Santos v. Bank Of The Philippine Islands

VILLA-REAL, J.:

The case before us arose from a decision of this court in the case entitled, De Santos vs. Bank of the Philippine Islands(58 Phil., 784), the dispositive part of which reads: Wherefore, the ordered appealed from is hereby reversed and the case ordered remanded to the court a quo in order to give the herein oppositor-appellee, Bank of the Philippine Islands, an opportunity to contest the partition in accordance with the provisions of article 403 of the Civil Code, without special pronouncement as to costs. So ordered. Upon the return of the case to the court of origin, in accordance with the order in the above-mentioned decision, and upon a new trial at which documentary and oral evidence was adduced, the appealed resolution was entered containing the following dispositive part: Wherefore, the court declares that the extrajudicial partition made by the petitioners together with the intervenor and his co-owner Isidro de Santos, on April 21, 1931, is void and illegal for fraud and, as a consequence, the court also decrees void and illegal all the proceedings taken after its execution, thus keeping intact and alive the right, interest and participation which Isidro de Santos had in the nine properties above-described at the time of the issuance of the attachment in favor of the oppositor bank, and orders that the said attachment of the right, interest and participation of Isidoro de Santos should remain registered and noted on the back of transfer certificates of title Nos. 34394, 34395, 34396, 34397, 34398, 34399, 34400, 34403 and 34530, which are the only valid ones, and as such should be restored in the same condition in which they were found before their cancellation, to the end that the oppositor Bank may enforce the execution of its judgment on the right, interest and participation which Isidoro de Santos had when the attachment was issued in favor of the oppositor bank on April 18, 1931.

The herein applicants Paz de Santos, Consuelo de Santos and Jose Mariano de Santos, by a motion filed in the corresponding cadastral case, seek the annulment of the notation of the preliminary attachment made in the respective certificates of title issued in their name by virtue of an order approving the partition entered into between them and their co-owners, their brothers Felipe de Santos and Isidoro de Santos, of the properties held by all of them in common. The principal question to be decided in the present appeal is whether or not the partition of the aforesaid properties, made among the co-owners, the brothers and sisters Paz de Santos, Consuelo de Santos, Jose Mariano de Santos, Felipe de Santos and Isidro de Santos, is fraudulent. The said brothers and sisters De Santos were the undivided owners of the parcels of land described in transfer certificates of title Nos. 34394, 34395, 34396, 34397, 34398, 34399, 34400, 34403 and 34530, issued by the register of deeds of the City of Manila, with the exception of the parcel described in certificate No. 34400, 14/75 parts of which belong in undivided ownership to said brothers and sisters and 5/75 parts belong to one, Mercedes Meyer y Alas, married to Agapito Novenario.

On October 16, 1930, the said brothers and sisters, owners in common, executed a deed whereby they constituted a first mortgage, in favor of Luis Mirasol, of the lots described in the transfer certificates of title Nos.

34396 and 34398, with the buildings and other improvements existing thereon, to secure the payment of loan for P20,000 contracted by all of them, of the interest thereon at the rate of 10 per cent per annum, and of other obligations in said deed, the said principal being payable jointly and severally within one year from the said date, October 16, 1930. and the interest in advance every month, between the 16th and 20th of each month, at the residence of the creditor. On January 27, 1931, a writ of preliminary attachment was issued by the Court of first Instance in civil case No. 37869, entitled, "Philippine Guaranty Co., Inc. vs. Isidoro de Santos", for the recovery of the sum of P4,000 with interest and the costs, attaching the right, interest and participation which said Isidoro de Santos had or might have in the properties described in transfer certificates of title Nos. 34399 and 34400.

On March 16, 1931, at the instance of Jose de Leon, attachment was levied on all the right, interest and participation which Isidoro de Santos had or might have in the properties described in transfer certificates of title Nos. 34395, 34397, and 34530, by virtue of a writ issued in civil case No. 4276 of the Court of First Instance of Bulacan, entitled "Jose de Leon vs. Isidoro de Santos et al.," for the recovery of the sum of P11,200. 1ªvvphïl.nët On April 7, 1931, all the co-owners, brothers and sisters, constituted a first mortgage in favor of the Philippine Guaranty Co., Inc., on the property described in transfer certificate of title No. 34403, "with the buildings and other improvements which now or hereafter may be found thereon, to secure the payment of a loan for seven thousand five hundred pesos (P7,500) as principal, of its interest at the rate ten per cent (10%) per annum, and of other obligations mentioned in the deed, the principal being payable within one year April 7, 1931, and the interest every month, from the 1st to the 5th of each month."

On April 18, 1931, a writ of preliminary attachment was issued in favor of the plaintiff in civil case No. 39435 of the Court of First Instance of Manila, entitled, "Bank of the Philippine Islands vs. Isidoro de Santos," for the recovery of the sum of P49, 500, with interest thereon and the costs, attachment being levied on all the right, interest and participation which said Isidoro de Santos had or might have in all the parcels or properties described in the nine transfer certificates of title above-mentioned, which were held in common by all the said five brothers and sisters De Santos. On April 21, 1931, the aforesaid five co-owners, brothers and sisters De Santos, agreed among themselves to extra-judicially partition the nine parcels already mentioned, with the buildings and other improvements thereon, into five parts, taking into consideration the value and income of each parcels.

