JOSE M. KATIGBAK, PLAINTIFF AND APPELLEE, VS. TAI HING CO., DEFENDANT. PO SUN SUY AND PO CHING, INTERVENORS AND APPELLANTS.

Po Sun Suy and Po Ching appeal to this court from the judgment
of the Court of First Instance of Manila, the dispositive part of which is as
follows:

“1. Ordering the defendants Po Sun Suy and Po Ching, as lessees
of the realty, to pay the plaintiff the sum of P28,500, with legal interest from
the filing of the complaint.

“2. Ordering the estate of the deceased Po Tecsi to pay the
defendants Po Sun Suy and Po Ching, that they may, in turn, pay the plaintiff
upon this judgment the sum which represents the rents of the property unduly
collected from the occupants of said properly by Po Tecsi while alive and by his
administrator Po Sun Suy after his death, and not paid to the plaintiff either
by Po Tecsi, father of the defendant Po Sun Suy, or by the latter, or by
defendant Po Ching. Said sum thus collected, according to the testimony of the
defendant Po Sun Suy (p. 147, t. s. n.) is P745, per month, which, for nineteen
months, amounts to P14,155. The balance of the rents, that is, the difference
between the sum of P1,500 for which the property was leased by the plaintiff to
the defendants, and P745 which is the sum collected from the occupants of the
property each month by Po Tecsi and by the administrator of his estate must be
for the account of the defendants; and

“3. Ordering the defendants and the intervenor each to pay
one-third of the costs of the action.”

In support of their appeal the appellants assign seventeen
errors which we shall take up in the course of this decision.

The following facts have been proven by a preponderance of the
evidence:

Gabino Barreto Po Ejap was the owner, with a Torrens title, of
the land in litigation, with the improvements thereon. This realty was subject
to a mortgage lien in favor of the Philippine National Bank, executed on May 5,
1919, to secure the payment of the sum of P60,000 with 7 per centum interest per
annum. (Exhibit 9.)

On November 29, 1921, Po Tecsi executed a general power of
attorney in favor of his brother Gabino Barreto Po Ejap, empowering and
authorizing him to perform on his behalf and as his lawful agent, among other
acts, the following: “To buy, sell, or barter, assign or admit in acquittance,
or in any other manner to acquire or convey all sorts of property, real and
personal, businesses and industries, credits, rights, and actions belonging to
me, for whatever prices and under the conditions which he may stipulate, paying
and receiving payment in cash or in installments, and to execute the proper
instruments with the formalities provided by the law.” (Exhibit A.)

On December 15, 1921, Po Tecsi executed an instrument
acknowledging an indebtedness to his brother Gabino Barreto Po Ejap in the sum
of P68,000, the price of the properties which the latter had sold to him.
(Exhibit U-1.)

On March 31, 1923, Gabino Barreto Po Ejap executed a second
mortgage on the aforesaid land with its improvements, in favor of Antonio M. H.
Limjenco for the sum of P140,000 and interest at 10 per centum per annum.
(Exhibit 9.)

On April 17, 1923, Gabino Barreto Po Ejap, sold the said land
with its improvements to his brother Po Tecsi for the sum of P10,000, subject to
the same encumbrances. (Exhibit 9.)

On November 22, 1923, Gabino Barreto Po Ejap, making” use of the
power conferred on him by his brother Po Tecsi, sold absolutely and forever to
the herein plaintiff-appellee Jose M. Katigbak, the aforesaid land with its
improvements for the sum of P10,000, mentioning in the instrument executed to
that end only the mortgage lien of P60,000 in favor of the Philippine National
Bank, and without recording either his power of attorney or the sale in the
proper certificate of title. Notwithstanding said sale Po Tecsi remained in
possession of said property.

On October 22, 1924, Po Tecsi leased a part of said land to Uy
Chia for a period of five years from October 1, 1923. The contract drawn up to
that end was recorded in the proper certificate of title. (Exhibits 2 and 9.)

On August 24, 1924, Po Tecsi wrote to his brother Gabino
Barreto Po Ejap complaining that he had been after him so much for the
forwarding of the rents of the property and explaining his precarious financial
condition, telling him that he did not collect the rents for himself, and
promising to remit the balance after having paid all expenses of repairs and
cleaning up, together with the vouchers, so he could not blame him for anything.
(Exhibits M and M-1.)

