[ G.R. No. L-1739. February 03, 1949 ] 82 Phil. 789
[ G.R. No. L-1739. February 03, 1949 ]
MANUEL LIM AND EMILIA QUINTOS DE LIM, PETITIONERS AND APPELLANTS, VS. THE REGISTER OF DEEDS OF RIZAL, OPPOSITOR AND APPELLEE. D E C I S I O N
FERIA, J.:
Manuel Lim and Emilia Quintos de Lim mortgaged on December 2, 1940, four parcels of land with, its improvements thereon, described in the transfer certificate of title no. 21783 of the office of the Register of Deeds of Rizal, with the Agricultural and Industrial Bank for P10,500, payable by installments. The mortgagors had been making partial payments on account of the mortgage obligation. On June 5, 1944, the mortgagors paid in full the balance due to the mortgagee, and the latter executed a deed of cancellation of the mortgage. The deed of cancellation together with the mortgagors’ duplicate of said transfer certificate No. 21783 were filed with the Register of Deeds for the City of Manila on October 3, 1944, and upon payment of the corresponding registration fees by the mortgagors, official receipt No. 0508458 was issued to them. The deed of cancellation was entered in the Day Book, Volume 9, of the Registry of Deeds on October 3, 1944, 11:05 a. m., according to the certificate issued by the Register of Deeds of Manila, presented as Annex A in this case, which reads as follows:
“At the instance of Mr. Potenciano Villegas, Jr., I, Mariano Villanueva, Register of Deeds for the City of Manila, do hereby certify that in the Day Book, Volume 9 of this Registry, there appears the following entry, to wit:
“Number of Entry …………….. 25716 Date of Filing ………………….. October 3, 1944 Hour of Filing ………………….. 11:05 a. m. Nature of Document ………… Cancellation Executed by …………………… Agricultural and Industrial Bank In favor of ……………………… Manuel Lim Date of Instrument …………. June 5, 1944 Certificate of title ……………. 21783 Presented by …………………. A. Francisco Postal address ………………. 401 Cu Unjieng Contract value ……………….. P10,500 Remarks ……………………….. Pasay
and that the document object of the foregoing entry does not appear among the salvaged records of this Office.
“In witness whereof I have hereunto set my hand and affixed hereto the seal of my Office this 8th day of May, 1947, in the City of Manila, Philippines.”
On February 24, 1947, the Court of First Instance of the Province of Rizal, Rizal City Branch, acting upon a verified petition of the mortgagors, issued an order requiring the Register of Deeds of said province to issue a new duplicate of transfer certificate of title No. 21783, in lieu of the owner’s copy which was either burned or lost during the liberation of the City of Manila, in which the cancellation of the mortgage of the property in favor of the Agricultural and Industrial Bank was not registered or annotated. In order to facilitate the annotation of the deed of cancellation of said mortgage, the mortgagors asked and obtained from the R. F. C., successor of the Agricultural and Industrial Bank, a new deed of cancellation of the mortgage, and said R. F. C. has executed a new deed of cancellation in favor of the mortgagors with the following annotation: “* * * subject to such further disposition as the Government may adopt regarding transactions consummated during the Japanese occupation.”
The mortgagors demanded from the Register of Deeds of Rizal the registration of the deed of cancellation without the annotation above quoted, but the latter refused to do so, and for that reason the petitioners filed a petition with the Court of First Instance of Rizal, Rizal City Branch, to compel the respondent to register the cancellation of the mortgage, but without the annotation in question, on the following grounds:
“(a) That had the annotation of the Deed of Cancellation of mortgage in the petitioners’ Certificate of Title No. 21783 for ten thousand five hundred pesos (P10,500) by the Agricultural & Industrial Bank been accomplished in due time by the Register of Deeds of Manila under its Primary Entry No. 25716, the annotation in the title of the said Deed of Cancellation would not bear any such annotation, the non-fulfillment of which, your petitioners should not be blamed; and
“(b) That the annotation intended and mentioned in paragraph 8 hereof, which is being done by the Rehabilitation Finance Corporation and also by every Register of Deeds, in accordance with Circular No. 14 of the Department of Justice, is illegal and, for that effect, null and void, because it is not based on any provision of law.”
The respondent Register of Deeds filed an opposition to the petition alleging only as defense:
“That the annotation sought to be eliminated in the certificate of title is inserted therein as a precautionary measure and in compliance with Circular No. 14, series of 1945, of the Department of Justice;
“That the annotation ‘subject to such disposition as the government may adopt regarding transactions consummated during the Japanese occupation’ is by instruction and direction of the Secretary of Justice inserted in all cases of registrations filed during or after the Japanese occupation;
“That the Register of Deeds is a subordinate of the Secretary of Justice and has to comply with Circular No. 14;
“That said annotation has to be inserted or written in all certificates issued by the register of deeds in compliance with said circular until said circular is either revoked and set aside or altered or amended by competent authority;
“That the duty of the Register of deeds in this matter is ministerial in nature;
“That this requirement contained in Circular No. 14 is made as precautionary measure based on reasons of public policy for the protection of all concerned and is valid exercise by the State of its police power.”
