EL HOGAR FILIPINO, MUTUAL BUILDING AND LOAN ASSOCIATION, PLAINTIFF AND APPELLANT, VS. SEVERINO OLVIGA ET AL., DEFENDANTS AND APPELLEES.

The plaintiff, a mutual building and loan
association, brought this action to recover from the defendants the
title to and possession of a parcel of land, with the improvements
thereon, situated in the barrio of Esperanza, of the municipality of
Lopez, Province of Tayabas, and more particularly described in transfer
certificates of title Nos. 5261 and 5617, both of which were issued by
the register of deeds of the said province. In the same action, the
plaintiff likewise seeks to recover from the said defendants damages in
the sum of P2,000 plus whatever other amount proven at the trial as
value of the fruits illegally received by them.

After trial, the court rendered judgment dismissing the complaint, with costs against the plaintiff. It appealed.

The case was submitted by the parties upon a stipulation of facts quoted hereinbelow, in addition to other evidence:

“The parties agree on the following facts:

“1. That the plaintiff is a mutual building and loan association duly
incorporated in accordance with the laws of the Philippine Islands.

“2. They agree as to the identity of the land in question.

“3. That the land in question formerly had original certificate of
title No. 477 (Homestead Patent No. 2973) issued by the
Governor-General on July 7, 1921, and registered in the registry of
deeds of Tayabas on October 3, 1921, in favor of the spouses Timoteo
Olviga and Rafaela Iglesia.

“4. That certificate of title
No. 477 was cancelled by transfer certificate of title No. 2505 issued
on August 3, 1928, in favor of Genaro T. Tabien.

“5. That on
August 4, 1928, the land in question wag mortgaged by said Genaro T.
Tabien to El Hogar Filipino for the sum of P5,600, and said mortgage
was registered in the registry of deeds of Tayabas and noted on the
said transfer certificate of title No. 2505.

“6. That
pursuant to the mortgage contract and Act No. 8135, the land in
question was extra judicially sold at public auction and adjudicated to
the plaintiff entity El Hogar Filipino, as the highest bidder, for the
sum of P6,232.30.

“7. That on April 18, 1931, this court
declared El Hogar Filipino, upon its petition, as the absolute owner of
the land in question and ordered the cancellation of transfer
certificate of title No. 2505, and the issuance in the name of said El
Hogar Filipino of another certificate, which is transfer certificate of
title No. 5261, of the registry of deeds of Tayabas.

“8.
That the land in question is the same land now known as lot No. 3912 of
Cadastral Record No. 54 of the Cadastre of Lopez, with its original
certificate of title No. 30174 in the name of the spouses Timoteo
Olviga and Rafaela Iglesia, issued on June 27,1930, and registered on
July 26, 1930, in the registry of deeds of Tayabas.

“9. That
on March 30, 1929, said parcel of land was sold by Timoteo Olviga, his
wife, Rafaela Iglesia, and their children to the defendant spouses
Bonifacio Perez and Irinea Olviga.

“10. That upon petition
of the spouses Bonifacio Perez and Irinea Olviga, and pursuant to the
court’s order dated March 24, 1931, in lot No. 3912, Cadastral Record
No. 54, the said original certificate of title No. 30174 was cancelled
and a new one, transfer certificate of title No. 5617, was issued in
favor of the said defendant spouses Bonifacio Perez and Irinea Olviga.

“11. That the defendant spouses Bonifacio Perez and Irinea Olviga have
been in actual possession of the land in question since March 30, 1929.

“12. That during the period between March 29,1930, and this date,
November 6,1931, the defendant spouses Bonifacio Perez and Irinea
Olviga harvested from the said land fruits valued at P400, and from
this date, November 6, 1931, the said land will yield fruits at the
average rate of P45 every three months.

“Therefore, both parties respectfully pray the court to Admit this stipulation of facts.”