In November, 1925, Po Tecsi, answering his brother Gabino
Barreto Po Ejap, wrote to the latter telling him that in the month of October,
1925, he had sent him a draft for the sum of P2,000, and was therefore surprised
that he claimed said rent. In said reply Po Tecsi also told his brother Gabino
Barreto Po Ejap that if he wanted to lease the property in question to Smith
Bell & Co., he should not do so without first consulting him, because if
someone offered him a higher rent he wanted to exercise his right to lease it.
(Exhibits N and N-1.)

On February 27, 1925, the mortgage on the land in question in
favor of Antonio M. H. Limjenco for P140,000 was cancelled, the cancellation
being recorded on the proper certificate of title on June 11, 1927. (Exhibits X
and 9.)

Po Tecsi died on November 26, 1926.

In December, 1926, Po Sun Suy, Po Tecsi’s son, submitted to
Gabino Barreto Po Ejap a liquidation of accounts showing the rents collected on
the property up to that month. (Exhibit P.)

On February 11, 1927, Po Sun Suy was appointed administrator of
the estate of his deceased father, submitting an inventory in which he included
the land in discussion as one of the properties left by his deceased father, and
obtaining the transfer of the certificate of title in his name as said
administrator.

On February 14, 1927, Po Sun Yao alias Po Sun Suy, answering a
letter from his uncle Gabino Barreto Po Ejap, told the latter that times were
bad, because the price of hemp had slumped, and the plantations had suffered
damages, and begged him to let him pay the rent later. (Exhibits C and C-1.)

On February 11, 1927, Gabino Barreto Po Ejap executed an
instrument in favor of his son Po Sun Boo, assigning to him all his rights and
actions in the credit of P68,000 against Po Tecsi. (Exhibit U.)

On May 22, 1927, Jose M. Katigbak sold the property in question
to Po Sun Boo for the sum of P10,000. (Exhibit J.)

On May 27, 1927, Po Sun Boo notified Po Sun Suy and Po Ching
that he had purchased the land they occupied and that from that date they were
to deal with him concerning the payment of the rents thereof. (Exhibit I.)

Ever since the property in discussion had been sold by Gabino
Barreto Po Ejap to Jose M. Katigbak, the former had administered it, entering
into an oral contract of lease with Po Tecsi, who occupied it at a monthly
rental of Pl,500, payable in advance on the first day of each month. Later on,
when Po Tecsi died, Po Sun Suy, as administrator of the estate of his father Po
Tecsi, continued renting said land on which stood Po Ching’s store.

As Po Tecsi had not paid a part of the rent due up to the time
of his death, and Po Sun Suy, his son, the rent due from his father’s death
until Jose M. Katigbak transferred the ownership thereof to Po Sun Boo on May
23, 1927, the present action was brought in the Court of First Instance of
Manila for the recovery of said rent which amounts to P45,280, first against the
commercial firm Tai Hing Co., and later against the members of said firm, Po Sun
Suy and Po Ching, by an amendment to the original compdaint.

Po Sun Suy, as the judicial administrator of the estate of his
deceased father Po Tecsi, filed an intervention praying that judgment be
rendered against Jose M. Katigbak, the plaintiff, declaring him not to be the
owner of the property described in the second paragraph of the complaint and,
therefore, not entitled to the rents of the property in question.

The first question to be determined in the present appeal is
one of procedure, and that is whether or not the trial court had jurisdiction to
try the case on its merits.

The appellants contend that they as intervenors, having raised
the question of ownership, the solution of which is necessary for the
determination of the question of rent, the Court of First Instance of Manila had
no jurisdiction to try the case, the properties in question being situated in
the municipality of Tacloban, Province of Leyte.

An action for the recovery of rent ia a personal action, and as
such is transitory and may be instituted in the province where the defendant or
the plaintiff resides, at the election of the plaintiff (sec. 377, Act No. 190;
Boga Tan Chiao Boc vs. Sajo Vecina, 11 Phil., 409). With respect to the
collection of rents, then, the Court of First Instance of Manila had
jurisdiction to try the action instituted to that end.

