On August 23,1909, Marcos de la Cruz filed a complaint against Vedasto Velazquez, in which  he alleged the following facts:  (1)  That he is  the administrator of the estate of Gregoria Hernandez, deceased; (2) that, on January 11, 1904, Gregoria Hernandez was  declared by the Court of Land Registration to be the owner  of a parcel  of land situated at No. 364 Calle Magdalena, in the district of Binondo of this city (the other specific circumstances in connection therewith as alleged in the said complaint are herein taken for granted) and the  proper certificate of title, No.  121, was issued in her favor by the register of deeds of the city of Manila; (3) that the defendant Vedasto Velazquez, being the attorney in fact of  Gregoria Hernandez and having in his possession all documents and  muniments of title relative to the said land, succeeded in having the register of deeds issue to him a certificate of title thereto on January 18 of the same year, by presenting a deed of sale executed in his behalf by the said Gregoria  Hernandez; but that the  said deed of sale was false and fraudulent and was not executed by  Greogria  Hernandez nor  by  any person authorized by her so to do, wherefore  it was canceled and annulled by the judgment of  December  31, 1907, rendered  by the Court of First Instance of the city of Manila, as a result of the complaint filed by Gregoria Hernandez against Vedasto Velazquez"on September 25,1906, of which a notice of lis pendens was served on the register of deeds on May 8,1907; (4) that, on November 7, 1904, Vedasto Velazquez sold the said  land under pacto de retro to Ramon Fabie, and in  May, 1907, sold it to him outright, whereupon certificate  of title No. 766 was issued to the purchaser, Ramon Fabie being thenceforth the owner of the land and  Gregoria Hernandez being deprived of her ownership therein; (5) that the said  land was worth P15,000 and its rental value P214.   By reason of all the foregoing facts, the plaintiff prayed the court to order Vedasto  Velazquez  and the  Insular Treasurer  (the latter subsidiarily in case  of nonpayment  by the former) to pay him P29,422, without legal interest, and to pay the costs.

These  facts,  it is to  be supposed, were admitted by the Attorney-General in behalf of the Insular Treasurer in demurring to the complaint.

The plaintiff amended paragraph four of his complaint, which was made to read as follows: That on November 7, 1904, Vedasto Velazquez sold the land to Ramon Fabie under pacto de retro, the sale becoming absolute in May, 1907, no encumbrance being noted  on  the certificate of title at the time of the said sale of November 7,1904; that on November 7, 1904, Ramon Fabie presented his deed of sale under pacto de retro for registration, and  it was registered on the same date,  November 7, 1904;  and that Ramon Fabie received from the register of deeds title to the said land, through means of certificate No. 766, and since the date of the registration became, and is still, the owner of the land. The Court of  First Instance of  the city of Manila sustained the demurrer and granted the plaintiff five days in which to amend his complaint, but as the plaintiff would not amend it the court dismissed the complaint and the proceedings with respect to the Insular Treasurer, with the costs  against the plaintiff.

The plaintiff appealed and, on September 23, 1911, this court affirmed the judgment  of the trial  court,  also  with costs against the plaintiff.  The latter moved for a rehearing and his motion was denied on December 4, 1915.  Such was the termination of this suit (case No. 5858).^[1]

On October 31, 1911, Marcos de la Cruz filed a new complaint against Ramon Fabie  and the register of deeds, in which he  prayed the court:  (1) To cancel  and annul the deed  of conveyance, Exhibit  D;  (2) to order the register of deeds to cancel the entry or registration of the documents A, C, and D and the certificates Nos. 43 and 766; and (3) to order Ramon Fabie to restore the land and to pay P17,976 for losses and damages, together with legal interest thereon and costs.

The document A is the deed of sale by Gregoria Hernandez to Vedasto Velazquez.   Document C is the instrument of sale  under pacto de retro from  Vedasto Velazquez to Ramon  Fabie.  Document D is the deed of final sale by Velazquez to Fabie.

The history of the case is as follows: Vedasto Velazquez was the attorney in fact of Gregoria Hernandez.  Gregoria Hernandez registered her title of ownership to the land in question in the property registry and was issued certificate of title No. 121.  Vedasto Velazquez, being the attorney in fact  of  Gregoria  Hernandez, had in his possession all the muniments of title of the land,  including the certificate of title  No. 121, and, abusing her confidence in him, a few days after the registration of the land, forged a notarial instrument wherein he  made it appear that she had sold the said land to him for the price of P8,000.

Vedasto Velazquez then went to the register of deeds and  applied  for  the registration of the  land  in  his  own name, presenting Gregoria Hernandez' certificate  of  title No.  121 for cancellation, and the deed of conveyance which was  purported to have been made by Gregoria Hernandez in his favor in order that he might  be  registered as the true owner of the land.  All this was done; Gregoria Hernandez' title was cancelled and certificate of title No. 43 was  issued to Vedasto Velazquez.

Vedasto Velazquez, on  November 7, 1904, sold  the  land to Ramon Fabie for P5,000 under pacto de retro, in the following  terms: "This sale is condition on that if, upon the termination  of the  period of one  year from  the  date of the execution of  the present instrument,  I, the vendor, do not repurchase the property from the vendee for the price above specified, the said present conditional sale shall be converted into an absolute and unrestricted one; Provided, however,  That the  said period may be extended for another year, if both parties are willing."

Ramon Fabie  presented this deed to the register, who entered on the back of  Vedasto Velazquez' title a memorandum of the sale under pacto de retro mentioned in the deed.

On May 31, 1907, Vedasto Velazquez and absolutely to Ramon Fabie, who presented to the register  of deeds  the notarial  instrument  executed  for the purpose and was thereupon furnished with the certificate of title No. 766.

On September 26, 1906, Gregoria Hernandez filed a complaint against Vedasto Velazquez in the Court of First Instance of the city of Manila, and the plaintiff says that the court rendered  judgment on  December 31, 1907, canceling and annulling the instrument Exhibit A.  This judgment was never presented in evidence in the former proceedings nor has it been shown in the present case; but, by stipulation of the parties, it is admitted that the said instrument was fraudulent, null, and void.  Proof of this point  is, therefore, no longer necessary.

Notwithstanding that the said  complaint was  filed  on September 26, 1906, the register of deeds was not notified of the lis pendens  (Exhibit B) until May 4, 1907, although the year stipulated in Exhibit  C  for  the  exercise of the right of redemption, which Vedasto Velazquez had reserved to himself, had elapsed since November 7, 1905; from this date, November 7, 1905, the sale under right of repurchase had become converted into an absolute and  final sale, pursuant to the stipulations contained in the said instrument Exhibit C.

Such  are the facts of  the present case, the same as those of the previous one, with the difference that the first action was brought against the "assurance fund"  of the Insular Treasury, while the case at bar  is  an action to recover the land sold by Velazquez  to Fabie, since the sum for which the Insular Treasurer was sued could not be obtained. The trial court, presided over by the Honorable Judge Charles S. Lobingier, granted all the demands of the complaint.

The first demand is that the instrument Exhibit D  be avoided and canceled and that the  execution of this instrument pe declared null and void in so far as it is claimed that it affects the plaintiff's rights.

The document Exhibit D is the deed  of final sale made by Vedasto Velazquez to Ramon Fabie.

Nothing is asked for with regard to Exhibit C, which is the pacto  de retro previously executed  by Vedasto Velazquez in behalf of this same Fabie.   As may be seen, the plaintiff maintains and  recognizes the entire validity of the said pacto de retro, which, 'by force of the terms of the covenant itself, was converted into a final sale on November 7, 1905, therefore  making the execution of the  document Exhibit D  unnecessary.   In his brief in the previous case, No. 5858, the plaintiff said:  "The facts show  that he  (Fabie) bought  the property from Vedasto Velazquez on November  7,  1904, under right of repurchase, and  that the sale was immediately registered.  The evidence also shows that at the time of the purchase the certificate  of title bore no entry of  any encumbrance.  Consequently, Fabie was vested with a perfect title on November 7,  1904  (see  sees. 50 and 55 of  Act No. 496).  His title was subject to a right of repurchase which expired in May,  1907  (not so; it expired on November 7 of the year 1905, for the period stipulated was  one year).   'The validity and  sufficiency of a properly executed contract of purchase and sale is not affected or weakened by the addition thereto of an agreement of pacto de  retro inasmuch  as the right of ownership of the thing sold, although  it may be defeated, is thereby transferred to the vendee,  who is  substituted  for  the  vendor. (Guillermo vs. Matienzo, 8 Phil. Rep., 368.)

