[ G.R. No. 20132. September 22, 1923 ] 47 Phil. 951
[ G.R. No. 20132. September 22, 1923 ]
JUAN DALAY, PLAINTIFF AND APPELLANT, VS. BERNARDO AQUIATIN AND PROCESO MAXIMO, DEFENDANTS AND APPELLEES. D E C I S I O N
ROMUALDEZ, J.:
Ciriaco Villarin, being the owner of six parcels of land described in the complaint, executed on July 4, 1917, a document (Exhibit A) in favor of Eugenio Gomez, acknowledging a debt, one of whose clauses is as follows:
" * * * and if I cannot pay the aforesaid amount, when the date agreed upon comes, the same shall be paid with the lands given as security,—the lot and house and lands described in the aforesaid seven documents."
As the period so stipulated elapsed without Ciriaco Villarin having paid the debt, Eugenio Gomez believing himself entitled to do so, executed a document Exhibit C on September 30, 1917, in favor of Juan Dalay, where the transfer is stated as follows:
“I hereby state that I have received from Mr. Juan Dalay, of the municipality of Paete, the sum of P2,300; and for this reason I hereby transfer and sell to him the lands to me paid by Ciriaco Villarin in accordance with the foregoing document and the title deeds of the aforesaid lands hereto attached.—Dated and signed at Pagsanjan, Laguna, September 30, 1917, Eugenio Gomez.—Acknowledged before a notary public on January 1, 1919.”
By virtue of this conveyance, Juan Dalay, on the same date it was executed, entered upon the possession of these lands and is now still in possession thereof. On October 10, 1917, Ciriaco Villarin, in an affidavit Exhibit B, acknowledged that the title to, and possession of, the aforesaid lands had been transferred in a real and absolute sale to Eugenio Gomez. Fifteen days later, that is, on October 25, 1917, Ciriaco Villarin contracted a debt in favor of Bernardino Aquiatin for which he gave the note set forth in the latter’s complaint, filed November 7, 1917, in civil case No. 2536 of the Court of First Instance of Laguna. After the judgment rendered in that case in favor of Bernardino Aquiatin became final, execution was issued and levied upon the six parcels aforementioned, among other properties. Juan Dalay brought this action against Bernardino Aquiatin and the deputy sheriff, Proceso Maximo, to have himself declared owner of said lands, to forever prohibit the defendants, their agents and other persons acting in their behalf, from performing any act tending to carry out the attachment and execution sale of said realties, and to recover the costs. The answer of the defendant Aquiatin is a general denial and a special defense wherein he alleges that the sale upon which the plaintiff Dalay relies is simulated and fraudulent, and that said plaintiff had not had exclusive possession of, nor title to, said lands. After trial, the court found that the plaintiff had no cause of action for the reason that he was not, nor could he have been, the owner of the properties given to him as security of the debt, and dismissed the complaint, ordering the execution to be carried out upon the lands in question, and sentencing the plaintiff to pay the costs. From this judgment, Juan Dalay appeals, assigning as errors the failure of the court to hold the documents Exhibits A and B effective as a transfer and absolute waiver of the title to the lands, and its failure to hold that the plaintiff is the absolute owner thereof and of the improvements thereon. This being the issue raised, the question to be decided is whether or not by virtue of the transfer hereinabove mentioned, Juan Dalay became the owner of the parcels of land in dispute. There is no question that Ciriaco Villarin was the original owner of these realties. Let us see whether the contract executed by the latter in favor of Eugenio Gomez (Exhibit A), and the transfer made afterwards by the latter in favor of Juan Dalay (Exhibit C), and the declaration made later on by Ciriaco Villarin (Exhibit B) had the legal effect of transferring to Juan Dalay the full title to these lands. The document Exhibit A contains, as above stated, the clause which we again quote as follows:
" * * * and if I cannot pay the aforesaid amount, when the date agreed upon comes, the same shall be paid with the lands given as security,—the lot and house and lands described in the aforesaid seven documents."
