G.R. No. 9957 - De la Vega vs. Ballilos

The case involves Perfecto de la Vega et al. (plaintiffs and appellees) and Tomas Ballilos (defendant and appellant).
The dispute arises over certain parcels of land in the pueblo of Balayan, Batangas, originally part of a six-cavan land holding inherited by the plaintiffs from their common predecessors, Victor de la Vega and Ursula de Guzman.

In about 1895, following a loan of P430 received from the defendant, Fidel de la Vega, one of the coowners, executed a contract conveying parcels of land (specifically lots Nos. 1, 4, and 6) under a contract of antichresis.
In 1905, the plaintiffs—except for one coowner, Policarpo de la Vega—borrowed additional amounts (P40, P18, and P60) under a similar arrangement, pledging other parcels (Nos. 2, 3, and 7) as security, from which the defendant collected interest.
When the plaintiffs attempted to settle the accumulated debt by offering a total payment of P548, the defendant refused to accept the payment and instead continued to appropriate the parcels of land, thus prompting the litigation.

The plaintiffs filed a complaint in the Court of First Instance of Batangas seeking the return and restoration of the parcels of land upon payment of the respective sums.
The defendant, in his answer, denied all the allegations and asserted that several parcels of land had been sold to him previously with conditions akin to a sale under pacto de retro.
The trial court rendered a judgment absolving the defendant with respect to certain parcels (Nos. 2, 3, 4, and 8) and ordering him to deliver parcels Nos. 1, 5, and 7 to the plaintiffs upon their payment of P430.
The defendant raised exceptions to the judgment and filed a bill of exceptions, which was transmitted to the higher court on appeal.

The central issue revolves around the interpretation of the deed of conveyance (Exhibit O), executed on July 29, 1896, by Fidel de la Vega in favor of the defendant.
The deed states that the defendant was given the ownership and possession of the land in consideration of receiving P430, with the provision that the debtor could redeem the property if he paid the sum due.
The instrument’s language includes terms such as “mortgaged” and “ceded and conveyed in order that he may manage and enjoy,” suggesting a security arrangement rather than a full-fledged sale.
Notably, the instrument was not executed as a public instrument nor recorded in the property registry, adding layers to its interpretation.

The plaintiffs contend that the instrument is a contract of antichresis, where the creditor (defendant) manages and enjoys the fruits of the property as security for the loan, with the possibility of redemption upon payment.
The defendant, on the other hand, argues that the deed constitutes a sale under pacto de retro, asserting that no fixed redemption period was stipulated, leading to a consolidation of ownership upon non-redemption.
The litigants also diverge on the interpretation of the contractual language and the implications of various Civil Code provisions regarding contracts of antichresis, mortgage, and pacto de retro.

Several provisions of the Civil Code were considered in interpreting the nature of the contract:

Articles 1881, 1883, 1884, and 1885, which lay out the rights and obligations inherent in a contract of antichresis.
Articles 1281, 1283, and 1284, which stress that the clear, evident intent of the contracting parties should govern the interpretation of ambiguous contractual terms.

Whether the deed of conveyance executed on July 29, 1896, is to be classified as a contract of antichresis or as a sale under pacto de retro.

How the language used in the instrument (e.g., “mortgaged,” “ceded and conveyed … in order that he may manage and enjoy”) reflects the true intention of the contracting parties.
Whether the absence of a fixed redemption period and the fact that the instrument was not executed as a public instrument or recorded affect its classification.

The implications of classifying the contract as one of antichresis regarding the right of the debtor to redeem the property after paying the debt.
Whether the plaintiff’s right to recover parcels Nos. 1, 5, and 7 on payment of the indebted sum (P430) is legally supported by the nature of the contract.