G.R. No. 26498, March 2, 1927
C.N. HODGES, plaintiff-appellant, vs. THE TREASURER OF THE PHILIPPINE ISLANDS, defendant-appellee.

FACTS

C.N. Hodges sought to recover P10,000 from the assurance fund as indemnity for damages allegedly caused by the negligence of the Register of Deeds of Occidental Negros. Hodges claimed that the Register of Deeds failed to promptly record a mortgage deed he had submitted. The mortgage deed, executed by Ramon Siocon in favor of Hodges on September 6, 1920, covered land previously owned by Asisclo Ramirez and Apolinario Alvarez and later sold to Siocon. When Hodges mailed the mortgage deed and related documents to the Register of Deeds on September 10, 1920, he did not include the required registration fees, internal revenue stamps, or a certified copy of the certificate of title. The Register of Deeds eventually returned the unrecorded mortgage deed to Hodges on October 13, 1921, citing the lack of a certified copy of the title. In the interim, Siocon mortgaged the same property to another party (Lichauco and Co.) on March 4, 1921, which was duly recorded. The trial court dismissed the case for lack of jurisdiction, ruling that the action for damages to rural property should have been filed in Occidental Negros where the land is located.

ISSUE

1. Whether the Court of First Instance of Iloilo had jurisdiction over the action for recovery of damages from the assurance fund.
2. Whether Hodges is entitled to indemnity from the assurance fund for the alleged negligence of the Register of Deeds.

RULING

1. Yes, the Court of First Instance of Iloilo had jurisdiction. The Supreme Court held that the action was not for damages to the real property itself but for personal damages suffered by Hodges due to the Register of Deeds’ alleged negligence, resulting in the loss of his preferential mortgage lien. Under Section 101 of Act No. 496 (Land Registration Act), actions against the Treasurer for recovery from the assurance fund may be brought in any court of competent jurisdiction. Applying the Code of Civil Procedure, since the action was not one for damages to real property, the plaintiff could elect to file it in the province where he or the defendant resided. Hodges, a resident of Iloilo, properly filed the case there, and the Iloilo court had jurisdiction.

2. No, Hodges is not entitled to indemnity from the assurance fund. The Supreme Court found that Hodges’ own negligence caused the failure to record the mortgage. Section 61 of Act No. 496 required the submission of the owner’s duplicate certificate of title and payment of registration fees for the recording of a mortgage. Hodges failed to comply with these requirements when he initially submitted the documents. Under Section 101 of the same Act, indemnity from the assurance fund is only available to those who suffer loss “without negligence on their part.” Since Hodges’ non-compliance with statutory requirements constituted negligence, he was not entitled to recovery.

The appealed judgment was reversed on the jurisdictional issue, but the case was ultimately dismissed for lack of merit. Hodges’ complaint was dismissed, and the defendant was absolved.