GR 98920; (July, 1995) (Digest)
G.R. No. 98920 July 14, 1995
JESUS F. IGNACIO, petitioner, vs. THE HON. COURT OF APPEALS, RENATO G. YALUNG and MARINA T. YALUNG, respondents.
FACTS
Petitioner Jesus F. Ignacio purchased a house and lot from respondents Renato and Marina Yalung under a “Deed of Sale Under Pacto de Retro” for P1,000,000.00. The contract granted the respondents the right to repurchase the property within 90 days. Upon their failure to redeem within the stipulated period, Ignacio filed a petition for consolidation of ownership with the Regional Trial Court of Pasig, which was docketed as a land registration case (LRC Case No. R-3936). The respondents opposed, claiming the deed was actually an equitable mortgage securing a loan, citing their continued possession and alleged unconscionable interest.
The trial court ruled in favor of Ignacio, upholding the pacto de retro sale and ordering the consolidation of title. On appeal, the Court of Appeals reversed, holding that the RTC, sitting as a land registration court, lacked jurisdiction over the petition for consolidation. The appellate court ruled that such an action is an ordinary civil action under Article 1607 of the Civil Code and dismissed the case without prejudice.
ISSUE
Whether the Regional Trial Court, in the case at bar, validly acquired jurisdiction to hear and decide the petition for consolidation of ownership.
RULING
Yes. The Supreme Court granted the petition and reinstated the trial court’s decision. The legal logic is twofold. First, while an action for consolidation of title under a pacto de retro sale is indeed an ordinary civil action, the objection to the trial court’s exercise of jurisdiction in this instance was merely procedural and was waived. The parties fully acquiesced in submitting their evidence and arguments on the merits before the RTC. They filed pleadings, presented testimonial and documentary evidence, and were given full opportunity to litigate. Having voluntarily participated, respondents were estopped from questioning the court’s mode of exercise of jurisdiction.
Second, the RTC is a court of general jurisdiction. The classification of a case as a land registration matter does not divest it of its authority to act on the case under its broader jurisdiction when the parties have effectively treated it as an ordinary civil action. On the substantive issue, the Court affirmed the trial court’s finding that the contract was a true pacto de retro sale, not an equitable mortgage. The respondents, educated and experienced in business, understood the terms, and the reduced price is typical in such sales to facilitate redemption. Their claim of continuous possession was disproven, as they were leasing the property out. With no valid redemption exercised or tendered, Ignacio was entitled to consolidation of ownership.