SANTIAGO QUIMSON, PLAINTIFF AND APPELLEE, VS. PABLO SUAREZ, DEFENDANT AND APPELLANT.

OSTRAND, J.:


This is an action of forcible entry and detainer, the plaintiff alleging that
he is entitled to the possession of the land in question under a lease from its
owner and that the defendant is wrongfully withholding it from him. The
defendant maintains that he is lawfully in possession under another lease of an
earlier date from the same owner.

It appears from the evidence that on February 28, 1917, the deceased Pablo
Tecson leased a large fishpond situated in the municipality of Orani, Province
of Bataan, to one David Luna for the term of ten years at an annual rent of
P900. Two months later Luna, with the consent of Tecson, assigned the lease to
Pablo Suarez, the defendant herein. Shortly afterwards Tecson applied for the
registration of the land under Act No. 496, but died before the final disposal
of the case and the final decree and corresponding certificate of title were
issued in the names of Esperanza Tongco de Trias, as administratrix of Tecson’s
estate, and Maximiana Tongco, his widow, in equal shares. Neither in the final
decree nor in the certificate of title was any mention made of the lease in
favor of Suarez.

Esperanza Tongco de Trias appears to have been succeeded as administratrix by
Maximiana Tongco and the latter as such administratrix, and as guardian of the
heirs of Tecson, and also in her own behalf, granted a lease of the land to the
plaintiff Quimson. The lease is dated May 23, 1920, and is for the term of six
years from May 1, 1921, the rent for the entire term being fixed at P6,250,
payable at the time of the execution of the lease. This lease was at once
entered by memorandum upon the certificate of title for the land. At the time of
the execution of the lease the plaintiff knew that the defendant Suarez was in
possession of the land as a tenant of Maximiana Tongco, by whom he had been told
that the term of Suarez’ lease expired on March 1, 1921, and there is no
evidence showing that he had notice of the fact that the term extended beyond
that date.

On November 15, 1920, Suarez brought an action in the Court of First Instance
against Quimson and Maximiana Tongco to have Quimson’s lease set aside. As far
as the record shows the action may still be pending.

On May 1, 1921, Quimson made a formal demand upon Suarez for the surrender of
the possession and the demand not being complied with, the present action was
brought in the court of the justice of the peace of Orani, the complaint being
filed May 6, 1921. The defendant objected formally to the jurisdiction of the
court on the ground that the action was in reality not one of forcible entry and
unlawful detainer, and therefore not within the jurisdiction of the justice of
the peace. The court overruled the objection, took cognizance of the case, and
rendered judgment in favor of the plaintiff ordering the defendant to vacate the
land and to pay damages in the sum of P280.

The defendant appealed to the Court of First Instance where he appeared
specially and presented a motion for the dismissal of the complaint on the same
grounds as those urged in support of his objection to the jurisdiction of the
justice of the peace. The motion was denied.

The case was placed on the calendar for June 22, 1922, but was continued on
motion of the defendant. It was again set for trial on August 11, 1922, and
plaintiff appeared accompanied by his counsel; the defendant also appeared and
presented another motion for a continuance on the ground that his counsel had a
case for trial in another court and was unable to appear in the present case on
that date. The court denied the motion and proceeded with the trial, at which
trial the defendant testified in his own behalf. The court thereupon rendered
judgment in favor of the plaintiff for the possession of the land and the sum of
P590 in damages, with costs, and the case is now before us upon appeal by the
defendant from that judgment.

The appellant presents three assignments of error, viz.:

“(a) The trial court erred in overstepping its discretionary powers
by denying the petition for postponement of the trial filed by the defendant on
August 9, 1922.

“(b) The trial court erred in overruling the motion for dismissal
presented by the defendant on the ground that the Court of First Instance of
Bataan had no jurisdiction to take cognizance of this case on appeal.

“(c) The trial court erred in holding that the right of possession
of the defendant to the land described in paragraph 1 of the complaint was
extinguished on April 30, 1921; and in adjudging that the contract of lease,
Exhibit 4 of the defendant, is null and void for not having been noted on the
corresponding certificate of title.”

(1) There is no merit in the first assignment of error. The defendant had
already been granted a continuance of the case and failed to give plaintiff’s
counsel due notice of the second motion for a continuance, thus causing the
latter the expense and trouble of going from Manila to Balanga. Under the
circumstances, the denial of the second motion certainly did not constitute
abuse of discretion.

