SAURA IMPORT & EXPORT CO., INC., AND RAMON E. SAURA, PETITIONERS, VS. JUDGE ARSENIO SOLIDUM, PROVINCIAL SHERIFF OF DAVAO, & CHINA BANKING CORPORATION, RESPONDENTS.

This is a petition for certiorari with preliminary
injunction to set aside the orders of respondent Judge dated February
24, 1965 and March
13, 1965, and to
annul the attachment and levy on execution on two (2) parcels of land belonging
to petitioners and registered in their respective names.  As prayed for we issued a writ of preliminary
injunction on June 3, 1965.

The facts of the case are
as follows:

In August 1953
petitioners purchased the afore­mentioned two parcels of land from the Board of
Liquidators for the National Abaca and Other Fibers Corporation under the
provisions of Republic Act No. 477.^[1]
On December 28, 1953 transfer certificates of title Nos. T-5049
and T-5050 in the names of petitioners Saura Import
and Export Co., Inc., and Ramon E. Saura, respectively,
were issued by the Register of Deeds for Davao.

On December
21, 1953, pursuant
to an agreement to finance petitioner Saura Import
and Export Company’s im­portation from
Hongkong of electrical motors and starters with an
invoice value of U.S. $21,802.00, respondent bank paid the face value of the
supplier’s exchange draft therefor, plus expenses and
related bank charges.  As of July 13,
1961, after deducting partial payment made, petitioners were still indebted to
respondent bank in the sum of P34,148.79, representing the peso value of the
exchange draft, stipulated interest, bank charges and trust receipt com­mission,
which sum petitioners failed to pay.

On October
12, 1961 respondent
bank filed a complaint in the Court of First Instance of Manila, docketed as
Civil Case No. 48326, for the collection of said sum of P34,148.79; with a
prayer for preliminary attachment.  On October
23, 1961 the court a
quo issued the writ and accordingly the two (2) parcels of land covered
by transfer certificates of title Nos. T-5049 and T-5050 were attached by the
respondent provincial sheriff of Davao.  On January
30, 1962 the
defendants (petitioners herein) moved to discharge the at­tachment, alleging in
effect that the complaint against them stated no cause of action and that they
had assets worth several times more than the claim of respondent bank which
could answer for any judgment which might be obtained under the complaint.  Respondent bank opposed the motion, whereupon
petitioners manifested that they “would now have no objection to the
deferment of the dissolution of the attachment until after the trial on the
merits.”

In the meantime the
parties (petitioners and respondent bank) in Civil Case No. 48326 concluded a
com­promise agreement which was submitted to the trial court.  On
July 25, 1962,
judgment was rendered by respondent Judge in accordance with the agreement,
which reads:

“The parties, assisted by their respective counsel,
respectfully submit the following compromise agreement in the above-entitled
case:

1.    The defendants hereby admit that they are jointly and severally liable
to pay to the plaintiff the total amount of P34,148.79, with 7% interest per
annum from and after July 13, 1961, until fully paid, plus an amount equivalent
to 20% of the total amount due as and for attorney’s fees;

2.    In consideration of the defendant’s voluntary admission of liability,
the plaintiff is agree­able to receive from the defendant in full settlement of
its aforesaid claim the amount of P30,000.00 with 7% interest per annum computed
from the date of this compromise, until fully paid plus P500.00 as and for
attorney’s fees by way of compromise-all to be paid jointly and severally by the defendants within two (2) years from
the date of this agreement;

3.    As security for the payment of the foregoing compromise sums, the
attachment levied by the Provin­cial Sheriff of Davao
City on the two  (2) parcels of land
belonging to the defendants and registered in their names under Transfer
Certificates of Title Nos. 5049 and 5050 of the Re­gistry of Deeds of Davao, shall re­main in full force and effect;

4.    The defendants hereby renounce forever any and all claims which they
may have against plaintiff by reason of the procurement and issuance of the
writ of attachment in this
case;

5.    In the event that the defendants shall fail to pay the compromise sums
as aforestated in paragraph 2 hereof, the plaintiff
shall be entitled to the im­mediate issuance of a writ of execution for the satisfaction therefor.”