"Well then,  supposing that  a notice of  lis pendens, in connection with the case of Gregoria Hernandez vs. Vedasto Velazquez, No.  4912  of the Court of First Instance, for the cancellation of the  fraudulent  deed of sale,  had been presented to the register of deeds on May 8, 1907, what effect could it have against Fabie?  (The plaintiff is talking) .  The mere fact that the right to repurchase expired subsequent to that date  (no; two and a half years before) in no manner affects his rights.  These were  acquired on November  7, 1904.  Therefore the questions relative to the lis pendens  and the date of the expiration of the  period granted Velazquez to repurchase from Fabie, may be eliminated."  (Brief, pp. 13 and  14.)

This court can not possibly affirm the judgment  of  the trial court in so  far as it grants the  first  demand  of  the complaint, for the legal reasons  contained in the preceding considerations put forward by the plaintiff himself in  his said brief, to wit: (1) Because Ramon Fabie's title is perfect, pursuant to sections 50 and 55 of  Act No. 496;  (2) because the ownership of every purchaser,  even  though it be subject to a right to redeem and be defeasible  by  the covenant,  originates from the  consummation of the contract or from the time of the delivery to him of the thing purchased, and the pacto de retro does not affect the ownership of the thing sold more than  to either reconvey it to  the vendor or to consolidate it in the purchaser, once the condition has been fulfilled or extinguished,  as decided by this Supreme Court in the case cited by the plaintiff and in many other decisions which now constitute settled doctrines;  (3) because a notice of lis pendens registered on May 8, 1907, cannot affect a sale consummated since November 7, 1904, and which had become irrevocable and  absolute since  the same date of the following years 1905, and, as the plaintiff himself very properly insists, all questions regarding  the effect of such a notice should be eliminated; and (4) because the document Exhibit D is one of supererogation or merely corroborative; it  confers no other right, and  has no other signification than a confirmation of what is implied by that which  is explicit  in accordance with the formalities of  the register.  So that, although the document Exhibit D were declared to be null and void in order to deprive of its effects the absolute sale therein stipulated, the land would not  for that reason cease to belong to Fabie, for the reasons stated by  the plaintiff himself, that is, because the document  Exhibit C, which is a perfect title of ownership, in accordance with law and the  cases cited, remains in  force.

The inscription of ownership made in  the registry in behalf of Gregoria  Hernandez  had disappeared, having been substituted by the entry in the name of Vedasto Velazquez; and as the registry showed the latter to be the owner of the land, Fabie was enabled to arrange with him to purchase it. It having been proven that Fabie's  ownership was and is perfect and absolute and that he is entitled to possess, as he does possess, the land in question, it is indisputable that Gregoria Hernandez had lost her property, and so it would appear that she was entitled to the indemnity she sought to recover in the previous suit, case No. 5858.

But that indemnity was denied her by both the trial court and this court, principally for the reason of her negligence. Section 101 of Act  No. 496  provides that any person who without  negligence  on his part is wrongfully  deprived of any land or  any interest therein, by  the registration  of any other person as the owner of such land, may bring an action against the Insular Treasurer.   Fabie was registered as the owner, it is  true, but Gregoria Hernandez had not proven that he was enabled to obtain the inscription without negligence  on her part.

The lower  court states the facts of  the case in the following terms: "It is alleged  in the complaint and admitted in the stipulation that Velazquez, on January 18, 1904, succeeded in registering in his own name the part of the property belonging to the  deceased (Gregoria Hernandez) that is the subject matter of these proceedings by exhibiting for the purpose a forged document (Exhibit A).  On November 7,1904, Velazquez executed the document Exhibit C in favor of the defendant Fabie, who in turn  presented it  to the register of deeds and obtained the registration in his name. This document contains a clause of pacto de retro, valid for one year, which subsequently expired on November 7, 1905. The fraud committed  by Velazquez having been discovered in the meanwhile (that is, between November 7, 1904, and November  7,  1905), the deceased, on September 21, 1906, brought an action to have the said document annulled and on May 8, 1907, a notification of lis pendens was filed in the office of the register."

In the former proceedings the Attorney-General, in behalf of the Insular Treasurer,  demurred to the complaint filed for the purpose of recovering indemnity, alleging that the complaint itself showed that if  Gregoria Hernandez suffered any  loss or damage whatsoever, it was due to her negligence and to the deceit and faithlessness of her agent and attorney in fact Vedasto Velazquez to whom she  had confided her certificate of title, and that such loss and dam age did not result from having  brought the land under the provisions of the Land Registration  Act,  from  its being registered by any other person, from any omission, mistake, or  legal  act  unduly performed by the clerk or  register, deputy or substitute of the register,  in the discharge of their official duties.  For  this reason the lower court  sustained the demurrer, and  principally  for this same reason we affirmed the judgment of the lower tribunal.

Although case No. 5858, the record of which is  attached as evidence to these proceedings, is terminated, we  desire to say that, for the reasons which will be given later on in connection  with this case, the reason for sustaining the demurrer and for finally  denying permission to bring an action against the assurance fund, to wit, Gregoria Hernandez' negligence, is solidly founded on good authority and on facts, though these latter only  appear in the present case. because the former  proceedings went no farther than the demurrer and the plaintiff refused to  amend his complaint. The  plaintiff himself testified in these proceedings that Gregoria  Hernandez,  while  still  living,  commissioned Adriano  Buenaventura to attend to a certain matter connected  with her property  titles, and that this was  in 1904; that Gregoria Hernandez  said that Vedasto Velazquez had not delivered to her the documents pertaining to her land, and she made this statement to the plaintiff when her mental faculties were as yet unimpaired; and when the plaintiff was asked whether  Vedasto Velazquez used to go to Gregoria Hernandez'  house  very  often, he  replied that he  did, sometimes in the morning, at others  in the afternoon,  and again during the siesta hour (record, pp. 57-58).

Adriano Buenaventura corroborated the references to him made in the testimony just above mentioned, and stated that  Vedasto Velazquez was the person who handled Gregoria Hernandez' documents; that the land in question was the only parcel that she possessed and that it was used for building purposes and for raising forage grass;  that Vedasto Velazquez lived in  the  same  house with  Gregoria Hernandez, who had neither husband nor children and was 60 years old; that when the witness made a demand upon Vedasto Velazquez, the latter told him "that he  (Velazquez) would present the document on such and such a  day, and that he would deliver, if not the money, the document;" and that  the person  who intervened  was  Aniceto  Reyes  as administrator.

From this testimony of the plaintiff's own  witnesses it is to be seen  that Gregoria  Hernandez, even as  far back  as 1904, called upon Vedasto  Velazquez to deliver to her the certificate of title, and that Vedasto Velazquez  was already speaking of delivering money  to  Hernandez, and  if  not money, the  document; that Hernandez since 1904 interested herself in the matter of her documents and in the only piece of land she possessed, the rental of which, as  set forth in the plaintiff's first complaint,  was  P214 per month, or, as he stipulated with Fabie in this second complaint,  only P66 per month, but whether it was P214 or P66, Hernandez was too much in absolute  need of this income  for her  support  not to have been anxious about t  and about her land. Nevertheless, until September, 1906, she had not commenced any judicial proceedings in respect  to  the said land, the alleged fraudulent sale of which by  Vedasto Velazquez  in November,  1904, she tried to annul,  as it was annulled by the court on December 31, 1907.

