Republic of the PhilippinesSUPREME COURTManila

EN BANC

June 1, 1906

G.R. No. 1748

THE BISHOP OF CEBU, REPRESENTING THE ROMAN CATHOLIC CHURCH,plaintiff-appellee,vs.MARIANO MANGARON,defendant-appellant.

L.D. Hargis, for appellant.Hartigan, Marple, Solignac and Gutierrez, for appellee.

PER CURIAM:

The plaintiff in this case relates to a tract of land in the district of Ermita of this city, it is alleged is at present occupied by the defendant. The object of the original complaint was to recover the possession of the said land, while in the amended complaint the plaintiff prays that the said land be declared to be the property of the Catholic Church and that it be restored to the latter. Counsel for appellant admits in his brief that the object of the action is the recovery of possession when he refers to the judgment of the court below as being "in favor of the plaintiff in anaction to recoverthe possession of certain real estate." (Record, p. 1.)

Neither party has exhibited any title papers to the land in question nor pay other documentary proof. They have only offered certain parol evidence as to the former possession of the land and as to certain acts of ownership exercised by the parties over the same.

The court below found (a) "that the defendant's parents and brothers had been in possession of the land in question until about the year 1887;" (b) "that it had not been clearly shown in what capacity they had occupied the lands;" (c) "that about the year 1887 the defendant and his relatives vacated the land by the virtue of an order from the municipality, which declared that the land was included within the zone ofmateriales fuertes(fire zone) and the houses in which they lived upon the said land without objection;" (d)"that after the land was vacated the parish priest of the Ermita Church fenced the land and cleaned the same without any objection whatsoever on the part of anyone; that the plaintiff claimed that this property had belonged to the Catholic Church from the time immemorial, the defendant, his parents and brothers having occupied a part thereof by the mere tolerance of the Catholic Church," (e) "that in the year 1898 the defendant, without the consent of anyone, entered upon the land in question and built thereon a nipa house and continued to live thereon without the consent of the parish priest of the Ermita Church or the plaintiff in third case." (Bill of exceptions, p. 11.) The court then ordered "that the defendants vacate the land described in the complaint and pay the costs of this action" (p. 12).

Counsel appellant says in his brief "that the defendant claims to be owner of the land by inheritance." (Brief, p. 8.) It is not necessary for this court to apply to the present case the well-settled doctrine that it is not sufficient to allege a universal title of inheritance without showing the manner and form in which such title was converted into a singular title in favor of the person invoking the same, particularly where, as in the present, case, the question involved does not relate to the ownership of the property but rather to who has the better right to the possession of the same. But the court below suggest that there are several brothers of the defendant who might also claim the same right to occupy the land but who, however, had not done so. The court says "from the evidence introduced at the trial and from the fact that the defendant's brothers do not claim any right to the land in question, it seems that the claim of the plaintiff is the more credible." (Bill of exceptions, p. 11.)

The complaint is directed against the illegal act of spoliation committed by the defendant in October, 1898, while as he himself says there was no priest in Ermita who could take care of the church and of the land in question, the American troops having occupied the parish house according to the defendant, and the Filipino troops having occupied it according to other witness. This is one of the points as to which there is no dispute between the parties, the defendant and the witnesses of both important details relating to this matter.

Counsel for appellant sums up his brief in the following paragraph:

The defendant was the legal owner of the property when he was unlawfully ejected by the plaintiff in 1879, and we insist that he had a right to reenter upon the land when he did so, the time for prescription not having expired since he was ejected in 1879 (p. 8).

Upon this point the court below said: "The occupation of the land by the defendant in the year 1898 was illegal, for, if her brought he had a right to the land, he should have applied to the courts for the possession of what belonged to him, and not proceed to occupy property claimed (he should have said possessed) by another against the will of the latter."

The conclusion of law of the trial court is entirely in conformity with the conclusion would sanction the recovery of possession through violence or other unlawful and arbitrary means, and would permit a person to take the law into his own hands. "If a person thinks that he is entitled to the property which another possesses he should claim the same from the person in possession. If the latter accedes and voluntarily returns possession and acknowledges that the property does not belong to him, there is no necessity of any one interfering, but if the person in possession refuses to deliver the property, the one who believes himself to be entitled to it, however well founded his belief may be, cannot take the law into his own hands but must seek the aid of the competent authorities." (4 Manresa, Commentaries on the Civil Code, p. 163.) The action of the defendant in 1898 was therefore absolutely unlawful.