The gist of the plaintiff’s three assignments of error may be
stated as follows: that the court erred in not declaring the plaintiff
to be the owner of the land in question, entitled to the immediate
possession thereof and to the value of the fruits illegally received by
the defendants, which value is determined in paragraph 12 of the
stipulation of facts.

The appealed judgment is based on two grounds, to wit:

(1) That the deed of sale alleged to have been executed by Timoteo
Olviga in favor of Genaro T. Tabien is false and fictitious and (2)
that transfer certificate of title No. 5261, which was issued in favor
of the plaintiff, cannot prevail over transfer certificate of title No.
5617 issued in the name of the defendant spouses Bonifacio Perez and
Irinea Olviga.

A careful examination of the evidence presented at the trial
convinces this court that the said deed of sale is not fictitious but
genuine. Only Timoteo Olviga and his son Severino testified in support
of its falsity. The former’s testimony is contained in an affidavit
prepared ex parte, which was admitted by the court
merely’because it was not objected to upon presentation. Its admission
under such circumstances did not in the least give it a greater
evidentiary value than it should have under the well recognized rules
of evidence. In said affidavit Timoteo asserted that he did not sign
the deed of sale in question, that the signature thereon is not his,
and that he was not even informed of the contents thereof. His son
Severino confined himself to testifying that the signature in his
father’s name appearing on the said instrument is not his father’s
because it does not look like his real signature.

A brief analysis of such evidence will show how insufficient it is
to overcome or detract from the evidentiary force of the public
instrument relating to the transfer made by Timoteo in favor of Genaro
T. Tabien. It should be borne in mind that said public instrument was
signed in the presence of two instrumental witnesses and appears to
have been ratified by Timoteo before a notary public. If the biased and
interested testimony of a grantor and the vague and uncertain testimony
of his son are deemed sufficient to overcome a public instrument drawn
up with all the formalities prescribed by the law then there will have
been established a very dangerous doctrine which would throw wide open
the doors to fraud.

The trial court, following the doctrine on the effects of the
registration of a homestead patent laid down in the cases of Legarda
and Prieto vs. Saleeby (31 Phil., 590), and De los Reyes vs.
Razon (38 Phil., 480), held that the titles obtained by Genaro T.
Tabien and the plaintiff should not prevail over those subsequently
obtained by the spouses Timoteo Olviga and Rafaela Iglesia and by the
spouses Bonifacio Perez and Irinea Olviga on the ground that the latter
titles were issued in a cadastral proceeding while the former, in a
proceeding for the registration of a homestead, in accordance with
section 122 of Act No. 496.

In arriving at said conclusion of law the court undoubtedly
disregarded the circumstance that the doctrines laid down in the above
cited decisions have been abandoned by this court after a further study
of the provisions of said section 122, as may be seen in the decisions
subsequently rendered in the cases of Aquino vs. Director of Lands (39 Phil., 850), and Manalo vs. Lukban and Liwanag (48 Phil., 973). In the first case the court said:

“The proceedings under the Land Registration Law
and under the provisions of Chapter VI of the Public Land Law are the
same in that both are against the whole world, both take the nature of
judicial proceedings, and for both the decree of registration issued is
conclusive and final. (Act No. 496, sees. 35, 38, and 45, as amended;
Act No. 926, sees. 59 and 63, as amended; Escueta vs. Director of Lands [1910], 16 Phil., 482; Grey Alba vs. De la Cruz [1910], 17 Phil., 49; Roxas vs. Enriquez [1914], 29 Phil, 31; Legarda and Prieto vs. Saleeby [1915], 31 Phil, 591.)”

And in the second case, the court said:

“Where a land was granted by the Government to a
private individual as homesteader under the provisions of Act No. 926,
and the corresponding patent was registered and issued to the grantee,
said land is considered registered within the meaning of the Land
Registration Act, No. 496. (Sec. 122, Act No. 496.)

“The
title to the land thus granted and registered may no longer be the
subject of any inquiry, decision, or judgment in a cadastral
proceeding. But a partition may be made in said proceeding, in
accordance with the provisions of Act No. 2259.”

