VICTORINO FLORO, PLAINTIFF AND APPELLANT, VS. SANTIAGO H. GRANADA, DEFENDANT AND APPELLEE.

This is an appeal from the order of the Court of First Instance
of Manila which dismissed, upon motion of the defendant, the action of the
plaintiff to compel the former to deliver to the latter the owner’s duplicate
certificates of title of five parcels of land sold with pacto de retro by
the defendant to the plaintiff “in order that the latter may surrender them for
the registration and notation of the aforesaid contract of pacto de retro
executed in his favor by the defendant herein.”

The ground upon which the order of dismissal is based is that
the Court has no jurisdiction to entertain the action, but what the plaintiff
should do is to present the deed in the office of the Register of Deeds of
Occidental Negros and if the defendant refuse to surrender his titles after due
notice, the plaintiff should ask the Court of First Instance of Occidental
Negros to require the defendant to produce said titles.

The lower court did not commit any error in dismissing the
plaintifff’s complaint on said ground.

According to the allegations in the complaint, the predecessors
in interest of the defendant could not deliver their duplicate certificates of
title of the lands sold by them to the defendant on April 4, 1944, time of the
sale, because they had lost them during the last war. The same parcels of land
acquired by the defendant were on the same date sold with pacto de retro
by him to the herein plaintiff. After liberation the defendant and appellee
filed a petition with the Court for the reconstitution of the original of the
abovementioned certificates of title, in order that the deed of sale in his
favor could be registered. In compliance with an order of the Court of First
Instance of Occidental Negros the plaintiff and appellant, on January 5, 1946,
submitted to the Court the deed of sale under pacto de retro with lease,
executed by the defendant in favor of the plaintiff and prayed that the said
deed be registered and annotated on the certificates of titles that wauld be
issued in the name of the defendant Santiago Granada. The Court issued an order
for the reconstitution of the titles of the aforesaid parcels of land, and on
May 15, 1946, the Register of Deeds of Occidental Negros issued the transfer
certificates of title covering said parcels of land in the name of the defendant
Granada, who received them on lay 17 of the same year, but refused to surrender
said certificates to the Register of Deeds or deliver them to the plaintiff, and
hence the filing of the plaintiff’s action.

Attorneys for appellant contend that the plaintiff’s action is
to compel the defendant to deliver to the former the duplicate certificates of
title issued in the latter’s name in order that the plaintiff-vendee may
register his interest in the land on those certificates issued in the name of
the defendant-vendor. Because “a contract of pacto de retro sale is a
voluntary deed of transfer which does not divest the land in fee simple from the
owner. Hence, the interest of the vendee a retro in the land is less than
an estate in fee simple. That being the case, according to section 52 of the
Land Registration Law, no new certificate is entered or issued to the
transferee, but his interest in the land is registered by filing with the
Register of Deeds the instrument creating such interest and by memorandum
thereof made by said Register of Deeds upon the certificate of title. “[Of the
registered owner].”

This is obviously untenable. A sale with pacto de retro
transfers the legal title to the vendee (Alderete vs. Amandoron, 46 Phil., 488),
and the vendee is subrogated to all the rights and actions of the vendor (art.
1511, Civil Code), and therefore the vendee is the owner of the estate in fee
simple subject to the vendor’s right of redemption. And he may mortgage the
property or impose upon it any other charge, but if the vendor redeems it he
(the vendor) is entitled to “received it free of any charge or mortgage imposed
by the vendee, but he shall be obliged to respect any lease made by the latter
in good faith and in accordance with the customs of the place where it is
situated” (art. 1520, Civil Code). This contention of the attorney for appellant
signing the brief runs counter to the opinion expressed by the same attorney in
his book on Land Registration and Mortgages, page 90, to the effect that “the
legal title is transferred to him (vendee), that is, he has the fee simple which
is the registrable title in the initial registration, while the right to redeem
the property retained by the vendor a retro should only be noted in the
decree and certificate of title,” or in the new certificate of title issued in
the name of the vendee under sections 52 and 57 of the Land Registration Act No.
496. This opinion is correct for the right to repurchase is a real right or
interest therein which may be registered as an interest less than an estate in
fee simple under section 52 of the same Act No. 496 and as such goes with the
land and may be claimed against any person deriving title from the vendee (Pan
Daguila vs. Gaza, 12 Phil., 663; Mortera vs. Martinez, 14 Phil., 541; Lucido vs.
Calupitan, 27. Phil., 148).

Section 57 of Act No. 496 provides that “an owner desiring to
convey in fee simple his registered land or any portion thereof shall execute a
deed of conveyance, which the grantor or grantee may present to the register of
deeds in the province where the land lies. The grantor’s certificate shall be
produced and presented at the same time the register, of deeds shall thereupon *
* * make out in the registration a new certificate of title to the grantee, and
shall prepare and deliver to him an owner’s duplicate certificate.” And
according to sec. 111 of the same Act, if the outstanding owner duplicate
certificate is not presented, the Court may, upon petition of the vendee and
after hearing, “order the registered owner or any person withholding the
duplicate to surrender the same, and direct the entry of a new certificate upon
such surrender.” Said section 111, reads as follows: “In every case where the
clerk or any register of deeds is requested to enter a new certificate in
pursuance of an instrument purporting to be executed by the registered owner, or
by reason of any instrument or proceedings which divest the title of the
registered owner against his consent, if the outstanding owner’s duplicate
certificate is not presented for cancellation when such request is made, the
clerk or register of deeds shall not enter a new certificate, but the person
claiming to be entitled thereto may apply by.petition to the court. The court,
after hearing, may order the registered owner of any person withholding the
duplicate to surrender the same, and direct the entry of a new certificate upon
such surrender.”

The petition shall be filed with the Court of First Instance
and entitled in the original case in which the decree of registration was
entered, according to the last paragraph of sec. 112 of Act No. 496, which
provides that “any petition filed under this section, and all petitions
and motions filed under the provisions of this Act after original
registration shall be filed and entitled in his original case in which the
decree of registration was entered.” (Italics ours).

Therefore, the order appealed from is affirmed with costs
against the appellant. So ordered.

Moran, C.J., Paras, Pablo, Perfecto, Bengzon, Tuason,
and Montemayor, JJ., concur.