[ G. R. No. 45475. November 16, 1937 ] 65 Phil. 20
[ G. R. No. 45475. November 16, 1937 ]
ESTATE OF ANTONIO MA. BARRETTO Y ROCHA, REPRESENTED BY ITS ADMINISTRATORS DOLORES MORATINOS VIUDA DE BARRETTO ET AL., PETITIONERS, VS. EMILIO MAPA, JUDGE OF FIRST INSTANCE OT MANILA, CONSUELO LEGARDA VIUDA DE PRIETO, AND MARIANO S. TUASON, RESPONDENTS. D E C I S I O N
CONCEPCION, J.:
This is a petition for a writ of prohibition. In civil case No. 24803 of the Court of First Instance of Manila, known as the case of the Mayorazgo Tuason, the defendants were ordered, on June 17, 1936, to deliver to the judicial receiver appointed in said case the sum of P133,690.67 owing by them as part of the revenues of the mayorazgo, for distribution among the plaintiffs and the intervenors; and upon failure of said defendants to do so within the time granted for the purpose, an order was entered on October 17th of the same year for the issuance of a writ of execution against the defendants, whose names were given in the subsequent order of November 3d of the same year, and a.mong whom the herein respondent Consuelo Legarda Viuda de Prieto is included. This respondent, as soon as “she became aware of the last order, filed through her attorneys, Orense and Belmonte, on the 9th of the same month, a petition praying that she be excluded as well from the order entered on the 3d of said month as from the writ of execution issued in pursuance thereof. The petition alleged that she is not and has never been a party defendant in this case, but that she is an intervenor in her own right, both as a descendant of one of the younger children of the founder of the mayorazgo and as descendant of purchasers of the participations of other descendants. That although she had been receiving a part of the revenues of the properties of this mayorazgo corresponding to the defendant Mariano S. Tuason, it was by virtue of a deed executed by the said Mariano S. Tuason ceding a portion of his undivided share in the aforesaid properties which is not involved in this case and which was and is not affected by the notice of litis pendens relating to this case. This cession was evidenced by the deed executed on November 7, 1935 in payment of a mortgage credit of the petitioner against the said Mariano S. Tuason, which deed was filed in the case of the Mayorazgo Tuason, and the court, by reason thereof, on December 2, 1935, ordered the receiver bank to deliver to the petitioner the share pertaining to the said Mariano S. Tuason in. the revenues of the aforesaid properties.
In view of the petition above referred to, and notwithstanding the opposition of the plaintiffs who are the petitioners herein, the court, on December 17, 1936, issued the order which gave rise to the present proceedings, modifying the order of November 3, 1936 as well as the writ ‘of execution issued by virtue thereof, in the sense that the name of the respondent Consuelo Legarda Viuda de Prieto was excluded therefrom and Mariano S. Tuason was substitutedi asdefendant in her stead.
The plaintiffs and the intervenors filed two motions for the reconsideration of the aforesaid order which were denied by the court, as a consequence of which the present petition for the writ of prohibition was brought.
To dispose of these proceedings, it is necessary to discuss and determine:
What was the liability or obligation referred to in the deed of cession which, under the aforesaid mayorazgo, could pertain to Mariano S. Tuason and which the grantee Consuelo Legarda Viuda de Prieto has not assumed in accepting the cession made in her favor by the said Tuason of a portion of his share in the properties of the mayorazgo? Was it a simple personal obligation, or was it in any way secured by any real property of the mayorazgo? Is the provision contained in the twelfth paragraph of the deed of cession and incorporated in the order complained of, under which it was stipulated that the said grantee would not assume the liability of the grantor, valid or not?
