THE CITY OF MANILA, PLAINTIFF AND APPELLEE, VS. AMOS G. BELLIS, DEFENDANT AND APPELLEE. BENITA QUIOGUE DE V. DEL ROSARIO AND SALVADOR V. DEL ROSARIO, DEFENDANTS AND APPELLANTS.

STATEMENT

This is a bill of interpleader by the City of Manila against
the defendants under the provisions of section 120 of the Code of Civil
Procedure, in which it is sought to have them litigate and settle between
themselves the corresponding amount of rental which each should have for the
school building in the City of Manila, known as “Manila East High School,” for
which, by reason of their conflicting claims, the city has not paid any rent to
either party since January 1, 1925.

For answer the defendant Benita Quiogue de V. del Rosario and
her husband admit the allegations made by the city in its interpleader, and for
cross-complaint alleges that under the terms and conditions of the lease between
them and the City of Manila, they are entitled to collect the whole amount of
rental at the rate of P1,640 per month against the city, and damages in the sum
of P10,000, with costs.

In his amended answer the defendant Bellis admits the material
allegations of the bill of interpleader, and alleges that he has had an actual
survey made of the land in dispute in and by which it was found that 60.2813 per
cent of the building in question belongs to him, and that he is entitled to a
monthly rental of P988.60, and that his part of the property is shown by a
survey made by the surveyor of the Bureau of Lands in G. L. R. O. Cadastral
Record No. 275, which was approved by the Court of First Instance, and as a
further answer in the nature of a crosscomplaint, he alleges that he became such
owner of 60.28 per cent by purchase thereof at a sale for the foreclosure of a
mortgage in his favor, and its confirmation on February 19, 1925, by the Court
of First Instance of Manila, by reason of which he is entitled to a monthly
rental of P988.60, with legal interest, and that under the provisions of article
1877 of the Civil Code, he is entitled to the portion of such rentals due and
owing from January 1, 1925, to February 20, 1925, in the sum of P1,647.68, by
reason of his real estate mortgage upon 60.28 per cent of the property on which
the rentals accrued and are due and unpaid. That he is entitled to P988.60 a
month, with legal interest as his portion of the monthly rental from February
20, 1925, by reason of the fact that upon that date, he became the owner of
60.28 per cent of the property and entitled to its possession by virtue of the
confirmation of the foreclosure sale, and he also claims a portion of the 39.72
per cent sufficient to pay a deficiency judgment in his favor and against his
codefendant, amounting to P4,154.26 after the credit thereon of P1,647.68
above-mentioned, with legal interest on the balance of such deficiency judgment,
at the rate of 12 per cent per annum from December 19, 1926.

As pointed out by the lower court, there were two trials in
this case, in the first of which the case was submitted upon the following
statement of facts:

“All parties admit to the allegations contained in paragraphs
1, 2 and 3 of the complaint, and that the contract referred to in paragraph 3 is
the same as the copy attached to the plaintiff’s complaint.

“It is further admitted that the defendant Bellis became the
owner of a portion of the property mentioned in the complaint, on the 19th day
of February, 1925, as more fully appears from a copy of the Order approving such
purchase in civil case No. 26401, attached as Exhibit B. The exact portion of
the property or building which might correspond to defendant Bellis by reason of
his purchase was 21/41 or 20/40, the exact figures to be determined and
submitted to the court.

“It is further stipulated that the defendant, Benita Quiogue de
V. del Rosario, each month demanded the payment of the rent provided for in the
contract attached to the complaint, but payment of the same was refused, the
plaintiff claiming that the defendant Bellis had made claim for a portion of
said rent; and in connection with this stipulation of fact the plaintiff submits
as Exhibit C, letter of the defendant Benita Quiogue de V. del Rosario, dated
June 22, 1925.

