57 SUPREME COURT even as against the heirs of the deceased spouse.

The rationale for

0 REPORTS this rule is that “a person dealing with registered land is not required
to go behind the register to determine the condition of the property.
ANNOTATED He is only charged with notice of the burdens on the property which
Cruz vs. Leis are noted on the face of the register or the certificate of title. To
G.R. No. 125233. March 9, 2000. *
require
Spouses ALEXANDER CRUZ and ADELAIDA CRUZ,
petitioners, vs. ELEUTERIO LEIS, RAYMUNDO LEIS, ________________

ANASTACIO L. LAGDANO, LORETA L. CAYONDA and  FIRST DIVISION.

*

THE HONORABLE COURT OF APPEALS, respondents. 571

Co-Ownership; Redemption; Redemption by a co-owner does VOL. 327, 571
not terminate the co-ownership nor give her title to the entire land MARCH 9, 2000
subject of the co-ownership.—Incidentally, there is no merit in
petitioners’ contention that Gertrudes’ redemption of the property Cruz vs. Leis
from the Daily Savings Bank vested in her ownership over the same him to do more is to defeat one of the primary objects of the
to the exclusion of her co-owners. We dismissed the same argument Torrens system.”
by one of the petitioners in Paulmitan vs. Court of Appeals, where Same; Pacto de Retro; Consolidation of
one of the petitioners therein claimed ownership of the entire Ownership; Usury; Article 1607 of the Civil Code, on consolidation
property subject of the case by virtue of her redemption thereof after of ownership by the vendee by virtue of the failure of the vendor to
the same was forfeited in favor of the provincial government for non- comply with the provisions of Article 1616, is intended to minimize
payment of taxes. We held, however, that the redemption of the land the evils which the pacto de retro sale has caused in the hands of
“did not terminate the co-ownership nor give her title to the entire usurers—a judicial order is necessary in order to determine the true
land subject of the co-ownership.” nature of the transaction and to prevent the interposition of buyers
Sales; Land Titles; Husband and Wife; Conjugal Partnership in good faith while the determination is being made.—As gleaned
of Gains; Where a parcel of land, forming part of the undistributed from the foregoing discussion, despite the Court of Appeals’ finding
properties of the dissolved conjugal partnership of gains, is sold by and conclusion that Gertrudes as well as private respondents failed to
a widow to a purchaser who merely relied on the face of the repurchase the property within the period stipulated and has lost all
certificate of title thereto, issued solely in the name of the widow, the their rights to it, it still ruled against petitioners by affirming the
purchaser acquires a valid title to the land even as against the heirs Regional Trial Court’s decision on the premise that there was no
of the deceased spouse.—Unfortunately for private respondents, compliance with Article 1607 of the Civil Code requiring a judicial
however, the property was registered in TCT No. 43100 solely in the hearing before registration of the property in the name of petitioners.
name of “Gertrudes Isidro, widow,” Where a parcel of land, forming This provision states: ART. 1607. In case of real property, the
part of the undistributed properties of the dissolved conjugal consolidation of ownership in the vendee by virtue of the failure of
partnership of gains, is sold by a widow to a purchaser who merely the vendor to comply with the provisions of Article 1616 shall not be
relied on the face of the certificate of title thereto, issued solely in the recorded in the Registry of Property without a judicial order, after
name of the widow, the purchaser acquires a valid title to the land the vendor has been duly heard. The aforequoted article is intended

1|Page
to minimize the evils which the pacto de retro sale has caused in the PETITION for review on certiorari of a decision of the Court
hands of usurers. A judicial order is necessary in order to determine of Appeals.
the true nature of the transaction and to prevent the interposition of
buyers in good faith while the determination is being made. The facts are stated in the opinion of the Court.
Same; Same; The essence of a pacto de retro sale is that title      Domingo M. Ballon for petitioners.
and ownership of the property sold are immediately vested in the      Hugo, Hugo & Associates for private respondents.
vendee a retro, subject to the resolutory condition of repurchase by
the vendor a retro within the reglementary period-failure of the KAPUNAN, J.:
vendor a retro to perform said resolutory condition vests upon the
vendee by operation of law absolute title and ownership over the
Private respondents, the heirs of spouses Adriano Leis and
property sold; The failure of a vendee a retro to consolidate his title
under Article 1607 of the Civil Code does not impair such title or
Gertrudes Isidro,  filed an action before the Regional Trial
1

