Kasilag v. Rodriguez, 69 PHIL 217

FACTS: Marcial Kasilag and Emiliana Ambrosio entered a contract of mortgage of improvements of land acquired as homestead to secure the payment of the indebtedness of P1,000 plus interest. The parties stipulated that Emilina Ambrosio was to pay the debt with interest within 4 ½ years., and in such case, mortgage would not have any effect. They also agreed that Emiliana Ambrosio would execute a deed of sale if it would not be paid within 4 ½ years and that she would pay the tax on the land. After a year, it turned out that she was not able to pay the tax. Hence, they entered a verbal agreement whereby she conveyed to the latter the possession of the land on the condition that they would not collect the interest of the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, & would introduce improvement thereof.

These pacts made by the parties independently were calculated to alter the mortgage a contract clearly entered into, converting the latter into a contract of antichresis. The contract of antichresis, being a real encumbrance burdening the land, is illegal and void because it is legal and valid.

ISSUE: W/N the petitioner should be deemed the possessor of the land in good faith because he was unaware of any flaw in his title or in the manner of its acquisition by which it is invalidated

RULING: Yes. From the facts found established by the Court of Appeals we can neither deduce nor presume that the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside from the prohibition contained in section 116. This being the case, the question is whether good faith may be premised upon ignorance of the laws.

Gross and inexcusable ignorance of law may not be the basis of good faith, but possible, excusable ignorance may be such basis. It is a fact that the petitioner is not conversant with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore, be the basis of his good faith.