“It is admitted by the plaintiff that no rents have been paid
under the contract mentioned in the complaint and offered herein since the first
of January, 1925, up to this date to any of the defendants;

“That the defendant Amos G. Bellis, since the issuance of the
order of the Honorable Pedro Concepcion, Exhibit D, has taken no steps to be
placed in possession of said property, either by way of an order of court or by
ejectment proceedings against his codefendant, Benita Quiogue de V. del Rosario
and her husband, Salvador V. del Rosario

“But the defendant Bellis gave notice to the City of Manila
that he claimed to be the owner of a portion of said property purchased by him,
which purchase was approved in Exhibit B of February 19, 1925, which notice
appears in the letters of the defendant Bellis to the Mayor of the City of
Manila, dated April 16th and 18th, 1925, and October 28, 1925, together with
certificate of title No 24084, which letter of April 16th is marked Exhibit D,
and letter of April 18th Exhibit E, and letter of October 28, 1925, Exhibit F,
and the Torrens title Exhibit G, and the defendant Bellis claims to have written
an additional letter on January 28, 1925, along the same lines, and ‘it is
agreed that if such letter is obtained from the City, that it may be offered and
received and marked Exhibit H, together with the Mayor’s answer to the said
letter of January 28, 1925;’

“That the defendant Bellis, as far back as January 28, 1925,
notified the Mayor in writing of his purchase of a portion of the said property
upon which the buildings, herein in question are erected, and that he, in that
letter, claimed the rent should be paid to him for the portion corresponding to
the amount which he had purchased by public auction, as provided by the court in
Exhibit B on February 19, 1925. This stipulation is made subject to the
production and presentation to the court of the original correspondence or duly
certified copies thereof, approved by the attorneys for Mrs. Benita Quiogue de
V. del Rosario and marked Exhibit H.

“The defendant Benita Quiogue de V. del Rosario insists that
the lease mentioned in plaintiff’s complaint shall continue in force in
accordance with its terms, the City of Manila to continue in the occupancy of
the premises for the period of that lease;

“But the defendant Bellis reserves any right which he may have
to approve such a continuation of the lease, or to proceed, as he has already
proceeded under article 1571 of the Civil Code regarding leased property, that
the purchaser of property leased or under lease has the right to annul that
lease;

“That Mr. Amos G. Bellis consents to the occupancy of the
building above referred to by the City of Manila, and to that effect signed a
proposed contract of lease which is presented in evidence as Exhibit I;

“That the plaintiff, prior to the institution of this action,
endeavored in every way to have the defendants herein make an amicable
arrangement as to the payment of the rents from the property in question, ‘but
was unsuccessful in its efforts;’

“It is further agreed that certified copies may be substituted
for any and all of the exhibits offered in this case.”

Judgment was first rendered upon that agreed statement of
facts. Motions for a new trial were filed by plaintiff and defendant Amos G.
Bellis which were granted on July 26, 1926.

Both the plaintiff ancj the defendant Benita Quiogue de V. del
Rosario and her husband duly objected to the admission of any other evidence,
contending that there was an agreed statement of facts upon which the case had
been tried and submitted. Be that as it may, the parties thereafter made and
entered into the following stipulation of facts:

“I. That on the 31st day of May, 1923, the defendants herein,
Salvador V. del Rosario, and his wife, Benita Quiogue de V. del Rosario, in
consideration of the sum of P40,000, which they received from the other
defendant herein Amos G. Bellis, duly made and executed in favor of the said
Amos G. Bellis and delivered to him a certain real estate mortgage on their land
described in Transfer Certificate of Title No. 19633, of the Office of the
Register of Deeds of Manila, with the buildings and improvements then on said
land or which might be placed thereon in the future, and under the terms and
conditions stated in the said mortgage, the original of which is attached to the
record of case No. 26401, of this court, as Exhibit B, and is hereby made a part
hereof, which mortgage was duly registered on said Transfer Certificate of Title
No. 19633;

“II. That on or about the 19th day of July, 1923 by mutual
agreement of the parties in said mortgage, Exhibit B, the said Salvador V. del
Rosario and Benita Quiogue de V. del Rosario, the registered owners thereof,
made a subdivision of the property described in said mortgage, and had the
description of said mortgaged property amended to read as
follows:

Then follows a technical description of the amendment.

“And upon their verified petition had the Land Court make an
order on July 26, 1923, approving said subdivision and amendment and cancelling
said Transfer Certificate of Title No. 19633 of the Office of the Register of
Deeds of Manila, and ordering issued in its stead a new transfer certificate of
title containing the amended description with the said mortgage of the said Amos
G. Bellis as amended duly registered thereon, and the said Transfer Certificate
of Title No. 19633 was pursuant to such order cancelled and the new Transfer
Certificate of Title No. 20151, of the Office of the Register of Deeds of
Manila, issued in lieu thereof, with the said mortgage of Amos G. Bellis duly
registered thereon, and the duplicate copy of said title was delivered to the
said Amos G. Bellis.

