ERLANGER & GALINGER, INC., PLAINTIFF AND APPELLEE, VS. AMPARO EXCONDE, DEFENDANT AND APPELLANT; ERLANGER & GALLINGER, INC., PLAINTIFF AND APPELLEE, VS. AMPARO EXCONDE, DEFENDANT…

In the year 1938 Erlanger & Galinger, Inc. obtained a judgment in
Civil Case No. 6249 of the Court of First Instance of Laguna against
Gil Exconde for the foreclosure of a mortgage amounting to P26,397.14,
with legal interest. Upon appeal to the Court of Appeals this judgment
was affirmed, and on February 17, 1940 an order was issued for the
execution of the judgment. The provincial sheriff gave notice of the
sale of the properties mortgaged. Erlanger & Galinger, Inc. claims
and alleges that the sale was actually effected; that it bought the
properties, and a deed of sale executed by the sheriff in its favor;
that the sale was confirmed by the court, the sale was registered in
the Office of the Register of Deeds of Laguna, and certificates of
title were issued in its favor by said office over the registered
lands, all prior to the war; that it was placed in the possession of
the properties and was in such possession during the war; and that the
record of the case in the Court of First Instance, and the proceedings
for the sale, registration and issuance of the titles, as well as the
titles issued in its name, were all destroyed during the liberation. G.R. No. L-4792 is a proceeding instituted by Erlanger & Galinger,
Inc. to reconstitute the records of the old case, Civil Case No. 6249,
while G.R. No. L-4793 is an action instituted by it to recover
possession of the properties it had acquired by virtue of the sale on
execution, together with damages. G. R. No. L-4794, Case No. 7, G.L.R.O. No. 244 is a proceeding for the registration of various parcels
of land by Gil Exconde, his wife Emilia J. Santos, Mamerta Exconde and
Arsenio Exconde. Erlanger & Galinger, Inc. filed an opposition
claiming that the lands were some of those it had purchased in the
execution sale in case No. 6249. G.R. No. L-4795, G.L.R.O. Rec. No.
1201, is an application of Erlanger & Galinger, Inc. to have the
certificates of title issued in the name of Eduvigis Javier and Emilia
J. Santos over lots Nos. 39 and 48 cancelled, and to have new titles
issued in its name. These four cases were tried jointly, and after
trial the court rendered judgment sustaining the claims of Erlanger
& Galinger, Inc. In G.R. No. L-4792, it ordered the reconstitution
of all proceedings entered in the docket of the court, and of the
notice of sale, the certificate of sale executed in favor of Erlanger
& Galinger, Inc. and the Sheriff’s return; in G.R. No. L-4793, it
ordered the defendants to return the possession of the properties to
the plaintiff and to pay it by way of damages P3,000 a year, until the
possession was returned. In G.R. No. L-4794, it sustained the
opposition of Erlanger & Galinger, Inc. to lots nos. 1, 2, 3 and 4,
and ordered their registration in its name. And in G. R. No. L-4795,
the court ordered the cancellation of Certificates of Title Nos. 9062
and 9089 and the issuance of new ones in the name of Erlanger &
Galinger, Inc.

Did the foreclosure sale take place in the
original case, and Erlanger & Galinger, Inc. become the owner of
the parcels of land sold thereat? This is the most important question
at issue in all these cases, upon which depend the outcome of the other
three actions. Plaintiff’s evidence consists of the following
testimonies: that of the prewar provincial sheriff of Laguna to the
effect that the sale of the properties took place, after due notice,
that the court confirmed the sale, and that he executed the deed of
sale in favor of Erlanger & Galinger, Inc.; that of the notary
public that he ratified the deed of sale executed by the sheriff; that
of the register of deeds of Laguna that he registered the deeds of sale
and issued the certificates of sale in the name of Erlanger &
Galinger, Inc.; that of plaintiff’s attorney that he took the
certificate of sale for registration to the office of the register of
deeds of Laguna; that of the head of the firm of Erlanger &
Galinger, Inc. that he had kept the titles in the safe at his office;
that of the accountant in said firm that he had also seen the titles in
the safe of the company; and those of two attorneys of San Pablo City
that they had gone to Erlanger & Galinger, Inc. offices to offer to
purchase the properties on behalf of clients who were interested in
buying them, or investigate the possibility of buying them.