James Edward  Hogg, the author of a work deemed by the trial judge to  be authoritative,  entitled  "Australian Torrens System,"  says on page 448 thereof: "In some cases damages are recoverable,  or are  only  recoverable under certain conditions.  1.  *   *  *  2.  *   *  *   3.   No damages  are recoverable  from the 'assurance fund' if the loss has been caused or contributed to by the owner's negligence.  4.  With some exceptions,  damages  are  not recoverable from  the 'assurance  fund for  loss occasioned by breaches of trust.' "

The Attorney-General did not err when  he  wrote in his brief in the preceding case: "To hold that the principal may recover damages from the assurance fund on account of such a fraudulent act as that charged to Vedasto Velazquez in this case  would be equivalent to throwing open the door to fraud, to the great advantage of the registered landowner and his agent and to the ruin and rapid disappearance of the assurance fund, and  the general funds of the Insular Treasury would become liable for the claims for indemnity in cases  where none such was due.  This course would in time wreck the  Insular  Treasury  and enrich designing scoundrels."   (Brief, p. 16.)

The appellant in  said case No. 5858 observed that abuse of confidence is the  same as robbery.

The agent's abuse of confidence is not comparable to a robbery.  If Vedasto  Velazquez  had forced  the  safe in which Gregoria Hernandez kept her  certificate of title, had removed the certificate therefrom  and  with  it  had performed all the other acts imputed  to  him, no negligence whatever could have been charged to Gregoria Hernandez, because  the robbery would  have been an  unforeseen  and fortuitous event; and  no one can be held  liable for  fortuitous happenings; but  abuse of  confidence is not a  fortuitous event, unforeseen and unavoidable, rather should it be foreseen  and avoided;  it  is a willful and deliberate act on the part  of the person  who commits  the abuse, perhaps because  of the  indolence and negligence  of  the  person wronged as where  a checkbook is received from the bank and  the owner  leaves it in  the  possession  of a  person because he reposes  confidence  in such person,  if the latter should draw a check against  the  bank  the owner  of the money cannot excuse  himself from liability,  because  he stands convicted  of negligence or failure  to  exercise  due care in safeguarding his documents of credit.

This negligence, in the beginning,  was the reason for the ruling on the  demurrer, upon  the sole  facts set up in the complaint in the preceding cause and recited in the first part of this decision.   In the present case, the same plaintiff has offered evidence of facts which show something more than negligence, to wit, the giving of an opportunity for the abuse of confidence charged against Vedasto Velazquez. From the testimony adduced  by his  witnesses, we agree with  the finding of the lower  court at the end of the judgment, to wit, that in the meanwhile,  or between 1904 and 1905, Gregoria Hernandez because aware of the fraud committed by Vedasto Velazquez, but  notwithstanding that fact she  allowed two years to pass before  bringing charges in court.  And it is not too much  to assert that the conveyance  made by Vedasto Velazquez  was for  a consideration agreed upon between himself and  Gregoria Hernandez; otherwise there is no explanation of why, when demand was made upon Vedasto Velazquez for the  documents, he should have replied that on such and such  a day  he would  deliver, if not the money, the document.  Of what money could he have  spoken that  should take the  place  of the document demanded of him?  The money  which both of them expected in exchange for  the document  in case the  land was sold.  Negligence is apparent, it being proven that Gregoria Hernandez had not lost sight of Vedasto Velazquez because he frequented her house in  the morning,  in the afternoon and at the siesta hour, as one witness testified, or because, according to another witness, he lived in the same house as she did.

And though  the negligence be  comparable to a  theft,  it is certain that, as prescribed in section 55 of Act No.  496, "in case of the loss or theft of an owner's duplicate  certificate, notice shall be sent by the owner or  by some one in his behalf to the register of deeds of the province in which the land lies as soon as the loss or  theft  is discovered." Up to this date neither Gregoria Hernandez nor the plaintiff has furnished the  required  notice to  the  register of deeds of this city.

Even considering the denial of the right of action against the assurance fund from the point of view of the registration of the other  owner in the registry, the defendant in the case at bar, the action for recovery of possession here brought is improper.  There is no reason for ordering the register of deeds to cancel the  registration A, C, and D, as requested in the second prayer of the complaint.

In the first place, the first inscription made in the name of Gregoria Hernandez would  not be revived by canceling these others.   At the commencement of his decision the trial judge  says that the purpose of these proceedings is to obtain the cancellation of a registration of title in order to have the register substitute  other documents in place of the one to be canceled and to recover possession of a piece of property, together with the  value of its use and occupation.  This court has not found that any petition had been made to have other documents  substituted in place of those to be canceled.  The second prayer of the complaint reads literally as follows: "That the  defendant register of deeds be ordered to cancel the entry  or registration of the documents A, C, and D, and to  cancel and annul the certificates Nos. 43 and 766."

Had  Gregoria Hernandez, in due season, complied with her duty to notify the register of deeds of  the  loss of her certificate  No. 121  and  had then petitioned the court to cancel the registration of the document A,  and had the court decreed the same and ordered the register of deeds to cancel all registrations subsequent to the original  one made in the name of Gregoria Hernandez,  he would have proceeded in entire conformity with law. "In all cases of registration procured by fraud," says the law, "the owner may pursue all his legal and equitable remedies against the parties  to  such fraud.   *   *   *   After the transcription of the  decree of  registration  on  the original application, any  subsequent registration under this  Act procured  by the presentation of a forged duplicate certificate,  or of a forged deed or other instrument, shall be null and void."

Any person other than Gregoria Hernandez would have exercised all her rights of action against the perpetrator of the fraud, Vedasto Velazquez; he would have brought proceedings for the abuse of confidence and for the recovery of the certificate of title No. 121; he would have prosecuted the author for the forgery of the instrument Exhibit A; in civil proceedings he would  have  sought to annul  the fraudulent  sale contained in  instrument Exhibit  A; he would have prayed for all the things above mentioned with regard to the cancellation of  the registration of the document A  and  the  reentry  of  the original  registration in her name,  petitions which she has not made even now in this  complaint,  filed  seven years  afterwards and which therefore could not be and certainly  were not granted by the court.  The lower court made only the following pronouncement: "It is decreed and ordered that the documents marked A, C, and D and  the  certificates numbered 43 and 766 be canceled and annulled, and that the register of deeds be instructed to record in his registry the said annulment and  registration."  Nothing is said in the judgment about substituting any documents in place of those canceled.  As far  as the public is concerned, the  original  registration disappeared  the  very moment  it was  substituted by  the registration  of the transfer  Exhibit A,  which up to  the present time  stands unchallenged in the registry.   It remained in  the registry only as an antecedent or key to the title of the land in question.

It was necessary to institute proceedings for the  abuse of confidence, first, in order to recover the certificate of title No.  121, as in a case of theft,  and in order  to be able to demand its reentry as a consequence  of the reentry of the original registration; second,  in order to preclude all idea of connivance between the owner and the thief and avert the suspicion that the loss or theft was feigned and agreed upon, especially as the owner and the thief were, prior to all of these events, principal and agent.

The interest which Gregoria  Hernandez had in clearing up the situation and  prosecuting the case was far greater than that of the public in exacting its vengeance.   It is not known how the plaintiff came to hold and still holds in his possession certificate No. 121.

Vedasto  Velazquez  has not  been held to account for the results  of  his wrongful act.  Its effects have  fallen on third persons: In the first proceedings  that  third person was the Insular  Treasurer; in these second proceedings. the third person  is the purchaser Ramon Fabie.

In the second  place, the lower court  has not set  forth in his judgment any positive ground for despoiling the defendant of his  property  for the purpose of returning it to the plaintiff as the representative of Gregoria Hernandez. He explicitly states that the defendant is the rightful owner of the land: the  law  protects Fabie because he purchased from the owner previously registered; but selecting a paragraph from the previous  decision of the Supreme Court in the previous case No.  5858, he puts it forward as a reason for deciding to the contrary, because our decision was a contrary one in that case and although it was only on a demurrer, yet all the  legal points thus decided are as binding as though they had been settled in a final judgment.