It appears from the decision rendered by this court on March 23, 1926 in the case of the Mayarazgo Tuason (Barretto vs. Tuason, 50 Phil., 888) that, in establishing said mayorazgo, its founder provided in the instrument of foundation, amount other things, that:
“It shall be his (possessor of the mayorazgo) duty to set apart one-fifth of the net revenue derived from the entail each year, and that one-fifth part shall be divided into eight parts, giving one to each of my eight children, and in their absence, to my grandchildren, * * *.” (Page 903.) And this court has held that:
“A special fideicomiso was instituted in the foundation in question consisting of a mandate to the first-born possessor of the, entailed properties to distribute one-fifth of the net revenue of the properties each year among the eight younger children of the founder and other specified relatives. This special charge, distinct, but a part of the mayorazgo under consideration, is specifically termed a family trust, as an annual distribution of funds among the relatives of the founder is involved.” (Id., p. 889.) This court, referring to the effects of the Statute of Disentailment, further stated:
“Summing up the effects produced with respect to this mayorazgo by the Disentailing Law on the one hand, and the conduct of the interested parties on the other, we may say first, that the trust of the naked ownership instituted in favor of the descendants of the founder indefinitely was abolished, in consequence of the disentailment; and second, that the trust of the usufruct of the properties became converted into a trust of the properties themselves, the beneficiaries being the same, but as owners; * * *” (Id., p. 937.) It is not disputed that the family trust consisting of the distribution of one-fifth of the revenues, formerly among the younger children of the founder and, now, among the heirs and descendants of the younger children, or the plaintiffs and the intervenors, was converted by the Disentailing Law into a trust of one-fifth of the properties in full ownership. In other words, it is beyond question that the plaintiffs and the intervenors are now the absolute owners of an undivided one-fifth of the properties of the mptfomzgo. What is involved In the present proceedings is the usufruct of the revenues not paid to the petitioners, that is, the fifth of the revenues to the usufruct of which the plaintiffs and the interyenors, were entitled. Does this usufruct constitute” a real lien on all the properties of the mayorazgo, as contended by the petitioners, or is it merely a personal obligation of the defendants to the plaintiffs and the intervenors, as claimed by the respondent Consuelo Legarda Viuda de Prieto? Stated differently, does the aforesaid family trust carry with it a real lien to which all the properties of the mayorazgo are subject in order to secure the payment of the fifth of the revenues collected by the defendants and not delivered to the plaintiffs and the intervenors ?
This court said:
“If up to the present time the entail in question subsists, this has been because the interested parties have been maintaining it without proceeding to the appraisal and distribution of the entailed properties, as required by articles 2 and 4 of the Disentailing Law; and in accordance with the doctrine announced by the Supreme Court of Spain on October 29, 1857, above cited, the properties of this mayorazgo preserved de facto by the interested parties as entailed, legally retain this character for the purposes of their partition, which must be effected in accordance with the statute of October 11, 1820.” (Id., p. 937.)
The only inference that can be drawn from the foregoing passage is that the mayorazgo exists in fact, and win continue to exist until the properties are divided among those entitled thereto; but there is absolutely nothing in the abovequoted paragraph or in the entire decisionT of March 2&, 1926 which holds, nor may it in any wise be deduced from the very nature of the family trust, with which we are here concerned, that the same implies any lien or mortgage, taking into account:
That the founder of this mayorazgo, in enumerating the properties entailed, expressly declared that they “are absolutely free from any encumbrance” {Id., p. 907) and that it was his:
“* * * will that all the property hereby entailed and all that which may be added to it shall not be sold or alienated, in whole or in part, or charged or encumbered or mortgaged with censos, or any other kind of encumbrance or charge; and if the contrary is done it shall be void and he who shall have done it or attempted to do it shall immediately lose the possession of the mayorazgo, and it shall pass to the next in succession, who shall make demand for the annulment of the alienation within thirty days; * * *” (Id., p. 908.)
This shows that it was the will of the founder of the mayorazgo that the properties which he delivered to his first-born free from any encumbrance should always be preserved in that condition, and said intention is entirely incompatible with the theory that those properties are subject to a lien or mortgage.
Law 27 of the Toro is cited for the purpose of demonstrating that the family trust in question is an encumbrance. The citation does not, however, establish the proposition, because the statement in that law to the effect that when the father or mother gives a betterment from the third part of their properties to any of their legitimate children or descendants, they may impose upon it any encumbrance, whether of restitution or of trust, leaves the issue before us undecided. If any encumbrance could be imposed, the question that arises is whether the founder of the mayorazgo not only could impose but in fact imposed a real lien on the properties of the mayorazgo. It has already been shown that the existence of a lien or encumbrance is contrary to the manifest will of the founder of this mayorazgo. A lien under the Civil Law is created by contract or by statute, or is a right in equity. (37 C. J., pp. 307 and 308.) Inasmuch as the family trust under consideration is not the result of a contract or of an express provision of a statute, we shall confine ourselves to finding out what a “lien in equity” is.