ownership for the method prescribed thereunder is merely for the Court (RTC) of Pasig seeking the nullification of the contracts
purpose of registering the consolidated title.—It bears stressing that of sale over a lot executed by Gertrudes Isidro in favor of
notwithstanding Article 1607, the recording in the Registry of petitioner Alexander Cruz, as well as the title subsequently
Property of the consolidation of ownership of the vendee is not a issued in the name of the latter. Private respondents claimed
condition sine qua non to the transfer of ownership. Petitioners are that the contracts were vitiated by fraud as Gertrudes was
the owners of the subject property since neither Gertrudes nor her co- illiterate and already 80 years old at the time of the execution
owners redeemed the of the contracts; that the price for the land was insufficient as it
572
was sold only for P39,083.00 when the fair market value of the
57 SUPREME lot should be P1,000.00 per square meter, instead of P390.00,
2 COURT REPORTS more or less; and that the property subject of the
ANNOTATED
Cruz vs. Leis ________________
same within the one-year period stipulated in 1
 Private respondents Eleuterio Leis, Raymundo Leis, Anastacia Leis-
the “Kasunduan.” The essence of a pacto de retro sale is that title Lagnada and Loreta Leis-Cayonda are the children of spouses Adriano Leis and
and ownership of the property sold are immediately vested in the Gertrudes Isidro, while private respondent Teresita Mandocdoc is the spouses’
vendee a retro, subject to the resolutory condition of repurchase by grandchild.
the vendor a retro within the stipulated period. Failure thus of the 573
vendor a retro to perform said resolutory condition vests upon the VOL. 327, MARCH 9, 573
vendee by operation of law absolute title and ownership over the 2000
property sold. As title is already vested in the vendee a retro, his
Cruz vs. Leis
failure to consolidate his title under Article 1607 of the Civil Code
does not impair such title or ownership for the method prescribed sale was conjugal and, consequently, its sale without the
thereunder is merely for the purpose of registering the consolidated knowledge and consent of private respondents was in
title. derogation of their rights as heirs.

2|Page
 The facts that gave rise to the complaint: On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs,
Adriano and Gertrudes were married on 19 April 1923. On herein private respondents, received demands to vacate the
27 April 1955, Gertrudes acquired from the then Department of premises from petitioners, the new owners of the prop-
Agriculture and Natural Resources (DANR) a parcel of land 574
with an area of one hundred (100) square meters, situated at 57 SUPREME COURT
Bo. Sto. Niño, Marikina, Rizal and covered by Transfer 4 REPORTS
Certificate of Title (TCT) No. 42245. The Deed of Sale ANNOTATED
described Gertrudes as a widow. On 2 March 1956, TCT No. Cruz vs. Leis
43100 was issued in the name of “Gertrudes Isidro,” who was erty. Private respondents responded by filing a complaint as
also referred to therein as a “widow.” mentioned at the outset.
On 2 December 1973, Adriano died. It does not appear that On the basis of the foregoing facts, the RTC rendered a
he executed a will before his death. decision in favor of private respondents. The RTC held that the
On 5 February 1985, Gertrudes obtained a loan from land was conjugal property since the evidence presented by
petitioners, the spouses Alexander and Adelaida Cruz, in the private respondents disclosed that the same was acquired
amount of P15,000.00 at 5% interest, payable on or before 5 during the marriage of the spouses and that Adriano
February 1986. The loan was secured by a mortgage over the contributed money for the purchase of the property. Thus, the
property covered by TCT No. 43100. Gertrudes, however, court concluded, Gertrudes could only sell to petitioner spouses
failed to pay the loan on the due date. her one-half share in the property.
Unable to pay her outstanding obligation after the debt The trial court also ruled that no fraud attended the
became due and payable, on 11 March 1986, Gertrudes execution of the contracts. Nevertheless,
executed two contracts in favor of petitioner Alexander Cruz. the “Kasunduan,” providing for a sale con pacto de retro, had
The first is denominated as “Kasunduan” which the parties superseded the “Kasunduan ng Tuwirang Bilihan,” the deed of
concede is a pacto de retro sale, granting Gertrudes one year absolute sale. The trial court did not consider the pacto de
within which to repurchase the property. The second is retro sale an equitable mortgage, despite the allegedly
a “Kasunduan ng Tuwirang Bilihan,” a Deed of Absolute Sale insufficient price. Nonetheless, the trial court found for private
covering the same property for the price of P39,083.00, the respondents. It rationalized that petitioners failed to comply
same amount stipulated in the “Kasunduan” with the provisions of Article 1607 of the Civil Code requiring
For failure of Gertrudes to repurchase the property, a judicial order for the consolidation of the ownership in the
ownership thereof was consolidated in the name of Alexander vendee a retro to be recorded in the Registry of Property.
Cruz in whose name TCT No. 130584 was issued on 21 April The dispositive portion of the RTC’s Decision reads:
1987, canceling TCT No. 43100 in the name of Gertrudes WHEREFORE, in the light of all the foregoing, judgment is hereby
Isidro. rendered:

3|Page
 1. 1.Declaring Exhibit G—“Kasunduan ng Tuwirang Bilihan” Gertrudes and the DANR as well as in TCT No. 43100 as a
Null and Void and declar[ing] that the title issued pursuant widow. Second, assuming the land was conjugal property,
thereto is likewise Null and Void; petitioners argue that the same became Gertrudes’ exclusively
2. 2.Declaring the property in litigation as conjugal property; when, in 1979, she mortgaged the property to the Daily
3. 3.Ordering the Registry of Deeds of Marikina Branch to Savings Bank and Loan Association. The bank later foreclosed
reinstate the title of Gertrudes Isidro;
on the mortgage in 1981 but Gertrudes redeemed the same in
4. 4.Ordering the plaintiff[s] [sic] to comply with the
provisiont[s] of Article 1607 in relation to Article 1616 of 1983.
the Civil Code; The paraphernal or conjugal nature of the property is not
5. 5.Ordering the defendant[s] to pay plaintiff[s] P15,000.00 determinative of the ownership of the disputed property. If the
nominal damages for the violation of plaintiffs’ rights; property was paraphernal as contended by petitioners,
6. 6.Ordering the defendant[s] to pay plaintiff[s] the sum of Gertrudes Isidro would have the absolute right to dispose of the
P8,000.00 as and for attorney’s fees; same, and absolute title and ownership was vested in
petitioners upon the failure of Gertrudes to redeem the
575 property. On the other hand, if the property was conjugal, as
VOL. 327, MARCH 9, 575 private respondents maintain, upon the death of Adriano Leis,
2000 the conjugal partnership was terminated,  entitling Gertrudes to
3

Cruz vs. Leis one-half of the property.  Adriano’s rights to the other half,
4

________________
1. 7.Dismissing defendant[s’] counterclaim; and
2. 8.Ordering defendant[s] to pay the cost of suit.  Records, p. 276.
2

 Civil Code, Article 175 (1).

3

SO ORDERED. 2
 Civil Code, Article 185.
4

Petitioners appealed to the Court of Appeals in vain. The Court 576

of Appeals affirmed the decision of the Regional Trial Court, 57 SUPREME COURT
holding that since the property was acquired during the 6 REPORTS
marriage of Gertrudes to Adriano, the same was presumed to ANNOTATED
be conjugal property under Article 160 of the Civil Code. The Cruz vs. Leis
appellate court, like the trial court, also noted that petitioners in turn, were transmitted upon his death to his heirs,  which
5

did not comply with the provisions of Article 1607 of the Civil includes his widow Gertrudes, who is entitled to the same share
Code. as that of each of the legitimate children.  Thus, as a result of
6

