G.R. No.

L-8934
[ G.R. No. L-8934, May 18, 1956 ]
ANASTADLO T, TEODORO, JR., PLAINTIFF AND APPELLANT, VS. ARMANDO MLRASOL, DEFENDANT AND
APPELLEE.
D E C I S I O N
LABRADOR, J.:
Appeal against an order dismissing the complaint. On November 20, 1952, defendant leased to plaintif a parcel of land situated along Taft Avenue,
Ermita, Manila, for a monthly rental of P490, payable on or before the ffth day of each month. The contract provides that the term of the lease is two
years, beginning on October 1, 1952, which may be extended for Another period not exceeding two years with the written consent of both parties. (Par.
2, Exh. A of Exh. 1, p. 24, Record on Appeal.)
On October 15, 1954, defendant wrote plaintif that the lease expired on October 1, 1954, and that as the latter has lost interest in renewing the same
and the retention by the lessee will mean a great fnancial loss to the owner, defendant is giving plaintif notice of the termination of the contract. (Par. 2,
Complaint, p. 2, Record on Appeal.)
It is alleged in plaintif's complaint that it is not true that plaintif has lost interest in the renewal of the lease contract; that as defendant allowed plaintif to
choose to continue the lease for another two years, defendant is now estopped from denying that the said period had actually been extended for another
period of two years; and that plaintif has already paid defendant a considerable sum of money, besides spending another big sum for the improvements
on the land. Plaintif prays that the court fx a longer term for the lease, or rather extend the lease for another period of two years and that defendant be
also required to pay plaintif P10,000 as indemnity for moral damanges, because defendant's wife had stated that a check issued by the plaintif had
been dishonored, such statement having been made for the purpose of afecting adversely plaintif's business. '
Upon receipt of the summons, defendant promptly fled a motion to dismiss the complaint on the following grounds: that the court has no jurisdiction to
graift the remedy prayed for in the complaint that there is another action pending between the same parties and for the same cause; that the complaint
states no cause of action against defendant; and that plaintif's claim can not be enforced because the same is barred by the Statute of Frauds. In
connection with the allegation that another action is pending between the same parties and for the same cause, a copy of a complaint for ejectment fled
by the defendant against plaintif in the Municipal Court of Manila on December 20, 1954, was attached as Exhibit 1. The complaint for ejectment
alleges that the lease was terminated on October 1, 1954, and that even if the contract could be extended for another period of two years the same had
already expired on December 20, 1954.
In his reply to the motion for dismissal, plaintif argues that as the ejectment suit in the Municipal Court of Manila was fled later than plaintif's action in
the Court of First Instance, the former must be dismissed; that the plaintif is claiming moral damages for P10,000, and this must be determined in the
Court of First Instance; and that by the letter that the defendant has sent plaintif, the defendant is estopped from denying that the contract of lease has
been extended for another period of two years. The trial court, after considering a rejoinder of defendant to plaintif's reply, sustained the motion for
dismissal on the ground that in view of the fling of the action for ejectment or unlawful detainer, all matters alleged in the plaintif's complaints could be
decided therein. After the denial of plaintif's motion for the reconsideration of the order, plaintif appealed to this Court.
There is no doubt in our mind that the order of dismissal appealed from should be sustained. The real issue between the parties is whether or not the
plaintif-appellant should be allowed to continue occupying the land under the, terms of the lease contract. This is the subject matter of the action for
unlawful detainer fled by defendant in the Municipal Court, and it is also the main or principal purpose of this Action. As we have held in the case of
Pue, et al. vs. Gonzales, 87 Phil., 81 and in the recent case of Lim Si vs. Lim, 98 Phil., 856, the right of a lessee to occupy the land leased against the
lessor should be decided under Rule 72 of the Rules of Courts The mere fact that the unlawful detainer or ejectment case was fled later did not deter us
from applying this ruling in the case of Lim vs. Lim, supra.