“III. That the said mortgagors, Salvador V. del Rosario and
Benita Quiogue de V. del Rosario, defaulted in the conditions of said mortgage,
Exhibit B, on April 30, 1924, by failing to pay the interest due thereon, and
also in failing to pay the installment of the principal due thereon on May 31,
1924, and by reason thereof the said Amos G. Bellis, on June 9, 1924, commenced
case No. 26401, of this court, against said mortgagors, to foreclose said
mortgage andto have the mortgaged property, as particularly described in said
Transfer Certificate of Title No. 20151, sold to satisfy the amount due thereon,
and after due trial of said action, on September 23, 1924, decision was entered
therein for the foreclosure of said mortgage as provided by law, the original of
which decision is attached to the record of said case No. 26401, of this court,
and is hereby referred to as Exhibit 1, and made a part hereof;

“IV. That the said Salvador V. del Rosario and Benita Quiogue
de V. del Rosario failed to pay the said judgment, Exhibit I, and the mortgaged
property described in the said Transfer Certificate of Title No. 20151, of the
Office of the Register of Deeds of Manila, with the buildings and improvements
thereon was sold as provided by law on January 24, 1925, to the said Amos G.
Bellis, the defendant herein, for the sum of P40,000, which sale was duly
approved by the court in said case on February 19, 1925, after due notice to all
the parties in interest, as shown by its final order in said case, which is
hereby referred to as Exhibit J, and made a part hereof; that on April 2, 1925,
by virtue of said sale, the said Transfer Certificate of Title No. 20151 was
surrendered by the said Salvador V. del Rosario and Benita Quiogue de V. del
Rosario, and by order of the court cancelled and a new title No. 24084, of the
Office of the Register of Deeds of Manila, with the same description as in said
Title No. 20151, issued to the said Amos G. Bellis as the owner of said lands
with the buildings and improvements thereon, a certified copy of which said
title No. 24084 is attached to the record in this case as Exhibit G, which is
hereby made a part hereof;

“V. That on December 1, 1926, in cadastral case No 55, G. L. R.
O. Cadastral Record No. 275, after due hearing and notice to all the parties in
interest, an order was entered by the court, ordering the register of deeds of
Manila to cancel the said title No. 24084, in the name of Amos G. Bellis, of the
property formerly covered by said mortgage, and issue a new title in those
proceedings for said property in the same terms as the one cancelled, with the
technical description set forth in said order, which’ is attached hereto as
Exhibit K, and made a part hereof which order was based on an amended plan made
by the Bureau of Lands and approved by the court in those proceedings on
November 10, 1926, as shown by its order attached hereto as Exhibit L, and made
a part hereof, and by virtue of such order, title No. 27359, mentioned in
paragraph 2 of his cross-complaint was issued to him, which title is hereby
referred to as Exhibit M, and made a part hereof;

“VIII. That on the 31st day of July, 1923, the defendant
herein, Salvador V. del Rosario and Benita Quiogue de V. del Rosario, leased and
let to the plaintiff in this case, the City of Manila, the said property known
as the ‘Manila East High School/ including that portion thereof with the
buildings and improvements, covered by the mortgage of the said Amos G. Bellis,
and particularly described in said Transfer Certificate of Title No. 20151 for a
period of five years from August 1, 1923, as a monthly rental of Pl,640, and
under the other terms and conditions stated in the written contract of lease,
copies of which are attached to the plaintiff’s complaint and the defendant’s
answer, which are hereby referred to as Exhibit N, and made a part hereof;

“IX. That on January 28, 1925, and many times subsequent
thereto, the defendant, Amos G. Bellis, duly notified the City of Manila, the
plaintiff in this case, that on January 24, 1925, he had purchased and was the
owner of that portion of said property, known as the Manila East High School
covered by his mortgage, as hereinbefore stated, and demanded that the
proportional part of the rent of said property be paid to him, all of which is
shown by the letters, Exhibits D, E, F, and H, and the answer to Exhibit H,
which are attached to the record of this case, and made a part hereof;

“X. That the defendants, Salvador V. del Rosario and Benita
Quiogue de V. del Rosario, have each month demanded the payment of the rentals
on the said Manila East High School from the City of Manila under the said
contract of lease Exhibit N, and in this connection offers the letter of June
22, 1925, as Exhibit C, and makes it a part of this stipulation;

“XI. That the plaintiff, the City of Manila, has paid no rents
on said property known as the ‘Manila East High School’ under said contract
Exhibit N since January 1, 1925, up to this date to any of the parties in this
action.

