Source: http://www.lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=4328:g-r-no-11201-february-15,-1917-rosa-dupilas-v-victoriano-cabacungan,-et-al-br-br-036-phil-254&catid=311&Itemid=566
Timestamp: 2019-04-26 08:15:42+00:00

Document:
ROSA DUPILAS, administratrix of the estate of the deceased, CECILIO ALUMISING, Plaintiff-Appellant, v. VICTORIANO CABACUNGAN, ET AL., Defendants-Appellees.
Morales & Gwekoh for Appellant.
1. REGISTRATION OF LAND; DEEDS OBTAINED BY MEANS OF FRAUD. — The fact that deeds obtained through fraud are recorded in the registry of property does not prevent the former owners and their heirs from proving that such deeds were thus fraudulent deeds, provided the purchaser had previous notice of these defects in his vendor’s title.
2. EVIDENCE; PUBLIC DOCUMENTS AS EVIDENCE. — Public documents are perfect evidence of the fact which gave rise to their execution and of the date of the latter, if the act which the officer witnessed and certified to or the date written by him are not shown to be false; but they are not conclusive evidence with respect to the truthfulness of the statements made therein by the interested parties.
3. VENDOR AND PURCHASER; POSSESSION AS NOTICE TO PURCHASER. — Possession of real estate under apparent claim of ownership is notice to purchasers of whatever interest the person actually in possession has in the fee, whether such interest be legal or equitable in its nature, and of all facts which the proposed purchaser might have learned by due inquiry. The purchaser under such circumstances takes the land, subject to the rights and interests of the possessor.
"Gregorio Cabacungan: Parcel 1. — Bounded on the north by lands of Ramon Gonzales and Felipe Madolora; on the east by the Patalan Road; on the south by lands of Marcelino Cabacungan; and on the west by land of Lorenzo Tabios. Area, 22.46 hectares.
"Parcel 2. — Bounded in the north by the land of Mariano Cabacungan; on the east by the Patalan Road; on the south by the lands of Cristobal Lopez and Romualdo Tiamsing; and on the west by land of Romualdo Tiamsing. Area, 18.40 hectares.
"Parcel 2. — Bounded on the north by land of Marcelino Cabacungan; on the east by lands of Tomas Dacoma and Juan Dacoma; on the south by the division line between Paniqui and Gerona; and on the west by land of Felizardo Tiamsing. Area, 25.48 hectares.
"Marcelino Cabacungan: Parcel 1. — Bounded on the north by land of Mariano Cabacungan; on the east by lands of Martin Villanueva and Tomas Dacoma; on the south by land of Gregorio Cabacungan; and on the west by the Patalan Road. Area, 28.365 hectares.
"Parcel 2. — Bounded on the north by the land of Gregorio Cabacungan; on the east by the Patalan Road; on the south by the land of Mariano Cabacungan; and on the west by the land of Lorenzo Tabios. Area, 17.40 hectares.
"Mariano Cabacungan: Parcel 1. — Bounded on the north by the lands of Julian Macaraeg, Mariano Domingo, and Juan Mendoza; on the east by lands of Esteban Salazar and Leonardo Beltran; on the south by land of Marcelino Cabacungan; and on the west by the Patalan Road. Area, 28.665 hectares.
Gregorio Cabacungan died in 1906 and Mariano Cabacungan died some time later, but before the commencement of this action. The original defendants are Victoriano Cabacungan, Marcelino Cabacungan, Liberato Mateo, Gabino Donato, and Juan de los Reyes. Marcelino, Mariano, and Victoriano are the sons of Gregorio Cabacungan. The other three above named defendants are in no wise related to the Cabacungan family. The complaint was amended on February 10, 1914, making various other parties defendants, none of whom are related to the Cabacungans, unless Silvestre Domingo, a descendant of Gregorio Cabacungan. There are some sixteen other descendants of Gregorio Cabacungan who were not made defendants. On March 22, 1913, Marcelino Cabacungan and Victoriano Cabacungan answered, denying all the allegations in the complaint, and interposed a counterclaim in which they alleged that Leon Alumising obtained the deeds (Exhibits D, E, and F) and the possession of the state grants by means of fraud, and prayed for affirmative relief to the effect that the deeds and the states grants be returned to them. On March 22, 1913, Juan de los Reyes filed his answer, disclaiming any interest in the lands in dispute. On the same date Gabino Donato filed a general denial and alleged as a special defense that he is the exclusive owner of a parcel of land situated in the sitio of Patalan, bounded on the north by Rosendo Cortez, on the south and east by Victoriano Cabacungan and Leon Lacayanga with an area of more than one hectare. This defendant further alleged that a judgment had been rendered in his favor as defendant in a suit for the possession of this small parcel of land in which the deceased Cecilio Alumising was the plaintiff. Liberato Mateo in his answer filed on March 22d, alleged, after making a general denial, as a special defense, that he is the sole owner of a parcel of land situated in the sitio of Patalan, bounded on the north by Teodoro Andres; on the east by Martin Villanueva; and on the south and west by Victoriano Cabacungan. Dionisio Macadangdang and Angelo Austria entered a general denial on March 11, 1914. The other named defendants filed a joint answer on February 28, 1914, denying the allegations in the complaint and set up, as a special defense, that they are simply tenants of their codefendants, Victoriano Cabacungan and Marcelino Cabacungan.