Is this stipulation violative of the provisions of article 1859 of the Civil Code? Two things are prohibited by this article, to wit, (a) the appropriation by the creditor of the properties pledged or mortgaged; and (6) the disposition thereof by the same creditor. The stipulation above set forth does not authorize either one or the other. Of course it is clear that it does not authorize the creditor to dispose of the properties mortgaged. Neither do we find that it authorizes him to appropriate the same. What it says is merely a promise,to pay the debt with such properties, if at its maturity it is not satisfied. It is merely a promise made by the debtor to assign the property given as security in payment of the debt, which promise is accepted by the creditor. There is no doubt that a debtor may make an assignment of his properties in payment of a debt. (Art. 1175, Civil Code.) And the assignment is not made unlawful by the fact that said properties are mortgaged, because the title thereto remains in the debtor; nor is a promise to make such an assignment in violation of the law. We are, therefore, of the opinion that this case does not come under the provisions of article 1859 of the Civil Code, and therefore said article is not applicable to the stipulation in question. Upon the expiration of the period for the payment of the debt without the same having been paid, Eugenio Gomez did not wait nor require Ciriaco Villarin to make a formal assignment of the mortgaged property in payment of the debt, and transferred the same to Juan Dalay in the document Exhibit C. And in doing so, Eugenio Gomez did not dispose of property merely mortgaged, but of property promised to be assigned in payment of the debt which had not been paid at the expiration of the period fixed for its payment. Gomez had not, by virtue alone of the promise of assignment of said property, any real right thereon, but he did have a personal action against Villarin to compel him to execute the proper deed of assignment. For this reason the conveyance made by Gomez in favor of Dalay was defective, it having been made in advance of the actual assignment of said property in his favor. This transfer, however, is not void per se inasmuch as Villarin consented to the said property passing to Gomez in payment of the debt after the expiration of the period for payment, if the debt was not paid. There is no question as to the concurrence of the other elements of this contract made in favor of Dalay, the defect consisting in Villarin not having previously executed the deed of assignment he had promised. This defect, which would have been a ground for annulling this transfer made by Gomez in favor of Dalay, had Villarin brought the proper action, was cured by the act of said Villarin in executing the document Exhibit B, wherein he acknowledged that the title to, and possession of, said lands were transferred to Gomez as in a real and absolute sale. This confirmation, valid and effective under the provisions of article 1311 of the Civil Code, gave full effect to the transfer of these properties made by Gomez in favor of Dalay. The allegation of the defendant Aquiatin that this sale in favor of Dalay is simulated and fraudulent cannot be held proven. It does not appear that when he executed the document Exhibit A, Ciriaco Villarin was indebted to anybody with the exception of Gomez, nor that he owed anything to anybody when he executed the document Exhibit B, which cured the defect of the transfer in favor of Dalay. As appears from the complaint of Bernardo Aquiatin himself, the debt of Ciriaco Villarin, which is the subject matter of the aforecited case No. 2536, was contracted by Villarin on October 25, 1917, about fifteen days after the execution of said document Exhibit B. We do not find, therefore, in the record sufficient ground for holding fraudulent the transfer of the lands in question in favor of the herein plaintiff Juan Dalay, who by virtue of said sale became the absolute owner of these lands before Villarin contracted his debt in favor of Aquiatin and of course before the filing of the complaint for the recovery of such debt and therefore before the rendition of the judgment in that case No. 2536; so that when the execution involved in this action was levied, Ciriaco Villarin, the judgment debtor, was no longer the owner of said parcels of land. The judgment appealed from is reversed and the plaintiff Juan Dalay is adjudged the sole and absolute owner of the lands described in his complaint, and it is ordered that the defendants, their agents, and other persons acting in their behalf, abstain forever from performing any act whatsoever tending to carry out the attachment and execution sale complained of, or to enforce either one in any manner whatsoever. No special finding as to costs is made. So ordered. Araullo, C. J., Johnson, Malcolm, Avancena, and Villamor, JJ., concur. Johns, J., concurs in the result.