The question of ownership was raised by the intervenors who
thereby submitted to the jurisdiction of the Court of First Instance of Manila
and, according to the doctrine laid down in the case of Manila Railroad Company
vs. Attorney-General (20 Phil., 523), a Court of First Instance having full and
unlimited jurisdiction over realty situated in the Philippine Islands, a Court
of First Instance of a province may try a case concerning realty situated in
another province so long as no objection is entered to said court’s exercise of
its jurisdiction. The intervenors having submitted to the jurisdiction of the
court by filing a third-party claim, in which they raised the question of
ownership of the premises, the rent of which it is sought to recover, they
cannot consistently object to the exercise of said jurisdiction.

Having decided the question Pof the court’s jurisdiction with
respect to the venue, we shall pass on to the question of the ownership of the
land involved herein.

In the first place, it is contended by the appellants that
Gabino Barreto Po Ejap was not authorized under the power executed by Po Tecsi
in his favor to sell said land, for the reason that said power had been executed
before Gabino Barreto Po Ejap sold said land to his brother Po Tecsi.

We do not think that on this point the pertinent part of the
power of attorney we have quoted above could give rise to any doubt. The power
is general and authorizes Gabino Po Ejap to sell any kind of realty “belonging”
(pertenezcan) to the principal. The use of the subjunctive “pertenezcan” (might
belong) and not the indicative “pertenecen” (belong), means that Po Tecsi meant
not only the property he had at the time of the execution of the power, but also
such as he might afterwards have during the time it was in force. (2 Corpus
Juris, p. 614.)

The appellants also contend that said power of attorney not
having been registered) in the registry of deeds, the authority granted therein
to sell realty registered in accordance with the Torrens system is ineffective,
and the sale of the property in question made by Gabino Barreto Po Ejap in favor
of Jose M. Katigbak by virtue of said power has no more effect than that of a
contract to transfer or sell.

Inasmuch as in accordance with, section 39 of said Act No. 496,
“Every applicant receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land who takes a
certificate of title for value in good faith, shall hold the same free of all
incumbrance except those noted on said certificate,” every document which in any
manner affects the registered land is ineffective unless it is recorded in the
registry of deeds. But such inefficacy only refers to third persons who, in good
faith, may have acquired some right to the registered land.

While it is true that a power of attorney not recorded in the
registry of deeds is ineffective in order that an agent or attoraiey-in-fact may
validly perform acts in the name of his principal, and that any act performed by
the agent by virtue of said power with respect to the land is ineffective
against a third person who, in good faith, may have acquired a right thereto, it
does, however, bind the principal to acknowledge the acts performed by his
attorney-in-fact regarding saiii property (sec. 50, Act No. 496).

In the present case, while it is true that the non-registration
of the power of attorney executed by Po Tecsi in favor of his brother Gabino
Barreto Po Ejap prevents the sale made by the latter of the litigated land in
favor of Jose M. Katigbak from being recorded in the registry of deeds, it is
not ineffective to compel Tecsi to acknowledge said sale.

From the fact that said power and sale were not recorded in the
registry of deeds, and from the omission of any mention in the deed of sale of
the mortgage lien in favor of Antonio M. H. Limjenco, and the lease of a part of
said land in favor of Uy Chia, the appellants deduce that said sale is
fraudulent.

The record contains many indications that Po Tecsi was not
unaware of said sale. His several letters complaining of the pressing demands of
his brother Gabino Barreto Po Ejap to send him the rents of the land, his
promises to send them to him, and the remittance of the same were a tacit
acknowledgment that he occupied the land in question no longer as an owner but
only as lessee.

The appellants have tried to explain the remittance of said
rents to Gabino Barreto Po Ejap by Po Tecsi, saying that they were in payment of
a debt which the latter owed the former for certain property which said Gabino
Barreto Po Ejap had sold to Po Tecsi. But there is nothing in any of said
letters to indicate that said rents were sent on account of said debt.

The appellants deny that there has been any contract of lease
between Po Tecsi and Gabino Barreto Po Ejap of the lands in question, for the
reason that there exists no document to evidence it. The evidence is clear that
the rents were payable in advance on the first day of each month. If this is so,
then there is no need of a contract to prove the existence of the lease.

Upon the death of Po Tecsi on November 26, 1926, his son Po Sun
Suy succeeded him in the possession of the land and was appointed administrator
of his! father’s estate on February 11, 1927. On February 14, 1927, he wrote to
his uncle, Gabino Barreto Po Ejap, in answer to the latter’s letter to send him
what he collected of the rents of the house, saying that the price of hemp had
suddenly dropped, his motor boat had been grounded, and his abaca plantations
had suffered damages, promising to send the rents later on.