In case at bar, we are led to the belief that the present action in the Court of First Instance was prompted by a desire on plaintif's part to anticipate the
action for unlawful detainer, the probability of which was apparent from the letter of the defendant to the plaintif advising the latter that the contract of
lease expired on October 1, 1954. The defendant evidently desired to give plaintif sufcient time to leave the premises because no action for unlawful
detainer was fled immediately after the giving of the notice of the expiration of the lease. But plaintif took advantage of defendant's delayed' unlawful
detainer suit to fle this case in the Count of First Instance of anticipation of the action for unlawful detainer, in order perhaps that he, may claim that the
action in the Court of First Instance was prior to the unlawful detainer case, and, therefore, should enjoy preference over the action fled in the Municipal
Court.
It is to be noted that the Rules do not require as a ground for dismissal of a complaint that there is a prior pending action. They provide that there is a
pending action, not a pending prior action. The fact that the unlawful detainer suit was of a later date is no bar to the dismissal of the present action. We
fnd, therefore, no error in the ruling of the court a quo that plaintif's action should be dismissed on the ground of the pendency of another more
appropriate action between the same parties and for the same cause.
It is also asserted by appellant that there is no identity between the unlawful detainer case fled by defendant and the ease at bar, frst because this one
is for specifc performance or for declaratory relief and second, this suit also includes a demand for moral damanges in the sum of P10,000, both of
which remedies may not be be within tile municipal court's jurisdiction to try and decide. In answer it may be stated that, be that as it may, plaintif's
action for declaratory relief is improper; this action is mean only for those cases where a contract is desired is be construed prior to its breach because
of an impending controversy, that the parties thereto may be informed of their rights thereunder. In the case at bar, the lease contract had already
expired and there has already been a breach thereof, hence the action for a declaratory judgment is no longer proper.
"Sec. 2. Before Breach.A contract or statute may be construed before there as been a breach thereof." (Rule 66, Rules of Court.)
Besides, cognizance of actions for declaratory relief is vested in the sound discretion of the court, which may dismiss the action if a declaration is no
longer necessary.
"Sec. 6. Discretionary,The court may refuse to exercise the power to declare rights and to construe instruments in any case where a decision under it
would not terminate the uncertainty or controversy which gave rise to the action, or in any case where the declaration, or construction is not necessary
and proper at the time under all the circumstances." (Id.)
There is no longer any need for the action, even if proper, because the matter could be threshed out in the unlawful detainer suit that the defendant had
institute in the municipal court.
It is not true that plaintif's supposed rights to an extension can not be decided in the unlawful detainer suit. If the plaintif has any right to the extension
of the lease at all, such right is a proper and legitimate issue that could be raised in the unlawful detainer case, because it may be used as a defense to
the action. Plaintif suit, therefore, violates the principle prohibiting multiplicity of suits, as the court a quo correctly ruled.
The claim for damages is also invoked as a ground for allowing the continuance of the action. We note that this supposed cause of action is merely an
incident of the main question of whether pr not plaintif should be allowed to continue the lease for two yejar3 more.] It is not alleged as an independent
cause of action. It is not set forth in a paragraph diferent from the others as the Rules require. If plaintif wants to insist on these damages, he may do
so clearly and plainly in another action; he may not assert it in the action for declaratory relief, as an excuse or reason for continuing his said suit for
declaratory relief, which is improper under the circumstances.
The order of dismissal may also be sustained on another ground, namely that on the face of the complaint the plaintif has no cause of action against
defendant. The contract expressly provides that the lease is for two years from October 1, 1952, but may be extended by written consent of both parties
for another two years. But there is no allegation in the complaint that this period of time was extended by the written consent of the parties.
The allegation in the complaint that the defendant's assumption that plaintif was no longer interested in renewing the lease is false and estops
defendants from claiming that the lease has been terminated is either a conclusion of law or it does not create any right of action in favor of plaintif for
the extension of the lease. As the contract of lease can be extended, according to its terms, only by written consent of the parties, no right for extension
can arise without such written consent. There is no allegation that such written consent was ever, given. Hence there is no sufcient ground alleged in
the complaint for the plaintif to be entitled to the extension. The order of dismissal was, therefore, further justifed by the fact that plaintif's complaint
alleges no cause of action against defendant.