“The term ’lien’ is used in equity in a broader sense than at law. And although it is difficult to define accurately the term equitable lien,’ generally speaking, an equitable lien is a right, not recognized at law, and which a court of equity recognizes and enforces as distinct from strictly legal rights, to have a fund or specific property, or the proceeds, applied in full or in part to the payment of a particular debt or demand; a right of a special nature over property which constitutes a charge or encumbrance so that the property itself may be proceeded against in an equitable action, and either sold or sequestered, and its proceeds or its rents and profits applied on the debt or demand of the person in whose favor the lien exists, * * *” (37 C. J., p. 308.)
Does this lien in equity exist in the family trust in question? In other words, does said family trust imply a lien in equity? We will say yes, in so far as the revenues of the properties of the mayorazgo are concerned; but our answer is negative, in so far as the properties are involved. There can be no doubt that such lien on all the revenues of the mayorazgo exists, that is, all the revenues shall respond for the payment of the fifth thereof to the younger children of the founder, now to the plaintiffs and the intervenors. This is plainly deduced from the very words of the founder: “It shall be his (possessor of the mayorazgo) duty to set apart one-fifth of the net revenue derived from the entail each year, and that one-fifth part shall be divided into eight parts, giving one to each of my eight children, * * *.” From this it may logically be concluded that as long as the fifth part of the net revenue shall not have been set apart, all the revenues are encumbered with the obligation to pay the shares of the younger children. The younger children, and now their descendants, have the right to assert their claim, wherever the revenues may be found, to the fifth thereof, and they may even ask for the attachment or deposit of all the revenues with a view to insuring their right to recover their participations. But the payment of the fifth of the revenues cannot be enforced against the properties of the mayorazgo by attaching and selling any part thereof, because that would be violative of the plain prohibition of the founder of the mayorazgo against the sale of the properties entailed and would destroy the family trust to the prejudice of future successors or descendants. Every time a part of the properties is attached and sold, the subject matter of the mayorazgo would be reduced, the revenues would be less, and, consequently, the day may come when there would no longer be any real property of the mayorazgo from which the payment of the fifth of the revenues may be effected. We should not forget that the defendants are under obligation to pay the fifth of the revenues, not at one time, but every year and as long as the mayorazgo exists.
Such alleged lien would: furthermore be essentially inconsistent with the continuance of the mayorazgo. The founder has established this entail as a permanent institution in order that the first-born children on the one hand and the younger children on the other, and their respective descendants, may enjoy the properties of the mayorazgo in perpetuity, and his express will and the purpose of the mayorazgo cannot be brought into realization if the younger children or their descendants would have such lien on the properties entailed as to permit them to attach and sell part or all of said properties. A lien on all the entailed properties does not and cannot exist in favor of the plaintiffs and the intervenors, for the reason that it is contrary to the nature and continuance of the family trust under consideration and of the mayorazgo itself. May there be a mortgage in their faVor? There is of course no express, voluntary or contractual mortgage. If one exists, it would be what is known under the former legislation as an implied or general mortgage. However, apart from the circumstance that any mortgage would also be contrary to the nature of the mayorazgo, tha petitioners have lost such implied encumbrance or mortgage, granting that they ever had it. According to the provisions of the second paragraph of article 1875 of the Civil Code, “the persons in whose favor the law creates a mortgage shall have no other right than to demand the execution and registration of the instrument by which the mortgage is to be evidenced; this without prejudice to the provisions of the Mortgage Law in favor of the State, provinces, and towns for the amount of the last year’s taxes and in favor of the insurers for the premium of the insurance.” The Civil Code was made effective in these Islands in 1889 by the Royal Decree of July 31, 1889, and the first Mortgage Law on the 1st day of October of the same year. According to article 348 of said law, “those who on the day this law becomes effective have any of the legal mortgages excepted in article 355, shall have the right to require, within the period of two years from said date, the person bound by said mortgage to execute in lieu thereof a special mortgage sufficient to answer for the amount of the obligation secured by the first.” (Rodriguez Berriz, Mortgage Law and Regulation, p. 93.)
