G.R. No. L-1619

FACTS:
Petitioner-appellant Filomena Villarruel y Basilio was the former owner of a parcel of land. Prior to filing a petition for land registration, she sold portions of the land: one to Miguel Herrera with a two-year right to repurchase (pacto de retro), and the remainder to respondent-appellee Petronila Encarnacion with a one-year right to repurchase. At the time the registration petition was filed, the repurchase periods had not yet expired. The vendees (Herrera and Encarnacion) opposed the registration. The Court of Land Registration denied Villarruel’s petition.

ISSUE:
Whether the petitioner, who held only a right to repurchase (pacto de retro) the property within a stipulated period, was entitled to have her interest registered under Section 19 of Act No. 496 (The Land Registration Act).

RULING:
No. The Supreme Court affirmed the denial of registration. The Court held that a vendor under a pacto de retro is not an “owner in fee simple” entitled to register the land itself under Section 19 of Act No. 496 . Furthermore, such a vendor is not a “mortgagor” within the meaning of that section. The contract of pacto de retro (governed by Articles 1507 et seq. of the Civil Code) is fundamentally different from a mortgage contract. Under a pacto de retro, the vendor loses all interest in the property absolutely if she fails to repurchase on the exact day stipulated, with no right of redemption thereafter. In contrast, a mortgagor retains a right of redemption even after the debt’s maturity until foreclosure. The term “mortgage” in the statute refers to the specific, known contract of mortgage, not to other distinct contracts like the pacto de retro. The Court noted that subsequent legislation (Act No. 1108, Section 6) had since expressly granted persons in the petitioner’s situation the right to register such an interest, but that law was not in effect at the time of her petition.