This  Supreme  Court made  no  finding whatever in that decision with  respect to the defendant Ramon Fabie, nor had it anything to decide, because  Fabie was not a party to the proceedings and the proceedings had not reached the stage where a decision could be rendered on the merits, inasmuch as  they had been brought before us merely on the demurrer to the complaint.

It is true that  this court stated in that decision that  if Gregoria Hernandez had not been  negligent (this part was suppressed by the trial judge in his citation) she could have cancelled inscription  A and Velazquez' certificate  of title No.  43 and,  consequently,  Fabie's inscription C,  not the letter's certificate of title which had not yet been issued and which, as shown in these second proceedings, was not issued until after the inscription of D was made.   It does not appear that there was any error on this point.

At first this question was considered in the light of the provisions of the Mortgage Law of Cuba and the Philippines and afterwards according to those of Act No. 496, in agreement with Act No. 190.

The Mortgage Law of Cuba and the Philippines was applied, because the appellant in that suit, the plaintiff herein, subjected to the provisions of that law the following question.  He said: "Now we come to a stage of the proceedings similar to that discussed in  the case of Merchant vs. Lafuente (5 Phil. Rep., 638),  a suit that was decided in accordance with the said Mortgage Law.  This is very clear and cannot be denied, for in accordance with the said Mortgage Law no error whatever was committed by this court in that  pronouncement.   Article 34 of the said law positively says: 'Notwithstanding the statements contained  in the preceding article, the instruments or contracts executed or covenanted by a person who, according to the registry, has a right thereto, shall not be invalidated by third persons, after they have once been recorded (as happens with respect  to  Fabie) although later the right of the  person executing them  (let us  call  him Velazquez) is annulled  or determined by virtue of a prior  deed not recorded, or for reasons which do not clearly  appear from the registry.'

"Only by virtue of a  recorded instrument  (like that  of Hernandez) may another later instrument (Fabie's)  also recorded, be invalidated to the prejudice of third persons, with the exceptions mentioned in article 389 (which has nothing to do with the case)."

In accordance with Act No. 496, the plaintiff, after having secured a judgment  annulling the spurious  sale  made  by Velazquez and ordering the  cancellation of the  inscription A, should have complied with the provision of section  81 of the said Act, that is to say, he should have requested the registration of the said judgment.  The clerk of the court would then have issued a certified copy thereof addressed to the register of the province where  the property is situated, and the latter would  have entered upon  the  proper certificate of title a memorandum to this effect, that is, upon Vedasto Velazquez' certificate of title No. 43,  whereon a memorandum had been made of the inscription G in Fabie's behalf, and he would have recorded  another memorandum in witness of the annulment of the fraudulent sale and the cancellation of the said spurious certificate of title in favor cf Velazquez.  Nothing of all this was done.

According to section 55 of the same Act, "after the transcription of the  decree of registration on the original application, any subsequent registration under this Act procured by the presentation of a forged duplicate certificate, or of a forged deed or other instrument, shall  be null and void."

Quaere: Is the inscription A, made in  the name of Vedasto Velazquez, null  and  void  on  account of its being fraudulent and is his certificate No.  43 null and void?  Is the inscription C made in the name of Fabie, which appears on  the back of  this certificate, also null and  void?  No, if it is shown  that  Fabie was an  innocent holder, because the same section of  the Act just  above  cited provides: "That in all cases of  registration procured by fraud the owner may  pursue all his legal  and  equitable  remedies against the parties to such fraud,  without prejudice to the rights of any innocent holder for value of a certificate of title."

The defect was that it was not alleged  in the first complaint (transcribed in  the first part  of this decision) as it was agreed  upon in these second proceedings, that Fabie was an innocent  holder of a certificate of title for value and, consequently, in  the demurrer no other fact could be understood as admitted than that affirmed and in the manner in which it was affirmed in the complaint.

Question: By  the mere allegation  made by the  plaintiff in his complaint and accepted by the defendant in  the demurrer, that Vedasto Velazquez, the notorious and convicted forger, had  sold the land to Ramon Fabie, can it be concluded that no one  other than Fabie should be considered to be the owner of the land as being an  innocent purchaser? Is not a  judicial finding as to the ownership  of the land necessary, in order to know who is  really vested with the ownership?   Is the affirmation of one of the parties sufficient to resolve so difficult, serious and important a problem?

This  court  understood  and understands, in  agreement with the Attorney-General  (p. 12 of his brief), that it does not devolve  upon the plaintiff and his attorney to decide whether Ramon Fabie is or is not an innocent purchaser for value and without knowledge of the alleged fraud or participation therein; and in the amended complaint there  is, no sufficient allegation of fact to show that Ramon Fabie is  an innocent purchaser  for value and that he had  no knowledge of the  fraud said to have been committed  by Vedasto Velazquez.

The simple allegation contained in the complaint that Fabie is a registered purchaser is not the same as that of his being a registered innocent purchaser.  The fact of the sale and the fact of the  registration are not sufficient to allow the understanding that it was  also admitted in the demurrer that he was an innocent purchaser.

There is no law or doctrine that authorizes such an interpretation.  The plaintiff must set forth in his complaint all  the  facts that necessarily conduce toward  the  result sought by his action.  The action was for the purpose of recovering from the assurance fund indemnity  for the damage suffered by the plaintiff in losing the ownership of his land as  a result of the registration obtained by an innocent holder for value (purchase).  It is a necessary requirement of the law that the registered property shall have been conveyed to an  innocent holder for value  who shall also have registered his acquisition.   Necessarily the complaint must show these facts as they are required by the law.  Will  it be understood as an indisputable fact, as res judicata, that Fabie was an innocent purchaser merely because the fact of the purchase and the fact of the registration were alleged in the complaint?

A person  who,  like Vedasto  Velazquez, knew how  to forge a deed of sale in his own behalf might very easily make it appear that the  property  was  sold  to  a third party without the  knowledge of the said third and afterwards have the purchase registered in the  name of the third party so as to enable the swindler to obtain from the assurance fund P29,420 for a piece of land worth only P5,000.  We do not say that this actually happened, but that it could  have happened and we leave the  persons who have taken  part in this affair their  good  name and reputation intact.  If in the opinion of the courts the possibility should exist, it is sufficient to  preclude interpretations  and presumptions.  It is not enough to  allege in the complaint the fact of the sale and the fact of the registration in order that it may be understood to be  admitted, in the demurrer that the purchaser was presumably innocent.  He might not have been  innocent.  If the proceedings had gone forward after the allowance of the demurrer it might perhaps  be a question as to whose duty it was to prove that he was or was not an innocent purchaser, but at all events it cannot but be  shown to the Insular  Treasurer that the thing is irremediable,  that the plaintiff's  ownership has been lost as to her, because an innocent third person  holds the land and his ownership has been finally and irrevocably entered in the registry; "in other words," says  the Attorney-General  in his brief  (p.  30),  "in order that the  court may  be informed by the allegations of the  complaint whether the said Ramon Fabie is an  innocent purchaser for value and has acquired the title to said property  without notice of fraud or forgery or any incumbrance, the court is entitled to require the plaintiff  to plead all the material facts  in connection with the  alleged transfer and registration of title and on the trial in proof of his allegations  to present in evidence a certified copy of the certificate of title or owner's  duplicate alleged  to have  been issued  to said Ramon  Fabie, together with the notations  or indorsements on the back  of said certificate of title  *   *   *  and the plaintiff must show  the court the reason,  if any there be, why the plaintiff did not in due time pursue his legal and equitable remedies against the parties to the alleged fraud."