Commenting on article 347 of the Spanish Mortgage Law from which the above-quoted article 348 of the first Mortgage Law of the Philippines was copied, Galindo y Escosura states the following:
“The main thought, the axis on which the project rotates, was to convert implied legal mortgages into special and express mortgages, a period being fixed for the purpose after the lapse of which the hidden encumbrance shall be inefficacious. But inasmuch as the one favored by the encumbrance ought to have the right to ask for the conversion, and the one subject thereto could not oppose it, disturbing effects in themselves of the old contracts and even of the relations of dependence and respect which the parties in some mortgages had, two groups of legal mortgages had to be established; one of those granted by the old legislation to women and to the children for their properties ; these were included in the’ general rule of article 347; the first, in the exception of 354 * * *” (Vol. 4, 2d ed., p. 491.) (Underlining ours.)
Manresa (vol. 12, 3d ed., p. 513), commenting on the above-quoted second paragraph of article 1875, states as follows:
“We then likewise state that before the publication of the Mortgage Law, legal mortgages were classified according to their nature into implied, necessary and general mortgages, which, without being evidenced by any document and without referring to determinate or known properties, subjected all that a person owned in favor of another, creating an odious privilege which was highly prejudicial to business transactions in the sense that under said system the purchaser or mortgage creditor was always exposed to the risk that a hidden mortgage would appear, the existence of which there was no means of knowing. But with the promulgation of the aforesaid law, the old ways were abandoned, although special care was taken to preserve the benefit conceded by the old laws to persons in whose favor’ said mortgages were constituted, without prejudice, however, to the publicity which the property must have in order to attain the ends of the Mortgage Law.
“Its effect was the continuance of legal mortgages, but of a new nature, for hidden and general encumbrances had to be converted into public and special ones through the exercise of the right granted for the purpose to the holders thereof.
“The second paragraph of the article under consideration therefore provides that the persons in whose favor the law creates a mortgage shall have no other right than to demand the execution and registration of the instrument by which the mortgage is to be evidenced. Thus at the present time, as well as from January 1, 1863, when the original Mortgage Law became effective, to have a legal mortgage is to have, not the real encumbrance or charge on the properties of the debtor whose obligation is secured by it or the mortgage already constituted, but solely the right to compel another to execute the same * * *.” (Underlining ours.)
In view of the provisions of article 348 of the first Mortgage Law of the Philippines and the second paragraph of article 1875 of the Civil Code, and of the foregoing commentaries, there can be no doubt that, even supposing tnat the family trust in favor of the petitioners implies or carries witn it a real lien, they have lost their right to thac lien or implied mortgage, for the reason that it was not converted into a special and public mortgage through the execution by the possessors of the mayorazyo of the corresponuing instrument and its registration in the registry of property.
It cannot be rationally argued that neither the Civil Code nor the first Mortgage Law and at one stroke destroyed existing rights acquired under the former legislation, such as an implied legal mortgage. Such contention is absolutely devoid of force, as will be seen from the circumstance that the aforesaid laws did not arbitrarily destroy or abolish implied mortgages, and that, on the contrary, they were preserved in improved forms by converting them into special and public mortgages after compliance by the holders of said rights, if they wanted to preserve them, with a certain requisite.
There being no real lien in favor of the petitioners to secure the payment of the fifth of the revenues, Mariano S. Tuason could therefore validly transfer his participation in the properties of the mayorazgo free froth all encumbrances, and Consuelo Legarda Viuda da Prieto could acquire the same without assuming any obligation of the grantor. There is nothing which militates against the validity of the stipulation contained in paragraph twelfth of the deed of cession executed by Mariano S. Tuason in favor of the respondent; and none of the various pronouncements made by this court in its decision of March 23, 1926 was violated, set aside or changed, when the respondent judge held in the order of December 17, 1936 that no lien was created in favor of the plaintiffs and the intervenors on the participation of Mariano S. Tuason in the four-fifths of the Hacienda de Mariquina, which is one of the properties of the mayorazgo. Neither did the respondent judge act without his jurisdiction and power in holding in the said order of December 17th that it is not proper to include the respondent Consuelo Legarda Viuda de Prieto as one of the defendants, in substitution for Mariano S. Tuason, as regards the payment of the sum of P133,690.67 owing by the said defendants, and much less to issue a writ of execution against her.
The petition is denied with costs against the petitioners, and the injunction issued in this case is ordered lifted. So ordered.
Avancena, C. J., Villa-Real, and Laurel, JJ., concur.