This possession held by the defendant in 1898 cannot be added to the former possession, which was interrupted in 1877 by the order of the municipality, so as to consider such possession continuous, the time intervening not being of sufficient duration to cover the statutory period of "a person who recovers possession according to law, which was improperly lost, is considered as having enjoyed it redound to his benefit." But in this case it appears (1) that it cannot be affirmed that the possession enjoyed by the defendant was improperly lost; that possession ceased by virtue of an order from the municipality and no proof to the contrary has been offered on this point; (2) that it is impossible to say what was the nature of the possession prior to the year 1877 that is to say, whether it was held by right or by the mere tolerance of the plaintiff in this case. The code refers to the recovery of the possession,according to law, which was improperly lost, and to "recover according to law means through the proper writs and actions, or by requesting the aid of competent authorities in the special cases where the provisions of article 441 may apply." (4 Manresa, Commentaries on the Civil Code, p. 329.) "Of course," continues Manresa "the acts of violence or secrecy or mere tolerance can not affect the right of possession." Consequently the defendant in this case could never have lawfully and legally done what he did, to wit, to reenter upon the land which he had been ejected by the city of Manila. If the order of the municipality was illegal, and the possession was improperly lost, the defendant should have requested the assistance of the competent authorities to recover it. He should have applied to the executive or administrative officials, as the case might have been, or to the courts of justice in a plenary action for possession, for a year having elapsed since he was ejected from the premises, he could not maintain a summary action for possession.

The legal provisions hereinbefore quoted would be sufficient ground upon which to base the confirmation of the decision of the trial court, but on account of the facts involved in this case a question of law has been raised by the members of this court which has not been urged by the parties themselves. It is absolutely necessary to decide this question, which naturally arises from the facts alleged in the complaint. The question is whether, after the promulgation of the Civil Code, theaccion publiciana, which had for its object the recovery of possession in a plenary action before an action for the recovery of title could be instituted, still existed. It is well known that under the legislation prior to the Civil Code, both substantive and adjective, there were three remedies which a party unlawfully dispossessed could avail himself of, to wit: Theaccion interdictal, which could be brought within a year, in a summary proceeding; the plenary action for possession in an ordinary proceeding, which could only be brought after the expiration of a year; and the action for title in an ordinary proceeding, which was brought in case the plenary action for possession failed. Theaccion interdictalhad for its object the recovery of thephysicalpossession; the plenary action for possession, thebetter rightto such possession; and the action for title, therecovery of the ownership.

We lay down as a conclusion that if the plaintiff, when he was deprived in October, 1898, of the possession which he had enjoyed quietly and peacefully for twenty years, more or less, had within a year instituted theaccion interdictal, or summary action for possession, he would have been, necessarily and undoubtedly, restored to the possession of the land. It would have availed the defendant nothing to allege, as he now alleges, that he had merely recovered the possession which he improperly lost in 1877, when he dispossessed the plaintiff as he did. Any tribunal, in the same arbitrary manner in which the defendant dispossessed the party in possession, would have condemned the said defendant to return the possession to that party.

But a year elapsed and the plaintiff brought this summary action for possession, and we also lay down as a conclusion that such summary action for possession could not be maintained, either under the old Code of Civil Procedure or under the new Code of Procedure in Civil Actions. (Laws 1 and 2, title 34 of theNovisima Recopilacion; art. 1635 of the Spanish Code of Civil Procedure and sec. 80 of the present Code of Procedure in Civil Actions.)

This quiet and peaceful possession of twenty years, more or less, thus lost in a moment, could not be recovered in a summary action for possession after the expiration of one year, but possession could still be recovered through theaccion publiciana, which involved the right to possess. This latter action would be then based upon the fact that he, having been in possession for twenty years, could not lose the same until he had been given an opportunity to be heard and had been defeated in an action in court by another with a better right. (The same laws.) This fact of itself would have been sufficient to recover the possession, not in summary, but in a plenary action, in which it would likewise have availed the defendant nothing to allege that all that he did was to recover a possession improperly lost in 1877. In one way or the other the plaintiff would have recovered such possession, in the first case the physical possession and in the second case the right to possess, which is not lost by the mere occupation of a third person, whether such occupation was effected violently, secretly, or arbitrarily.

But the doubt which now exists is whether, after the promulgation of the Civil Code, the accion publiciana continued to exist.

The doubt arises from the provisions of article 460 of the Civil Code, which reads as follows:

The possessor may lose his possession

1. By the abandonment of the thing.

2. By transfer to another for a good or valuable consideration.

3. By the destruction or total loss of the thing or by the thing becoming unmarketable.

4. By the possession of another, over against the will of the former possessor, if the new possession has lasted more than one year.

