GR L 19280; (February, 1967) (Digest)
G.R. No. L-19280 February 10, 1967
EUGENIA CORPUS, petitioner, vs. COURT OF APPEALS, MARIANO LUDA, FRANCISCO RAMOS and GENOVEVA ITO, respondents.
FACTS
The disputed four-hectare land in Dupax, Nueva Vizcaya was part of a homestead acquired by intervenor Genoveva Ito. On April 22, 1948, she sold one hectare with a right to repurchase (pacto de retro) to defendant Jose Molina. On September 15, 1952, she sold the entire four hectares with a right to repurchase to defendant-appellant Eugenia Corpus. Both sales were unregistered. Corpus and Molina cultivated the land and paid taxes. After the action commenced, Molina conveyed his one hectare to Corpus, who then possessed the entire property. Subsequently, Ito mortgaged the land to Dr. Leon Velasco, and this mortgage was annotated on her title. On June 25, 1953, Ito again sold the same land with a right to redeem within one year to the plaintiffs, spouses Mariano Ludan and Francisca Ramos. The plaintiffs, in good faith and without knowledge of the prior unregistered conveyances (knowing only of the Velasco mortgage), used the proceeds from the sale to pay Ito’s debt to Velasco, resulting in the cancellation of the mortgage annotation. They registered the sale in their favor, which had the approval of the Secretary of Agriculture and Natural Resources. Ito failed to redeem within the stipulated year, so the plaintiffs secured a court order consolidating their title. Defendants Molina and Corpus refused to vacate, prompting the plaintiffs to file an action for recovery. The Court of First Instance declared the plaintiffs as owners, ordered Corpus to restore possession, and declared Ito with a right to repurchase from the plaintiffs upon payment of P6,000. Corpus appealed to the Court of Appeals, which affirmed the judgment but modified it by declaring Ito without any right to redeem, thereby recognizing the plaintiffs as absolute owners entitled to possession.
ISSUE
1. Whether the pacto de retro sale between Genoveva Ito and the spouses Mariano Ludan and Francisca Ramos should be interpreted as an equitable mortgage under Article 1602 of the New Civil Code.
2. Whether petitioner Eugenia Corpus has a right to redeem the land.
3. Whether the Court of Appeals erred in reviewing and reversing the judgment of the lower court in favor of respondents Ludan and Ramos, who did not appeal.
RULING
1. The Supreme Court held that petitioner Corpus cannot raise the issue that the pacto de retro sale should be considered an equitable mortgage under Article 1602 of the New Civil Code because she was not a party to that contract. While intervenor Ito raised this issue, the trial court declared it a real sale and recognized her right to redeem under Section 119 of the Public Land Act. The Court of Appeals eliminated this right of redemption, and Ito did not seek a review of that decision, rendering the question closed.
2. The Supreme Court held that petitioner Corpus has no right to redeem the land. Since Genoveva Ito herself lost her right of redemption by the Court of Appeals’ judgment, which she did not appeal, Corpus cannot exercise that right. Furthermore, Corpus does not qualify under Section 119 of the Public Land Act, as she is neither the widow nor a legal heir of the homestead applicant, Genoveva Ito.
3. In view of the resolution of the first two issues, the Supreme Court deemed it unnecessary to pass upon the third assignment of error. The judgment of the Court of Appeals was affirmed.