For the foregoing considerations, the judgment appealed from is hereby afrmed, with costs against plaintif-appellant.
Paras, C. J., Bengzon, Padilla, Montemayor, Jugo, Concepcion, Reyes, J. B. L., and Endencia, JJ., concur.
G.R. Nos. 85991-94
SECOND DIVISION
[ G.R. Nos. 85991-94, Juy !3, 1991 ]
REPUBLIC CEMENT CORPORATION, PETITIONER, VS. COURT OF APPEALS, MOISES CORREA AND REGISTER OF
DEEDS OF BULACAN, RESPONDENTS.
D E C I S I O N
REGALADO, J.:
This is a petition for review on certiorari of the decision of respondent court, promulgated on September 20, 1988 in CA-G.R. CV Nos. 07824-88,
ordering the registration of Lot No. 2880 of the Cadastral Survey of Norzagaray,Bulacan in the name of petitioner Republic Cement Corporation but
excluding the portions thereof described in Plans PSU 229592, 227659 and 225872 of the Norzagaray Cadastre which were ordered registered in the
name of private respondent Moises Correa.
[1]
As found by respondent court, petitioner Republic Cement Corporation fled a petition in the then Court of First Instance of Bulacan, Branch V at Sta.
Maria, docketed therein as Land Registration Case No. (SM) N-093, for the registration in its name of a parcel of land identifed as Lot No. 2880 of the
Cadastral Survey of Norzagaray,Bulacan, Plan Ap-16404, located in barrio Minuyan, Norzagaray, Bulacan, with an area of 207,996 square meters,
more or less. It is alleged that said applicant purchased the parcel of land from persons who, by themselves or through their predecessors in interest,
had occupied and cultivated it continuously since the Spanish regime to the present and had been in open, continuous, exclusive and notorious
possession and occupation of said parcel of land under a bona fde claim of ownership, except against the Government, since July 26, 1894.
The application was opposed by spouses Jose Rayo and Susana Mangahas and one Pedro Legaspi. According to the oppositor spouses, they are the
owners of the east central portion of the parcel of land, title to which is sought to be registered by petitioner, covered by Plans PSU 229592 and 227659,
with a total area of 68,389 square meters, having been in actual, open, public, adverse, peaceful and uninterrupted possession and occupation thereof
in the concept of owner for a period of over sixty (60) years and having acquired ownership thereof by donation on the occasion of their marriage from
the parents of Jose Rayo. Oppositor Pedro Legaspiclaims that he is the owner of the eastern portion of the same parcel of land covered by Plan
PSU-225872, with a total area of 31,887 square meters, having been in actual, open, public, adverse, peaceful and uninterrupted possession and
occupation thereof in the concept of owner for a period of over sixty (60) years and having acquired ownership thereof by purchase from its original
owner.
Accordingly, the spouses Jose Rayo and Susana Mangahas and Pedro Legaspi sought to register title to the respective portions of the parcel of land in
question subject of and based on the allegations in their respective oppositions to the application of petitioner, which counter-applications were docketed
therein as Land Registration Cases Nos. (SM) N-146 and (SM) N-147. Petitioner duly fled an opposition to said applications on the grounds alleged in
its application and the Solicitor General likewise opposed said applications.
Applicants/oppositors Pedro Legaspi and the spouses Jose Rayo and Susana Mangahas were later substituted by private respondent Moises Correa as
subsequent purchaser of the aforesaid portions of said parcel of land.