The last provision of this article has given rise to the doubt whether possession which is lost by the occupation of another against the will of the former possessor is merely possessionde factoor possessionde jure.

The most powerful reason why it is thought that it refers to possession bothde factoandde jureis that, whereas the two are equally lost in the manner indicated in the first three provisions of this article, it would be rather strange that the fourth provision should only refer to possessionde facto.

This, however, is not convincing because not only can the right of possession of any kind be lost in the aforesaid three ways, but the right of ownership as well. It could not be inferred from this, however, that the right of ownership can be lost in the fourth manner indicated. The legislation and the jurisprudence of all countries will allow a party after he has lost possession to bring an action to recover the ownership of the property that is to say, to recover what belongs to him except where he is barred by the statute of limitations. There is no law fixing one year and one day as the period of prescription of such actions.

Manresa expressly propounds this question and says:

Meditation upon the nature of possession, being convinced as we are of the fact that possession constitutes a right, a rightin rem, whenever it is exercised over real property or property rights, has merely served to strengthen as far as possible our conviction of the existence of theaccion publiciana. We confess, willing to rely only upon a sound basis, that a doubt has occurred to us as to whether or not such action should be exercised by the possessor, as we find nothing definite upon which to place such reliance, although we have noticed that most of the authors admit that he should, and we know that where there is a right there is a cause of action.

We have later seen this question raised and the proposition advanced that, although, as an exception to the general rule, such action is based upon equity, but as equity is not sufficient to allow the exercise of such action, it would be necessary to have a legal provision, an article in the code, establishing the same, a provision and an article which do not exist, and their nonexistence shows that there is no such thing as theaccion publiciana.

That we have no knowledge of the existence of any legal text or recent provisions which expressly relate to such action, is true. The same thing is true in France. However, the majority of the authors admit its existence. Among us it existence is also generally admitted by the authorities on civil and procedural law. But we do not desire to base our conclusions upon the arguments of the authorities, particularly when we note that Sanchez Roman is the only one who has attempted to support in any way his conclusions. It is sufficient, says this author, that the right existing, there should be an action to protect it. There is no necessity of any special declaration in the Civil Code.

We are of the same opinion as the author in question, but certainly not because we believe that if the possessor is deprived of theaccion publicianahis right ceases to be a rightin rem. In regard to this matter we refer to what we have already said in our preliminary consideration of the question of possession.

In regard to this matter the idea is present in the code that possession should be considered as an actual right and it is so stated in various articles of that code, as for instance in article 438. It would be impossible to admit that a mere physical act would confer all the rights which a possessor ordinarily enjoys.

Article 445 presupposes that possession may be considered either asde factoorde jure, for when it refers to controversies arising from the possessionde facto, it clearly indicates that other controversies may arise which would not relate to the possession de facto. Further it can not be conceived that had its intent been different it should have preferred actual possession to any other possession. The article in question ends with the following significant words: "The thing shall be placed in deposit or judicial keeping until thepossessionor ownership thereof is decided in the proper manner." That is to say, the questionof factcan not be determined until the questionof lawhas been decided either in regard to the ownership or in regard to the possession (pp. 220-221).

Further, let us take another subject, for instance, the subject for easements. It was generally believed that the accion confesoriaexisted. Vain delusion! We have carefully examined all the provisions of the code relating to easements and we find absolutely nothing in regard to such an action. Then theaccion confesoriais another error. It does not really exist. Then, if the owner of the dominant estate is denied the use of the easement, it would not be because he has not a right to such use of it. The only thing that he has not is the action.

No; such an absurdity cannot be admitted. It is impossible to conceive that a person has a right which need not be respected by others, and such respect cannot be exacted unless the law provides an adequate remedy for its enforcement. If a person has a right over any kind of property, such right would not be complete unless it could be enforced as against the whole world. The action is the recognition of the right; it is the weapon for its protection; the right certainly does not arise from the action, but on the contrary the action arises from the right. There is a right recognized by the code then this is sufficient! That right necessarily carries with it the action to enforce it, the life-giving force. The action is, under this aspect, the actual enforcement of the right, and these two things are so closely allied that if the action is denied the right is also virtually and actually denied. Theaccion publiciana, therefore, exists, not for the sake of equity, but because it must necessarily exist if the right to possession exists or can exist as provided in article 445, and as is inferred from the other articles of the code dealing with this subject.

