G.R. No. L-8450; January 29, 1914
CRISANTO LICHAUCO, ET AL., petitioners-appellees, vs. RAYMUNDA SORIANO, opponent-appellant.

FACTS:
Petitioners Crisanto Lichauco et al. sought registration of several parcels of land in their names with the Court of Land Registration. Opponent Raymunda Soriano objected to the registration of parcels A and C. The dispute centered on a notarial instrument dated December 7, 1888, executed by creditors of spouses Ramon Henson and Matilde Magdañgal. This instrument outlined an agreement among creditors (including Concepcion Gruet de Atayde, Cornelia Laochanco, Joaquina Caldes, and Lino Cardenas Reyes, represented by Raymunda Soriano) to manage the spouses’ hacienda to settle outstanding debts. Key provisions included: forming a partnership to administer the property, distributing net profits proportionally among creditors, assigning a monthly pension to the spouses, and restoring the hacienda to the spouses after all debts were paid. On the same date, a separate notarial document (No. 16) purported to absolutely sell parcels A and C to creditors Concepcion Gruet and Cornelia Laochanco. Later, Concepcion Gruet assigned her rights to Cornelia Laochanco, mother of the petitioners. The petitioners based their claim of ownership on this purported sale.

ISSUE:
Whether the notarial instrument of December 7, 1888, and the subsequent purported sale of parcels A and C on January 12, 1889, validly transferred ownership of the parcels to the petitioners, thereby entitling them to registration.

RULING:
No. The Supreme Court reversed the judgment of the Court of Land Registration regarding parcels A and C and denied the petition for their registration.

The Court held that the instrument of December 7, 1888, constituted a novation of the creditors’ preexisting claims and created a contract of antichresis over the property, whereby the creditors would possess and manage the hacienda to recover their credits. Additionally, the instrument established a partnership among the creditors for this purpose. The subsequent purported absolute sale of parcels A and C to only two of the creditors (Concepcion Gruet and Cornelia Laochanco) was ineffective because:
1. It was executed without the consent of the other parties to the original agreement, violating the partnership formed under the 1888 instrument.

3. The sale did not convey valid title to the purchasers, as the original contract of antichresis and partnership remained binding on all parties and their privies, regardless of its non-registration in the property registry.

Thus, the petitioners’ claim of ownership, derived from the invalid sale, could not be sustained. The registration of parcels A and C was denied. The judgment was affirmed in all other respects. No costs were awarded.