Therefore it follows that inasmuch as the titles in favor of Tabien
and the plaintiff have been issued in accordance with the provisions of
Act No. 496, the same have all the characteristics of an irrevocable
Torrens title, and since Tabien’s title is prior to that issued in the
name of the spouses Bonifacio Perez and Irinea Olviga, the latter title
should not prevail over the former.

The case presents another legal aspect. Nobody questions the fact
that the property in question was originally a public land which was
granted to Timoteo Olviga and his wife as a homestead. Later the title
obtained by them under the Public Land Act was registered under the
Torrens System by virtue of the provisions of section 122 of Act No.
496. Thenceforth the land became subject to the provisions of the
latter Act and the title issued thereunder became irrevocable. When the
Olviga spouses appeared in the cadastral proceedings and applied for
the cancellation of their title and the issuance of a new one to them,
which was so done, the court which took cognizance of the cadastral
proceedings must have known that the land already had an old title and
that Genaro T. Tabien appeared in the records of the registry of deeds
as the registered owner thereof. In such case it was in duty bound not
to order the issuance of a new certificate of title in favor of the
Olviga spouses on the ground that they had already ceased to be the
registered owners of the same. The court, however, ordered the
cancellation of the old title of the said Olviga spouses and the
issuance to them of a new certificate of title which was later replaced
by the transfer certificate of title issued in the name of the
defendant spouses Bonifacio Perez and Irinea Olviga. The irregularity
thus committed is due to no other cause than the failure of the Olviga
spouses to inform the court, which took cognizance of the cadastral
proceedings, that they had already obtained Torrens title to the said
land and that in the records of the registry of deeds Genaro T. Tabien
appeared as the registered owner thereof and the plaintiff as the
mortgagee.

There is no question that the plaintiff is a mortgagee in good
faith and for value and if that is true there is no valid reason in law
for not considering it as the absolute owner of the land in question
inasmuch as in enforcing its right, it foreclosed the mortgage
constituted thereon in its favor and acquired the said property at
public auction, and later succeeded in obtaining the issuance to it of
transfer certificate of title No. 5261.

As regards the indemnity for damages and the value of the fruits
which the defendant spouses Bonifacio Perez and Irinea Olviga have been
receiving, this court is of the opinion that the evidence does not
sufficiently show that said spouses are possessors in bad faith
inasmuch as there is no sufficient proof that they were aware of the
fact that Timoteo Olviga and his wife had no title to transfer the
property, nor is there sufficient indication that there was collusion
between the said parties. For this reason this court holds that there
is no legal justification for ordering said defendant spouses to pay to
the plaintiff the value of the fruits in question.

Wherefore, the judgment appealed from is hereby reversed, by
declaring the plaintiff as the absolute owner of the land in question
and ordering the spouses Bonifacio Perez and Irinea Olviga to deliver
the possession and enjoyment of the same to the said plaintiff, with
the costs of both instances against the said Perez spouses. The
register of deeds of Tayabas shall cancel de oficio original certificate of title No. 30171 and transfer certificate of title No. 5617. So ordered.

Malcolm, Villa-Real, Abad Santos, Hull, and Goddard, JJ., concur.

 

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DISSENTING

STREET, J.,

In view of the finding that the deed under which the plaintiff
claims in this case was forged, I am of the opinion that the judgment
should be affirmed. Negligence should not be imputed to Olviga from the
fact that he placed his owner’s duplicate certificate in the hands of
Juan Tabien, for that act was done for a legitimate purpose and no
negligence existed.