Petitioners are now before this Court seeking the reversal of the death of Adriano, a regime of co-ownership arose between
the decision of the Court of Appeals. First, they contend that Gertrudes and the other heirs in relation to the property.
the subject property is not conjugal but is owned exclusively by
Gertrudes, who was described in the Deed of Sale between
4|Page
 Incidentally, there is no merit in petitioners’ contention that 2000
Gertrudes’ redemption of the property from the Daily Savings Cruz vs. Leis
Bank vested in her ownership over the same to the exclusion of to end the existing state of co-ownership (Supra, Art. 489). There is
her co-owners. We dismissed the same argument by one of the no doubt that redemption of property entails a necessary expense.
petitioners in Paulmitan vs. Court of Appeals,  where one of the
7
Under the Civil Code:
petitioners therein claimed ownership of the entire property Art. 488. Each co-owner shall have a right to compel the other
subject of the case by virtue of her redemption thereof after the co-owners to contribute to the expenses of preservation of the thing
same was forfeited in favor of the provincial government for or right owned in common and to the taxes. Any one of the latter
non-payment of taxes. We held, however, that the redemption may exempt himself from this obligation by renouncing so much of
of the land “did not terminate the co-ownership nor give her his undivided interest as may be equivalent to his share of the
expenses and taxes. No such waiver shall be made if it is prejudicial
title to the entire land subject of the co-ownership.” We
to the co-ownership.
expounded, quoting our pronouncement in Adille vs. Court of The result is that the property remains to be in a condition of co-
Appeals: 8
ownership. While a vendee a retro, under Article 1613 of the Code,
The petition raises a purely legal issue: May a co-owner acquire “may not be compelled to consent to a partial redemption,” the
exclusive ownership over the property held in common? redemption by one co-heir or co-owner of the property in its totality
Essentially, it is the petitioner’s contention that the property does not vest in him ownership over it. Failure on the part of all the
subject of dispute devolved upon him upon the failure of his co-heirs co-owners to redeem it entitles the vendee a retro to retain the
to join him in its redemption within the period required by law. He property and consolidate title thereto in his name (Supra, Art. 1607).
relies on the provisions of Article 1515 of the old Civil Code, Article But the provision does not give to the redeeming co-owner the right
1613 of the present Code, giving the vendee a retro the right to to the entire property. It does not provide for a mode of terminating a
demand redemption of the entire property. co-ownership.
There is no merit in this petition. It is conceded that, as a rule, a co-owner such as Gertrudes
The right of repurchase may be exercised by a co-owner with
could only dispose of her share in the property owned in
respect to his share alone (CIVIL CODE, Art. 1612; CIVIL CODE
[1889], Art. 1514.). While the records show that petitioner redeemed
common. Article 493 of the Civil Code provides:
the property in its entirety, shouldering the expenses therefor, that ART. 493. Each co-owner shall have the full ownership of his part of
did not make him the owner of all of it. In other words, it did not put the fruits and benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even substitute another person in
________________ its enjoyment, except when personal rights are involved. But the
effect of the alienation or the mortgage, with respect to the co-
5
 Civil Code, Article 777. owners, shall be limited to the portion which may be allotted to him
6
 Civil Code, Article 996. in the division upon the termination of the co-ownership.
7
 215 SCRA 866 (1992).
8
 157 SCRA 455 (1988).
Unfortunately for private respondents, however, the property
577 was registered in TCT No. 43100 solely in the name of
VOL. 327, MARCH 9, 577 “Gertrudes Isidro, widow.” Where a parcel of land, forming

5|Page
part of the undistributed properties of the dissolved conjugal of the transaction and to prevent the interposition of buyers in
partnership of gains, is sold by a widow to a purchaser who good faith while the determination is being made. 10

merely relied on the face of the certificate of title thereto, It bears stressing that notwithstanding Article 1607, the
issued solely in the name of the widow, the purchaser acquires recording in the Registry of Property of the consolidation of
a valid title to the land even as against the heirs of the ownership of the vendee is not a condition sine qua non to the
578 transfer of ownership. Petitioners are the owners of the sub-
57 SUPREME COURT
8 REPORTS ________________
ANNOTATED 9
 Ibarra vs. Ibarra, Sr., 156 SCRA 616 (1987), citing Paraiso vs.
Cruz vs. Leis Camon, 106 Phil. 187 (1959). Ibarra was wrongly cited in p. 4 of the Petition
deceased spouse. The rationale for this rule is that “a person (Rollo, p. 6) as Vda. de Carcallas v. Judge Yancha, G.R. No. L-46401, 18 Dec.
87,” at 156 SCRA 608 (1987).
dealing with registered land is not required to go behind the 10
 Aquino, Civil Code, Vol. 3, 1990 ed., pp. 150-151.
register to determine the condition of the property. He is only 579
charged with notice of the burdens on the property which are VOL. 327, MARCH 9, 579
noted on the face of the register or the certificate of title. To 2000
require him to do more is to defeat one of the primary objects Cruz vs. Leis
of the Torrens system.” 9

