FACTS
Esteban Guillermo (plaintiff-appellee) initiated an action to recover possession of two parcels of coconut land. He claimed to have purchased these properties five years prior from the Montefalcon brothers (Irineo, Miguel, and Aurelio) through a sale with a pacto de retro agreement. Guillermo sought to nullify the attachment and sale of the property, which was conducted by the deputy sheriff of Nagcarlang at the request of Ramon Matienzo (defendant-appellant). Matienzo had obtained an execution against Irineo Montefalcon for an unpaid debt. Guillermo contended that only Irineo Montefalcon’s right of redemption could have been attached, not the property itself, as it was no longer owned by Irineo.

The defendants, Ramon Matienzo and Mariano Manalang, moved for the dismissal of the complaint. They denied all allegations and asserted that the judgment in favor of Matienzo against Irineo Montefalcon was final and executed. They claimed the sheriff attached two parcels of land in Tipacan, distinct from the location mentioned by Guillermo, and that these lands, owned exclusively by Irineo Montefalcon, were purchased at public auction by Mariano Manalang.

Initially, the deputy sheriff and bondsman were included as defendants but were later excluded from the suit upon the plaintiff’s agreement, as they were not directly involved in the core dispute.

The trial court ruled in favor of Guillermo, declaring the auction sale and adjudication of the land to Mariano Manalang null and void. The court ordered the cancellation of the deed of sale to Manalang and affirmed that the parcels of land belonged to Guillermo. The judgment also preserved Manalang’s right to recover payments from Matienzo and reserved Matienzo’s right to seek re-issuance of the original judgment against Irineo Montefalcon for a new writ of execution. Costs were awarded against the defendants.

The defendants, Manalang and Matienzo, excepted to the judgment. Manalang later withdrew his exception, while Matienzo moved for a new trial, arguing the evidence did not support the judgment. The Supreme Court noted that the complaint was essentially an intervention by Guillermo, the owner of the attached and sold property, to recover it from a sale executed to satisfy a debt of a former owner.

The Court examined Guillermo’s purchase on June 18, 1900, from the Montefalcon brothers under a pacto de retro in a private document. This agreement stipulated no fixed period for repurchase, but stipulated that the sellers could not repurchase within four years. The vendors, who occupied the land as tenants, delivered possession to Guillermo on June 18, 1904, upon the expiration of the lease, precisely after four years. The Court affirmed the validity of the sale with pacto de retro, stating it did not invalidate the purchase and sale. Guillermo, as the purchaser, was subrogated to the vendors’ rights. The Court also upheld the admissibility of the private document, as it was legally acknowledged by the parties and binding between them, regardless of not being registered. It was determined that Matienzo, as a creditor of Irineo Montefalcon, had only a personal right to collect his debt and had not acquired any real rights over the land sold to Guillermo. Therefore, Article 389 of the Mortgage Law was inapplicable.

The Court concluded that if Guillermo was the lawful owner since June 18, 1900, and obtained possession on June 18, 1904, the land could not have been lawfully attached on July 22, 1904, at Matienzo’s instance for Irineo’s debt. Guillermo’s request for the removal of the attachment should have been heeded, as the land did not belong to the debtor. An attachment and sale of property belonging to a third party, not liable for the debt, cannot be sustained. Guillermo’s claim for damages was not pursued on appeal, leading to an implied assent on that matter.

ISSUE: Whether the attachment and subsequent sale of the two parcels of coconut land at the instance of Ramon Matienzo, in satisfaction of a debt owed by Irineo Montefalcon, were lawful, given that Esteban Guillermo had previously purchased the said lands from the Montefalcon brothers under a sale with pacto de retro agreement and had taken possession thereof.

RULING: The Supreme Court affirmed the judgment of the lower court. The Court held that the sale of the two parcels of coconut land by the Montefalcon brothers to Esteban Guillermo on June 18, 1900, under an agreement con pacto de retro, was valid and legally transferred ownership of the property to Guillermo. As such, Guillermo was the owner of the land when it was attached and sold on execution to satisfy a debt owed by Irineo Montefalcon. The Court reasoned that Matienzo, as a creditor of Irineo Montefalcon, possessed only a personal right to collect his debt and had not acquired any real rights over the property sold to Guillermo. Therefore, the attachment and sale of the land, which belonged to a third party (Guillermo) not liable for Montefalcon’s debt, were unlawful and null and void. The decision of the lower court declaring the auction sale and adjudication to Mariano Manalang invalid, restoring possession to Guillermo, and ordering the cancellation of the deed of sale was sustained. Costs were assessed against the appellant, Ramon Matienzo.