There are not, in reality, any practical difficulties, for the courts consider as owners many who are simply possessors, and actions for title are maintained upon evidence which appears to be proof of ownership, but which in reality is not, for the reason that the title under which such ownership is claimed is not always in question, but merely its superiority over the claim of title of another. In a word, it is necessary to state the nature of the action but not the name by which it is known, and the claim being a just one, it is allowed in an action for title which in a multitude of cases would be nothing but anaccion publiciana(plenary action for possession). Do not give the name of the action because it is not necessary; merely ask that the right be enforced. Who can reject the claim ? (Pages 223-224.)

Paragraph 4 of article 460 is not an innovation in the Civil Code, nor does it mean the modification or reformation of the old law. Law 17, title 30 of the thirdPartidacontains the same provision: "One who holds property can not lose the possession thereof except in one of the following manners: (1) If he is ejected from it by force; (2) if another person occupies in while he is absent and upon his return refuses him admission. . . . But although he may lose the possession in either of the aforesaid manners, he can, however, recover the same, and even the title thereto by an action in court." There is no doubt that paragraph 4 of article 460 is nothing but a repetition of the law in force prior to the Civil Code. He who loses possession in either of these ways may demand the return of the same in an action in court, as well as the ownership of the property, the glossator in expanding the wordjuiziowhich appears in the law, saying, "by means of an action,unde vi, namely, that of recovery, or by any such restorative means." So that the possession thus lost may be recovered not only in an action unde vi but some other restorative means, such as theaccion publicianaor a penal action; this aside from an action for title.

Law 2, title 34, book 11 of the"Novisima Recopilacion"contains in its title the following prohibitive provision: "No one shall be deprived of his possession until he has had an opportunity to be heard and his right is defeated in accordance with the law."

As a legal precedent to paragraph 4 of article 460 we have law 3, title 8, of the same book 11, which says: "The laws of some cities provide that he who has been in possession of a building, vineyard, or other land for one year and one day, peacefully and adversely to the person claiming to be entitled to such possession who travels in and out of the village, shall not be held responsible therefor. There being doubt as to whether such possession for the period of one year and one day requires title in good faith, we, to dispell this doubt, do hereby order that he who holds such possession for the period of one year and one dayshall not be exempt from liability therefor while in possessionunless such possession of one year and one day was accompanied bytitle in good faith."

If the whole provision of article 460, paragraph 4, was contained in the old law and such was the meaning and efficacy that possession of one year and one day had under the said old law, the courts must give some satisfactory and convincing explanation why the meaning and efficacy of such possession of one year and one day referred to in the code should be different. We are unable to give such explanation, because in the act which was the basis of the present code nothing new was provided upon this subject, nor was any rule or procedure specified by which the various sections of the new law should be governed. Therefore the provisions of the code should be construed, as to the possession of one year and one day, as they were construed in the prior legislation, unless it appears that the intention of the legislature was otherwise that is to say, unless it appears that the said legislature intended exactly the contrary of what had been established preceding the enactment of the code.

The right acquired by the person who has been in possession for one year and one day is the right that the former possessor lost by allowing the year and one day to expire. The right is lost by the prescription of the action. And the action which prescribes upon the expiration of the year is "the action to recover or to retainpossession; " that is to say, the interdictory action. (Art. 1968, par. 1.) then the only right that can be acquired now, as before, by the person who was in possession for one year and one day is that he cannot be made to answer in an interdictory action, but this is not so in a plenary action unless he had some title in good faith. The former possessor who had been in possession for twenty years, more or less, was considered as owner, and unless he was given an opportunity to be heard, and was defeated in law, he could not be deprived of such possession; and notwithstanding all this, and in spite of such prohibition, the maintenance of a possession wrongfully taken from the former possessor by a willful act of the actual possessor had to be sustained.

The lessee, the depositary, the pledgee, the intruder, the usurper, the thief himself, after the expiration of a year would not be responsible for the possession of which the lawful possessor was wrongfully deprived, and if the latter could produce no evidence of his right of ownership the only thing that he could do according to the contrary theory it would be impossible for him to recover such possession thus lost by any other means.

If, in addition to the fact of possession, the action for the enforcement of which prescribes after the expiration of one year and one day, there exists without any doubt whatsoever the right to possess (or more properly speaking in the case at bar, to continue to possess, which said right of possession would be a rightin rem, such possession would not be on a less favorable footing than a mere possessionde facto; and, if in the latter case the interdictory action lies, the action which existed prior to the enactment of the code, to wit, theaccion publiciana, should continue to lie in the former case. The code establishes rights and the Law of civil Procedure prescribes actions for the protection of such rights, and we can not look to the code to find any provision defining the action which every civil right carries with it.