Elsewhere in  his brief,  on page 28 thereof,  he also says the following: "It does not appear why  Gregoria Hernandez did not file suit for the annulment  of  the  fraudulent sale by Vedasto Velazquez  until September 25,  1906, nor does it appear why Gregoria Hernandez or her  agent did not file the lis pendens  with the register of deeds under section 79, Act No. 496, immediately upon filing her suit in September 26, 1906, instead  of  waiting until May,  1907.
There  is  no allegation  of  facts  giving any reason why Gregoria  Hernandez did not  take steps between January 18, 1904,  and November 7,  1904, the date of the alleged sale with  pacto de retro, to have said false  and  fraudulent deed and the certificate of  title issued thereunder declared null and void,  as the law says they are."

As Velazquez perpetrated a crime in order  to appear in the registry as the owner  of the land;  as  the fraudulent sale appearing in the deed Exhibit A was  declared to be null and void  in 1907 and, as the certificate of title No. 43  was canceled in consequence  of the  annulment of the registration A, naturally a doubt arose as to  whether Vedasto Velazquez, who was not the lawful owner of the land, could convey any right of  ownership  whatever to Ramon Fabie in the land acquired by the latter;  and a still greater doubt whether, after the cancellation of  Velazquez' certificate of title, on the back  of which was noted the sale under pacto de retro made to Fabie, the memorandum still continued  in effect.

The  natural  consequence of the judicial  declaration of the annulment of the sale of the land and of the certificate of title obtained by Velazquez was the filing of another suit to compel  Velazquez to  restore the  possession of the land to Gregoria Hernandez or  to her agent and for the cancellation of the inscription A and the certificate of title No.  43, Ramon  Fabie  being included  in the  proceedings, because of his being the  present possessor and because the cancellation of the certificate of  title containing a memorandum of his pacto de retro purchase  title  might affect him.  Gregoria  Hernandez or her  agent  in the complaint simply states the fact of Vedasto Velazquez conveying the land to Ramon Fabie by sale under pacto de retro.

Ramon Fabie can  demur to the complaint of Gregoria Hernandez or her agent,  alleging that the facts set forth therein do not constitute a right of action, because the plaintiff must presume that he is an innocent holder of a certificate of title for value, and, under section 55 of Act No. 496, he can not be  sued by reason of  such acquisition.  It is certain that in  reply  the plaintiff would allege that in his complaint he is  not obliged to presume anything,  that he has only to affirm actual  facts in support of his  right of action.   If no presumption may be allowed in the complaint with respect to the facts alleged therein, why must presumption  be  allowed  in   the  admissions  of  the  demurrer? Necessarily discussion would inevitably fall upon the principal fact in the case, to wit,  whether Ramon Fabie is an innocent holder  of a  certificate of  title for value and  the court would finally decide whether  he is or is not,  in order to determine the  propriety or impropriety of  the action for recovery of  possession.  The Insular  Treasurer would necessarily have to have  before him a final  judgment declaring  Fabie to be an innocent  holder for value  in order to consider the  property  lost to  one person by reason of the registration of another as the owner thereof.  Without this, there is  no court that  can  order that an owner be indemnified out of the "assurance fund."

In these proceedings it has only been shown, by virtue of a stipulation  of facts, that Ramon Fabie is an  innocent holder of a certificate of title for  value; consequently, in conformity with the  oft-cited section 55  of  Act No. 496, he is the absolute owner of the land mentioned in the complaint, and the action  for recovery of possession, improperly brought  against him, can  in no wise prosper.

It is improper to cancel the registrations  A, C, and D. The  last two,  C and D, the deeds  of sale under pacto de retro  and the final and absolute  deed of  sale executed by Vedasto  Velazquez, for the reason  that they are perfectly legal; and the registration A,  that of the, sale forged by Vedasto Velazquez in his favor, because, according to section 38 of Act No. 496, in .case there be an innocent purchaser for  value, the decree of  registration  fraudulently obtained shall not be opened, but  shall remain in full force and effect forever, subject  only to the right of  appeal. This is the registration to which Ramon Fabie found no objection whatsoever and upon which the  certificate No. 43 showing his repurchase was issued.

In turn the defendant asks  for the cancellation of the notice of lis pendens made on the certificate of title No. 766 issued as a result of the absolute sale.  This petition should be allowed, because it was shown by the plaintiff himself that such notice was  absolutely valueless.

It  is improper to  tax  the  costs against  Fabie  jointly with Velazquez, or in  any other manner, because Velazquez was not made a party defendant, and because Fabie is entirely  in the right.

The judgment appealed from  is reversed in so  far as it decrees the  cancellation of the documents A, C, and D and the certificates Nos. 43 and 766, directs the  register to  record the said cancellation and  orders  the possession of the land to be adjudicated to the plaintiff, with the costs against Fabie and Velazquez; and the judgment is affirmed in  so  far  as it  denies  the  prayer for damages and the payment of  rentals.   No  special finding as  to costs.  So ordered.

Johnson, J., concurs.

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^[1] De la Cruz vs. Velazquez, not reported.

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C O N C U R R I N G

TORRES, J.,

The undersigned concurs in  the foregoing decision.  He believes, however, that certified copies of the forged deed and certified copies of other documents and records  of proceedings in connection therewith, as may be  conducive to prove  the commission of the crime, should be forwarded to  the Attorney-General  in order that he  may take such action in the premises as the law requires.

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C O N C U R R I N G

CARSON, J.,

I concur.

I am satisfied that  an  examination of the second proviso in section 55 of Act No.  496 together with the context, having in mind the general purpose and object sought to be attained  by  the enactment of the statute  as a whole, leads to the conclusion that notwithstanding the fact that after the transcription of the decree of registration on the original application,  any subsequent registration which is procured by the presentation of a forged instrument is null and of no effect as between the  parties, it may nevertheless be the root  of a good title; so that the title of a  registered owner, who  has taken bona fide  for a valuable consideration, is not affected by  reason of his claiming through someone, the registration of whose right or interest was void because it had  been procured by the  presentation of forged instruments.  I am not  unaware  of the objections which can be urged to this construction of the statute, and especially the objections based on  alleged constitutional limitations  on the power of the local legislature to enact the proviso thus construed.   But similar  provisions  have  been adopted  by some of the  States of the United States (cf. par. 38 of the California Act) and until the Supreme Court of the United States shall  have held to the contrary, I  am not prepared to hold the  proviso  unconstitutional and  thus  emasculate the entire statute  and weaken the confidence of the public in the whole system.  I recognize the force  of the  argument against the constitutionality of the  proviso,  but I do not deem it of such conclusive force as to justify the court in declaring the statute  unconstitutional  in this regard.

I here insert some citations from the comment by William C. Niblack in his Analysis of the Torrens System of Conveying Land, on the effect upon that system of forgery (Chapter XI), because  they quite clearly develop  some  of the difficulties confronting us in the  disposition  of this  case, and the reasoning on which the court must rely in its rulings on the various contentions of the parties.

"In  some  acts it is provided that the production  of the owner's duplicate certificate, whenever any voluntary instrument is presented for registration, shall be conclusive authority from the registered owner to the registrar of titles to enter a new certificate or to make a memorial of registration  in accordance with such instrument, and that  a new certificate or memorial shall be binding upon the registered owner and upon all claiming under him, in favor of every purchaser for value and in good faith.  When a person is dealing with land registered under an act containing such a provision, it seems  to be unnecessary for him to require any other evidence of the existence and identity of the registered owner than the production of the  owner's  duplicate certificate, and it seems that he may rely  on the validity of a conveyance  from the person producing such certificate. If this is the right construction of this declaration, it validates the title of an innocent person for value, relying  on the production of the certificate, who  is  registered  as the immediate  result  of  a forgery committed  by some third person, and, in doing so, it goes one step beyond the general Torrens system, which requires that a  registration be made under the last real registered owner, in order to be valid. If the production of the last certificate of title makes the new certificate binding on the registered owner whose name has been forged, in favor of the new registered purchaser for value and  in good faith, then the latter keeps the title to the land, and the  former registered owner is remitted to his remedies  against the person causing  the  loss and against  the indemnity fund.  In Gibbs vs. Messer, supra, and Ex parte Davey, supra, the owners' duplicate  certificates were produced at the time of the  new registrations, and if the Victoria and New Zealand acts had declared that the production of such a certificate should make a memorial of registration  binding on the last registered owner,  in favor of a new registered purchaser for value in good faith, the decisions in those cases might have been entirely different.  The intention of the legislature must be very clear, before a court will hold that a person registered and claiming immediately under a forged  instrument  will take  an indefeasible title by virtue of his registration, and it may be very doubtful whether, in enacting the provisions just referred to, there was really any intent on the part of the legislature to declare  that the production  of the  last duplicate  certificate should validate  a new certificate,  even though  it was issued as the result of a forgery.  It is much more probable that the purpose of the provisions was to get away from the suggestion that the registrar was acting in a judicial capacity when he made a registration, and to have the validity of a transfer declared under the terms of a statute, rather than to have it inferred as a matter of law from the act and determination  of the registrar.   Nevertheless,  the provisions seem  to show a clear legislative  intent,  in any event and under  any circumstances,  even in case of forgery, to vest the title in the new registered owner, whenever the last duplicate certificate is produced at the time of registering the transfer.

