G.R. No. L-38185 September 24, 1986
Hilario Ramirez and Valentina Bonifacio, petitioners, vs. Honorable Court of Appeals, Francisca Medina, Matilde Martin, Emilio Martin, Delfin Guinto, Teofilo Guinto, Prudencio Guinto and Margarita Guinto, respondents.

FACTS

Petitioners Hilario Ramirez and Valentina Bonifacio filed an application for registration of a parcel of riceland in Las Piñas, Rizal. After publication and no opposition, the court granted their application based on their parol evidence that they purchased the land from Gregorio Pascual, though the deed was lost. A decree of registration was issued, and Original Certificate of Title No. 2273 was issued in their names. Subsequently, private respondents, who are petitioners’ nephews and nieces, filed a petition to review the decree on the ground of fraud. They claimed to be the legal heirs of Agapita Bonifacio, who allegedly acquired the land from their grandmother, Gregoria Pascual. They asserted that in 1938, they mortgaged the land to petitioners via an antichretic loan of P400.00, whereby petitioners took possession and paid taxes but ownership remained with respondents.
The trial court found the petitioners’ later-proffered deeds of sale to be spurious. It determined that the respondents were the true owners and that petitioners’ possession arose merely from a contract of antichresis. The court ordered the reconveyance of the property to respondents and the cancellation of the petitioners’ title. The Court of Appeals initially affirmed this decision, then set it aside on reconsideration, but ultimately reinstated the trial court’s ruling upon the respondents’ motion. Petitioners elevated the case to the Supreme Court.

ISSUE

The core issue is whether the Court of Appeals erred in affirming the trial court’s decision which set aside the decree of registration and declared the respondents as the true owners, thereby ordering reconveyance.

RULING

The Supreme Court affirmed the decision of the Court of Appeals, with modification. The Court upheld the factual findings of the lower courts that the petitioners were not the owners but merely antichretic creditors. Their possession of the land was derived from the loan agreement, not in the concept of an owner. Under Article 540 of the Civil Code, possession as a holder (e.g., a creditor in antichresis) cannot serve as a title for acquiring dominion. The Court cited established jurisprudence, such as Trillana v. Manansala, that an antichretic creditor cannot acquire the land by prescription. The petitioners’ possession, therefore, could not ripen into ownership nor support a registrable title.
The Court found no reversible error in the appellate court’s affirmation of the trial court’s detailed factual conclusions, which were based on a preponderance of evidence showing the respondents’ ownership. The defense of laches was unavailing given the close familial relationship between the parties and evidence of prior attempts to recover the property. However, the Court modified the decision by ordering the respondents, as debtors, to pay the petitioners the P400.00 principal loan amount, in accordance with Article 2136 of the Civil Code, noting that the fruits from the land’s possession had been applied to the interest.