“XII. That the defendants, Salvador V. del Rosario and Benita
Quiogue de V. del Rosario, insist that the contract of lease attached to the
plaintiff’s complaint and marked Exhibit N shall continue in force in accordance
with its terms, the City of Manila to continue in the occupancy of the premises
for the period of that lease.

“That the defendant Amos G. Bellis, is willing and has
consented to have the said contract of lease Exhibit N covering the said
property now owned by him continue in force for its full period, as provided
therein, provided the proportional part of the rent due thereunder to him is
paid to him.”

The lower court held that a new trial having been granted and
the case then being before the court upon an amended answer by the defendant
Bellis, it would receive any further evidence “which might tend to show the
truth of the questions at issue” and in addition to such stipulated facts, the
court found that the following facts were established by the evidence:

“That the proportion of the building known as the ‘Manila East
High School’ situated upon the land of defendant Bellis in Transfer Certificate
of Title No. 27359 (Exhibit M) is 60.28 per cent as determined by a survey made
by a surveyor of the Bureau of Lands (Exhibit R and the plan Exhibit Q), and
that 60.28 per cent of the monthly rental of said building is the sum of P988.60
a month; that on April 8, 1926, counsel for defendant Amos G. Bellis petitioned
the Court of First Instance of Manila in the mortgage foreclosure proceedings
(civil case No. 26401 of this court) for the issuance of an order placing the
defendant Bellis in actual possession of the property purchased by him in said
foreclosure proceedings, which property described in his Certificate of Title
No. 27359 (Exhibit M), and that on April 9, 1926, the court granted said
petition and the Sheriff of the City of Manila placed the defendant Bellis in
actual possession of the property so purchased by him at the foreclosure sale
(Exhibits P and P-1); that on June 3, 1926, the defendant Bellis obtained in the
mortgage foreclosure proceedings a deficiency judgment against the other
defendants herein, Benita Quiogue de V. del Rosario and Salvador V. del Rosario,
jointly and severally, for the balance due on his mortgage credit against them
in the sum of P4,755.80 with interest at the rate of 12 per cent per annum from
February 19, 1925, until paid, in accordance with the provisions of section 260
of Code of Civil Procedure (Exhibit O), and that no part of this deficiency
judgment has been paid by said defendants.

“The defendant Bellis claims the rentals due on said building
known as the ‘Manila East High School’ from January 1, 1925 to February 19,
1925, inclusive, in the sum of P1,647.68, as a credit upon his said deficiency
judgment (Exhibit O), by virtue of his mortgage on that portion of said property
now covered by his Torrens Certificate of Title No. 27359 (Exhibit M). The
evidence shows that on April 30, 1924, the mortgagors, said Benita Quiogue de V.
del Rosario and Salvador V. del Rosario defaulted in the conditions of said
mortgage by their failure to pay the interest due thereon, and also failed to
pay the installments due on the principal on and after May 31, 1924; that said
defendant Bellis foreclosed the said mortgage, and that the mortgaged property
was sold by the Sheriff at public auction and was purchased by said defendant
Bellis at the foreclosure sale on January 24, 1925, for P40,000; that after
applying the amount paid for the mortgaged property by the said Bellis, the
latter, on June 3, 1926, obtained a deficiency judgment against the mortgaged
debtors in the sum of P4,755.80, with interest thereon at 12 per cent per annum
from February 19, 1925; and by virtue of the provisions of article 1877 of the
Civil Code the defendant Bellis, under his said mortgage, claims the unpaid
rents which have become due on the mortgaged property since the date when his
mortgage credit fell due.

