G.R. No. 209216 - Executive Secretary Leandro Mendoza, Department of Energy-Attorney General Joint Task Force, and Secretary Angelo Reyes vs. Pilipinas Shell Petroleum Corporation

The subject property is a 126,622-square-meter lot originally registered under OCT No. P-489 in the names of spouses Serafin, Sr. and Salud Adolfo, originally issued on December 15, 1954.
The property was mortgaged to the Rehabilitation Finance Corporation (now DBP) on August 18, 1955, foreclosed upon default, and later repurchased by Serafin Adolfo, Sr., who was issued TCT No. 6313 on December 1, 1971.

In 1975, Serafin Adolfo, Sr. allegedly entered into a transaction with Aniceto Bangis by mortgaging the property for the sum of P12,500. Bangis immediately took possession of the property.
The transaction was not reduced to writing, creating a factual dispute as to whether it was a mortgage or a sale.

Upon the death of Adolfo, his heirs (Luz Adolfo Bannister, Serafin Adolfo, Jr., and Eleuterio Adolfo) executed an extrajudicial partition on December 24, 1997, and subsequently, separate titles were issued when the property was subdivided on May 26, 1998.
Later in 1998, the Heirs of Adolfo expressed their intention to redeem the mortgaged property, but Bangis (and later his heirs) contended that the transaction was a sale. During conciliation meetings, Bangis’ son produced a photocopy of a deed of sale and a certificate of title to support the claim.

The Heirs of Adolfo initiated a complaint on July 26, 2000, before the Regional Trial Court (RTC) seeking annulment of the alleged deed of sale, a declaration that the underlying contract was not a sale but a mortgage or antichresis, and remedies including redemption and damages.
Bangis, in his Answer with Counterclaim, asserted that he had legally purchased the property and claimed open, adverse possession since 1972, also contending that the Heirs of Adolfo’s claim had prescribed.
During trial, evidence was presented by one of Bangis’ heirs in the form of a photocopy of an Extra-Judicial Settlement with Absolute Deed of Sale dated December 30, 1971, and a notarized promissory note. The Heirs of Adolfo denied the authenticity and due execution of these documents.

On December 29, 2005, the RTC rendered a decision in favor of the Heirs of Adolfo by:

Declaring the contract between the parties as a mortgage (or antichresis) rather than a sale.
Ordering Bangis to surrender possession and nullifying TCT No. T-10567.

The Court of Appeals (CA) affirmed the RTC’s findings, noting that while Bangis had taken possession, the certificate of title remained with Adolfo/its heirs. The CA ordered:

Payment of the mortgage debt (P12,500.00) with interest.
Delivery of possession to the Heirs of Adolfo upon full payment.
However, it deleted the RTC’s order for canceling TCT No. T-10567 on the ground that it constituted a collateral attack under PD 1529.

The Heirs of Bangis subsequently filed a petition for review on certiorari, challenging the CA’s determination that the transaction was a mortgage and questioning the admissibility of the deed of sale evidence.

Whether the transaction between Serafin Adolfo, Sr. (and subsequently his heirs) and Aniceto Bangis constituted a sale or a mortgage (or antichresis).

Whether the presented Extra-Judicial Settlement with Absolute Deed of Sale (provided in photocopy form) is admissible under the best evidence rule.
Whether such evidence is sufficient to establish a purported sale contrary to the other documentary and testimonial evidence.

Whether TCT No. T-10567, purportedly issued in favor of Bangis, can override the titles held by the Heirs of Adolfo.
Whether the cancellation of TCT No. T-10567 should be confirmed as part of resolving the title dispute.

Whether the claim by the Heirs of Bangis based on their long possession (since 1972) can be validly maintained despite alleged bad faith and the statutory period for acquisitive prescription.