Po Tecsi occupied the Iand as lessee from November 22, 1923,
until his death on November 26, 1926, having paid up the rents accrued until
October 22, 1906, and leaving unpaid the rents due and accrued from that date
until his death, at the rate of P1,500 per month. From the latter date his son
Po Sun Suy was appointed administrator of the estate of his father Po Tecsi, and
continued to collect the rents of daid land from the lessees, amounting to
P745.

It does not clearly appear from what date the land was leased
to the defendants Po Sun Suy and Po Ching for the sum of P1,500 a month. If Po
Tecsi had rented it until his death, then the defendants Po Sun Suy and Po Ching
could not have rented it until after the death of Po Tecsi.

The rights of the sub-lessee Uy Chia, whose lease for five
years from October 1, 1923, was duly recorded in the registry of deeds, are
valid, for it does not appear that he had any knowledge of the sale of the
subleased property in favor of Jose M. Katigbak, which sale, as we have said,
has not been recorded in the registry of deeds and cannot, therefore, affect the
rights of third persons acquired in good faith and duly registered.

To summarize, then: the sale made on November 22, 1923, by
Gabino Barreto Po Ejap, as attorney-in-fact of Po Tecsi, in favor of Jose M.
Katigbak of the land in question is valid; after said sale, Po Tecsi leased the
property sold, from Gabino Barreto Po Ejap, who administered it in the name of
Jose M. Katigbak, at a rental of P1,500 per month, payable in advance, leaving
unpaid the rents accrued from that date until his death which occurred on
November 26, 1926, having paid the accrued rents up to October 22, 1925; from
November 26, 1926, the defendants Po Sun Suy and Po Ching leased said land for
the sum of P1,500 per month; on February 11, 1927, Po Sun Suy was appointed
administrator of the estate of his father Po Tecsi, and filed with the court an
inventory of said estate including the land in question; and on May 23, 1927,
Jose M. Katigbak sold the same property to Po Sun Boo.

The claim for rents due and unpaid by Po Tecsi, deceased, and
proceedings for the settlement of whose estate have been instituted, should be
presented to the committee on claims and appraisal appointed in said intestate
proceeding in accordance with the provisions of section 703 of the Code of Civil
Procedure and cannot be collected by an ordinary action.

As to the rents accrued and unpaid since the death of Po Tecsi,
his son Po Sun Suy, as administrator of his property, having included said
property in the inventory of the latter, the same is in custodia legis, and
hence, the rents collected by said administrator of said property are also in
custodia legis. The claim then of Jose M. Katigbak for the rents accrued and
unpaid up to the date when said property was sold to Po Sun Boo, as well as the
accrued and unpaid rents from the time the latter acquired it up to the present
date, must be presented in the court taking cognizance of the intestate
proceeding for the settlement of Po Tecsi’s estate.

For the foregoing, we are of opinion and so hold: (1) That Jose
M. Katigbak was the absolute owner of the property in controversy, subject to
the encumbrances on the same appearing in the registry of deeds; (2) that his
claim for the rents of the property in litigation accrued and unpaid by Po Tecsi
before his death must be presented to the committee on claims and appraisal
appointed in the intestate proceedings for the settlement of the estate of said
Po Tecsi; (3) that the claim of Jose M. Katigbak for the rents of the said
property collected by Po Sun Suy, as administrator of the property of the
intestate estate of his father Po Tecsi, must be presented to the court having
cognizance of said intestate proceeding.

By virtue whereof, and with the modifications above indicated,
the judgment appealed from is affirmed, without special pronouncement as to
costs. So ordered.

Avanceña, C. J., Johnson, Villamor, Ostrand, Johns, and
Romualdez, JJ., concur.

---

DISSENTING

MALCOLM, J.:

Until the rules formally announced in Briones vs. Garcia
([1919], 40 Phil., 68) relating to the approval of bills of exceptions, an
authority often followed, shall be reconsidered and set aside, the said rules
should be given indiscriminate application to all cases, and this being done in
the instant case, the petition presented on behalf of the appellee should be
decided in favor of the petition, with the result that the appeal should be
ordered dismissed.