From a judgment in favor of the defendants dismissing the complaint upon the merits, with costs, and ordering the return of the deeds and state grants, plaintiff appealed and now urges that the court erred (1) in finding that the seven parcels of land all belonged to Gregorio Cabacungan; (2) in finding that the sales to Leon Alumising were fictitious and made for the sole purpose of enabling him to raise a loan on the lands in order that Gregorio Cabacungan might pay him a debt of P77.50; (3) in finding that the letters, Exhibits Nos. 2, 3, and 4 of the defendants, are authentic and not forged; (4) in finding that Leon Alumising had never been in possession of the land up to the time of his death; and (5) in finding that Gregorio Cabacungan and his heirs have been in continuous, peaceable, and quiet possession of the lands since and before the issuance of the state grants. All of these alleged errors may be considered together.
"Apo Gorio: As they do not believe in Manila that you have intrusted the sale of your land to me, even when I show them your title, for the reason that there has not been executed before a notary a sufficient power, I have decided to write you in order that you may come here to Moncada, that then we may go together to Tarlac to make an instrument of sale, for in this manner it will be easier to negotiate the sale; have no fear of the step I propose nor feel that I will deceive you in the future, for you have already that contract which was made there.
"SIR: It is strange to me that you did not go to Tarlac with your children on the day we fixed to go before a notary for the purpose of executing the instrument, and it hurts me to think that you seem to have doubts. I entreat you to banish that doubt from your mind, since you have the contract and these my letters in your hands. Therefore come so that we may agree on the day most convenient for you to go to Tarlac with the object of executing the instrument as if it were a sale, and if the notary asks you if you have already received the money tell him yes, nothing more, for you if you have already received the money tell him yes, nothing more, for you have this letter of mine which is proof that you have not really received any, except the P77.50 for that which was given me as guaranty.
"LEON ALUMISING MEND. A. .
"SIR; Don’t be grieved if I deliver now to other persons the land which you gave me in guaranty, as I have not been able to sell it at the price I wanted in order that both of us might make a profit; at any time, if you will give me the P77.50, I will deliver your land. I am informed that you are continually worried because of the instrument of sale which we had executed, but I tell you you have no cause to be anxious, because I will take them there when I go if I do not forget them as I did that other time I went. My papers are out of place; I do not trust them to any one because I am uneasy.
Marcelino Cabacungan identified Exhibits Nos. 2, 3, and 4 and testified that each bore the signature of Leon Alumising. Paulino Villafuerte testified to the same effect. Santiago de Jesus testified that the signatures of Exhibits Nos. 2 and 3 are those of Leon Alumising. Both Paulino and Santiago were employees with Leon Alumising in the Court of First Instance of the Province of Tarlac for sometime prior to the death of Leon Alumising in 1897. When Exhibits Nos. 2, and 3, and 4 were offered in evidence counsel for the plaintiff asked time within which to read and examine them. Later on the court asked counsel what he desired to say with reference to these exhibits. Counsel replied as follows: "We object to the introduction of Exhibits 2, 3, and 4 because they are impertinent, for the reason that they are not dated and it is not known to what they refer; they speak of an indeterminate parcel of land," Court: "Exhibits 2, 3, and 4 are admitted." No exception in the court below to show that the letters were not written by Leon Alumising. Neither did the plaintiff attempt to prove that these letters referred to other lands than those in question. That the three letters were written by Leon Exhibits D, E, and F and the state grants, there can be no question.
