G.R. No. L-15043; February 27, 1961
JUANITO FLORIZA, petitioner, vs. THE HON. COURT OF APPEALS and EULOGIO TIAMSON, respondents.

FACTS

Respondent Eulogio Tiamson filed a petition with the Court of First Instance (CFI) of Rizal, sitting as a land registration court, to register an Affidavit of Consolidation of Ownership over a residential lot. He claimed to have purchased the property from petitioner Juanito Floriza and others under a pacto de retro sale with a one-year redemption period. Floriza and the other vendors opposed the registration, contending the transaction was an equitable mortgage, that usurious interest was collected, and that a share belonging to an heir, Eduardo Reyes, was involved. The CFI, on June 16, 1953, declared the transaction a valid pacto de retro sale and ordered the registration of the affidavit. On July 9, 1953, Floriza filed a motion to repurchase the property, invoking the 30-day redemption period granted to vendors under Article 1606(3) of the new Civil Code. The CFI denied this motion on September 12, 1953, ruling that Tiamson’s right had vested before the new Code’s effectivity. The Court of Appeals later dismissed Floriza’s appeal, holding that the 30-day right to repurchase under Article 1606(3) must be exercised without judicial intervention and that Floriza had lost the right by not exercising it within 30 days after the CFI decision became final.

ISSUE

The primary issue was whether the CFI, acting as a land registration court under Act No. 496 , had jurisdiction to adjudicate the controversial issues surrounding the nature of the transaction and order the registration of the affidavit of consolidation.

RULING

The Supreme Court reversed the decisions of the lower courts, ruling that the CFI, sitting as a land registration court, lacked jurisdiction over the petition. The Court interpreted Section 112 of the Land Registration Act ( Act No. 496 ), which allows for amendments to certificates of title. Jurisdiction under this section is limited to non-controversial matters where there is unanimity among parties or no serious adverse claims. The Court cited precedent, including Tangunan v. Republic, establishing that when a petition involves disputed factual and legal issues—such as whether a contract is a true pacto de retro sale or an equitable mortgage, and the validity of claims over shares of non-participating heirs—it becomes controversial and must be litigated in an ordinary civil action. Here, Floriza’s opposition raised substantial controversies regarding the nature of the contract and ownership interests. Consequently, the registration court exceeded its authority in declaring the transaction a pacto de retro sale and ordering the registration. The Supreme Court did not reach the substantive issues regarding the application of Article 1606(3) or the rights of the heir, as the jurisdictional defect was fundamental. The judgment and order of the CFI were set aside, without prejudice to the parties pursuing their claims in the proper court.