JOSE GEMORA ET AL., PLAINTIFFS AND APPELLANTS, VS. F. M. YAP TICO & CO., LTD., ET AL., DEFENDANTS AND APPELLEES.

This action deals with the ownership and possession of various
lots of land described in the complaint, and damages in the sum of P75,000 plus
the costs.

The plaintiffs allege that said land belongs to them and that
the defendant F. M. Yap Tico & Co., Ltd., in the case commenced by it
against Catalina de la Cruz (civil case No. 3602, Court of First Instance of
Occidental Negros), prayed for and secured a preliminary attachment on one-half
of said property knowing that it did not belong to said Catalina de la Cruz, and
the defendant sheriff later sold said half of the said property at public
auction to the defendant Antonio C. Quiana, for the sum of P28,000.

The defendants contend that the land claimed in the complaint
does not belong to the plaintiffs in its entirety, because one-half thereof
belongs to said Catalina de la Cruz as her share in the conjugal property, and
that she made no valid transfer of this half belonging to her, and if she did at
all alienate it, such a disposal would have been illegal and in fraud of her
creditors, and, in particular, of the defendant F. M. Yap Tico & Co., Ltd.

Defendant Go Chiengco, administrator of the estate of the
original defendant Antonio C. Quiana, filed a counterclaim in the sum of P6,000
for damages caused by the plaintiffs retaining the said half of the property
purchased at the auction sale by said Quiana.

After the trial, Judge Quirico Abeto, presiding over the Court
of First Instance of Occidental Negros, rendered judgment dismissing both the
complaint, and the counter claim filed by the defendant Go Chiengco, without
special pronouncement as to costs.

The plaintiffs appealed from such judgment, and assign several
errors to the trial court which they enumerate and discuss in their brief.

The
following facts are proven: Catalina de la Cruz and her deceased husband Susano
Gemora, acquired as conjugal property the lands which are the subject matter of
the complaint (Exhibits 2 and 3). The plaintiffs are children of said
spouses.

When Susano Gemora died, proceedings for the settlement of his
intestate estate were had (civil case No. 1588), in the course of which Catalina
de la Cruz alleged that she was the owner of one-half of the property left by
her husband as being her half of the conjugal property (Exhibit 7.)

On April 16, 1920, when Catalina de la Cruz owed a large sum of
money to F. M. Yap Tico & Co., Ltd., she made a simulated sale of her
portion of the conjugal property to her brother-in-law, Jose Gemora. (Exhibit
8.)

On May 30, 1920, Jose Gemora resold said property to Catalina
de la Cruz. (Exhibit 9.)

On January 8, 1921, the court issued an order (Exhibit G) in
the course of the aforesaid intestate proceedings of Susano Gemora, adjudicating
to the herein plaintiffs, children of Catalina de la Cruz, all the property of
the estate without awarding to said Catalina her half of the conjugal property.
Although Catalina de la Cruz had previously claimed in such proceedings that
half of the conjugal property, she did not appeal from the said order of the
court depriving her of her aforesaid portion of the marriage property. F. M. Yap
Tico & Co., Ltd., moved for the reconsideration of that order, praying that
one-half of that property be adjudicated to its debtor, Catalina de la Cruz; but
the court denied the motion. (Exhibits I and H.)

On September 28, 1925, Ricardo Gemora, for himself and in
behalf of his brothers, all children of Catalina de la Cruz on the one hand, and
Yu Mia, representing and with authority from F. M. Yap Tico & Co., Ltd., on
the other, agreed that F. M. Yap Tico & Co., Ltd., would sue Catalina de la
Cruz for the collection of her debt which amounted to P46,540; that she would
not answer the complaint and would allow judgment by default to be rendered
against her so that the property described in the complaint would be attached
and sold at auction; that if F. M. Yap Tico & Co., Ltd., purchased such
properties at the auction, it would return to the herein plaintiffs one-half of
lots, Nos. 721 and 726, plus 40 hectares from the other lots, executing a sale
to that effect in favor of said plaintiffs for the price of P8,000; that if any
other person bought said property F. M. Yap Tico & Co., Ltd., would pay the
present plaintiffs P5,000.

This was done. Judgment by default was rendered against
Catalina de la Cruz and one-half of the property was sold at auction to Antonio
C. Quiana for the price of P28,000, and, in accordance with the agreement, F. M.
Yap Tico & Co., Ltd.,paid the Gemoras P5,000.

