JUANITO FLORIZA, PETITIONER, VS. THE HON. COURT OF APPEALS AND EULOGIO TIAMSON, RESPONDENTS.

A petition to review the decision of the Court of Appeals, in Case
CA-G.R. No. 12439-R dismissing the appeal taken by petitioner from the
decision of the Court of First Instance of Rizal dated June 16, 1953,
and its order in the same Case, dated September 12, 1953.

Respondent Eulogio Tiamson, on October 6, 1952, filed a petition with
the CFI of Rizal for the registration of an Affidavit of Consolidation
of Ownership, over a residential lot situated in Angono, Rizal, which
he alleged to have bought from Petitioner Juanito Floriza, his brothers
and sisters, on February 2, 1950, under a pacto de retro sale, the redemption to take place one year hence. The registration was opposed by the supposed vendors a retro on three grounds: viz: (1) that the transaction was not one of pacto de retro,
but an equitable mortgage; (2) that respondent Tiamson collected
usurious interest, and (3) that one of the co-owners of the lot, who
died, left an heir in the person of Eduardo Reyes. The opposition
notwithstanding, the lower court on June 16, 1953, rendered judgment
declaring the transaction a pacto de retro sale and ordering
the Register of Deeds of Rizal, to register the affidavit of
consolidation of ownership. The copy of the judgment was received by
the oppositors on June 26, 1953. On July 9, 1953, one of the oppositors
herein, petitioner Juanito Floriza, in behalf of the other
vendors-a-retro, presented a Motion of the following tenor:

“Comes
now the above-named oppositor and all the ‘Vendor’s-a-Retro’,
signatories to the document executed by them on February 2, 1950, by
their undersigned counsel and before this Honorable Court respectfully
moves for the repurchase of the land decreed to be registered in the
name of Petitioner by Court order dated the 16th of June, 1958, in view
of the provisions of Art. 1606, of the Civil Code, third paragraph, * *
*”.

The lower court promulgated an Order on
September 12, 1953, denying the repurchase, on the premise that Tiamson
had already acquired a vested right to the property prior to the
effectivity of the new Civil Code which granted the right to repurchase
and, therefore, paragraph 3 of Article 1606 thereof, is not applicable
to the case at bar.

A motion to appeal as pauper, from the decision declaring the transaction a pacto de retro
sale (dated June 16, 1953) and from the order denying the motion to
repurchase (dated September 12, 1953), was denied in an order dated
October 3, 1953, on the ground that the said decision had already
become final. This order was, however, reconsidered in a resolution
handed down on October 23, 1953, and the appeal was given due course.
The Court of Appeals dismissed the appeal, saying:

“The
crux of the problem seem to be whether the thirty-day period granted by
the third paragraph of Art. 1606 is dependent upon judicial permission
to be granted by a court of justice precisely and expressly in its
decision declaring a controverted contract to be a conditional sale and
not an equitable mortgage. Stated elsewise, does the right granted by
said third paragraph of Art. 1606 require judicial intervention? Our
view is that the said right must be exercised within the thirty-day
period without need of judicial mandate or intercession. * * *

In this case before us, therefore, the oppositor, having failed to
exercise his right to redemption within the thirty-day period after the
decision of the lower court became final, has lost that right
irretrievably. * * *”.

In the present proceedings,
petitioner Floriza alleges that the Court of Appeals erred: (1) In
denying him the right to repurchase the property in spite of the fact
that par. 3, Art. 1606 of the new Civil Code expressly grants said
right; and (2) In considering the share of intervenor Eduardo Reyes as
having been legally transferred, notwithstanding the fact that he had
not participated in the transaction in litigation.

It
results, therefore, that pursuant to a petition filed by respondent
Eulogio Tiamson, before the Court of First Instance of Rizal, sitting
as a Registration Court, the latter had declared that the transaction
in question was a contract of sale with pacto de retro instead
of an equitable mortgage, as contended by the petitioner Florida, and
ordered the Register of Deeds of Rizal to register the affidavit of
consolidation of ownership, over the opposition of petitioner Floriza,
and ruled that the share of intervenor Eduardo Reyes was legally
transferred, not withstanding his non-participation in the transaction
under consideration. Although not raised in the appeal, being of
jurisdictional character, this Court believes that the Court of First
Instance of Rizal, sitting as a Registration Court, lacked authority to
declare the transaction in question a pacto de retro sale, and
to order the Register of Deeds to register the affidavit. Interpreting
section 112 of Act No. 496 (Land Registration Act), this Court said, in
the case of Tangunan, et al. vs. Republic of the Philippines, 94 Phil., 171; 50 Off. Gaz., No. 1, p. 115:

“* * *. We are of the opinion that
the lower court did not err in finding that it lacks jurisdiction to
entertain the present petition for the simple reason that it involves a
controversial issue which takes this case out of the scope of section
112 of Act No. 496. While this section, among other things,
authorizes a person in interest to ask the court for any erasure,
alteration, or amendment. of a certificate of title ‘upon the ground
that registered interests of any description, whether vested,
contingent, expectant, or inchoate, have terminated and ceased’, and
apparently the petition comes under its scope, such relief can only
be granted if there is unanimity among the parties, or there is no
adverse claim or serious objection on the part of any party in
interest; otherwise the case becomes controversial and should be
threshed out in an ordinary case or in the case where the incident
property belongs. Thus, it was held that ‘It is not proper to
cancel an original certificate of Torrens title issued exclusively in
the name of a deceased person, and to issue a new certificate in the
name of his heirs, under, the provisions of section 112 of Act No. 496,
when the surviving spouse claims right of ownership over the land
covered by said certificate.’ (Gimenez vs. Castro, 40 Off. Gaz. (No. 3, 1st Sup.), p. 80). And, in another case, where
there was a serious controversy between the parties as to the right of
ownership over the properties involved, this court held ‘that following
the principle laid down in the decision above cited, the issues herein
should be ventilated in a regular action, as was done in the case of
Montilla vs. Jalandoni (TA-R.G. No. 3133) above-mentioned.’ (Government of the Phil. vs. Jalandoni, 44 Off. Gaz., 1837.)” (Italics supplied).

There is no gainsaying the fact that the petition under consideration
involves controversial issue. There was serious objection on the part
of petitioner against the registration of the affidavit for
consolidation of ownership. While the respondent Tiamson alleged the
transaction to be a sale of pacto de retro, the petitioner
Floriza claimed it was an equitable mortgage. While the respondent
Tiamson pretended that he could acquire the share of the intervenor
Reyes, the petitioner contended that said intervenor should not be
prejudiced at all. The controversy should, therefore, be threshed out
in an ordinary judicial action.

Considering this view, it is deemed unnecessary to pass upon the questions raised in the present appeal.

The judgment dated June 16, 1953, and the order dated September 12,
1953, appealed from are, therefore, reversed, without prejudice to the
rights of the parties to ventilate the questions raised in these
proceedings, in the proper court. Without costs.

Bengzon, Acting C. J., Padilla, Bautista Angelo, Concepcion, Reyes, J. B. L., Paredes, and Dizon, JJ., concur.