The defendant Emilia J. Santos, wife of Gil Exconde, claims that she
had paid the full amount of the indebtedness around the middle of
March, 1941, and testified to having gone personally to the manager of
the plaintiff company paying him therefor P30,000, of which sum P5,000
was furnished by Marcos Paulino; and to having received the three
original certificates of title of the properties and a certain
“compromise agreement”, which papers were turned over to her attorney,
Zacarias B. Ticson for the corresponding motion in court. She further
declared she had received a receipt for the payment, but which was
destroyed during the war. Her testimony is sought to be corroborated by
a copy of a supposed order of the court, Exhibit 6-Exconde, wherein the
sale was declared annulled, and by testimonial and documentary evidence
to the effect that the properties were paid for during the military
occupation to the Japanese military, and thereafter registered in the
name of the defendants. The most important of these is Exhibit
3-Exconde, supposed translation of a document executed in Japanese,
evidencing payment of P26,399.14, representing a mortgage indebtedness
of Gil Exconde to Erlanger & Galinger, Inc. It can be noted,
however, that the validity of the supposed payment set forth in said
receipt, Exhibit 3-Exconde, assuming its authenticity and legality,
absolutely depends on a subsisting mortgage indebtedness, the existence
of which is, however, denied by plaintiff on the ground that the
properties mortgaged had already been sold and acquired by it in a
foreclosure sale, with certificates of title issued in its name. In the
last analysis, therefore, the most important issue is the existence of
the supposed sale on foreclosure, which sale is affirmed on the one
hand by plaintiff, and denied on the other hand by defendants. We must
state in advance that the testimonies of the formidable array of
witnesses presented by plaintiff to prove the sale, all of whom are
disinterested, may not be ignored, unless some more credible evidence,
like a public document, the authenticity of which is unquestioned or
unquestionable, can be presented to overcome their import. This is
sought by defendants in Exhibit 6-Exconde and Exhibit 3-Exconde, which
are now to be considered.

The theory of the defendants to sustain the supposed existence of Exhibit 6-Exconde is that Atty. Tanalega filed an ex-parte
motion in case No. 6249 asking for the annulment of the sale (or notice
of sale) on the ground that the mortgage indebtedness had been paid,
and Judge Proceso Sebastian thereupon issued said order. Upon
examination of the testimony of Atty. Tanalega, our attention was
struck by the fact that whereas he gives specific and detailed facts
and circumstances on even minor incidents, he testifies in generalities
about the alleged motion, mentioning no specific document or fact upon
which he based it, nor the circumstances and incidents connected
therein that would confirm the fact of its having been presented or
which give rise to it. He purposely avoids testifying on the matter of
payment, how it was supposedly made, the receipt which should have been
presented, and how said payment was proved or shown to the court. If
Emilia J. Santos had a receipt of payment, why was not this given to
him, or why does not the witness make any mention thereof? From
experience, we know that this lack of definiteness or concreteness as
to facts is a badge of fabrication or falsity. To corroborate the
supposed filing of the motion, Emilia J. Santos testified she gave the
certificates of title from Erlanger & Galinger, Inc., together with
the receipt of the payment of the debt, to Atty. Zacarias B. Ticzon,
for the purpose of having the mortgage cancelled. But Atty. Ticzon
denied having received the supposed receipt of payment, or the
certificates of the title (t. s. n., p. 386), and positively asseted
that the papers received were those connected with another case, Civil
Case No. 7475. Judge Sebastian, who is the one who supposedly issued
the order, was made to make a statement and he declared in his
deposition that he could not have issued the order, Exhibit 6-Exconde.
A careful study of the order itself discloses its spurious character.
No judge would issue such an important order, annulling a sale on an ex-parte
motion, without the certificate of payment or any other authentic
document to the same effect being presented in court in support of the ex-parte
motion. If the sale or notice of sale had actually been annulled, why
is it that Exhibit 5-Exconde filed by defendants themselves shows that
as late as May 15, 1941 (date of exhibit), the sheriff still gave
notice to the Register of Deeds of the sale of the unregistered lands
included in the notice of sale on execution? Again, if the mortgage
indebtedness had really been paid, why is it that the manager of
Erlanger & Galinger, Inc. should refuse to execute a deed of
cancellation of the mortgage, as Emilia J. Santos herself had declared?
The excuse given by her is that her husband, Gil Exconde, refused to
work again with the company. This is incredible and inconsistent with
reason and sense. Why should Erlanger & Galinger, Inc. still desire
to have her husband continue working for it, after it had gone to a
long and ardous litigation to make him pay his accounts?

The
supposed circumstances sustaining the theory of payment do not actually
support it; they belie it completely. The testimonial evidence given by
the clerk who issued the copy, on the supposed existence of the order,
Exhibit 6-Exconde, which he supposedly copied, merits scant
consideration, there being no credible corroborative evidence to
support its truth, and the circumstances already mentioned above
indicating its falsity. The testimony, which is direct evidence of the
supposed existence of the order supposedly copied is, unlike the
surrounding circumstances, easy of fabrication, and no court of justice
would give it credence if the surrounding circumstances, instead of
corroborating it, belie its existence. On the other hand, the evidence
submitted by plaintiff, which is all circumstantial and therefore less
susceptible to fabrication, constitutes an unbroken chain of natural
and rational circumstances corroborating each other, and it certainly
can not be overcome by the very inconcrete and doubtful evidence
submitted by the defendants. We, therefore, find that the conclusion of
the trial court that the properties in question were actually purchased
at the foreclosure sale by plaintiff and were, thereafter, registered
in its name is supported by a great preponderance of the evidence, and
said finding must be sustained.

