G.R. No. L-27696 - Florentino vs. Encarnacion, Sr.

On May 22, 1964, Miguel Florentino, Rosario Encarnacion de Florentino, Manuel Arce, Jose Florentino, Victorino Florentino, Antonio Florentino, Remedios Encarnacion and Severina Encarnacion (petitioners-appellants) and Salvador Encarnacion Sr., Salvador Encarnacion Jr. and Angel Encarnacion (petitioners-appellees) filed Land Registration Case No. N-310 under Act 496 before the Court of First Instance of Ilocos Sur.
The subject is a parcel of agricultural land in Barrio Lubong, Dacquel, Cabugao, Ilocos Sur, allegedly owned pro-indiviso in fee simple and free of encumbrances.

The land was inherited from their aunt, Doña Encarnacion Florentino (d. 1941), and adjudicated among heirs by an extrajudicial partition deed dated August 24, 1947 (Exhibit O).
Two applicants (Salvador Jr. and Angel) later acquired their shares by purchase from other heirs.

Exhibit O-1 provides that the fruits of the parcel be used to defray specified religious expenses (e.g., Holy Week processions), with any surplus divided among the heirs.
The stipulation was not registered in the Register of Deeds under any system.

After publication, only the Director of Lands initially opposed (then withdrew), and a general default was entered.
Applicants sought annotation of Exhibit O-1 as an encumbrance on the title. Oppositors moved to withdraw their shares, which the court denied.
By decision of November 29, 1966, the court confirmed registration and ordered annotation of religious expenses on all shares except those of Salvador Sr., Jr. and Angel, holding the stipulation void for lack of acceptance and grant.
On reconsideration (January 14, 1967), the court reaffirmed that Exhibit O-1 was revocable at the unilateral option of the co-owners and that the applicants were not the real parties in interest.

Whether the stipulation in Exhibit O-1 is revocable at the unilateral option of some co-owners or is binding on all co-owners and their successors.
Whether a Land Registration Court, in a summary registration proceeding, may pass upon the merits and validity of an alleged encumbrance (stipulation pour autrui) incorporated in the title application.