G.R. No. L-14857, December 20, 1919
MARIANO CABANOS, plaintiff-appellee, vs. THE REGISTER OF DEEDS OF LAGUNA and CIRILO OBIÑANA, defendant. CIRILO OBIÑANA, appellant.

FACTS:
On March 10, 1913, Cirilo Obiñana sold three parcels of land to Mariano Cabanos under a pacto de retro (sale with right of repurchase) for P1,170. The document was ratified before a notary on September 30, 1913. Obiñana failed to repurchase the property within the stipulated period. However, on December 17, 1914, Obiñana filed a petition for the original registration of the same lands under the Torrens system in his own name, without Cabanos’s knowledge. A decree of registration was issued in Obiñana’s favor on August 8, 1916. On January 12, 1918, Cabanos filed a complaint seeking to be declared the exclusive owner, demanding delivery of the lands, cancellation of Obiñana’s certificates of title, and issuance of new titles in his name, plus damages. Obiñana defended by alleging the pacto de retro document was fictitious and merely concealed a usurious loan. The trial court ruled in favor of Cabanos. Obiñana appealed.

ISSUE:
Whether Mariano Cabanos, as the purchaser in a pacto de retro sale where the right of repurchase was not exercised, can compel the vendor, Cirilo Obiñana, to deliver the lands and execute an absolute deed of sale, notwithstanding that Obiñana subsequently obtained a Torrens title over the same properties.

RULING:
Yes. The Supreme Court affirmed the trial court’s decision with modifications. The Court held:

3. Notwithstanding the indefeasibility of Obiñana’s Torrens title, the prior contract of sale between the parties remained valid and subsisting. The issuance of the decree did not rescind the pacto de retro sale. While Cabanos lost his action in rem to recover the property based on his consolidated ownership due to the title, he retained a personal action against Obiñana to enforce the vendor’s obligation under the contract.
4. Therefore, Obiñana, having received the purchase price and with no right to retain the land, was ordered to:
a. Execute a deed of absolute sale in favor of Cabanos, with retroactive effect from the date of the ratification of the original pacto de retro document.
b. Deliver possession of the lands to Cabanos.
c. Deliver to Cabanos two-thirds of the fruits gathered from the lands since March 1913, or their value.
d. Deliver the owner’s duplicate certificates of title to Cabanos for the annotation of the absolute sale.
5. Costs were not awarded.

Separate Opinions:
Justice Araullo concurred, emphasizing that Obiñana’s Torrens title did not extinguish his contractual obligation to Cabanos and that Obiñana, having litigated with temerity, should bear the costs. Justice Malcolm concurred in the result, aligning with the views of the principal decision as qualified by Justice Araullo.