We will now proceed to
consider the objections raised against the procedure followed in the
reconstitution, or the sufficiency of the proceedings on which the
order of reconstitution is based. Appellant’s contention that
proceedings subsequent to a judgment may not be reconstituted, because
reconstitution applies only to pending cases, must be dismissed.
Judicial records are subject to reconstitution without exception,
whether they refer to pending or finished cases. This may be inferred
from Secs. 4 to 7 of Act No. 3110. There is no sense in limiting
reconstitution to pending cases; finished cases are just as important
as pending ones, as evidence of rights and obligations finally
adjudicated.

It is also argued that before reconstitution
may be allowed on the basis of secondary evidence, the loss of the
proceeding to be reconstituted must first be proved, as well as its
existence and content, and that these requisites were not complied with
by the plaintiff in this case. The evidence submitted shows that the
record of the case after the order of execution was destroyed and could
no longer be found. It was further proved that there was a certificate
of sale executed by the sheriff and ratified by him, that this
certificate was presented to the registered of deeds, and that the
latter issued certificates of title in the name of the plaintiff. Under
the above circumstances, there was no need of proving the contents of
each and every one of the above proceedings or documents because courts
can take judicial notice of what they contained. Standard forms are
used for such proceedings or documents, hence there was no need to
prove what their contents were. There was also no need of proving that
there was an order for the confirmation of the sale, because no
certificate of sale would have been executed and registered without
such order.

Having found that the order of the trial court
in Case No. 6249, G.R. No. L-4972, ordering the reconstitution is
sustained by the evidence on record and is authorized by the law on
reconstitution, we next come to the related issue, the validity and
effect of the proceedings during the military occupation, evidenced by
Exhibits 3-Exconde and 1-Exconde. This issue is the subject of G.R.
No. L-4793. By these documents and by testimonies of witnesses the
defendants-appellants pretend that the mortgage indebtedness in favor
of plaintiff-appellee was paid during the Japanese occupation. It must
be stated at the outset that only Exhibit 1-Exconde is authentic and
genuine; Exhibit 3-Exconde is a simple copy merely, the authenticity of
which is subject of dispute. Exhibit 1-Exconde is an official receipt
for the sum of P64.50, under Ex. Or. 89, dated May 30, 1944 “For entry
certificate”, while Exhibit 3-Exconde purports to be a certificate of
payment of an indebtedness. Exhibit 1-Exconde proves that a certificate
of sale must have been presented for registration, not a certificate of
payment of indebtedness. Exhibit 3-Exconde does not bear the
corresponding rubber stamp of the registration office placed in the
appropriate case by the Office of the Register of Deeds; it is not the
authentic copy of the document actually registered for which Exhibit
1-Exconde was issued. The documents registered as indicated in Exhibit
1-Exconde must have been certificates of sale, not mere receipts of
payment of mortgage debts. There is incontrovertible evidence that new
certificates of title have been issued in the name of Erlanger &
Galinger, Inc. prior to the war, and this circumstance sustains the
conclusion that the deeds registered were deeds of sale or transfer.
Furthermore, had there been more cancellation of mortgage, no deeds
would have been registered at all, but merely affidavits of
cancellation. Without elaborating further, we agree with the finding of
the trial court that Exhibit 3-Exconde is spurious and confirm its
rejection by it. We also agree with the trial court that their
execution (of the deeds of sale by the Japanese Military Administration
of the properties registered in the name of Erlanger & Galinger,
Inc. in favor of defendants-appellants) was unauthorized and violative
of the provisions of international law (Sec. III, article 46, The Hague
Regulations), and the same and the titles issued by virtue thereof are
null and void.

The award of P3,000 as damages yearly is
claimed by defendants-appellants as excessive. The court takes judicial
notice of the fact that after liberation and until the present prices
of copra or coconuts are high, compared to those prevailing prior to
the war, in view of the relatively high demand and the limited
production. The award made by the trial court is also hereby sustained.
So is its award of possession of the lands subject of the action and
its dismissal of defendants-appellants’ counterclaims.

The
outcome of the case on reconstitution also determines that of the other
two registration cases, G.R. Nos. L-4794 and L-4795. As the lands
claimed by Erlanger & Galinger, Inc. had been purchased by it at
the foreclosure sale and titles thereto acquired by it before the war,
their registration in its name must be granted.

The judgments appealed from should be, as they hereby are, affirmed, with costs against appellants. So ordered.

Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo and Bautista Angelo, JJ., concur.