The decision was amended
on August 4, 1964,
upon motion for reconsideration filed by petitioners, by insert­ing the
following addendum to the compromise agreement:

“The China Banking Corporation will interpose no objection to
the release of any of the aforesaid lots, provided the remaining property is
sufficient, as per the Development Bank of the Philippines’
appraisal, to secure the payment of the entire compromise amount.”

In view of the expiration
of the two-year period stipulated in paragraph 2 of the compromise agreement
with­out petitioners’ having paid their indebtedness, respondent bank moved for
execution of the judgment.  Accordingly,
a writ of execution was issued by respondent Judge on August
21, 1964.

On September
3, 1964 petitioners
filed a motion to lift the attachment and any levy made by respondent sheriff
on two (2) parcels of land in question, invoking for the first time Section 8, paragraph one, of Republic Act. No. 477, which states:

“SEC. 8.  Except in
favor of the Government or any of its branches, units, or institutions, land
acquired under the provisions of this Act or any permanent improvements thereon
shall not be subject to encumbrance or
alienation from the date of the award of the land or the improvements thereon
and for a term of ten years from and after the date of issuance of the
certificate of title nor shall they become liable to the satisfaction of any
debt contracted prior to the expiration of such period.”

Respondent Judge denied the motion in his Order dated February 24, 1955, as follows:

“x x x, it
appears that the prohibition contained in the above quoted provision to the
effect that said lands shall not “become liable to the satisfaction of any
debt contracted prior to the expiration of such period” or “for a term of ten years from and after the date
of issuance of the certifi­cate of title”, is not annotated on the said
Transfer Certificate of Title Nos. 5049 and 5050.  x x x.

x x
x                          x
x x                             x x x

“Moreover, the herein defendants are now estopped
from raising the ille­gality of the levy in question by virtue of the fact that
said defendants in a compromise agreement entered into by them with the
plaintiff on July 21, 1962, placed as security for the payment of their
indebtedness the said two (2) parcels of land, and that when the same parcels
were levied upon under the writ of attachment issued by this Court, the
defendants never raised the legality of the levy but instead agreed to
guarantee their compliance with the same compromise agreement with the very
same parcels.”

Petitioners moved to reconsider but were turned down.  Meanwhile, on April 10, 1965, respondent sheriff of Davao, in compliance with the writ
of execution previously issued by respondent Judge, levied upon the parcels of
land in question.  However, before the
sheriff could proceed with the sale petitioners filed this petition for
certiorari, with a prayer for preliminary injunction.

With respect to the first ground on which respondent Judge denied
the motion to lift the attachment, petitioners contend that the exemption of the
two (2) parcels of land from liability for any obligation contracted prior to
the expiration of ten years from and after the issuance of the certificates of
title is a right which arises from law and is therefore binding on respondent
bank even if not registered, citing paragraph 1, section 39 of Act No. 496,
which reads:

“SEC. 39.  Every person
receiving a certificate of title in pursuance of a decree of registration and
every purchaser of registered land who takes a certificate of title for value
in good faith shall hold the same free from
all encumbrances except those noted on said certificate and any of the
following encumbrances which may be subsisting,
namely:

“First Liens, claim or rights arising or existing under the
laws or Constitution of the United States or of the Philippine Islands which the sta­tutes of the Philippine
Islands cannot require to appear on record in the registry.”

We find no merit in
petitioners’ position.  In the first
place the prohibition in Section 8 of
Republic Act. No. 477 is not a “lien, claim or right” arising or
existing under a law which cannot be required to appear on record in the
registry.  In fact the certificate of
titles carried the annotation that “the vendee shall not sell and/or
encumber the property within a period of ten (10) years from the date of the
issuance of the Certificate of Title except by way of mortgage to a government
banking institution.” However, no annotation was made as to the exemption
of the properties from “the satisfaction of any debt contracted prior to the
expiration” of the said period of 10 years.  In the second place, respondents might be
charged with know­ledge, at least by presumption, as far as the law was concerned, but there can be no similar presumption concerning the origin of the lands, specifically the fact that they had been acquired
from the Board of Liquidators and therefore came within the purview of Republic
Act 477.  As to that fact the requirement
of registration in order to effect third persons was not dispensed with.  There is no suggestion in the record that
said respondent had knowledge of that fact such as to render the lack of
registration immaterial.