"While the acts of Massachusetts,  Hawaii, and the  Philippine Islands  provide  that the production of the owner's duplicate certificate shall be conclusive authority to the registrar to  make a new registration, and that a new certificate shall be binding in favor of every purchaser for value and in  good faith, there is this qualification: 'After the transcription of  the decree of registration on the  original application, any  subsequent registration which is procured by the presentation of a  forged duplicate certificate, or of a forged  deed or other instrument, shall be null and void.' This qualification does  not say that any title founded on a forgery shall be null and void, but  it merely says that a registration procured by a forged certificate or other instrument shall be  void, and  we may infer that under such a statute the general rule applies, that a registration procured by forgery is void, but that such a registration may be the root of a good title, and that  a person registered in  good faith and for value under a prior registration procured by forgery, when the last certificate is produced, takes a  valid title.  Looked  at from this  point  of view, the  three acta just mentioned simply declare the general rule  where the statute is silent on the subject of forgery, and are in effect the same as  the  South Australia, California and Ontario statutes.

"*       *      *       *       *       *       *
"If a Torrens act makes a title founded on a forged instrument null and void, it renders certificates of title clearly defeasible,  and tends to take away the confidence of  the public in them; and if it makes a forged instrument capable of becoming  the  root  of  a new title, it upsets  the  long-cherished and popular tradition that a forged instrument is absolutely void for all purposes.   The English theory that a landed proprietor is to be protected as far as possible in his proprietary rights may be the basis  of the deep-seated and general feeling that a person ought not to lose his land, under any possible circumstances, by  means of  or as  the result of a forgery.   One who  does  not understand  the reasons of the general rule, as to the  effect of forgery under the Torrens  system, may regard it as  a compromise  between two different policies, but the  rule  arises logically from  certain principles of title registration.  A proposed purchaser of land  who becomes registered under an  imposter, and not under a real registered owner, gets no title to the land, loses the money he has paid on the proposed purchase, and has no recourse to the indemnity fund.  He has been guilty of negligence contributing to the loss, and his loss did not arise from operations under the act, because he dealt with a person who  was not registered  under  the act, at least as to the property in question.  Whatever may be the  practical  merits of  the  theory,  his  case does  not detract from the general proposition that one  registered under the last registered  owner of  an estate in  land gets the title to the registered  estate.   Where one in good faith for value is registered as a new  owner under a person who is registered  with a title, invalid because it was procured by forgery, one  of two innocent persons must  lose the land either the owner from  whom  the transfer was forged, or the  registered purchaser from  the  registered person, whose title was invalid while he was so registered.  In  the absence of any constitutional limitations on its powers,  it is competent for the legislature to say which one shall have the title, and in establishing a system of title  registration, it is proper for it to declare, in favor of the last certificate of title issued under governmental authority, that the new registered owner shall have it, and that the victim of the forgery shall be left to his actions against the wrongdoer and against the  indemnity fund.  The English act  alone declares  the other way that a  registration  obtained  by forgery is void for all purposes, that in case of forgery the register  shall be rectified,  and that the person  suffering loss by the rectification shall be entitled to the indemnity. "We have discussed the effect of the forgery of instruments respecting registered land as if the conditions of the law were the same in this and in foreign countries.  In foreign countries the  legislative  power  may  declare that the production of the last duplicate certificate  of title shall be conclusive authority to a registrar to make a new registration, and may declare also that a  new registration on a transfer from the last registered  owner shall  be valid and shall be conclusive evidence of title.  When it declares that a registration void for forgery shall become the root of a new title, in favor of a bona fide transferee for value  from the owner whose certificate was  issued as the  result of the forgery, there is the end of it.  But in this country  there are constitutional limitations on  the power of the legislatures to  pass laws, and no law of a state may deprive any person of property without due process of law.  There are many decisions  of courts  in  this country on  the  question as  to what is and what  is  not due process of law, and, as the system developes, the  Torrens statutes of this country are likely to swell the number of them very greatly.  Before it can be  said that  the Torrens  system is a secure method of conveyancing and dealing with land in this  country, it must be established firmly  that such statutory declarations are valid and effective here.  In  order to work the system, certificates must vest an indefeasible title, and it will not do to deal with  registered land under  a system where any registration, no matter how far  back, may be set aside as void.  In England landowners cried out vehemently against a statute which gave effect to a title founded on a  forgery. They were  more concerned  about holding the lands they had than about an improved  system under which they might take title to other lands, and they refused to put their lands under the Act of 1875.  In framing the Act of  1897 due reference was  paid  to this objection to the Torrens system, and a  registration founded on  a forgery  was declared to be absolutely void for all purposes, and a person suffering loss by the rectification of the register was given compensation from the indemnity fund.   This provision,  making all registrations under  a forgery absolutely void,  greatly impairs the symmetry  and effectiveness of the English system, for  it is  directly contrary to the cardinal principle that a bona fide  transferee for value from  the last registered  owner  holds  a certificate  which is conclusive evidence of title to registered land. If  such statutory declarations as we have mentioned are null and void  under our constitutional  limitations, the  American, Ontario  and English systems  are practically alike as to the result of a forgery, except that no recourse to the indemnity fund is given in any of the American  statutes to the person who may suffer loss from  the rectification of the register.  It may be that section 38 of  the California act is constitutional and valid, but for the  determination of this matter, and of many questions arising  under Torrens statutes, we must wait until the supreme court of the United States has rendered its decision."

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D I S S E N T I N G

MORELAND, .J.,


I agree with the trial  court in the disposition of this case and its judgment ought to be affirmed.

The parties submitted to the trial court a stipulation of facts  in which it was admitted by the defendant that the deed  from Gregoria Hernandez to Vedasto Velazquez was forged and that it had been set aside upon that ground in an  action  instituted by Gregoria Hernandez against Vedasto Velazquez.  The  trial court in its opinion says  in this connection;

"It is alleged  in the complaint and admitted by the stipulation that Velazquez  on  January 18, 1904,  procured  the registry  in his  own name of that portion of decedent's property which is here in question, presenting for that purpose a forged instrument (Exhibit A)."

The fact of forgery  and the cancellation of the forged deed in the action referred to are admitted by both parties on this appeal and nobody questions either of those facts in this Court, nor the fact that the registration was procured fraudulently by means of the forged deed.

I think the opinion of this court is in error  in discussing any other question than that stated  by the trial court to have been submitted to it  for decision when it said: "The question  is therefore clearly presented as to the right  under the Torrens land transfer system of a bona fide purchaser from a registered holder who became such through the fraudulent registration of a forged instrument."  That was absolutely the only question presented  to  or discussed or considered by the trial court. The defense of  negligence or laches  was not offered; nor was that of estoppel or election of remedy or kindred defense ever suggested. Nor have these  defenses been offered on this  appeal.  Not one of them is relied on or even mentioned in the brief of counsel,  and  no oral argument thereon has  been offered. As  I  view the case, therefore,  none  of  these  questions is before this court.   The sole question presented for our consideration, the plaintiff not having appealed, is whether or not the conveyance  to  Fabie by Velazquez, whose title was obtained by means  of a forged deed, deprived Gregoria Hernandez and  her successors in interest of the property, it being conceded that  Fabie was an innocent purchaser for value.