The history of the transactions relating to the execution of Exhibits D, E, and F and the turning over to Leon Alumising of the state grants is stated by Marcelino Cabacungan substantially as follows: Gregorio Cabacungan obtained the state grants from the Spanish government. The land was divided, as appears in the state grants, by the surveyor. Notwithstanding the fact that the titles were issued in the names of the three Cabacungans, the whole of the land belong to Gregorio Cabacungan. Gregorio Cabacungan owed Leon Alumising the sum of P77.50. Gregorio could not meet this obligation at the time the payment was demanded by Leon. There upon Leon proposed that he be given a power of attorney to pledge the three titles in Manila. The titles were then turned over to Leon. Sometime later Leon informed Gregorio that he was unable to pledge the titles and requested that the necessary documents be executed, purporting to sell the lands to Leon, Gregorio to make the simulated sales, which was done, as appears from Exhibits D, E and F. No money was received by the Cabacungan as a result of the execution of those documents. The only purpose of executing the documents was to authorize Leon to sell or pledge the lands. On receipt of the letter, Exhibit 4, the Cabacungans took the P77.50 to Moncada for the purpose of paying Gregorio’s debt and obtaining the deeds and state grants. The debt was then paid to Leon, but the documents were not returned, Leon saying that they had been mislaid. Leon promised to return the documents as soon as they could be found. After the death of Leon the Cabacungans made a demand upon Leon’s family for the return of the documents. The members of the family stated that they did not know where the titles were. In 1908 Cecilio Alumising the possession of the land, but failed, the Cabacungans being absolved. Later Cecilio instituted another action against Donato, which suit was abandoned by Cecilio in the Court of First Instance.
The defendants, Dionisio Macadangdang and Angelo Austria, have established that they are the owners, with other parties, of the parcels of land occupied by them. This ownership is evidenced by Torrens title issued on March 5, 1908, and November 11, 1910, respectively. The trial court found that the Cabacungans and their heirs are now, and have been since sometime prior to the issuance of the state grants, in the open, peaceable, and quiet possession as owners of the remainder of the land in question and that neither Leon Alumising nor anyone pretending to hold under him has ever been in the possession of the whole or any part of these lands, nor received at any time any of the products therefrom.
The result is that the Cabacungans, as a matter of fact, never sold the lands to Leon Alumising. Exhibits D, E, and F were executed at the instance of Leon Alumising in order that he might sell or pledge the lands for the Cabacungans. The Gregorio Cabacungan debt to Leon of P77.50 was paid during the lifetime of the latter. At the time Leon’s widow attempted to sell the lands to Cecilio Alumising, Cecilio, who lived in the same community, knew that the lands were then in the possession of the Cabacungans and had been all the time. He also knew that neither Leon nor Alejandra had ever been in possession and had ever received any of the products from the land. If he pad the widow the amount stated in the document, he did so with full knowledge of these facts.
The question now arises whether Cecilio Alumising acquired title to the lands by virtue of the document executed in his favor by Alejandra. The solution of this question depends upon the effect produced by the registration of Exhibits D, E, and F. It is urged that Cecilio Alumising acquired absolute title to the lands by purchase from, as it s said, the registered owner and that Exhibits D, E, and F and the facts stated therein are binding upon the contracting parties and their successors in interest. Counsel in support of these contentions cite and rely upon articles 1215, 1218, and 1219 of the Civil Code, and Escario v. Regis (31 Phil. Rep., 618); Cancio v. Baens (5 Phil. Rep., 742); Nolan v. Salas (7 Phil. Rep., 1); Mendoza v. Fulgencio and De Asis (8 Phil. Rep., 243); and Dancel and Mina v. Ventura (24 Phil. Rep., 421).
Article 1219 provides that public instruments, made for the purpose of impairing a former instrument, between the same parties, shall be effective against third parties only when the contents of the former should have been entered in the proper public registry or in the margin of the original instrument, and in that of the transcript or copy, by virtue of which the third person may have acted.
Consequently, the defendants in the instant case had a right to offer any competent evidence for the purpose of establishing their defense to the effect that the execution of the deeds, Exhibits D, E, and F, were obtained in the manner indicated above.
"The possessor of a title issued in due form has in his favor the legal presumption that in the issuance thereof all the requisites prescribed therefor by law have been fulfilled. . . .
"So long as the composition title secured by the plaintiff Gregorio Escario, through a final judgment rendered after a hearing had in due form and according to the provisions of the laws that treat of the efficacy and validity of the titles granted by the state with reference to sale and composition, has not been declared null and void and without force or effect, he is the only one to be regarded as the legitimate owner of the lands in question, to the exclusion of anybody else who cannot exhibit better right and title thereto.
"The inscription, therefore, of the instruments in question prejudices the plaintiffs, Cancio and Cruz, notwithstanding the fact that they did not participate in the proceedings relating to the composition of the said land between the state and the defendant, and in view of the provisions of article 27 of the Mortgage Law there can be no doubt that the said plaintiffs should be considered as third persons, whom the execution of the deed or instrument of the defendant and the inscription thereof in the registry of property affected and prejudiced.
In Mendoza v. Fulgencio and De Asis, supra, the court laid down the rule that an action to recover property appertains to the owner of the thing, and he may proceed not only against the person who is in actual possession, but also against the person unlawfully detaining it. There mere holding or material occupation of property, without the circumstances and conditions prescribed by law does not constitute legal possession, but is simply an intrusion with intention of securing control over it, and is ineffectual in every way to confer any right of possession.
