G. R. No. 8450, January 29, 1914

Supreme Court of the Philippines
26 Phil. 593
G. R. No. 8450, January 29, 1914

CRISANTO LICHAUCO ET AL., PETITIONERS AND APPELLEES, VS.
RAYMUNDA SORIANO, OPPONENT AND APPELLANT.
DECISION
TRENT, J.:
This is an appeal from a judgment of the Court of Land
Registration, ordering the registration of several parcels of land in
the names of the petitioners. The appeal is limited to parcels A and
C, there being no question as to the location or identity of the same
under the proofs offered by either party. The objection to the
registration of these two parcels is based principally on the
following notarial instrument:
"The undersigned scriptory creditors of the spouses Don
Ramon Henson and Dona Matilde Magdangal, residents
of the pueblo of Arayat, Province of Pampanga, have
entered into the following agreement for effecting the
transfer by sale and delivery of their property, as
payment, on the grounds set forth.
"1. Don Ceferino Revilla, in representation of the spouses

Don Lino Cardenas Reyes and Dona Raymunda Soriano
under power of attorney duly acknowledged, obligates
himself to withdraw the complaint in the court of the
Province of Pampanga which Don Manuel Murciano
filed, raising the attachment levied on the hacienda
belonging to those spouses, Don Ramon Henson and
Dona Matilde Magdangal, situated in the barrio of Lacmit
of the pueblo of Arayat, and leaving it free to the
disposition of the undersigned.
"2. The amount of seven thousand four hundred pesos,
the subject matter of Don Manuel Murciano's complaint
wherein Don Lino Cardenas Reyes was subrogated, shall
fix the proportion in which he shall participate in both the
expenses and the assets of said hacienda; likewise, Dona
Joaquina Caldes shall participate in proportion to her two
thousand and ninety-two pesos; Dona Concepcion Gruet
de Atayde and Dona Cornelia Laochanco, in both
expenses and assets, and these last two credits shall be
liquidated on the current thirty-first of December; and all
these credits shall be passed upon by the creditors
themselves in order to determine the total liabilities, as
the joint partnership capital.
"3. After the expenses have been deducted, Messrs.

Cardenas and Caldes shall take from the net profits the
proportionate part corresponding to each, as set forth in
the preceding clause, while the remainder shall be divided
equally between the two creditors, Dona Concepcion
Gruet de Atayde and Dona Cornelia Laochanco, without
reference to the amounts of their credits.
"4. These allotments of assets shall serve for

extinguishing their respective credits, with the rate of
interest made uniform at six per cent a year.
"5. Care shall be taken by all the interested parties that the
management be the most economical possible, with the
maximum of production, and sale of the products of the
hacienda at the best price.
"6. Dona Joaquina Caldes also agrees to withdraw the

complaint she has filed in the said court of Pampanga,
raising the attachment levied in part on the products of
said land, leaving them free to the disposition of the
interested parties themselves.
"7. A book of minutes shall be kept for the decisions they

may reach in regard to the administration and
management of the hacienda, which book shall be in care
of a person chosen by the creditors themselves; and they
will submit, without appeal, to the decision of friendly
arbitrators, whenever they may disagree in a tie vote on
subjects not expressly provided for in this agreement,
each partner to have in the meeting only one vote,
regardless of the amount of his credit; and all are
obligated to perform what the majority decides.
"8. With reference to his general credit of eight thousand

and odd pesos, Mr. Cardenas agrees to collect the same
after the undersigned shall have secured their respective
credits.
"9. As the first expense charged against the products of

the hacienda, there shall be assigned to the spouses
Henson and Magdangal a pension of thirty pesos a month
from the first of January, 1889.
"10. When everything shall have been paid, at some more

or less remote time, the hacienda and its dependencies
shall be restored to the spouses Henson and Magdangal.
"11. In their own interest and on account of the monthly

allowances assigned to them, the spouses Henson and
Magdangal shall be obligated to direct and to aid in the
care of the hacienda, if the partnership so deem expedient,
in order to utilize the knowledge and experience they may
have of it.
"12. In case need should arise for an administrator or

manager of said hacienda to look after the cultivation and
kindred labors, including milling, with the status of a
genuine manager, action shall likewise be taken by vote
among the creditors.
"13. Each partner in person or by proxy shall have the

same intervention and inspection for all the operations of
the hacienda, but shall cease to have any right or
participation under this agreement after his credit has
been paid.
"14. If, as is not to be expected in view of the new

