G.R. No. L-7287; March 29, 1913
Pedro Montiero, petitioner-appellee, vs. Virginia Salgado y Acuña, opponents-appellant.

FACTS

Pedro Montiero applied for registration of four parcels of land in his name, and in representation of his wife Severa Poniente, for six other parcels. Initially, these lands had been sold under pacto de retro to Benito Javier, who opposed the registration. After the spouses repurchased the lands using money obtained from Virginia Salgado, Javier withdrew his opposition. Subsequently, Virginia Salgado intervened, claiming ownership based on two instruments executed by the spouses on October 25, 1910. The first instrument was an absolute deed of sale conveying the ten parcels to Salgado for P2,700. The second was a conditional sale agreement where Salgado bound herself to resell the lands to the spouses between July 1 and December 31, 1925, under specified terms. The Court of Land Registration ordered the registration of the lands in the names of Montiero and Poniente, subject to a mortgage in favor of Salgado for P2,500. Salgado appealed, arguing the instruments constituted a sale with pacto de retro and that registration should be in her name.

ISSUE

Whether the instruments executed by the spouses in favor of Virginia Salgado constitute a sale with pacto de retro, and if so, whether the vendors under such a contract may apply for registration of the property in their names.

RULING

Yes, the instruments constitute a sale with pacto de retro. However, the vendors under a pacto de retro sale may apply for registration of the property in their names, provided the right of the purchaser is recorded. The Court affirmed the lower court’s decision, ordering registration in the names of Montiero and Poniente, subject to Salgado’s mortgage right. The stipulation extending the repurchase period beyond ten years is void under Article 1508 of the Civil Code. Following the precedent in Mortera vs. Martinez, the Civil Code provisions on pacto de retro remain in force, and the vendor’s right to redeem is a real right that can be asserted against any possessor. Therefore, registration in the vendor’s name is permissible while recognizing the purchaser’s lien.