Facts:

The case involves two petitions for a writ of certiorari filed by Simeon Ayson and Maura Lumanlan (G.R. No. L-6501) and Primo Arambulo (G.R. No. L-6599) seeking judicial review of a decision rendered by the Court of Appeals in CA-GR No. 7358-R on May 31, 1955. The origins of this conflict date back to December 29, 1942, when Primo Arambulo initiated an action in the Court of First Instance of Tarlac to compel Basilio Yalung to execute a formal deed of sale for a 10-hectare parcel of land, covered by Certificate of Title No. 41132. This was a follow-up to a private contract the two executed on November 24, 1942. Subsequently, Paulina Yalung, Basilio's sister and a co-owner, was also included as a party defendant. In this context, the appellant spouses, Simeon Ayson and Maura Lumanlan, intervened, claiming they were vendees a retro for the same piece of land, having entered into a transaction regarding the property with the Yalungs prior to Arambulo's claim. After multiple

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Facts:

Background of the Transaction

• On November 24, 1942, Basilio Yalung executed a private document in Manila selling a 10-hectare parcel of land in barrio Lawi, Capas, Tarlac, covered by Torrens Certificate No. 41132, to Primo Arambulo for the price of P5,000.
• Primo Arambulo took peaceful possession of the property, acquired the tenant’s house, installed a water pump, made improvements, and placed tenants there.
• The seller, Basilio Yalung, later showed reluctance to formalize a registered deed of sale and to surrender the Certificate of Title, alleging that it was kept elsewhere for safekeeping.

Discovery of Conflicting Interests and Prior Encumbrances

• Arambulo, with his attorney Victorino Valle, discovered that the Certificate of Title remained in the name of Basilia Tambengco (Basilio’s mother) and Paulina Yalung (Basilio’s sister).
• It was further revealed that on December 10, 1936, the land had been mortgaged by Basilia Tambengco to intervenors Simeon Ayson and Maura Lumanlan for P2,000.
• On May 15, 1941, Basilio Yalung and his sister, anticipating another deed notarized for the mortgage debt plus an additional P1,200, informally agreed that the property would be deemed sold to Ayson and Lumanlan subject to a reserved right of repurchase for P3,200 within four years. The deed of sale (Exhibit 9) was executed but not recorded, with the duplicate Certificate of Title later placed in the possession of the vendees a retro.

Litigation and Procedural Developments

• Primo Arambulo initiated an action in the Court of First Instance of Tarlac on December 29, 1942 seeking compulsory execution of a formal and registrable deed of sale from Basilio Yalung.
• Subsequently, Paulina Yalung was impleaded as a defendant due to her co-ownership of the land, while Ayson and Lumanlan intervened claiming to be vendees a retro, having deposited P3,200 with the Clerk of Court per the July 27, 1944 order.
• During the pendency, the intervenors secured the recording of the sale in their favor in July 1943 and effected the cancellation of Torrens Certificate No. 41132 for a new certificate (No. 19408) in their name, albeit subject to the lis pendens entered by Arambulo on December 29, 1942.

Repurchase and Consignation Developments

• As the redemption period neared expiration, on May 10, 1944, Arambulo requested that the intervenors allow him to repurchase the land and pay an additional P500 to Paulina Yalung—an amount representing her share or participation.
• By conciliatory agreement at the hearing, intervenors and defendants withdrew objections, provided that the sums (P3,200 for repurchase and P500 for Paulina Yalung) be consigned in Court.
• Following this, Arambulo deposited the amount of P3,700 (remitting a cashier’s check from the Philippine National Bank and a separate money order for P18.50 clerk’s fees) with the Clerk of Court, triggering a series of contested issues.

Entry of the Court Below and Subsequent Appeals

• The trial Court ultimately rendered a decision dismissing Arambulo’s action for specific performance and his monetary claim against Basilio Yalung, while declaring Arambulo as the absolute owner of the land by virtue of the constructive repurchase.
• The decision further ordered the issuance of a new Transfer Certificate of Title in favor of Arambulo and his spouse, notwithstanding the continuation of the lis pendens.
• The intervenors (Ayson and Lumanlan) appealed, raising several assignments of error concerning issues such as the effect of the unrecorded deed (pacto de retro), the validity of the consignation, possession in good faith, and the application of the Statute of Frauds.

Issues Raised in G.R. Nos. L-6501 and L-6599

• Dispute concerning whether the unrecorded notarial deed of sale with the right of repurchase effected any valid transfer of title under the Torrens system and Act 496.
• The legality and sufficiency of the consignation made by Arambulo, including issues on the mode of payment (i.e., check versus legal tender), deduction of clerk’s fees, and the lack of proper notice to the intervenors.
• Allegations that Arambulo’s good faith possession was vitiated upon learning of the prior sale to the intervenors, and challenges on his standing as a possessory owner.

Issue:

Effectiveness of the Unrecorded Deed of Sale

• Whether the notarial deed (Exhibit 9) executed on May 15, 1941, despite being ratified by the parties, was operative as a conveyance under the Torrens system given that it was not recorded until 1943.
• The implications of Section 50 of Act 496 and the requirement that registration, not mere execution, conveys and binds title.

Validity and Impact of the Lis Pendens and Possession Status

• Whether the notice of lis pendens recorded on December 29, 1942, on the land’s Certificate of Title effectively subjected the property to the pending litigation and the rights of the intervenors.
• Whether Arambulo’s continued actual and good faith possession, in light of the intervenors’ unrecorded sale, sustains his claim despite purported knowledge of conflicting transactions.

Legality of the Consignation Made for Repurchase

• Whether the deposit of P3,200 (plus P500 for Paulina Yalung) was valid given that it was made by a cashier’s check (and later a money order for the clerk’s fee) instead of in legal tender.
• Whether the consignation complied with statutory requirements, including the need for proper notice to the intervenors as mandated by Article 1178 of the Civil Code.

Rights and Claims of the Parties Regarding Ownership

• Whether the intervenors are entitled to damages or indemnity because of any defect in Arambulo’s possession once the pacto de retro sale was discovered.
• Whether Paulina Yalung’s subsequent ratification of the sale to Arambulo, evidenced by accepting the P500, conclusively barred the intervenors from contesting the conveyance on grounds of non-compliance with the Statute of Frauds.

Procedural and Substantive Considerations

• Whether the commencement of Arambulo’s specific performance action impeded the consolidation of title in his favor.
• Whether the procedure followed in effecting the consignation and his subsequent actions provided sufficient legal protection to his claim of ownership.

Ruling:

• (Subscriber-Only)

Ratio:

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Doctrine:

• (Subscriber-Only)