management and resources the hacienda will have, and
there should not have intervened any public calamity or
force majeure, such as a typhoon, flood, locust pest,
earthquake, epizooty, or fire, etc., it should be seen that in
two consecutive years, counting from the crop of 1889-
1890, and excluding the present one, not even enough
should have been produced to pay the indispensable cost
of cultivation, with merely unproductive expense to the
undersigned, the creditors shall agree among themselves
upon the best plan they may deem expedient in accord
with the instrument of delivery.
"15. Any one failing to comply with the decisions reached

and with these conditions shall be liable on his
proportionate share of profits and on his credit for the
damages his negligence or opposition may cause.
"16. The parties to this agreement shall seek the best

method of arranging with Messrs. Smith, Bell & Co. in
regard to the debt of Don Ramon Henson for the
machinery installed on the hacienda.
"17. The present instrument shall be made a public

document after execution of the instrument of sale and
delivery.
"In witness whereof, we sign herewith on five copies to

the same effect, in Manila, on the seventh of December,
1888.—Corrections valid.—Attest: Ceferino Revilla.—
Attest: Concepcion Gruet de Atayde.—Attest: Cornelia
Laochanco.—With my consent: Juan Atayde.—Attest: for
my mother, Dona Joaquina Caldes: Enrique Barrera y
Caldes.—Ramon Henson.—Matilde Magdangal."
By a notarial document of the same date, numbered 16, the two
spouses attempted to make an absolute sale of parcels A and C to
Concepcion Gruet and Cornelia Laochanco. On December 7, 1894,
the former assigned her rights in the premises to the latter, who was
the mother of the present petitioners.
The claim of ownership on the part of the petitioners to parcels A

and C cannot be sustained. The document of December 7, 1888,
copied above, constituted a novation of the preexisting claims of the
creditors who affixed their names thereto, regardless of whether
such claims were secured by mortgage liens on the real property of
the spouses, or were merely personal debts. It is self-evident from
this document, that a contract of antichresis was created upon the
property of the spouses; and that, as between the creditors
themselves, a partnership was formed, as is specifically stated in
clause No. 2 thereof. The attempted sale of the property to two of
these creditors shortly thereafter appears to have been made, on the
part of the spouses, under a misunderstanding of its signification. It
was made without the consent of the other parties to the original
contract. The fact that at the time this contract of sale was entered
in the property registry, the original contract did not appear therein,
can make no difference under the facts of this case. The original
contract was binding on the parties thereto and their privies, without
registration.
Viewed in another light, the sale of January 12, 1889, was an

attempt on the part of two of the partners to withdraw from the
partnership for their own personal profit before the termination of
the partnership at the expense of the partnership, an act which was
expressly prohibited by Law 12, Title 10, Fifth Partida, and is now
so prohibited by article 1706 of the Civil Code. The notarial
document of January 12, 1889, did not therefore convey the title to
the land in dispute to the would be purchasers, and as the claim of
ownership of the petitioners is necessarily based on that document,
it results that the certificate of registration ought not to include
those parcels.
For the foregoing reasons, the judgment of the Court of Land

Registration, in so far as it orders the entry of a decree of
registration in favor of the petitioners of parcels A and C, is hereby
reversed, and the petition as to those parcels is denied. Otherwise,
the judgment is affirmed. Without costs in this instance.
Arellano, C. J., Carson and Araullo, JJ., concur.

Moreland, J., concurs in the result.
Batas.org

G. R. No. 8450, January 29, 1914

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Supreme Court of the Philippines

G. R. No. 8450, January 29, 1914

"1. Don Ceferino Revilla, in representation of the spouses

"3. After the expenses have been deducted, Messrs.

"4. These allotments of assets shall serve for

"6. Dona Joaquina Caldes also agrees to withdraw the

"7. A book of minutes shall be kept for the decisions they

"8. With reference to his general credit of eight thousand

"9. As the first expense charged against the products of

"10. When everything shall have been paid, at some more

"11. In their own interest and on account of the monthly

"12. In case need should arise for an administrator or

"13. Each partner in person or by proxy shall have the

"14. If, as is not to be expected in view of the new

"15. Any one failing to comply with the decisions reached

"16. The parties to this agreement shall seek the best

"17. The present instrument shall be made a public

"In witness whereof, we sign herewith on five copies to

The claim of ownership on the part of the petitioners to parcels A

Viewed in another light, the sale of January 12, 1889, was an

For the foregoing reasons, the judgment of the Court of Land

Arellano, C. J., Carson and Araullo, JJ., concur.

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