VALENTINA LANCI, VDA. DE LUENGO, ET AL., PLAINTIFFS AND APPELLANTS, VS. TEODORO R. YANGCO ET AL., DEFENDANTS AND APPELLEES.

This action was instituted in the Court of First Instance of
Manila by Valentina Land, Vda. de Luengo, and her daughters Consuelo and Maria,
of the surname of Luengo y Lanci, the two last named being assisted by their
respective husbands, Buenaventura Rodriguez and Eusebio R. Moro, against Teodoro
R. Yangco, Angel A. Ansaldo, and Ricardo Summers, the latter as sheriff of the
City of Manila, for the purpose of obtaining a declaration of nullity with
respect to a sale under execution made by the defendant Summers of a parcel of
property, with the improvements thereon, located at No. 1164 Carolina Street, in
the District of Malate, City of Manila, at which sale the defendant Yangco had
become purchaser, and also to obtain a declaration of nullity with respect to
the interest claimed by the defendant Ansaldo therein as transferee of the right
acquired by Yangco by virtue of his purchase, with other appropriate incidental
relief. Upon hearing the cause the trial judge declared Angel A. Ansaldo owner
of the land in question and absolved the defendants from the complaint, without
costs. From this judgment the plaintiffs appealed.

The documentary facts upon which the defendants rely are these:
The lot in question was originally registered under Act No. 496 on April 21,
1923; and a transfer certificate of title therefor was issued on March 27, 1924,
in the name of Romarico Agcaoili, married to Josef a Luengo. (Transfer
certificate No. 21715.) Thereafter the defendant Teodoro R. Yangco, having
obtained a judgment for a sum of money in civil cause No. 26808, in the Court of
First Instance of the City of Manila, against Romarico Agcaoili and Angel A.
Ansaldo, caused an execution to be levied upon said lot and the improvements
thereon as the property of Romarico Agcaoili. After levy upon the land had been
thus effected, the plaintiff Valentina Lanci and her two daughters presented a
third party claim to the sheriff, alleging that the lot belonged to them and not
to the defendant in the execution. Notwithstanding the interposition of this
claim the sheriff, upon the presentation by the execution creditor of a bond of
indemnification, proceeded with the sale; and the parcel in question, with other
lands seized by virtue of the same execution, were sold to Yangco, the execution
creditor, for the sum of P15,000. Thereafter Angel A. Ansaldo, codefendant with
Romarico Agcaoili in the civil cause above referred to, acquired by transfer
from Yangco the interest which the latter had acquired in consequence of his
purchase at the execution sale. The year allowed by law for redemption from said
sale elapsed without redemption having been effected, and shortly thereafter the
present action was instituted. It should be here noted that the certificate of
title issued in the name of Romarico Agcaoili contained no special notation with
respect to improvements on the property, but the levy effected by the sheriff
purported to be executed upon Agcaoili’s interest, not only in the land but also
in the improvements.

Without calling in question any of the documentary acts
above-mentioned, the plaintiffs assert title upon the following additional
occurrences: Romarico Agcaoili is the husband of Josefa Luengo, daughter of Jose
Luengo y Perez, deceased; and at the time registration was effected in the name
of Agcaoili, lot No. 1164, Carolina Street, was vacant. Thereafter, as we gather
from the record, a house was built upon the property with the consent of the
registered owner with money supplied by Luengo. Agcaoili, it may be stated, was
the architect who superintended the construction; and even before the house was
entirely finished, Luengo moved in, with his family, and thereafter occupied the
premises as a residence until the date of his death which occurred on February
12, 1925.

After the death of Luengo, administration was duly instituted
upon his estate, with Eusebio R. Moro as administrator; and in the course of a
few months thereafter an agreement for the partition of the estate was entered
into by the individuals interested therein. This partition appears to have been
more a matter of form than of substance, since the parties thereto, instead of
selling the property for the purposes of division, agreed to maintain their
community interest undivided. More important to be noted is the fact that the
court approved the agreement; and, all debts appearing to have been paid, the
administration was concluded on March 20, 1926, and the administrator
discharged. Among the properties involved in this administration was the lot,
with the house thereon, which is the subject of this controversy.