This is the reason why as a title of chapter 3 of the code in which article 460 is included, and a sanction of the whole of title 5, book 2, which deals with possession, article 446 provides that every possessor has a right to be respected in his possession, and should he be disturbed therein, he must be protected or possession must be restored to him by the meansestablished in the laws of procedure.

The code refers to the laws of procedure enacted in Spain in 1881 and extended to the Philippines in 1888. Article 1635 of the old Code of Civil Procedure makes provision for summary proceedings to retain or to recover, to protect or to restore, possession, provided the action is brought within a year, but after the expiration of this period the party may bringsuch action as may be proper. This latter action, as has been explained before, may be either the plenary action for possession referred to or an action for title. This assumed, and reading article 1635 of the old Code of Civil Procedure immediately before article 446 of the Civil Code, we are unable to conceive how that could be successfully denied after the 8th of December, 1889, when the Civil code went into effect, which could not be denied prior to that date, to wit, the existence of theaccion publicianato recover the right of possession, to enforce the right to possess, which although it could not be brought within the year as a mere interdictory action for the protection of the mere physical possession, there can be no valid reason why it could not be brought after the expiration of the year in order to protect the right and not the mere physical possession.

Article 1635 of the old Code of Civil Procedure not having been repealed by the Civil Code, if theaccion publicianaexisted prior to its enactment, it must necessarily exist after such enactment. We consequently conclude that the action brought by the plaintiff in this case to recover the possession of which he was unlawfully deprived by the defendant can be properly maintained under the provisions of the present Civil Code considered as a substantive law, without prejudice to any right which he may have to the ownership of the property, which ownership he must necessarily establish in order to overcome the presumption of title which exist in favor of the lawful possessor, the plaintiff in this case, who had been in the quiet and peaceful possession of the land for twenty years, more or less, at the time he was wrongfully dispossessed by the defendant.

Having reached this conclusion, the judgment of the court below is accordingly affirmed, with the cost of this action against the appellant. So ordered.

Arellano, C.J., Torres, Mapa and Willard, JJ., concur.Johnson, J.,dissents.

Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. No. L-3133 January 2, 1908

THE ROMAN CATHOLIC APOSTOLIC CHURCH, ET AL., plaintiffs, vs.THE MUNICIPALITIES OF CUYAPO, ALIAGA, SAN ANTONIO, SAN ISIDRO, CABANATUAN, TALAVERA, AND LUCAB, Province of Nueva Ecija, ET AL., defendants.

Hartigan, Rohde and Gutierrez, for plaintiffs. Buencamino and Diokno, Benito Natividad, and Pedro Carmen, for defendants.

WILLARD, J.:

This is an original action brought in this court by virtue of the provisions of Act No. 1376. It is in all respects similar to the case of the Roman Catholic Apostolic Church, et al., vs. The Municipalities of Tarlac and Victoria, in the Province of Tarlac, et al.1

The complaint was duly served upon all the defendants, and an answer was filed on behalf of Gregorio Aglipay, and other answers were presented by some of the municipalities who were made defendants. After the evidence was taken in the case, there was the same agreement made therein between the plaintiffs and the Attorney-General in reference to the public squares and streets as was made in the case above cited, relating to the municipalities of Tarlac.

In the brief filed by the plaintiffs they say that the matter in dispute in the case is reduced to the church, convent, and cemetery of Cuyapo, the church and cemetery of Zaragoza in the municipality of Talavera.

As to the property in Cuyapo, the municipality made an answer in which it disclaimed any interest whatever in any of the property described in the complaint, stating, however, that it was occupying certain apartments in the convent by permission of the priest of the Independent Filipino Church, who was in possession of the whole thereof. The evidence offered at the trial also showed that the municipality made no claim in its own right to any of the property in question, but that it was occupying, as stated in its answer, certain parts of the convent. The only defendants interested in this property in Cuyapo are, therefore, the municipality of Cuyapo and Gregorio Aglipay.

The municipality of Aliaga filed an answer relating to the church and cemetery of Zaragoza in which it disclaimed any interest whatever therein and expressed its willingness to deliver the property to anyone to whom the court might direct its delivery.

As to the cemetery in the municipality of Talavera, that municipality filed an answer claiming to be the owner thereof.

It appears that the only persons, therefore, interested in any of the property now in controversy in this case are the three municipalities of Cuyapo, Talavera, and Aliaga and the defendant, Gregorio Aglipay.