By agreement of the parties the three cases were jointly tried. On August 25, 1982, the lower court, acting on eleven (11) land registration cases the
applicants wherein were corporations and one of which was the application of petitioner in Land Registration Case No. (SM) N-093, issued an order the
pertinent part of which reads:
"In view of the recent ruling of the Honorable Supreme Court in G.R. No. L-49623 (Manila Electric Company, Petitioner-
Appellant vs. Judge Floreliana Castro-Bartolome of the Court of First Instance of Rizal, Makati, Br. XV, & Republic of the Philippines, Respondents-
Appellees) promulgated on June 29, 1982 afecting applications for land registration by juridical entities and it appearing that in the above-cited cases
juridical parties are involved and therefore falling under the same category, said cases are hereby dismissed.
[2]
On August 29, 1983, judgment was rendered in Land Registration Cases Nos. (SM) N-146 and (SM) N-147, thedispositive portion of which provides:
WHEREFORE, confrming the Order of Special default entered on September 16, 1971 for these two registration cases, the Court hereby orders the
registration of Psu-225872, Norzagaray Cadastre, depicted in the plan which was surveyed for Pedro Legaspi on March 13, 1977 and Psu-229592 and
Psu-227659 as depicted in the plan which was surveyed for spouses Jose Rayo and Susana Mangahas on March 12, 1966 and May 15, 1966,
respectively, together with its corresponding technical description and all improvements existing thereon, in the name of substituted
applicant Moises Correa, of legal age, Filipino citizen, married to Rosario N. Correa, with residence at Poblacion, Norzagaray, Bulacan.
"After this decision shall have become fnal, the corresponding decree shall issue."
[3]
Herein petitioner appealed from the order of dismissal of its application, the denial of its motion for the reconsideration thereof and the judgment
rendered by the trial court. The Solicitor General, in behalf of the Director of Lands, also appealed from the aforesaid judgment.
On August 13, 1984, herein private respondent Correa fled an action for recovery of possession and damages (accion publiciana) against petitioner in
the Regional Trial Court of Bulacan, Branch XVII, involving the same parcel of land subject of the aforesaid three cases for registration of title, which
action was docketed therein as Civil Case No. 7678-M.
Petitioner moved to dismiss the complaint against it on the ground that the order of dismissal of its application and the judgment rendered in the land
registration cases have not yet become fnal as they were the subject of its appeal.
The court below granted petitioner's motion and dismissed the complaint on February 1, 1985. The motion for reconsideration of the order of dismissal
having been denied, on July 1, 1985, herein respondent Correa took an appeal therefrom to respondent Court of Appeals where it was docketed as CA-
G.R. CV No. 07088.
In its own appeal to respondent court, herein petitioner charges that the trial court erred -
1) in ordering the registration of the three (3) parcels of land covered by PSU-225872, PSU-229592 and PSU-227659 in the name of Correa;
2) in not declaring Jose Rayo, Susana Mangahas, and Pedro Legaspi as usurpers of the lot applied for bypetitioner;
3) in holding that petitioner surveyed, encroached upon, and developed the disputed three (3) parcels of land to the prejudice of Correa;
4) in holding that petitioner through its workers and employees, forcibly entered into the disputed three (3) parcels of land in 1970;
5) in not recognizing petitioner's vested rights to the land and dismissing motu proprio LRC Case No. (SM) N-093; and
6) in not allowing petitioner to submit an "amended petition to conform to evidence" or to fle the proper motion for substitution by the qualifed assignee
of petitioner.
[4]
On his part, the Solicitor General faults the trial court with error (in CA-G.R. CV No. 07825) for -
1) not denying the application for registration for failure of the applicant to adduce clear and convincing evidence of possession and occupation of the
nature and for the length of time required by law;
2) granting the application for registration despite the failure of the appellee to submit in evidence the original tracing cloth plan; and
3) fnding that appellee has a registerable title over the subject property.
and (in CA-G.R. No. 07826) for -
1) confrming applicant-appellee's alleged title over the two parcels of land shown in Plans PSU-229592 and PSU-227659, consisting of 38,290 and
30,099 square meters, respectively, despite absence of proof that said lands have been released as alienable and disposable;
2) confrming applicant-appellee's alleged title over the above two parcels of land despite absence of adequate proof that applicant-appellee and his
predecessors-in-interest have been in open, continuous, exclusive and notorious possession thereof since June 12, 1945 or earlier;
3) confrming applicant-appellee's alleged title over the subject parcels of land despite absence of the requisite reports of the Commissioner of Land
Registration and the Director of Lands pursuant to Section 29 of PD 1529; and
4) granting the application despite the failure of applicant to submit the original tracing cloth plan of the lands applied for, the submission of which is a
statutory requirement of mandatory character.