“It would appear that this right is established by the
provisions of article 1877 of the Civil Code, which reads as follows:

” ‘A mortgage includes all natural accessions, improvements,
growing fruits, and rents not collected when the obligation falls due, and the
amount of any indemnities paid or due the owner by the insurers of the mortgaged
property or by virtue of the excercise of the power of eminent domain, with the
declarations, amplifications, and limitations established by law, whether the
estate continues in the possession of the person who mortgaged it or whether it
passes into the hands of a third person.’

“The rentals now due unpaid on said mortgaged propr erty from
January 1, 1925, to February 19, 1925, inclusive, is the sum of P1,647.68, which
sum the defendant Bellis is, under article 1877 of the Civil Code, entitled to
have applied on his deficiency judgment against the other defendants in this
case.

“A survey of the said ‘Manila East High School’ by the Bureau
of Lands shows that the interest of said defendant Bellis in said property is
60.28 per cent thereof, and that said Bellis has been the absolute owner of said
portion of the ‘Manila East High School’ property since February 19, 1925.
Section 257 of the Code of Civil Procedure provides that—

” ‘The sale when confirmed by decree of the court, shall
operate to divest the rights of all the parties to the action and to vest their
rights in the purchaser.’ Hence, the confirmation of the sale by the court on
February 19, 1925, divested the defendants Benita Quiogue de V. del Rosario and
Salvador V. del Rosario of all the rights which they previously had in the
mortgage property, including the right of ownership and the right of possession,
and said rights were by operation of law vested in the defendant Amos G. Bellis
as the purchaser of said property at the foreclosure sale.

“The lease under which the City of Manila held said property
and used it for the purposes of the Manila East High School was not recorded on
the registered title, and for that reason the defendant Bellis had the right to
cancel the lease to the 60.28 per cent of said property acquired by him; but,
instead of cancelling said lea’se he agreed to have the lease continue in force
and effect, and he gave notice to the City of Manila of his acquisition of a
portion of said property and tried to collect from the City of Manila the
rentals which accrued on his portion of said property from and after his
acquisition of the portion of the land and building belonging to him. In fact,
on January 28, 1925, after the defendant Bellis had purchased the mortgaged
property and before the confirmation of the sale by the court, the said Bellis
notified the City of Manila that he had purchased said mortgaged property and
was the owner thereof, and he demanded that a certain proportional part of the
rentals be paid to him. Notwithstanding his notice and demand of the defendant
Bellis, the City of Manila refused to pay any part of said rentals to said
Bellis, and on November 24, 1925, brought this action of interpleader so that
the claimants of said rentals could interplead and the courts determine their
respective rights in and to said rentals.

“The defendant Amos G. Bellis having expressly consented that
said lease (Exhibit N) should continue in force and effect for its full period,
provided that the proportional part of the rentals accruing upon the portion of
the property owned by him be paid to him, it would appear that the said Bellis
now has the right to collect the proportional part of said rentals claimed by
him.

“In the matter of the legal interest claimed by defendants, the
court is of the opinion that plaintiff is not liable for interest on an
unliquidated claim.”

It then entered judgment in favor of Bellis and against the
City and the defendant Benita Quiogue de V. del Rosario and her husband for
P27,021.68, the amount being 60.28 per cent of the whole amount of rentals due
on the contract of lease of the property, known as the “Manila East High
School,” from February 20, 1925, to and including the month of May, 1927, with
legal interest from the date of the judgment. It also rendered judgment in favor
of Benita Quiogue de V. del Rosario and her husband for P2,733.30 as the total
amount of the rentals due and unpaid from January 1, 1925, to February 19, 1925,
at the rate of P1,640 a month, and for the further sum of P17,804.93, being
39.72 per cent of the whole amount of such rentals from February 20, 1925, to
and including the month of May, 1927, with legal interest, and in favor of the
defendant Bellis and against the defendant Benita Quiogue de V. del Rosario and
her husband jointly and severally for the sum of P1,647.68 from and out of the
amount of the judgment of the defendant Benita Quiogue de V. del Rosario and her
husband for the period from January 1, 1925, to February 19, 1925, inclusive,
being 60.28 per cent of the amount of rentals awarded to the defendants for that
period, and in favor of the defendant Bellis for a preference over the amount of
P17,804.93 in and to the amount of any balance remaining due on the deficiency
judgment in his favor after applying the P1,647.68 as a credit thereon.

