G.R. No. L-4135 November 29, 1951
SEVERINA ROSALES AND PUREZA CONGZON, plaintiffs-appellants, vs. LOECADIO S. TANSECO, ET AL., defendants-appellees.

FACTS

Plaintiffs Severina Rosales (widow) and Pureza Congzon (daughter) of Eustaquio Congzon filed a complaint in May 1947 with three causes of action concerning a piece of land in Catbalogan, Samar owned by Eustaquio and his wife. They alleged that on August 15, 1927, defendant Leocadio S. Tanseco prepared a fictitious mortgage on the land in favor of Tan Tay San, which Eustaquio signed without consideration. This was replaced on May 30, 1930, by another document for P26,000 in favor of Tan Sun, which Eustaquio also signed through fraud and without consideration. Tan Sun transferred his rights to Tan Tay San on March 30, 1932, who then assigned them to Leocadio Tanseco in April 1936. The second cause of action incorporated the first and alleged that buildings on the lot were burned in June 1942, the mortgagees had always occupied the buildings, the plaintiffs never enjoyed possession or fruits of the land, but they paid taxes amounting to P39,480.75. The third cause of action stated that after the June 8, 1942 fire, plaintiffs were in actual possession until June 1, 1946, when defendant Leocadio Tanseco, through force and strategy, occupied the property and built a house. Plaintiffs prayed to be declared owners, for annulment of the mortgage documents and assignments, and for Tanseco to vacate and pay damages. Defendants moved to dismiss, arguing prescription as the latest document was executed in 1936, over ten years before the suit. The trial court dismissed the complaint on the ground of prescription.

ISSUE

Whether the trial court correctly dismissed the plaintiffs’ complaint on the ground of prescription.

RULING

No. The order of dismissal is reversed and the case is remanded for further proceedings. The trial court was correct in holding that the first cause of action for annulment of the mortgage and assignments based on fraud or lack of consideration had prescribed, as more than ten years had elapsed since the 1936 assignment. However, the second cause of action, when construed in relation to applicable law, stated a valid claim. The document, though titled a mortgage, was in reality a contract of antichresis, as it stipulated the debtor would pay no interest but ceded use of the property to the creditor, who would collect all rentals until the debt was paid. Under Article 1882 of the Civil Code, in antichresis, the creditor is obliged to pay taxes on the property unless otherwise stipulated. The contract here said nothing about taxes, so the obligation to pay taxes fell on the creditor. The plaintiffs’ allegation that they paid P39,480.75 in taxes, against a debt of only P26,000, effectively meant they had discharged the debt by paying what the creditor should have paid, entitling them to return of the property free from encumbrance, or at least grounds for an accounting. Dismissal on a mere motion was therefore erroneous. The third cause of action also posed a question regarding the possessory rights of the antichretic debtor ejected by force, which warranted protection under the Civil Code.