G.R. No. L-3440 March 6, 1951
ANATOLIO HENSON, plaintiff-appellant, vs. J. K. PICKERING & CO., LTD. PARTNERSHIP, defendant-appellee.

FACTS

On July 29, 1949, Anatolio Henson filed an action in the Court of First Instance of Rizal to compel J. K. Pickering & Co., Ltd. Partnership to execute a final deed of sale over a parcel of land and surrender its Transfer Certificate of Title so he could secure a new title, and to pay damages. The defendant moved to dismiss, claiming the complaint failed to state a cause of action. The court sustained the motion, reasoning that the defendant had nothing more to do with the land because its administrator, the Japanese Enemy Property Custodian, had already perfected a sale in favor of Jaime de los Angeles, who completed payment, and from whom the plaintiff bought the property. The plaintiff appealed.
The facts, as gleaned from the complaint and its annexes, are: On April 11, 1932, the defendant, through its attorney-in-fact, sold a parcel of land in San Juan, Rizal to Albert C. Donor on installment. When war broke out, a balance on the purchase price remained. On December 27, 1943, Donor, with the written consent of the Japanese Enemy Property Custodian (the then administrator of the property), sold his rights to Jaime de los Angeles. In April 1944, De los Angeles paid the outstanding balance to the Japanese Enemy Property Custodian, who executed a final deed of sale and a deed of release of mortgage in his favor. On June 19, 1944, De los Angeles sold the property to the plaintiff, Anatolio Henson. All corresponding documents were presented for registration to the Register of Deeds of Manila. During the liberation of Manila, these records were burned or lost. In September 1947, the plaintiff informed the defendant of these facts and requested the execution of a final deed of sale and surrender of the defendant’s title, but the defendant refused, prompting the present action.

ISSUE

Whether the plaintiff has the right to compel the defendant to execute a final deed of sale and surrender its duplicate certificate of title to enable him to secure a new title, or whether the proper step is to reconstitute the lost transfer documents under Act No. 3110, as amended by Republic Act No. 26.

RULING

The Supreme Court set aside the order of dismissal and remanded the case for further proceedings, holding that the complaint states facts sufficient to constitute a cause of action.
The Court ruled that mere reconstitution of the lost transfer documents would not suffice for the plaintiff to obtain a new title because the Land Registration Act requires such documents to be accompanied by the owner’s duplicate certificate of title for registration and issuance of a new title. The defendant’s duplicate title was never submitted to the Register of Deeds and was still in the defendant’s possession; thus, there was no need to reconstitute it, and the defendant’s claim that the plaintiff should reconstitute it was untenable.
Examining the stipulations in the original “contract to sell” (Annex “A”), the Court found: (1) the defendant agreed to deliver the Torrens title upon completion of payments; (2) the purchaser agreed not to sell or transfer rights without the company’s written consent until all stipulations were fulfilled; and (3) the agreement was binding upon the parties’ heirs, executors, administrators, and assignees. The Court held these stipulations had been complied with: the balance was paid to the Japanese Enemy Property Custodian (the administrator), Donor’s sale to De los Angeles was with the administrator’s written consent, and the transfer to the plaintiff as ultimate assignee was binding on the defendant. Therefore, the defendant was duty-bound to deliver the Torrens title, and the only way to comply was to execute a final deed of sale and surrender its certificate of title.
The Court rejected the contention that payment to the Japanese Enemy Property Custodian was invalid, citing precedents (Haw Pia vs. China Banking Corporation and C. N. Hodges vs. Maria Gay et al.) which held such payments valid under International Law and the Civil Code, as payments to a person authorized by law to receive them.
Separate Opinions:
Justice Padilla concurred in the result, agreeing the complaint stated a cause of action, but dissented from the majority’s ruling on the validity of the payment to the Japanese Enemy Property Custodian, believing it unnecessary to decide that issue.
Justice Tuason concurred, but premised his concurrence on the defendant’s failure to question the payment’s validity, maintaining that such payments would not be binding if repudiated by the vendor. He held that with all installments satisfied, the seller was obligated to issue the title to the purchaser’s successor.