

The Supreme Court reversed the trial court’s decision and dismissed the application for registration. The Court held that Exhibit “D” is unequivocally a mortgage contract, not a deed of sale or pacto de retro sale. The document’s language, using terms like “isinangla” (mortgaged) and referencing a debt of P100.00, clearly establishes a loan secured by the property. The intention of the parties at the time of execution prevails, and here, the intent was to create a security obligation, not to transfer ownership.
Consequently, the possession of the Reyes family was not in the concept of an owner, which is essential for acquiring title through prescription. A mortgage does not constitute “just title” for acquisitive prescription, as the mortgagor retains ownership. The payment of realty taxes, while a factor, is not conclusive proof of ownership or adverse possession; it cannot override the clear contractual nature of the transaction as a mortgage. The doctrine “once a mortgage, always a mortgage” applies, preventing the mortgagee from acquiring ownership through mere possession and tax payment absent foreclosure or a valid pacto de retro sale. Since Reyes derived his claim from a mortgagee, his rights cannot exceed those of a mortgagee. The Court ordered the registration of title in the name of the oppositors-appellants, upon their payment to Reyes of the P100.00 debt plus 6% annual interest from 1926.