DIONISIA VALENCIA ET AL., PLAINTIFFS AND APPELLANTS, VS. HONORIO ACALA ET AL., DEFENDANTS AND APPELLEES.

At the trial, the parties submitted to the court the following agreed statement of facts:

“The parties agree that the land in question is the
same lot that is the subject of litigation in civil cause No. 966 of
this court; and that in the year 1891, the plaintiff herein, Dionisia
Valencia, and her deceased husband, Daniel Adepueng, conveyed to one
Severino Agbagala and his wife Francisca Cadapan the land in question,
as evidenced by the document marked Exhibit A of the plaintiffs, which
is found on folio 24 of civil cause No. 966 of this court.

“Later on in the year 1899 Francisca Cadapan, wife of Severino
Agbagala, conveyed this same property to Juan Cagayat and Josefa
Galendis, as shown by the memorandum appearing at the bottom of the
document marked Exhibit A of the plaintiffs, attached to the record of
the cause No. 966, folio 24.

“That the possession of the
land passed to Pedro Acala, who is one of the Acalas, the defendants in
the present action. In the year 1912, the herein defendants Acala sold
the land unconditionally to the herein defendant Bagayanan for the sum
of P70.”

The pertinent part of the contract Exhibit A reads thus:

“We, Daniel Adepueng and Dionisia Valencia,
acknowledge being indebted to Severino Agbagala in the sum of P6.75,
which we will pay with the fruits of the land the possession of which
we now turn over to him. We have mortgaged it for P6.75, it being
covenanted that we may redeem it by paying the same price, without
taking into account the fruits of the land and the interest on the
money.”

The memorandum mentioned in the agreement is as follows:

“I, the undersigned, declare that the lot mentioned
in the foregoing document (Exhibit A) was mortgaged by me to the
spouses Juan Cagayat and Josefa Galendis for the same amount
above-mentioned and with the same condition. Paete, December 6,
1899.—Francisca Cadapan—”

The judge a quo held that the contract in question was one of sale with the right of repurchase, and decided: (a) That the defendants must be absolved from the complaint; (b)
that the contract (Exhibit A) and those that were successively executed
involving the lot in question are contracts of sale and not of mortgage
or of loan with security; (c) that the action for the redemption and annulment of the sale of the lot in question has prescribed; (d) that the defendant Apolinario Bagayanan is at present the lawful owner of the said lot; and (e) that the costs of the suit should be paid by the plaintiffs jointly and severally to the defendants.

Upon examining the record before us, and bearing in mind the fact
that, when the terms of a contract are clear and leave no doubt as to
the intention of the contracting parties, the literal meaning of its
clauses should prevail, we are of the opinion that the contract herein
above copied is a contract of antichresis and not of sale with the
right of repurchase.

In the case of De la Vega vs. Ballilos (34 Phil., 683), this court said:

“When money is loaned and the debtor places the
creditor in possession of a piece of real property as security for the
sum loaned in order that he may hold it in usufruct, in consideration
for the said loan, the contract is not one of mortgage, notwithstanding
the terms thereof, inasmuch as it is not of the nature of a public
instrument, and even though it were, it does not appear to have been
recorded in the property registry. Neither can such a contract be
classified as one of sale under pacto de retro,
notwithstanding that it is set forth therein that the debtor cedes and
conveys to the creditor the ownership and possession of the said real
property. Therefore, such a contract should be classified as one of
antichresis, by means of which the creditor acquires the right to
collect the fruits of the real property turned over to him by his
debtor, but with the obligation to apply them to the payment of
whatever interest is due and the contracting parties may stipulate that
the interest of the debt be paid by the fruits of the property given in
antichresis.”

The legal nature of the contract in question having thus been
determined, it is evident that the antichretic creditor and his
successors in interest cannot acquire ownership by prescription of the
realty given in antichresis.

That the defendants Acala could not sell unconditionally the same
land to their codefendant Bagayanan, is proved by the agreed statement
of facts according to which the possession of the predecessor in
interest of the Acala people was the same precarious possesion of his
assignor Juan Cagayat.

The judgment appealed from is reversed, and it is ordered that the
defendants return the land in question to the plaintiffs upon payment
by the latter of the sum of P6.75, the redemption price of the land,
without prejudice to whatever right the defendant Bagayanan may have to
recover from his codefendants Acala the price he might have paid them
for the land, without special finding as to costs. So ordered.

Johnson, Araullo, Street, and Avancena, JJ., concur.