[5]
On September 20, 1988, respondent Court of Appeals rendered a decision upholding the right of herein petitioner to fle an application for registration of
the land in question pursuant to the doctrine in The Director of Lands vs. Intermediate Appellate Court, et al.,
[6]
which overruled the holding in Manila
Electric Company vs. Castro -Bartolome relied upon and cited by the trial court, supra; and ordering the registration of Lot No. 2880 in the name of
petitioner, but excluding portions thereof as described in Plans PSU-229592, 227659 and 225872 which were ordered registered in the name of private
respondent Correa, more particularly as follows:
"WHEREFORE, the orders dated August 25, 1982 and February 8, 1984, appealed from by Republic Cement Corporation (Land Registration Case No.
SM-093, now CA-G.R. CV No. 07824) are REVERSED; the judgment rendered on August 29, 1983, appealed from by Republic Cement Corporation
(Land Registration Cases Nos. SM-146 and SM-147, now CA-G.R. CV Nos. 07825 and 07826) is MODIFIED in the manner as hereafter provided; and
the orders dated February 1, 1985 and July 1, 1985, appealed from by Moises R. Correa (Civil Case No. 7678-M, now CA-G.R. CV No. 07088), are
AFFIRMED.
"Title to the parcels of land covered by Plans PSU-229592 and PSU-227659 (Exhibits 1 and 1-A, Rayo-Mangahas, pp. 10-11, rec., Vol. IV), the technical
description of which are on pages 7 and 8, rec., supra, and the parcel of land covered by Plan PSU-225872 (Exhibit 1-Legaspi, p. 9, rec., Vol. III), the
technical description of which are on pages 6 and 7, rec., supra, is confrmed in the name of Moises R. Correa. Said parcels of land excluded from Lot
No. 2280, Norzagaray Cadastre, Plan AP-16404 (Exhibit D, p. 10, rec., Vol. I), the technical description of which are on pages 7 and 8, rec. supra, title
to the remaining portion thereof (Lot No. 2280) is confrmed in the name of Republic Cement Corporation. Accordingly, upon fnality of this judgment,
the corresponding adjustment in the technical description of Lot No. 2280 shall be made before issuance of the corresponding decrees and certifcates
of title to and in the names of the proper parties.
"No pronouncement as to costs in these instances.
SO ORDERED."
[7]
Herein petitioner then fled a motion for reconsideration, which was denied by respondent Court of Appeals in its resolution dated November 22,
1988. In its aforesaid resolution, respondent court expressly noted therein that the Solicitor General did not fle a motion for reconsideration of its
judgment nor a petition for its review before this Court.
[8]
Hence, the present recourse is now of petitioner by itself.
Before us, petitioner contends that respondent Court of Appeals erred in ordering the registration of the three parcels of land covered by Plans PSU-
225872, 229592 and 227659 in the name of private respondent Correa, as purchaser of the properties from Jose Rayo, Susana Mangahas and
Pedro Legaspi, allegedly because:
1. Private respondent failed to prove the genuineness of his title and the identity of the lands he claims for his own in the manner and with the degree of
evidence required by law;
2. Jose Rayo, Susana Mangahas and Pedro Legaspi have not proven exclusive, continuous, open and adverse possession of these parcels of land to
justify a fnding of ownership;
3. The whole of Lot No. 2280 is duly covered by deeds of sale in petitioner's favor and amply supported by surveyor's certifcates, the contents of
which prevail over private respondent's doubtful allegations; and
4. The disputed parcels of land are specifcally described by boundaries, putting their identity and extant beyond doubt.
[9]
We fnd the petition at bar to be without merit.