ject property since neither Gertrudes nor her co-owners

As gleaned from the foregoing discussion, despite the Court redeemed the same within the one-year period stipulated in
of Appeals’ finding and conclusion that Gertrudes as well as the “Kasunduan.” The essence of a pacto de retro sale is that
private respondents failed to repurchase the property within the title and ownership of the property sold are immediately vested
period stipulated and has lost all their rights to it, it still ruled in the vendee a retro, subject to the resolutory condition of
against petitioners by affirming the Regional Trial Court’s repurchase by the vendor a retro within the stipulated period.
decision on the premise that there was no compliance with Failure thus of the vendor a retro to perform said resolutory
Article 1607 of the Civil Code requiring a judicial hearing condition vests upon the vendee by operation of law absolute
before registration of the property in the name of petitioners. title and ownership over the property sold. As title is already
This provision states: vested in the vendee a retro, his failure to consolidate his title
ART. 1607. In case of real property, the consolidation of ownership
under Article 1607 of the Civil Code does not impair such title
in the vendee by virtue of the failure of the vendor to comply with
the provisions of Article 1616 shall not be recorded in the Registry or ownership for the method prescribed thereunder is merely
of Property without a judicial order, after the vendor has been duly for the purpose of registering the consolidated title. 11

heard. WHEREFORE, the decision of the Court of Appeals is

The aforequoted article is intended to minimize the evils which MODIFIED in that the petitioners are deemed owners of the
the pacto de retro sale has caused in the hands of usurers. A property by reason of the failure of the vendor, Gertrudes
judicial order is necessary in order to determine the true nature Isidro, to repurchase the same within the period stipulated.

6|Page
However, Transfer Certificate of Title No. 130584, in the name Properties acquired during the marriage are presumed to be
of Alexander M. Cruz, which was issued without judicial order, conjugal, but this prima facie presumption cannot prevail over
is hereby ordered CANCELLED, and Transfer Certificate of the cadastral court’s specific finding, reached in adversarial
Title No. 43100 in the name of Gertrudes Isidro is ordered proceedings, that the lot was inherited by one of the spouses.
REINSTATED, without prejudice to compliance by petitioners (Pisueña vs. Heirs of Petra Unating and Aquilino Villar, 313
with the provisions of Article 1607 of the Civil Code. SCRA 384 [1999])
SO ORDERED.
     Davide, Jr.  (C.J., Chairman), Puno and Ynares- ——o0o——
Santiago, JJ., concur.
     Pardo, J., On official business abroad. © Copyright 2020 Central Book Supply, Inc. All rights reserved
Judgment modified. Transfer Cert, of Title No. 130584
issued in the name of Alexander M. Cruz cancelled, Transfer
Cert, of Title No. 43100 in the name of Gertrudes Isidro
reinstated.
_________________

 De Guzman, Jr. vs. Court of Appeals, 156 SCRA 701 (1987). See also De
11

Bayquen vs. Balaoro, 143 SCRA 412 (1986).

580
58 SUPREME COURT
0 REPORTS
ANNOTATED
People vs. Gaviola
Notes.—The party who invokes the presumption of Article
160 of the New Civil Code provides that “all property of the
marriage is presumed to belong to the conjugal partnership”
must first prove that the property in controversy was acquired
during the marriage—the presumption refers only to the
property acquired during the marriage and does not operate
when there is no showing as to when property alleged to be
conjugal was acquired. (Francisco vs. Court of Appeals, 299
SCRA 188 [1998])

7|Page