It further appears that on May 29, 1925, Romarico Agcaoili
executed a unilateral document of transfer by which, for the purported
consideration of P3,828, he conveyed the parcel now in question to the estate
(Intestado) of Jose Luengo, the document reciting that the money representing
said consideration had been received in cash prior to the date of the execution
of the instrument. No special mention of improvements was made in this document;
but in view of the fact that the house then standing on the lot had been built,
according to the contention of the plaintiffs, with money supplied by Luengo,
the title to the house was already vested in the estate of the latter. Though
the deed by which the transfer of the lot was thus effected was executed before
a notary public, it has not as yet been noted by the register of deeds as a
valid transfer of the Torreng title. Accordingly in the partition agreement
Agcaoili obligated himself, within a reasonable time, to effectuate the
inscription of the lot in the name of the widow and heirs of Luengo y Perez. In
the same agreement Agcaoili admitted that both the house and the improvements
thereon belonged to said widow and heirs.

Upon the facts above stated the trial court held that the
execution creditor had acquired a perfect title to both house and lot, for which
reason the complaint was dismissed. In support of this conclusion his Honor gave
determinative weight to the fact that the Torrens title to the land was
inscribed in the register’s office in the name of Agcaoili, and it appeared to
his Honor that the unregistered conveyance by which Agcaoili conveyed, or
attempted to convey, the lot to the plaintiffs on May 29, 1925, was wholly
invalid. In our opinion this view of the case is untenable.

It is established doctrine that a judgment creditor only
acquires at an execution sale the identical interest possessed by the judgment
debtor in the property which is the subject of the sale. He therefore takes the
property subject to all existing equities to which the property would have been
subject in the hands of the debtor. It results, therefore, that, if the deed of
the judgment debtor Agcaoili created a right enforceable against himself, that
right can be enforced against the judgment creditor Yangco, and Ansaldo who
stands in Yangco’s shoes. It is true that in section 50 of the Land Registration
Law (Act No. 496) it is declared that the inscription is the act that gives
validity to the transfer or creates a lien upon the land. But this is no
obstacle to the giving due effect to anterior obligations, as between the
parties and their successors other than bona fide purchasers for value.

From the record before us it must be deduced that the deed
executed by Agcaoili to the estate of Jose Luengo was executed for a valuable
consideration and in all probability pursuant to agreement between Agcaoili and
Luengo while the latter was living. Furthermore, this instrument is of a date
anterior to the date of the levy of Yangco’s execution. It results that the
transfer effected by the deed must prevail over the execution sale, provided
legal efficacy can be conceded to the deed. The doubt upon this point arises
from the fact that the deed was not executed in favor of Jose Luengo in life but
is executed in favor of his estate, subsequent to his death. It is well
recognized doctrine that the conveyance of real property requires not only a
personality capable of transferring the title but also a personality competent
to receive it. This doctrine, which is inferable from fundamental principles of
the civil law, more especially perhaps from article 1457 and related provisions
of the Civil Code, is fully recognized in common law jurisprudence, where we
find it repeatedly declared that a deed to a dead man is a nullity (Hunter vs.
Watson, 12 Cal., 363; 73 Am. Dec., 543; Morgan vs. Hazlehurst Lodge, 53 Miss.,
665); though it has been held that a deed to one who, at the time, is dead, “or
his heirs,” is good if his heirs can be identified (Neal vs. Nelson, 117 N. C,
393; 53 Am. St. Rep., 590; 23 S. E., 428).

It has also been, decided that a deed to the estate of a dead
man is void (Mclnerney vs. Beck, 10 Wash., 515). But whether or not this
consequence attaches to such a conveyance depends somewhat upon the
circumstances attending the execution of the conveyance. Thus, in City Bank of
Portage vs. Plank (141 Wis., 653), it was held that a deed executed in favor of
one E. D. Plank, who was known to be dead, might be treated in equity as
intending to convey the property to E. S. Plank, who was at the time acting as
administrator of the estate of E. D. Plank. In discussing the effect of the deed
in this case the court said:

“* * * It is a rule asserted from early times that no grant can
exist without a grantee. This is of course axiomatic. The title cannot pass from
the grantor unless it passes to someone. As a corollary, it is declared in many
cases that a deed or grant to a person who does not exist at the time of the
grant is void. Such statements are unassailable if properly understood. If .the
grant, in the intention of the parties, is attempted to be made to some person
who has no existence, it cannot take effect: Neal vs. Nelson, 117 N. C, 393; 53
Am. St. Rep., 590; 23 S. E., 428. Many technical rules, however, have yielded to
more rational views in modern times. The real intention of the parties is to be
sought and effectuated by courts when possible. If it was the intention both of
grantor and grantee that the grant should be to some person or persons in
existence, that intent may be effectuated by ascertaining under proper rules of
evidence the intention of the parties, although such person be not designated by
his legal or usual name. It has been said in many cases that a conveyance to a
partnership name could have no validity because a partnership has no legal
existence. But the overwhelming weight of modern authority is that courts may
ascertain the fact that certain existent individuals are accustomed to be called
by the association name, either corporate or copartnership, and draw the
inference that those persons were intended to be the recipients of the title,
although their true names did not appear in the firm name at all, and even if
the names of other existent persons did so appear. Again, it is recognized in a
multitude of cases that if the court can find that a certain person was intended
as grantee, it matters not what name is given him in the deed. The case of Staak
vs. Sigelkow, 12 Wis., 234, is an illustration. The proposition is broadly
stated in Case vs. Fish, 63 Wis., 475, 479; 22 N. W., 322, and Conroe vs. Case,
79 Wis., 338; 48 N. W., 480. When parties deliberately on one side make a
conveyance and on the other side receive the same and pay a consideration
therefor, there is a most irresistible inference that a conveyance is intended.
Such intent of necessity involves the further conclusion that the parties had in
mind some person or persons to whom the property should pass. When a person well
known is named, and that person has gone out of existence without the knowledge
of the parties, it may well be that no inference is justifiable that anyone else
was intended. But when the person formerly bearing the name written in the deed
is known to both parties to be dead, the inference is very strong that by the
use of that name they mean to designate not the dead man but some existent
person or persons.”

The facts in the case before us closely resemble those involved
in the case from which the preceding excerpt has been taken. The individual
referred to as grantee in the deed was known to all parties in interest to be
dead; his estate was known to be in course of administration; and the
personality of the deceased was represented only in the administrator. Of course
the grantor must have intended that the widow and heirs of the deceased should
be the ultimate beneficiaries of the conveyance, but the deed itself was made
directly to “the estate” (Intestado). Under these conditions we can commit no
violence against the intention of the grantor in holding, as the majority of the
court now determines, that this deed should be interpreted as if it had been
made to the administrator by name. In other words, the expression “estate of
Jose Luengo” is equivalent to “administrator of the estate of Jose Luengo.”
Moreover, as already shown, in the course of the administration proceedings, the
validity of this deed was impliedly recognized, when the court gave its approval
to the agreement which treated this property as property of the heirs.

Josefa
Luengo, daughter and heir of Jose Luengo, has not been made a party to this
action, but no formal objection was interposed by the defendants on the ground
of lack of parties; and it is not improper to grant to the plaintiffs herein the
relief appropriate to the facts proved.

At the inception of this action the
court of origin granted a preliminary injunction against the sheriff requiring
him to abstain until further order from disturbing the plaintiffs in the
possession of the house and lot which is the subject of this action. This
preliminary injunction will necessarily now be made permanent.

From what has been said it follows that the judgment appealed
from must be reversed; and it is declared that the sheriff’s sale and sheriff’s
certificate pursuant thereto in favor of Teodoro R. Yangco, as well as the
subsequent transfer of the property by the latter to Angel A. Ansaldo, are of no
effect. The plaintiffs, on the other hand, are declared to be owners of the
property in question pro indiviso in conjunction with Josef a Luengo, or her
successors in interest. Proceedings consequent upon this decision for
rectification of the annotations on the registered certificate of title and the
issuance of a proper certificate to the owners should be brought in the land
registration expediente pertaining to this property. So ordered, without costs.

Avanceña, C. J., Johnson, Malcolm, Villamor, Ostrand,
Romualdez, and Villa-Real, JJ., concur.