To this effect they executed the private deed of partition Exhibit R-1, Appendix A. In accordance with the aforesaid deed of partition, the said co-owners, brothers and sisters, on the same date, April 21, 1931, carried out the partition agreed upon by lot (Exhibit R-1, Appendix B), it having fallen to the lot of Consuelo de Santos a part of the property described in certificate of title No. 34395 and that described in certificate No. 34398, with a total value of P93,545 and an annual income of P12,408; to Jose Mariano de Santos, a part of the property described in certificate of title No. 34395, with another property and a coconut land which are not involved in this case, with a total value of P100,275 and annual income of P12,252; to Isidoro de Santos, a part of the property described in certificate of title No. 34530 and that described in certificate of title No. 34397, which a total value of P69,444 and an annual income of P12,768; to Felipe de Santos, a part of the property described in the certificate of title No. 34530 and that described in the certificates of title Nos.

34403 and 34400, with a total value of P63,872 and an annual income of P12,396; and to Paz de Santos, the properties described in the certificates of title Nos. 34399, 34394 and 34396, with a total value of P77,104 and annual income of P14,832. In the aforesaid deed of partition, Isidoro de Santos stated in the fourth clause thereof the following: 4. I, Isidoro de Santos, also individually state that I bind myself to release the mortgages, within five days from the adjudication by lot referred to in subparagraph (c) of this deed, on the properties mentioned in the second paragraph of this same deed which did not fall to my lot in the adjudication.

On April 22, 1931, the register of deeds of Manila recorded the aforesaid writ of preliminary attachment issued on April 18, 1931, by the Court of First Instance of Manila in civil case No. 39435, at the instance of the plaintiff therein Bank of the Philippine Islands against Isidoro de Santos. On June 25, 1931, judgment was entered in the said case No. 39435 of the Court of First Instance of Manila in favor of the plaintiff Bank of the Philippine Islands, ordering the defendants Isidoro de Santos and Paulino Candelaria to pay the said plaintiff the sum of P45,000 with interest at 9 per cent per annum from August 8, 1930, plus P1,000 as attorney's fees, and the costs. On July 31, 1931, upon motion of the co-owner Felipe de Santos, the court entered in these same cadastral cases before us an order approving the aforesaid extrajudicial partition and ordered the issuance of new certificates of title upon cancellation of the old ones.

These new titles were issued in the same of the following persons: in the name of Paz de Santos the new transfer certificate of title No. 39885 (Exhibit B), with the notation on the back thereof of the preliminary attachment issued against Isidoro de Santos in civil case No. 39435, entitled "Bank of the Philippine Islands vs. Isidoro de Santos", in the name of Consuelo de Santos the new transfer certificate of title No. 39879 (Exhibit C), with the same notation and that of the preliminary attachment issued in civil case No. 4276 of the Court of First Instance of Bulacan, entitled "Jose de Leon vs. Isidoro de Santos", in the name of Jose Mariano de Santos the new transfer certificate of title No. 39880 (Exhibit C), with the notation of the same attachment; in the name of Isidoro de Santos the new transfer certificates of title Nos. 39881 and 39883 (Exhibits J and E), with the notation of the same two attachments (Exhibits L and N); and in the name of Felipe de Santos the new transfer certificates of title Nos. 39822, 93884 and 41305 (Exhibits J, H and I), with the same notations (Exhibit M).

On August 29, 1931, there was issued in civil case No. 39435, entitled "Bank of the Philippine Islands vs. Isidoro de Santos et al.," an order of execution of the judgment because the latter had become final and executory. On September 30, 1931, there was issued in the same civil case No. 39435 an order denying the motion filed by Felipe de Santos wherein he asked for the cancellation of the notation of the preliminary attachment levied by the Bank of the Philippine Islands against Isidoro de Santos on the certificates of title to the properties which have not been adjudicated in the partition to said Isidoro de Santos.

From this order nobody appealed. On December 19, 1931, the properties described in transfer certificates of title Nos. 34530 and 34397, pertaining to Isidoro de Santos, were sold at public auction, the same having been acquired by Jose de Leon, as the highest bidder, for the sum of P6,825. This sale was made by virtue of an order of execution issued by the Court of First Instance of Bulacan on November 11, 1931, in the aforesaid civil case No. 4276 of said court, entitled "Jose de Leon vs. Isidoro de Santos et al."

(Exhibits O, and Q.) On August 31, 1933, the Court of First Instance of Manila rendered judgment in civil case No.

41033, entitled "El Hogar Filipino etc. vs. Isidoro de Santos et al.," approving the stipulation of facts submitted by the parties, wherein the therein defendant and debtor Isidoro de Santos made a statement of the annual income and expenses of his properties which had to answer for his indebtedness the recovery of which the subject matter of said litigation, as follows: Income ..............................................................................

P88,540.00 Expenses .......................................................................... 13,619.88 Net Income ...........................................................