The cases just examined establish these propositions: (a) The possessor of a title issued in due form has in his favor the legal presumption that in the issuance thereof all the requisites prescribed therefor by law have been fulfilled; (b) parol evidence cannot, as a general rule, prevail over documentary proof, such as titles duly issued by the Government; (c) so long as state grants secured through a final judgment rendered after a hearing had in due form and according to the provisions of the laws that treat of the authenticity and validity of titles granted by the state have not been declared null and void, the grantee must be regarded as the true owner of the lands to the exclusion of anyone else who cannot exhibit a better right and title thereto; (d) the inscription of state grants prejudice third persons whether they participated in the proceedings which resulted in the issuance of such titles or not; and (e) the writings of deceased persons are not admissible in evidence until after the authenticity of such writings has been satisfactorily established.
The principal defendants are not attempting to have the state grants declared null and void. They do not question their validity. The authenticity of the letters of the deceased Leon Alumising was satisfactorily established before they were admitted in evidence. Consequently, the cases relied upon have no direct bearing upon the question under consideration.
"Art. 33. The record of instruments or contracts which are null in accordance with the law are not validated thereby.
"ART. 34. Notwithstanding the statements contained in the preceding article, the instruments or contracts executed or convenanted by a person who, according to the registry, has a right thereto, shall not be invalidated with regard to third persons, after they have once been recorded, although later the right of the person executing them is annulled or determined by virtue of a prior deed not recorded, or for reasons which do not clearly appear from the registry.
"Only by virtue of a recorded instrument may another later instrument, also recorded, be invalidated to the prejudice of third persons, with the exceptions mentioned in article 389.
In Suiliong & Co. v. Chio-Taysan (12 Phil. Rep., 13), a certain tract of land was duly inscribed in the registry in the name of Avelina Caballero. On March 27, 1903, Avelina borrowed from Francisca Jose P1,000 and turned over to Francisca the title deeds to the land as security for the loan, but no entry touching the transaction was noted n the land registry. Avelina died on June 5, 1903, and as a result of proceedings instituted for the purpose of obtaining a declaration of heirs, the court, on August 5, 1903, found and decreed that Silvina Chio-Taysan y Caballero was the sole heir of the estate of her deceased mother, Avelina Caballero. On March 9, 1904, the registrar of deeds, by virtue of the above mentioned decree, entered an inscription in the land registry whereby Silvina Chio-Taysan was made to appear as the owner of the parcel of land which stood upon the records in the name of her mother. On May 26, 1904, Silvina borrowed from the plaintiff company P2,500 and mortgaged the land as security for the payment of the loan. On October 10, 1906, the plaintiff company instituted an action praying for a judgment for the amount of the loan and the foreclosure of the mortgage upon the land. Francisca Jose intervened and prayed that the court declare the mortgage rescinded and annul the inscription in the land registry. From a judgment in favor of the plaintiff company, the intervener appealed and this court, in reversing the judgment, held that the inscription of the land in the name of Avelina did not prejudice the lien of the intervener, citing article 33 of the Mortgage Law.
In the first case Lim-Chingco was a party to the forgery, and the recording of the forged deed could not, of course, give him any additional right or validate the deed. In the second, Lafuente was an innocent purchaser for value from, in so far as he knew, the registered owner. He had no notice either actual or constructive of any adverse claims against the lands. He was entitled to rely upon the registry. And in the third, Suiliong & Company knew from the entry in the registry, whereby Silvina Chio-Taysan was made to appear as the owner of the land, that she had inherited it from her mother, who died on June 5, 1903. The company also knew that under the law the property of the deceased Avelina was liable for her debts. It was the duty of the company to make inquiries as to the status of the estate of Avelina before making the loan.
In the instance case Cecilio Alumising knew at the time he purchase the lands that the defendants were, and had been for many years, as we have said, in the actual, open, visible, and exclusive possession of the entire parcel. These facts were sufficient to put him upon inquiry as to the claims of ownership was notice to Cecilio of whatever interest they had in the land. Their interest being inconsistent with the title of the apparent owner of record, it necessarily follows that Cecilio’s purchase was subject to the defendant’s rights and that the recording of Exhibits D, E, and F, which were obtained by means of fraud, did not validate them as to after wish to record any instruments relating to this same land, it will be necessary for them to procure cancellation of the record of the deeds, Exhibits D, E, and F, but the fact that they had not commenced any such action did not prohibit them from proving, when they were sued for the possession of the land, that the deeds under which the plaintiff claims were obtained by Leon Alumising by means of fraud.
For the foregoing reasons the judgment appealed from is affirmed, with costs against the appellant. So ordered.

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