As to the second ground
stated by the lower court in the order complained of, petitioners contend that
they are not estopped from invoking the illegality of
the levy by the compromise agreement or by their failure to object seasonably to the attachment.  The said
agreement, they maintain, in so far as it subjected the parcels of land
in ques­tion to the obligation specified therein and adjudged in the decision, is null and void, being in
contravention of the express prohibition in Section 8 of Republic Act No. 477.

We believe that the
principle of estoppel applies in this case.  The representation or omission that this prin­ciple
renders conclusive upon petitioners (Arts. 1431 and 1433, Civil Code; Rule 123,
Sec. 68(a), Rules of Court) is on a matter of fact, namely, the origin and
manner of acquisition by them of the lands in question.  They in effect led respondent Bank to believe
that the said lands proceeded from a source other than that contemplated in
Republic Act No. 477 and that they were
subject to levy and
attachment.  Judging from the
circumstances and considering that petition themselves were aware of the
exempting provisions of the law they concealed the vital fact from respondent
not only when they first moved for the dissolution of the attachment on a
different ground and then withdrew their motion, manifesting that they
“would now have no objection to the deferment of the dissolution of the
attachment until after the trial on the merits,” but also when they
entered into the compromise agreement and asked the court to render judgment in
accordance therewith.  Indeed it was they
who offered, by their letter of June 28, 1967 to respondent Bank’s counsel, the security
of the lands in question to support their proposal for amicable settlement.

Relying on the foregoing
conduct of the petitioners, respondent bank concluded the compromise agreement
with them, wherein it was stipulated that as security for the payment of the
indebtedness the attachment levied by the provincial sheriff on the two parcels
of land should remain in full force and effect. 
Petitioners even renounced any and all claims which they might have
against respondent bank by reason of the procurement of the
writ.  Upon the other hand they were able
to obtain the following concessions:

1.     Reduction of the actual in­debtedness of P34,148.79, with 7% interest
per annum from and after July 13, 1962 until fully paid plus an amount
equivalent to 20% of the total amount as and for attorney’s fees, to P30,000.00
with 7% interest per annum from the date of the compromise agreement until fully paid, plus P500.00 as and for attorney’s fees.

2.     Extension of two (2) years for
the payment of the sums agreed upon.

The doctrine of estoppel applicable to petitioners here is not only that
which prohibits a party from assuming inconsistent positions, based on the
principle of election, but that which precludes him from repudiating an
obligation voluntarily assumed after having accepted benefits therefrom.  To
countenance such repudiation would be contrary to equity, and would put a
premium on fraud or misrepresentation.

From the procedural viewpoint, petitioners’ motion to lift the
attachment came too late.  It was not
only a writ issued in the usual process prescribed in the Rules of Court, but
one that was subsequently embodied in the compromise agreement and therefore
became part of the judgment of the
court approving the same.  The time to assail
the legal­ity of the attachment was before the judgment became final.  To set aside the attachment thereafter would amount to altering or
amending the judgment which was already beyond correction, even assuming that
it contained an error which needed correcting.

The writ prayed for is denied and the injunction is dissolved,
with costs against petitioners.

Concepcion, C.J., Reyes, JBL, Dizon, Zaldivar, Sanchez,
Angeles, and Fernando, JJ., concur.

Ruiz Castro, J., took no part.

^[1]
An Act to Provide for the Administration and
Disposition of properties, Including the Proceeds and Income Thereof
Transferred to the Republic of the Philippines under the Philippine Property
Act of 1946 and of Republic Act No. 8, and of Public Lands and Improvements
Thereon Transferred to the National Abaca and Other Fibers Corporation Under
the Provisions of Executive Order No. 29 Dated October 25, 1946 and of Executive Order No. 99 dated October
22, 1947.