 

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DISSENTING

DIAZ, J.,

It is with regret that I have to dissent from the majority opinion.
Timoteo Olviga’s affidavit and the testimony of his son Severino are
not the only evidence on the falsity of the deed of sale by means of
which JuanT. Tabien and his brother Genaro T. Tabien, on August 3,
1928, obtained the issuance of transfer certificate of title No. 2505
in favor of Genaro; but so are Juan T. Tabien’s two letters to Timoteo
Olviga, dated July 1, 1928, and March 23, 1929, respectively. Between
Timoteo Olviga and Juan T. Tabien, there never existed any relation of
principal and agent. In order to induce Timoteo Olviga to deliver to
him Olviga’s certificate of title No. 477, Juan T. Tabien resorted to
the trick of informing Olviga that the latter’s son-in-law named
Bonifacio Perez was under arrest, that he (Perez) had to file a bond in
order to be set at liberty, and that it was necessary for said Olviga
to deliver to said Tabien his certificate of title and become one of
Perez’s bondsmen. This fact appears in Juan T. Tabien’s aforesaid
letter dated July 1,1928. Thus induced, Timoteo Olviga, who, by the
way, is illiterate and furthermore an old man seventy-seven years of
age, delivered the certificate of title required of him by Juan T.
Tabien who, after obtaining possession of the same, with the aid of his
brother Genaro T. Tabien, forged the aforesaid deed of sale in favor of
Genaro, making it appear therein that the same had been executed and
signed by Timoteo Olviga, who never did so in fact, thus pitilessly
abusing the old man’s good faith.

When Timoteo Olviga asked Juan T. Tabien to return his certificate
of title, the latter wrote him the letter dated March 21, 1929,
promising to return the said certificate as soon as possible, although
he knew positively that such thing was impossible because he did not
have it in his possession, nor could he again have possession of the
same on the ground that it had been cancelled upon the issuance of
transfer certificate of title No. 2505 in favor of Genaro T. Tabien by
the register of deeds of Tayabas. With the aid of the said forged deed
and the exhibition of Timoteo 01viga’s certificate of title, the two
Tabien brothers succeeded in inducing the said register of deeds to act
as he did, and with the new certificate of title issued by the said
official to Genaro T. Tabien, the two likewise succeeded in inducing
the herein appellant to buy with pacto de retro from Genaro the land covered by the said certificate.

Upon the facts just stated, I am of the opinion that the doctrine laid down by this court in the case of De la Cruz vs.
Fabie (35 Phil., 144), is not applicable to the case at bar on the
ground that the facts of that case are not similar to those of the
instant case. In the case of De la Cruz vs. Fabie, Vedasto
Velasquez really acted as Gregoria Hernandez’s attorney in fact to sell
or otherwise encumber the land in question, while in this case it
cannot be said that there has existed the same relation of agent or
attorney in fact and principal between Juan T. Tabien and Timoteo
Olviga. The above cited case was decided adversely to Gregoria
Hernandez because it was held that said woman was negligent while in
this case the same cannot be said as regards Timoteo Olviga for, in the
first place, if Olviga acceded to Juan T. Tabien’s request for the
delivery to him of the former’s certificate of title, it was simply
because Olviga was made to believe that such delivery was only for the
purpose of qualifying him as one of the bondsmen of his son-in-law
Bonifacio Perez; in the second place, said Juan T. Tabien was never
authorized by Olviga to sell the latter’s land or obtain from anybody
any loan secured by said property, and in the third place, Olviga did
not fail to require Tabien to return his document. Such acts do not
constitute negligence.

On the other hand, the same section 55 of Act No. 496, as amended
by Act No. 3322, contains a clause which protects Timoteo Olviga,
providing as follows: “That after the transcription of the decree of
registration on the original application, any subsequent registration
under this Act procured by the presentation of a forged duplicate
certificate, or of a forged deed or other instrument, shall be null and
void.”

Wherefore, I am of the opinion that the appealed judgment should be
affirmed and that charges for falsification of a public document should
be filed against the brothers Juan T. Tabien and Genaro T. Tabien,
without prejudice to the appellant’s right to recover from Genaro T.
Tabien or from both of said brothers the amount paid by it for Timoteo
Olviga’s land.

BUTTE, J.;

I concur fully in the views expressed in Justice Diaz dissenting opinion