The evidence in this case is similar to the evidence presented in the case referred to relating to the municipalities of the Province of Tarlac, and it shows that the plaintiff church had been in possession of the property for many years when it lost its possession about 1902. As to the church property in Cuyapo, the evidence shows that it is in the possession of the Independent Filipino Church.

There are the same reasons for entering judgment for the plaintiffs in this case as appeared in the case above mentioned.

It is therefore by the court adjudged and decreed that this action be dismissed, without costs as to all the defendants except Gregorio Aglipay, the municipality of Cuyapo, and the municipality of Talavera.

It is further adjudged and decreed that all of the land described in the complaint, as amended, be eliminated therefrom except that relating to the church, convent, and cemetery of Cuyapo, the church and cemetery of Zaragoza, barrio of Aliaga, and the cemetery of Talavera; and as to the property thus eliminated, this court makes no determination in regard to the rights of the parties to this action thereto.

It is further adjudged and decreed that the plaintiff, the Roman Catholic Apostolic Church, is entitled to the immediate possession of the following-described property, situated in the municipality of Cuyapo, in the Province of Nueva Ecija, to wit:

The church and the convent built of strong materials and with corrugated iron roof, known as the church and convent of Cuyapo.

The cemetery known as the cemetery of Cuyapo.

In the municipality of Aliaga, in the said Province of Nueva Ecija, the following described property, to wit:

A church building situated in the former municipality of Zaragoza, now a barrio of Aliaga, and known as the cemetery of Zaragoza.

A cemetery situated in the former municipality of Zaragoza, now a barrio of Aliaga, and known as the cemetery of Zaragoza.

And in the municipality of Talavera, in said Province of Nueva Ecija, the following-described property, to wit:

The cemetery known as the cemetery of Talavera.

It is further adjudged and decreed that neither the said municipality of Cuyapo, nor the said municipality of Aliaga, nor the said municipality of Talavera, nor Gregorio Aglipay, obispo maximo of the Independent Filipino Church, has any right, title, or interest in or to any of the property hereinbefore described.

It is further adjudged and decreed that the property hereinbefore mentioned be returned to the plaintiffs and that the said defendants be ousted from the possession thereof and that said possession be awarded to the plaintiffs.

And it is further adjudged and decreed that a writ of possession issue out of this court against the defendant Gregorio Aglipay, obispo maximo of the Independent Filipino Church, in the manner and form prescribed in Act No. 190, for the recovery of the church, cemetery, and convent hereinbefore described as situated in the municipality of Cuyapo, and against the municipality of Cuyapo for the recovery of the possession of the convent in said municipality, hereinbefore described; and against Gregorio Aglipay, obispo maximo of the Independent Filipino Church, and the municipality of Aliaga for the recovery of the church and cemetery of Zaragoza; and against Gregorio Aglipay, obispo maximo of the Independent Filipino Church, and the municipality of Talavera for the recovery of the cemetery in Talavera. No costs will be allowed to either party in this court. So ordered.

Arellano, C.J., Torres, Mapa and Tracey, JJ., concur. Johnson and Carson, JJ., concur in the result.

Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. No. L-41377 July 26, 1935

ANGELA BLONDEAU and FERNANDO DE LA CANTERA Y UZQUIANO, plaintiffs-appellants, vs.AGUSTIN NANO and JOSE VALLEJO, defendants-appellees.

John R. McFie, Jr., for appellants.Evangelista and Santos for appellee Vallejo.No appearance for the other appellee.

MALCOLM, J.:

This action was brought in the Court of First Instance of Manila to foreclose a mortgage alleged to have been made by the defendants Agustin Nano and Jose Vallejo to the plaintiff Angela Blondeau, bearing date November 5, 1931, to secure the payment of the sum of P12,000, and covering property situated on Calle Georgia, Manila. Nano, purporting to represent both defendants, after filing an answer, was found in contempt of court. The other defendant Vallejo thereupon presented an amended answer in which it was alleged that his signature to the mortgage was a forgery. Following the trial, judgment was rendered against Nano but not against Vallejo. From this judgment the plaintiffs have taken an appeal.