(2) Neither can the second assignment of error be sustained. The defendant
argues that the action is not one of forcible entry and detainer as defined in
section 80 of the Code of Civil Procedure. The pertinent part of that section
reads as follows:

“Anyone deprived of the possession of any land or building by force,
intimidation, threat, strategy, ot stealth, and any landlord, vendor, vendee, or
other person against whom the possession of any land or building is unlawfully
withheld after the expiration or determination of the right to hold possession,
by virtue of any contract, express or implied, and the legal representatives or
assigns of any such landlord, vendor, vendee, or other person, shall at any time
within one year after such unlawful deprivation or with-holding of possession be
entitled, as against the person or persons unlawfully withholding or depriving
of possession, or against any person or persons claiming under them, to
restitution of the land, building, and premises possession of which is
unlawfully withheld, together with damages and costs * * *.”

The complaint alleges that the plaintiff has been entitled to the possession
of the land since May, 1921; that the defendant’s right of possession expired
April 30, 1921; and that the defendant is illegally withholding the possession
from the plaintiff. These allegations bring the case squarely within the section
quoted and, if so, the justice of the peace had original jurisdiction. The
authorities cited by the defendant in support of his contention are so clearly
inapplicable to this case that a discussion of them seems unnecessary.

(3) The third assignment of error relates to the principal question in the
case, i. e., the determination of the legal effect of the two leases and of
their relative priority. As we have already stated, the land in question is
registered under Act No. 496. The plaintiff’s lease is duly entered upon the
certificate of title; the defendant’s lease, though prior in date, has never
been registered, nor is any intimation of its existence to be found upon the
certificate of title. At the time the plaintiff entered into his contract of
lease, he had knowledge of the fact that the defendant was in physical
possession of the land and if the land were unregistered this would be
sufficient to put him upon inquiry and charge him with constructive notice of
the defendant’s rights.

But here the land is registered and in regard to such lands an unrecorded
lease operates only as a contract between the parties and does not affect the
rights of third parties in the absence of fraud on their part. Inasmuch as
sales, mortgages and leases stand on the same footing in this respect, the
following quotation from Niblack on the Torrens System, p. 222, citing
Independent Lumber Co. vs. Gardiner (3 Sask., 140), is in point:

“The rule relative to the protection which will be afforded by a new
registration is that a purchaser for value will be protected in his registered
interests unless actual and moral fraud on his part is to be inferred from the
circumstances under which he obtained them. A person taking a mortgage from a
registered owner of land is not affected by notice of art unregistered interest
in another person, whereby such person is the owner of an undivided one-half of
the land, but if the mortgagor, when he executed it, expressly told the
mortgagee that he owned only an undivided one-half of the land, that he only
intended to mortgage his one-half, and that he intended to exempt the interest
of his cotenant, the mortgagee is guilty of fraud against the unregistered owner
in attempting to enforce the mortgage against the whole land. Fraud on the part
of a vendor in acquiring his title cannot affect the statutory protection and
indefeasibility of title given to a registered purchaser for value, who had no
part in or knowledge of the fraud. This rule is the same as in case of original
registration.”

One of the principal features of the Torrens System of registration is that
all incumbrances on the land or special estates therein shall be shown, or, at
least, intimated upon the certificate of title and a person dealing with the
owner of the registered land is not bound to go behind the certificate and
inquire into transactions, the existence of which is not there intimated. There
being in the present case no indication on the certificate of title of the
existence of the defendant’s lease, and the certificate therefore showing a
clear title and right of possession in favor of the lessor, the plaintiff had a
perfect right to rely on the lessor’s statement that defendant’s right of
possession terminated on April 30, 1921, and was not bound to make further
inquiries. He can, therefore, not be charged with fraud, neither actual nor
constructive.

The disadvantages of adopting the rule suggested by the appellant would far
outweigh the advantages, would be out of harmony with the underlying principles
of the Torrens System of registration and would tend to impair the value of
registered titles.

The judgment appealed from is therefore affirmed, with the costs against the
appellant. So ordered.

Araullo, C. J., Johnson, Avancena, and Romualdez, JJ.,
concur.

STREET, J., dissents.

DISSENTING

JOHNS, J.:

I dissent.

At the time the plaintiff took his lease, he personally knew that the
defendant was in the actual physical possession of the property, and had been
for a number of years. The fact that the plaintiff had personal knowledge of
such fact was sufficient to put him upon notice of defendant’s rights, and to
legally charge him with knowledge of any information, which he might have
received upon inquiry from the defendant as to the tenure of his lease.

The only object of the registration law is to give a party notice of the
rights of third parties, and if he has personal knowledge of such rights, or
such notice as to put him upon inquiry, as in this case, he is not in a position
to say that he took the lease without knowledge of defendant’s rights.

Upon that ground, I dissent.