The lower court, after considering the petition, answer of the respondent, and petitioners’ reply to the answer, rendered or issued an order upholding the respondent’s contention or defense, and denying the petition that the respondent be ordered to register the deed of cancellation without the annotation therein contained.
The petitioners appealed from the order of the lower Sourt to this Court, and the case is now before us on appeal.
There is no doubt that the above-quoted annotation in the deed of cancellation of the mortgage would be an emcumbrance on the title or a charge on the property of the petitioners, beoause it would make the title to the property subject to any action which the government may take on the validity of the payments made with Japanese war notes, so that in case the Government, through Congress or the Supreme Court of the Philippines, declares those payments invalid the property would have to continue as a security for the payment of the mortgage obligation.
According to section. 39 of Act No. 496, as amended, every subsequent purchaser of a registered land under the Torrens System who takes a transfer certificate of title for value in good faith, shall hold the same free of all incumbrance, except those noted on the certificate and any of the legal incumbrances ennumerated in said section. It is obvious, and of judicial notice, that such incumbrance was not and could not have been noted on the transfer certificate of title No. 21783 nor on the deed of cancellation of the mortgage executed by the Agricultural and Industrial Bank on June 5, 1944, and filed for registration on October 3, 1944, which were lost or destroyed during the liberation according to Annex A, above quoted. Therefore, the Secretary of Justice had no power or authority to order or direct, by Circular No. 14, series of 1945, the respondent Register of Deeds to insert such annotation, and reciprocally the latter is not bound to comply with such instruction.
Under section 79 (B) of the Administrative Code the Secretary of Justice is only empowered to promulgate rules, regulations, orders, circulars and other instructions not contrary to law, to all offices and dependencies of his department; and compliance with the instruction in question would be contrary to the Constitution, for it would impair the obligations of contract or deprive a person of his property without due process of law. It can not be contended that the Secretary of Justice issued said circular in the exercise of the police power of the State, because Congress has not delegated such power to the Secretary of Justice. The sovereign police power is exercised by the State through its legislative branch; and its valid exercise may be and are, generally, delegated to towns, municipalities, and cities, and sometimes also to the Chief Executive in case of national emergency. (Primicias vs. Fugoso, L-1800, promulgated January 27, 1948, 45 Off. Gaz., 3280.[1]) But is it a well settled rule that a legislative power delegated to a body or person cannot be delegated by the latter to another.
But even if the annotation in question were not an incumbrance, and the Secretary of Justice had power to issue the aforesaid Circular No. 14, such annotation would have no longer any effect and, therefore, the insertion thereof in documents relating to transactions consummated during the Japanese occupation would not serve any purpose, in view of the ruling laid down by this Supreme Court in the case of Haw Pia vs. China Banking Corporation, L-554, 45 Off. Gaz. [Supp. to No. 9], 229[2]; Hongkong and Shanghai Banking Corporation vs. Perez Samanillo, G. R. No. L-1345[3], in which it was held that payments made with Japanese war notes during the occupation of obligations contracted before the war to the creditor or his legal representative, and accepted by the latter, are valid and release the said obligations. Philippine Congress having not enacted any act on the matter, the ruling of this Court in the oases aforementioned is the disposition adopted by our government regarding transactions consummated during the Japanese occupation, to which said annotation refers.
The fact that the new deed of cancellation executed by the Rehabilitation Finance Corporation, which is not a party in this case, contains also such annotation, can not be a bar to the rendering of this decision for the following reasons: First, because the annotation was not and could not have been inserted in the deed of cancellation executed on June 5, 1944, by its predecessor in interest, the Agricultural and Industrial Bank, and filed with the respondent on October 3, 1944 (Annex A); and the respondent appellant could and would have registered the cancellation without such annotation, had it not been for the Circular No. 14, because he alleges, as the only ground for his refusal to do so, the existence of said circular and not the annotation in the new deed of cancellation. Secondly, because it is to be presumed that such annotation, which is identical to that contained in Circular No. 14 of the Department of Justice, was only inserted in the new deed of cancellation in conformity with said circular, for the mortgagee is a government banking institution. And lastly, because although the Rehabilitation Finance Corporation is not a party, and therefore it can not legally be bound by the judgment in this case, the said Rehabilitation Finance Corporation can not suffer and, therefore can not claim against anybody, any damage because of the omission of said annotation in the deed of cancellation of the mortgage, for the reasons already set forth in the preceding paragraph.
Therefore, the order of the lower court is reversed, and the respondent Register of Deeds is ordered to register the deed of cancellation of the mortgage without the annotation under consideration.
So ordered.
Pablo, Perfecto, Briones, and Reyes, JJ., concur. Paras, J., concurs in the result.