With all due deference to the findings of the trial judge, now an honored member of this court, we are inclined to the view, first, that the accessorias bearing Nos. 905A to 905F, Calle Georgia, Manila, were as indicated in the mortgage, the property of the defendant Agustin Nano, and second, that the purported signature of the defendant Vallejo to the mortgage was not a forgery. In support of the first of our statements, attention need only be invited to a series of documents, including the transfer certificate of title, showing that Vallejo was considered the owner of the land only. As to the second statement, it needs be recalled that the mortgage was executed in the home of the plaintiffs, and that of those present, the principal plaintiff Angela Blondeau and her husband Fernando de la Cantera, together with the instrumental witness Pedro Jimenez Zoboli, identified Vallejo as the person who signed the document. As against their testimony stands the alibi of Vallejo, partially corroborated by the testimony of the notary public Gregorio Bilog. It is expecting a great deal to have us believe that not only the mortgage but the power of attorney of Vallejo in favor of Nano and a series of documents were the product of the evil machinations of Nano, and that although Nano and Vallejo, members of same family, lived together, Vallejo was entirely unacquainted with the activities of Nano in dealing with their joint property. It is significant that the proper cedulas of Vallejo were presented for the accomplishment of the documents, and that if there was fraud, not one but a number of notaries public were deceived thereby.

We repeat that upon its face, the mortgage appears to be regular and to have been duly executed and accepted by Vallejo on November 5, 1931. The evidence then resolves itself into a question of the execution of the mortgage by Vallejo on the one hand, and the denial of its execution on the other hand. That there was a conflict between experts as to the handwriting, one being of the opinion that the signatures of Vallejo were genuine, and the other being of the opinion that they were not genuine, is not unexpected. Under such conditions, the question is, which side produced the weightier testimony, and as hereinbefore indicated, we are of the opinion that the balance inclined in favor of the plaintiffs.

But there is a narrower ground on which the defenses of the defendant-appellee must be overruled. Agustin Nano had possession of Jose Vallejo's title papers. Without those title papers handed over to Nano with the acquiescence of Vallejo, a fraud could not have been perpetrated. When Fernando de la Cantera, a member of the Philippine bar and the husband of Angela Blondeau, the principal plaintiff, searched the registration records, he found them in due form, including the power of attorney of Vallejo, in favor of Nano. If this had not been so and if thereafter the proper notation of the encumbrance could not have been made, Angela Blondeau would not have lent P12,000 to the defendant Vallejo.

The Torrens system is intended for the registration of title, rather than the muniments of title. It represents a departure from the orthodox principles of property law. Under the common law, if the pretended signature of the mortgagor is a forgery, the instrument is invalid for every purpose and will pass on the title or rights to anyone, unless the spurious document is ratified and accepted by the mortgagor. The Torrens Act on the contrary permits a forged transfer, when duly entered in the registry, to become the root of a valid title in a bona fide purchaser. The act erects a safeguard against a forged transfer being registered, by the requirement that no transfer shall be registered unless the owner's certificate was produced along with the instrument of transfer. An executed transfer of registered lands placed by the registered owner thereof in the hands of another operates as a representation to a third party that the holder of the transfer is authorized to deal with the lands. (53 C.J., 1141, 1142; Act No. 496, as amended, secs. 47, 51, 55.)

With respect to the conclusiveness of the Torrens title and the binding force and effect of annotations thereon even when through a forged deed the land passes into the possession of an innocent purchaser for value, the basic rule is found in the opinion delivered by Mr. Chief Justice Arellano in De la Cruz vs. Fabie ( [1916], 35 Phil., 144). The history of the case was as follows:

Vedasto Velazquez was attorney in fact of Gregoria Hernandez. Gregoria Hernandez registered her title of ownership to the land in question in the property registry and was issued certificate of title No. 121. Vedasto Velazquez, being the attorney in fact of Gregoria Hernandez, had in his possession all the muniments of title of the land, including the certificate of title No. 121, and, abusing her confidence in him, a few days after the registration of the land, forged a notarial instrument wherein he made it appear that she had sold the said land to him for the price of P8,000.

Vedasto Velazquez then went to the register of deeds and applied for the registration of the land in his own name, presenting Gregoria Hernandez' certificate of title No. 121 for cancellation, and the deed of conveyance which was purported to have been made by Gregoria Hernandez in his favor in order that he might be registered as the true owner of the land. All this was done; Gregoria Hernandez' title was cancelled and certificate of title No. 43 was issued to Vedasto Velazquez.

x x x x x x x x x

On May 31, 1907, Vedasto Velazquez sold the land finally and absolutely to Ramon Fabie, who presented to the register of deeds the notarial instrument executed for the purpose and was thereupon furnished with the certificate of title No. 766." On these facts, it was held that Fabie was an innocent holder of a title for value and that, under section 55 of the Land Registration Law, he was the absolute owner of the land.