From this judgment the defendant Benita Quiogue de V. del
Rosario and her husband appeal and assign the following errors:

“I. The lower court erred in admitting evidence over the
objection of appellants at the second hearing on March 22, 1927, in addition to
the agreed statement of facts submitted to the court by the parties at the first
hearing on March 17, 1926. (P. 19, B. of E.).

“II. The lower court erred in finding that the building belongs
to appellee Amos G. Bellis and appellant Benita Quiogue de V. del Rosario in the
proportion of 60.28 and 39.72 per cent instead of 21/41 and 20/41,
respectively.”

JOHNS, J.:

Upon the first assignment of error, the appellants say:

“Upon the pleadings and said agreed statement of facts, the
court rendered its decision on March 31, 1926, in favor of the appellant Benita
Quiogue de V. del Rosario and against the appellees. Thereafter, appellees moved
for a new trial which was granted by the court on July 26, 1926. An amended
answer by appellee Amos G. Bellis having been filed and admitted, the case was
again tried on March 22, 1927, during which hearing appellant objected to the
admission of additional proofs in view of the agreed statement of facts
theretofore submitted by the parties and for the further reason that the case
was not on new trial on the ground of newly discovered evidence. The court
overruled said objection to which ruling timely exception was taken by appellant
(pp. 1 to 4, s. n.).

“There is nothing in the record to show that the case was
before the court for a new trial on March 22, 1927, on the ground of newly
discovered evidence. Neither is there any motion or petition presented by
appellee Amos G. Bellis asking the court to relieve him from the effect of the
agreed statement of facts to enable him to introduce additional proofs. We
submit that considering the status of the case on March 22, 1927, the court
should have sustained appellants’ objection to the admission of additional
proofs, and thereupon decided the case on the merits based on the stipulation of
facts entered into by the parties to this case on March 17,
1926.”

After which they contend that:

“The court cannot go outside the case as stated in the
stipulation.”

“As a consequence of this rule, the courts cannot order further
evidence to be taken.

“If, notwithstanding such stipulation, the trial court makes a
finding in conflict with the agreed facts, such finding will be ignored by the
appellate court.

“In order that a party to a stipulation may be relieved
therefrom, after decision thereon, leave of court upon valid cause shown is
necessary, a thing which was not done in the instant case.

“Until an amendment is obtained and while the stipulation
exists the facts recited therein are conclusive.

“Authority to obtain relief from the effects of a stipulation
is vested in the courts, but such step must be taken before the decision is
announced.” Citing authorities under each one of those headings, and concluded
as follows:

“It will be seen that: (1) There has been no attempt to deny
the truth of the facts set forth in the stipulation; (2) there has been no
allegation of fraud or mistake in entering into the stipulation; (3) no attempt
has been made by appellee Bellis to relieve himself from the effects of the
stipulation in the manner provided for by law; (4) the terms of the stipulation
are conclusive upon the parties; and (5) no additional evidence could be offered
to vary the terms of the stipulation.”

The authorities cited by the appellants under that assignment
of error are good law, but the question is whether upon the admitted facts, they
are in point.

March 17, 1926, the case was set down for hearing on the
original pleadings and the original agreed statement of facts. March 31, 1926,
the court entered judgment in and by which it was found under those pleadings
that it could not adjudicate the rights of the defendants as between themselves,
and it left each of them to their legal remedies against the other, and rendered
judgment upon her crosscomplaint in favor of Benita Quiogue de V. del Rosario
for the full amount of the rentals against the City of Manila. April 20, 1926,
both the City of Manila and the defendant Bellis moved the court for a new trial
on the ground that its decision was not in accord with the evidence and was
against the law. Pending a decision of those motions and on July 20, 1926, the
defendant Bellis moved the court that in the interest of justice the decision be
reconsidered and set aside, and that he should be permitted to file an amended
answer, which was attached to, and made a part of, the motion, and that the case
be set down for trial on the merits. July 26, 1926, the court granted the motion
to set aside its former decision and permitted the amended answer to be filed,
and gave all parties leave to file such other and further pleadings as might be
necessary to protect their rights, to which ruling no objection was made or
exception taken by either party. December 14, 1926, the defendant Bellis filed
another amended answer and cross-complaint in which he then claimed 60.28 per
cent of the total amount of rents due or to become due from the plaintiff from
and after January 1, 1925, and that from and out of the remaining portion of
39.72 per cent due from the City of Manila to the defendant Benita Quiogue de V.
del Rosario, he should have a sufficient amount to pay his deficiency judgment
against her and her husband in the sum of ?4,154.26, with interest at 12 per
cent from December 19, 1926.

