G.R. No. L‑5530, 29 December 1910
Higinio Montañez v. Provincial Sheriff of Occidental Negros, et al.

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FACTS: 1. Contracts Ciriaco Montañez, the original owner of three parcels of land (Jaimaya, Tabao, Nabusuang), executed three private, unrecorded instruments:
– 15 May 1899 a mortgage of the Tabao and Nabusuang parcels to his brother Higinio Montañez for ₱200.
– 19 May 1899 a pacto de retro over the Jaimaya parcel to Higinio for ₱400.
– 3 August 1899 a pacto de retro sale of all three parcels to Pedro Jaboneta for ₱550.

2. Possession Higinio actually took possession of the parcels upon the 1899 mortgage/sale; he retained possession of Tabao and Nabusuang until Jaboneta’s claim.

3. Judicial proceeding On 3 August 1906 the Court of First Instance (CFI) of Occidental Negros, in a suit Pedro Jaboneta vs. Ciriaco Montañez, declared the 1899 sale to Jaboneta consummated and ordered execution of the judgment.

4. Execution 2 Sept 1907 the provincial deputy sheriff delivered possession of the three parcels to Jaboneta.

5. Action by Higinio 5 Sept 1907 Higinio instituted an action to recover possession of the three parcels. He was not a party to the 1906 CFI case, nor was he given notice or a hearing.

6. Lower court Found Higinio the owner of the Jaimaya parcel; held Jaboneta owner of the Tabao and Nabusuang parcels.

7. Appeal Higinio appealed the portion of the decision retaining possession in favor of Jaboneta.

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ISSUE: Whether Higinio Montañez, having acquired the Tabao and Nabusuang parcels from his brother under a mortgage (pacto de retro) and possessing them before the subsequent sale to Pedro Jaboneta, is entitled to ownership and possession of those parcels despite the CFI judgment in favor of Jaboneta, given that Higinio was not a party to the earlier suit and the contracts were private and unrecorded.

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RULING: (Supreme Court)
1. Ownership & Possession Under Art. 1473 of the Civil Code, ownership confers the right to possess. Higinio, having purchased the parcels and obtained actual possession prior to Jaboneta’s purchase, remained the lawful owner until the mortgage is fully satisfied.

2. Effect of Unrecorded Private Instruments The lack of registration did not invalidate Higinio’s title; registration is not a requisite for ownership, only for notice to third parties.

3. Void Judgment as to Non‑party The CFI decision, rendered without Higinio’s participation or opportunity to be heard, could not impair his rights; the judgment is void insofar as it affects him.

4. Disposition The Supreme Court reversed the portion of the lower‑court ruling that allowed Jaboneta to retain possession of the Tabao and Nabusuang parcels. Possession of those two parcels is restored to Higinio Montañez, who shall be protected in possession until the mortgage amount (₱200) is paid in full.

5. Damages & Costs No determination was made regarding damages for illegal possession or costs; the order is limited to restitution of possession.

Concurrence: Arellano, C.J., and Justices Torres, Moreland, and Trent.