It may readily be seen that the issues raised by herein petitioner are questions of fact which are not within the province of the present recourse. Settled
is the rule that fndings of fact of the Court of Appeals are fnal and binding upon the Supreme Court if borne out by the evidence on record.
[10]
A review
of the factual fndings of the Court of Appeals is not a function ordinarily undertaken by the Supreme Court, the rule admitting of only a few exceptions
recognized under decisional law, which exceptions are not obtaining in the case at bar.
[11]
G.R. No. 41377
[ G.R. No. 413"", Juy #6, 1935 ]
ANGELA BLONDEAU AND FERNANDO DE LA CANTERA Y UZQUIANO, PLAINTIFFS AND APPELLANTS, VS. AGUSTIN
NANO AND JOSE VALLEJO, DEFENDANTS AND APPELLEES.
D E C I S I O N
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 plaintif 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 fling 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 plaintifs have taken an appeal.
With all due deference to the fndings of the trial judge, now an honored member of this court, we are inclined to the view, frst, that the
accesorias,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 frst of our statements, attention need
only be invited to a series of documents, including the transfer certifcate 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 plaintifs, and that of those present, the principal plaintif
Angela Blondeau and her husband Fernando de la Cantera, together with the instrumental witness Pedro Jimenez Zoboli, identifed 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 the same family, lived together,
Vallejo was entirely unacquainted with the activities of Nano in dealing with their joint property. It is signifcant 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 confict 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 plaintifs.
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 plaintif, 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
no title or rights to anyone, unless the spurious document is ratifed 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 fde 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 certifcate 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, sees. 47, 51, 55.)
With respect to the collusiveness of the Torrens title and the binding force and efect 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. Table ([1916], 35 Phil., 144). The history of the case was as follows:
"Vedasto Velazquez was the. attorney in fact of Gregoria Hernandez. 'Gregoria Hernandez registered her title of ownership to the land in question in the
propertv registry and was issued certifcate 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 certifcate of title No. 121, and, abusing her confdence 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'
certifcate 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 certifcate of title No. 43
was issued to Vedasto Velazquez.
* * * * * * *
"On May 31, 1907, Vedasto Velazquez sold the land fnally 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 certifcate 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
Olviga 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 XL S.; 457), is of enlightening interest. Plaintifs
in this case, purchasers of land previously brought under the Illinois Torrens Act, delivered the certifcate of title to a party under an agreement to sell,
who forged a deed to himself, had a certifcate issued in his name, and then conveyed to defendants who were good faith purchasers for value. Plaintifs
informed the registrar of the forgery after the defendants had bought, and demanded the cancellation of the deeds and certifcates, and the reissue of a
certifcate to themselves. The registrar 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 certifcate, as a condition to the issue of a new one. The appellants saw ft to entrust it to
Napletone and they took the risk. They say that according to the construction of the act adopted the registrar's certifcate would have had the same
efect even if the old certifcate had not been produced. But that, if correct, is no answer. Presumably the registrar will do his duty, and if he does he will
require the old certifcate to be handed in. It does not justify the omission of a precaution that probably would be sufcient, to point out "that a dishonest
ofcial could get around it. There is not the slightest reason to suppose that Napletone would have got a certifcate 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 sufer the consequence of a breach of trust,
the one who made it possible by his act of confdence must bear the loss."
Vargas & Manalac 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 fde purchaser of a certifcate 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 5s in recognizing as valid the title of one who has succeeded in ripening a forged
color of title by prescription.
"In the frst place, a forger cannot efectuate 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 certifcate. 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 certifcate 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 certifcate
he is to be judged according to the maxim, that when one of two innocent persons must sufer 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 certifcate, 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 fnal analysis this is a case of a
mortgagee relying upon & 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 sufer the
consequence of a breach of trust, the one who made it possible by his act of confdence 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 plaintif'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.
Judgment reversed.