In my judgment, section 55 of Act No. 496 is conclusive of the case.   The second paragraph of that section provides that "the production of  the owner's duplicate certificate whenever any voluntary instrument  is presented for registration shall be conclusive authority from the registered owner to the clerk  or  register of deeds to enter a  new certificate or to make a  memorandum of registration in accordance with such instrument, and the new certificate or memorandum shall be  binding upon  the registered  owner and upon all persons claiming under him, in favor of every purchaser for value  and in good faith."  There  are, however,  two provisos found in this  same paragraph, one of which has a very material bearing on the provision  just quoted in favor of "every purchaser for value and in good faith."   The first proviso deals with  the relations between the owner and the  person  who commits a fraud against him in the original registration, and declares that the  provision of section 55 shall  not  interfere with his right of action against the wrongdoer based upon the fraud.  The second proviso deals with the relations between the owner and a purchaser in good faith  and for value and declares, in effect, that the rights of such purchaser as  conferred by the  section must give way to those of  an  owner  who has been deprived of his  property by a forged duplicate certificate  or by a  forged  deed or other instrument.  It provides:

"And  provided further, That after the transcription of the decree of registration  on the  original application, any subsequent registration under  this Act  procured by  the presentation of  a  forged  duplicate certificate, or a  forged deed  or other instrument, shall be null  and  void."

This language, as I  view it, is  so  clear and comprehensive that it leaves no room for doubt.  It is a direct statement to the effect  that the rights of an innocent  purchaser for value,  and of  every other  person for that matter, are subordinated and  must give way to the superior rights of an owner  whose property has  been taken away  from him by  means of a forged duplicate certificate of  title or  a forged  deed or other instrument.  Indeed,  the declaration of the statute is that a title so  obtained is absolutely valueless no  matter  into whose hands it falls it  is null and void.   Language cannot be stronger.

The contention  of counsel quoted in the opinion of the trial court to the  effect that "the proviso surely can only mean that such registration is null  and void as between the immediate parties," is baseless.   The right of an owner of property concerning which a deed has been forged and registry obtained  in the name of the forger to bring an action to set aside that deed  and to cancel the registry obtained under it  exists and existed  under the  law of the land quite regardless of the proviso under  discussion.  So long as the property remains in the forger's hands there can be  no question, there  never  was any question, of the right of the owner to obtain an annulment of the deed and a cancellation  of  the registry  obtained thereunder.  No provision of statute is required  to  confer  that  right.  It exists independent of  section 55 and is a  right of which the legislature could not deprive him if it tried.  The contention  is unsound for another reason.  The proviso under discussion refers to an innocent purchaser for  value and not to the forger.   It was introduced into  the section for the purpose of limiting the privileges just  granted by another portion of the  section to innocent  purchasers  for value. A person who forges a deed to another's property and obtains a registry in his own name under that forged instrument is not a purchaser for value and in good faith. Indeed,  he is not  a purchaser at all; and,  as a  necessary consequence, the proviso cannot  refer to him as it deals, as I have said, with an innocent purchaser for  value.  It touches  the relations between the owner and the innocent purchaser and has nothing  to do with the relations between the owner and the forger.

Such  being the case, the  decisions cited by the trial court in substantiation of his own personal opinion  as against that of  the court expressed in the  decision  in the case of Hernandez vs.  Velazquez  are not applicable, there being a statute in this  jurisdiction dealing expressly with  the subject  to which the decisions refer.

I cannot agree to the conclusions which  the concurring opinion  quotes and adopts from "Analysis  of the Torrens System of Conveying Lands" by Mr. Niblack, found in his .discussion of the last proviso of section 55 under consideration here.  I  do not desire in any manner to criticize the author or his very able work.   I refer to and discuss certain of his views because they are a type of that extreme school which, it seems to  me,  needlessly sacrifices everything to the interests of the innocent purchaser for value.  Speaking of the limitations of the proviso he says:

"This  qualification does not  say that  any title founded on  a forgery shall  be null  and void, but it  merely  says that a registration procured by a forged certificate or other instrument shall  be void, and we may infer that under such  a statute the general rule applies, that a  registration procured by forgery is void, but that such a registration  may be  the root of  a good  title, and  that  a person registered in  good  faith and  for  value under  a prior  registration procured by forgery, when the last certificate is  produced, takes a valid title.  Looked at from this point of view, the three  acts just  mentioned simply declare the general  rule where the statute is silent on the subject of forgery,  and are in effect the same  as the South  Australia, California, and Ontario Statutes."

In  the first place, if the first part  of this statement has any meaning, it makes a distinction between a  registration and  a  title  founded  on  a  registration.  This,  in   my judgment, is unwarranted.  The statute of the Philippine Islands  a  portion of  which, namely,  the  last proviso of section 55 (Act 496), makes no such distinction.   Indeed, by  express provision,  it  renders such  a  distinction  impossible, and in the strongest terms prohibits  a separation of the title from the registration.  Section 50 of the  Act (No. 496) provides:

"An owner of registered  land may convey, mortgage, lease,  charge, or otherwise deal with  the same as fully as if it had not been registered.   He may use forms of deeds, mortgages, leases, or other voluntary instruments like those now in use and sufficient in law for the purpose intended. But no deed, mortgage, lease, or other voluntary instrument, except a  will, purporting to  convey or affect  registered land, shall take effect as  a  conveyance or bind the land, but  shall operate only as a contract between  the parties and  as evidence of authority to the clerk or  register of deeds to make registration.   The act of registration shall be the operative act to convey and  affect  the land, and in all cases under this Act the registration shall be made in the office of register of deeds for the province or provinces or city where the land lies."

From this section it is clear that the registration is the title.  Until registration  is accomplished there  is nothing between the parties but "a contract" which operates simply as an "authority to the clerk or register of deeds to convey and  effect the land."  Under the Torrens system, here the owner cannot convey or give title.   He is deprived of all power to do so.   He can only give authority to the clerk or register  to  convey.   The  act of  the  clerk or  register in registering  the title  is "the operative act to convey and affect the land."  As a  necessary result, the registration is the title, is absolutely the only evidence of ownership, the only means "whereby the owner of lands  hath the just possession of his property."  Therefore, if the registration is null and void, there is no title. The fact that the registration is null and void prevents the occurrence of anything affecting the title; and, registration being the only act which can  create title, none is created and, therefore, none transferred.   The quoted statement would  be more in harmony with the provisions and purposes of  the statute if the word "title" were replaced  by the word  "registration" so that the statement would  read: This qualification does not say that any registration founded on a registration procured by forgery shall  be null and  void, but it merely says that a registration procured by a forged certificate or other instrument shall be  void, etc.  What is meant, as shown by subsequent lines, is that the  forged registration is sound on its face and  that  if the land is transferred to another and registered in his name that  registration is good; in other words, a valid registration can be founded on a void registration.  We may admit this to be true for the purposes of the discussion;  but if true it is so not because the void registration was the "root" of  a title but because, as to third persons,  it was the title itself;  not because it  was bad  but  could  be ripened or grown into something good, but  because it was always good, the  law not permitting it to be called bad, but conclusively presuming that, as to the world,  it was good from the beginning; not because it was  defective and could be completed and perfected by  the subsequent acts of somebody, but because there  never  was a moment when, as to all the outside world, the registration was  not  complete and perfect.   If  the innocent purchaser for value could  get anything by his registration based on the void  registration, he got all there was at once; and, if the  forged  registration could  give him  anything at  all, it could  give him all.  It could not give him the root of a title, it  gave him  the  title itself.  The statement that the forged registration, while absolutely void between  the owner and the  forger, was valid  as to  an innocent purchaser for value does not mean the same as the statement that a forged registration "may become the root of a good title."  It  distinguishes  between a title  and an inchoate title, between  a complete and an incomplete title, between a root of a good title and a good title, between a  title and a registration.   The statute permits of no such distinction. Moreover, if the title may detach itself from the registration  and  wander about independent  thereof, there is an end of the Torrens  system; for then registration will  not be the sole determinant of title, a necessity absolutely essential to the integrity of that system.   As to third persons, under the Torrens law there are no equitable titles.  Legal titles alone are those created and  sanctioned by that  law.  Nor are  there half-titles  or  quarter-titles or  colored titles or colors of title or roots of title, or things that can ripen into titles.  What that  law knows is simple  title a complete title; and under it is title or nothing. By express provision of that law title is registration and registration is title. It is clear, therefore, that,  when  the author speaks of a void registration being the "root of a good title," he must be held to say simply that a  void registration ia good as to purchasers for value in good faith which is the very proposition we set out to discuss and which is one clearly necessary to discuss in view of the proviso which has provoked all  these words.  The whole discussion of the  question whether a forged registration will protect an innocent purchaser  for value  consists, then, simply  in the  statement that a void registration protects an  innocent purchaser for value.   While this gets quick results it is not altogether satisfactory.