The lots in question were adjudicated to the plaintiffs in the
proper cadastral proceeding. Lots 2105, 2117, 2118, 2120 and 2164 on December 8,
1921; lots 2119, 2165 and 2166 on July 10, 1925; and lots 2126, 2127, 2128,
2129, 2163 and 2361 on December 22, 1925.

The question raised is whether, as the plaintiffs allege, they
are the owners of the whole of these lots for having been adjudicated to them by
the court, both in the intestate proceedings of their deceased father Susano
Gemora, and in the cadastral proceeding; or whether, as the defendants contend,
one-half of said property continued to belong to Catalina de la Cruz, and said
one-half as property of the latter was attached and sold at auction to satisfy
the judgment rendered against her.

We find the following views stated in the appealed judgment to
be supported by the evidence of record:

“The court deems the defendants’ contention the more
reasonable. An examination of the evidence shows that the plaintiffs in
conjunction with their mother Catalina de la Cruz, have plotted a number of acts
tending to defraud the latter’s creditors.

“Catalina de la Cruz already owed Yap Tico & Co., Ltd., a
considerable sum of money (Exhibit 4), when the property was adjudicated to her
children without her appealing from the order, or even moving for its
consideration, notwithstanding that she was the owner of one-half of it; and in
the cadastral proceeding also, she neither claimed said half, nor appealed from
the judgment adjudicating it to her children and all the time her debt to Yap
Tico & Co., Ltd., still subsisted. The way in which the property was divided
among the plaintiffs, and the omission, better said, with the consent of
Catalina de la Cruz, practically left her creditors, and especially Yap Tico
& Co., Ltd., without any means of protecting their rights.”

From the proceedings heretofore had it follows that the
adjudication to the herein plaintiffs of the whole estate of the deceased Susano
Gemora, made in the order Exhibit G, dated January 8, 1921, is void, for,
according to the evidence of record, the same was procured by fraud, inasmuch as
in the same proceedings in which the order of said court was issued there
appears the allegation of the surviving spouse that one-half of said estate
belongs to her as her share of the conjugal property. That the property in
question is conjugal property has been sufficiently and satisfactorily proven as
in the record. And such a judicial adjudication procured by fraud may be
assailed and vacated in a collateral proceeding such as is the present one:

“A judgment obtained by fraud may, however, be void under some
circumstances, and subject to collateral attack, as where such fraud appears on
the face of the record, or goes to the method of acquiring jurisdiction.” (34 C.
J., 566.)

With respect to the adjudication of the title to said lots made
in the cadastral proceeding, considering all the circumstances of the case, the
possession by the plaintiffs of one-half of said property pertaining to the
widow Catalina de la Cruz, and the registration of said half in favor of the
herein plaintiffs, should be understood to be in the nature of a trust for the
said Catalina de la Cruz. To this case is applicable the doctrine laid down in
the case of Gilbert vs. Hewetson (79 Minn., 326), cited with approval in the
case of Severino vs. Severino (44 Phil., 343), as follows:

“A receiver, trustee, attorney, agent, or any other person
occupying fiduciary relations respecting property or persons, is utterly
disabled from acquiring for his own benefit the property committed to his
custody for management.”

As to the motion for a new trial filed by the appellants, the
court, considering the pros and cons of the proposition, holds that the
proffered evidence cannot be treated as newly discovered and therefore denies
said motion.

Therefore, the adjudication to the plaintiffs of one-half of
the estate of the deceased Susano Gemora made by the Court of First Instance of
Occidental Negros in the intestate proceedings is hereby annulled; and the
adjudication of the title to the lots here in question, made in the
corresponding cadastral proceeding must be understood to be subject to a trust
in favor of Catalina de la Cruz and those deriving rights from her. Within sixty
days after being notified of this judgment, the plaintiffs shall execute legally
sufficient certificates of transfer in favor of the heirs of the deceased
Antonio C. Quiana of one-half pro indiviso of the land here in question, and
shall deliver to the registrar of deeds the duplicate certificates of title to
said lots, if they already have them, in order that the same may be cancelled
with respect to the aforesaid half and new certificates issued therefor. The
cost of such instruments, cancellations, and issuance of new certificates shall
be borne by the plaintiffs.

With these additional instructions, the judgment appealed from
is affirmed, with the costs of this instance against the appellants. Sa ordered.

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