G.R. No. 44388; September 22, 1938
ENGRACIO DE ASIS, appellant, vs. MANILA TRADING AND SUPPLY CO., appellee.

FACTS

The property in question, covered by Transfer Certificate of Title No. 1434 in the name of Ramon H. Severino, was sold with pacto de retro to Engracio de Asis (appellant) on August 28, 1926, and this sale was duly recorded and noted on the certificate of title. Later, by virtue of a writ of execution against Severino in another civil case, the provincial sheriff sold the same property at public auction to Manila Trading and Supply Co. (appellee) on March 30, 1929. The sheriff’s deed of sale was recorded on June 7, 1929. The appellee filed a petition for the cancellation of the original certificate and issuance of a new one in its favor. The appellant opposed this and sought a copy of the certificate due to loss of his duplicate. The lower court granted the appellee’s petition.

ISSUE

Whether the prior registration of the pacto de retro sale in favor of the appellant gives him preference over the subsequent sheriff’s sale and registration in favor of the appellee.

RULING

Yes. The Supreme Court reversed the lower court’s decision. A sale with pacto de retro transfers legal title to the vendee, subject to a resolutory condition. The appellant’s title became consolidated and irrevocable approximately two years before the sheriff’s sale, as the vendor a retro did not repurchase within the stipulated period. The proper notation of the pacto de retro contract on the certificate of title constituted notice to all persons dealing with the property of the agreement and its resolutory condition. Therefore, the subsequent sheriff’s sale and registration could not affect the appellant’s already consolidated ownership. Costs were imposed on the appellee.

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