Hence, we have this situation. After the case was tried and
submitted and judgment was rendered on the original pleadings and the original
stipulated facts, on motion of both the plaintiff and the defendant Bellis, that
judgment was vacated and set aside, and the defendant Bellis was permitted to
file his amended answer, to which no objection was made or exception taken. The
amended answer, which was later filed with the leave of the court, presented new
questions, both of law and fact, and different from those presented in the
original answer of Bellis, upon which the case was first tried and submitted,
all of which were germane to the former pleadings. It must be conceded that the
setting aside of the original judgment and the granting of the new trial was a
matter largely in the discretion of the trial court, and that the same thing is
true as to the filing of the amended answer, upon which the case was finally
tried and decided and the judgment rendered, from which this appeal is
taken.

The legal effect of the granting of the new trial and the
filing of the amended pleading was to have the case tried and submitted upon
such pleading as amended, and the purpose of the filing of the amended answer
was to permit Bellis to prove the facts alleged in his amended answer. In other
words, its legal effect was to grant a new trial on the new issues made by the
amended pleadings, and if Bellis could not introduce any evidence to sustain
such amended pleadings, the granting of the new trial as to him would be a
nullity. If the original judgment had not been set aside and had become final,
it would present another and a very different question, and Bellis would then be
bound and concluded by the original stipulation of facts. But after the original
judgment was set aside and the amended pleadings were filed by order of the
court, the parties then entered into another and a different stipulation of
facts, and in that situation, the one stipulation of facts is just binding and
has the same legal force and effect as the other stipulation. The legal
principle for which the appellants contend under their first assignment of error
would in legal effect nullify the power of the court to set aside a judgment or
to grant a new trial or the right of either party to file an amended pleading
which would conflict with any stipulation of facts made under the former
pleadings. All things considered, we cannot say, as a matter of law, that the
trial court abused its discretion in setting aside the original judgment and in
permitting the amended answer to be filed.

It is true that the appellants vigorously protested and
objected to any new evidence being offered to sustain the amended pleadings, and
that they did not waive their right to make such objection, but it is also true
that they did enter into a second stipulation of facts, and that testimony was
taken by both parties on the amended pleadings.

All things considered, we are clearly of the opinion that there
is no merit in the first assignment of error.

It appears from the second stipulation of facts that since
April 2, 1925, Bellis has been the registered owner under a Torrens title of the
lands, buildings and improvements situated thereon described in Transfer
Certificate of Titiles Nos. 20151 and 24084, and which are now described in
Transfer Certificate of Title No. 27359 of the Office of the Register of Deeds
of Manila, and that he acquired them through foreclosure of a mortgage and in
cadastral case No. 55 of the City of Manila. Although it is true that the total
area of the lands described in Transfer Certificate of Titles Nos. 20151 and
24084 is therein stated to be 1,395.70 square meters more or less, and that the
total area described in Transfer Certificate of Title No. 27359 is stated to be
1,437.30 square meters, yet, by a comparison of the technical description by
metes and bounds in each of said titles, the land therein described is the same
in each certificate, although it is true that there is a slight difference in
the computed area.

As to the area in question, the lower court found as a fact
that the proportion of the building known as the “Manila East High School” as
situated upon the land of the defendant Bellis, evidenced by his Certificate of
Title No. 27359, was 60.28 per cent, and this finding is based upon the evidence
of Evangelino Laserna, who is a surveyor of the Bureau of Lands, and who made
the surveys described in Transfer Certificate of Title No. 27359 and plotted the
building on the plan, and the testimony of this witness as to the technical
description and as to actual location of the building is not contradicted by
that of any other witness, and must be accepted as true.

We have given this case the careful consideration which its
importance demands, but are clearly of the opinion that the findings of fact
made by the lower court are sustained by the evidence, and that the judgment
should be affirmed, with costs. So ordered.

Malcolm, Villamor, Ostrand, Romualdez, and
Villa-Real, JJ., concur.