The decision above cited has repeatedly been reexamined by this court, one of the most recent instances being found in the case of El Hogar Filipino vs. Olviga ( [1934], 60 Phil., 17). While counsel for the appellee is undoubtedly correct in his contention that neither the case of Fabie nor the case of Olgiva nor any other case relied upon by the appellants is on all fours with the present facts, the principle on which these cases rest should here be carried forward and given application.

The recent decision of the United States Supreme Court in the case of Eliason vs. Wilborn ( [1930], 281 U.S., 457), is of enlightening interest. Plaintiffs in this case, purchasers of land previously brought under the Illinois Torrens Act, delivered the certificate of title to a party under an agreement to sell, who forged a deed to himself, had a certificate issue in his name, and then conveyed to defendants who were good faith purchasers for value. Plaintiffs informed the register of the forgery after the defendants had bought, and demanded the cancellation of the deeds and certificates, and the reissue of a certificate to themselves. The register refused, and a petition was brought to compel such action. The Circuit Court for Cook County, Illinois, the Supreme Court of Illinois, and the United States Supreme Court, united in dismissing the petition. Mr. Justice Holmes, delivering the opinion of the latter court, said:

. . . The statute requires the production of the outstanding certificate, as a condition to the issue of a new one. The appellants saw fit no entrust it to Napletone and they took the risk. They say that according to the construction of the act adopted the registrar's certificate would have had the same effect even if the old certificate had not been produced. But that, if correct, is no answer. Presumably the register will do his duty, and if he does he will require the old certificate to be handed in. It does not justify the omission of a precaution that probably would be sufficient, to point out that a dishonest official could get around it. There is not the slightest reason to suppose that Napletone would have got a certificate on which the Wilborns could rely, without the delivery of the old one by the appellants. As between two innocent persons, one of whom must suffer the consequence of a breach of trust, the one who made it possible by his act of confidence must bear the loss.

Vargas & Maalac in their treatise on the Philippine Land Registration Law quote with approval the comment of Mr. Powell in his book on Land Registration, section 213. The question which the author propounded was: Why does the law say that the person who had no title at all and only a forged deed as a color of title should become the true owner of the land by merely continuing to occupy and enjoy the land which in fact does not belong to him, but which belongs to the victim of the forgery? His answer was:

. . . that public policy, expediency, and the need of a statute of repose as to the possession of land, demand such a rule. Likewise, public policy, expediency, and the need of repose and certainty as to land titles demand that the bona fide purchaser of a certificate of title to registered land, who, though he buys on a forged transfer, succeeds in having the land registered in his name, should nevertheless hold an unimpeachable title. There is more natural justice in recognizing his title as being valid than there is in recognizing as valid the title of one who has succeeded in ripening a forged color of title by prescription.

In the first place, a forger cannot effectuate his forgery in the case of registered land by executing a transfer which can be registered, unless the owner has allowed him, in some way, to get possession of the owner's certificate. The Act has erected in favor of the owner, as a safeguard, against a forged transfer being perpetrated against him, the requirement that no voluntary transfer shall be registered unless the owner's certificate is produced along with the instrument of transfer. Therefore, if the owner has voluntarily or carelessly allowed the forger to come into possession of his owner's certificate he is to be judged according to the maxim, that when one of two innocent persons must suffer by the wrongful act of a third person the loss fall on him who put it into the power of that third person to perpetrate the wrong. Furthermore, even if the forger stole the owner's certificate, the owner is up against no greater hardship than is experienced by one whose money or negotiable paper payable to bearer is stolen and transferred by the thief to an innocent purchaser.

Other incidental facts might be mentioned and other incidental legal propositions might be discussed, but in its final analysis this is a case of a mortgagee relying upon a Torrens title, and loaning money in all good faith on the basis of the title standing in the name of the mortgagors only thereafter to discover one defendant to be an alleged forger and the other defendant, if not a party to the conspiracy, at least having by his negligence or acquiescence made it possible for the fraud to transpire. Giving to the facts the most favorable interpretation for Vallejo, yet, as announced by the United States Supreme Court, the maxim is, as between two innocent persons, in this case Angela Blondeau and Jose Vallejo, one of whom must suffer the consequence of a breach of trust, the one who made it possible by his act of confidence must bear the loss, in this case Jose Vallejo. Accordingly, the four errors assigned will be sustained, the judgment reversed, and in the court of origin a new one entered sustaining plaintiff's mortgage and granting her the relief prayed for in her complaints .So ordered, without special pronouncement as to the costs in either instance.

Villa-Real, Imperial, Butte, and Goddard, JJ., concur.