The necessary result of Mr. Niblack's  discussion  is that the proviso under consideration produces no  effect whatever except between the owner and the forger.

This  theory  seems to me  to be untenable.   In the first place, if it be correct the proviso does nothing but set down the law as it then existed; for it has always been the  law that a title obtained by forgery is absolutely void as between  the forger  and the owner.   If the proviso does no more than declare that principle,  it does nothing.   In the second  place,  the proviso taken in conjunction with  the enacting clause to which it relates refers, as a  mere matter of language, to an innocent purchaser for value; and the limitation contained in the proviso is precisely a limitation on the rights  of the innocent purchaser.   It is well recognized that a proviso is a clause engrafted  on  a preceding enactment for the purpose of restraining or modifying the enacting clause, or of excepting something  from its operation which otherwise would  have been within  it; and that its appropriate office is to restrain or modify  the enacting clause and not to enlarge it.  Clearly the  enacting clause here is "the new certificate  or memorandum shall be binding upon the registered owner and upon  all persons claiming under him, in favor of every purchaser for value  and in good faith."   Now, the  proviso, referring directly to this enacting  clause, declares that  "any  subsequent registration under this Act procured by the  presentation of a forged duplicate certificate,  or forged deed or other instrument, shall be  null and  void."  To what does the proviso refer?  Clearly to the declaration  in favor of an innocent purchaser for value and to him alone.   The proviso is meaningless unless that be so.   There is no person mentioned in the enacting clause between whom and the owner the proviso could  possibly  establish a relation except the innocent purchaser.  The innocent purchaser is alone named in the enacting clause and the effect of the forger's act on him is alone declared in the  proviso.  It requires no interpretation or construction  to reach this conclusion; and I  have gone into it thus far only by way of reply.   If the language of statutes were looked at  by judges  and authors with the same abstraction with which they look at ordinary articles in the newspapers there  would be  far  more application and far less interpretation  and construction of statutes.  If one should receive a letter  from his wife in which she says that yesterday  she sent all of the children to school except Virginia,  it would  take  no interpretation or construction of the letter, or involved argument, to  determine which child was not sent to school.  If a statute says that a registration  shall protect an innocent  purchaser  except when it is obtained by forgery it takes no consideration, or interpretation, or construction,  or fine distinctions, or involved argument,  to determine when a registration does not protect an innocent purchaser.  This is  precisely  what the proviso before  us does.  The statute states that a registration shall be conclusive upon the owner and shall protect an innocent purchaser for value except when that registration is procured  by forgery.  Does it require  any interpretation, or construction, or fine  distinction, or involved argument,  to determine when an innocent purchaser is not protected?

A word  now as  to the  relative merits of the Torrens system without the proviso and that system with the proviso, assuming  it to mean  what I contend it means.  The author says that a  proviso applied as I insist on applying the one before  us  "greatly impairs the symmetry and effectiveness of the English system, for it is directly contrary to the cardinal principle" which protects an innocent purchaser for value; and he complains against  the English landowners who  cried out vehemently against  a  statute which gave effect to a title founded  on forgery and he declaims against them especially because they refused to out their lands under the Torrens Act of 1875.   It  occurs to me to inquire why should not an owner strenuously object when, on  going to  bed at night, he knows that the  very house in which he  sleeps may be stolen from him before he arises in the morning.  And more; he knows  that if it is stolen he will never be able to recover it; that his loss will  be irrevocable.  He  knows that, under such  a system, he is placed  in a far worse position than is  he who has his watch  or his jewelry or his automobile or  his horse stolen.  These can  be retaken whenever found, no matter through how many innocent hands they may have passed; but his house, his land,  his home, is lost forever.  Under the benign  and ultra-civilized theories of the Torrens system extremest,  real estate may be stolen with  results incomparably more disastrous to the owner than  centuries  of civilization, of law and order, have permitted to follow the theft of personal property.  Why should the owner of real estate not object when he is dealt with in such an unheard of manner?  Why should he not protest when he is placed in a position  where the safest thing for him to do when he receives his title from the State is  to burn it up on the spot in order to insure himself against the loss of his lands by the theft  of his title?  I have heard much talk about the protection of the innocent purchaser; but I have heard none about the  protection of the innocent owner.  As  I view it he is the one entitled to first consideration; and any system which, in its  attempt to protect the innocent purchaser, goes to the  extreme of rendering insecure the title of the innocent owner is  essentially vicious, is irremediably bad.  And the ridiculous thing about it is that such a system  does not  in reality protect the innocent purchaser; for the very instant he himself becomes the owner his ownership is as  insecure as that of  the owner from whom his purchase assisted in filching it.  I contend that any system which render the beneficial and effective ownership of real estate less  secure in any given instance than that of  personal property is inherently wrong.

I have heard  much talk also of the "symmetry" of the Torrens system; of its "emasculation" and  the defeat of its "cardinal principle" and of the destruction of the "confidence of the public" in the system, by a failure to protect the innocent purchaser for value.  But  I have heard nothing about a system which, in the  very act of protecting an innocent purchaser, renders his title insecure; which operates advantageously only so long as the transfer of ownership is continuous; and which, when the ownership stops in any  given  person  long enough  to be stolen, puts the stamp  of its approval on  the theft  of  it.   I  have heard nothing  about "emasculating" the  title of  an  innocent owner; or  of defeating "the cardinal principle" of ownership.  Nor have I heard anything against a theory which sacrifices the  security of ownership  to the symmetry of a system.

But it may  be urged that the loss  of title by theft and forgery will be so infrequent that the cry of the owner of real estate  against the system of the extremists is not justified.  Very well; let  as admit this; but the answer  is a conclusive demonstration of the utter  weakness and futility of the contention and argument of the opposition; for if the less to the  owner will be negligible under that system then for the very same reason the loss to the innocent purchaser would be negligible under the other  system.  Why, then. change  the status  quo?  If  nothing is accomplished by changing a principle of law centuries old, which  protects owners from theft and robbery and all other crimes against their property, why change it?  If nothing is gained  why change the incidence of loss from where it has been placed for generations  not only  by settled  law, but also by unimpeachable principles of right and justice?   Certain  it is that if the loss of title under the Torrens system by forgery will be so infrequent as not to disturb the security of ownership, and I admit that it will be, how can it affect the "symmetry"  of the system, or "emasculate the entire statute," or "weaken the  confidence of the public  in  the whole system," or "greatly impair the symmetry and effectiveness of the  *  *   *  system?"  To precisely  the  extent  that. under such a system, transfers are made  secure, ownership is made insecure.  If 10,000 innocent purchasers of Torrens lands lose them  in a  single day  in the city of  Manila by reason of  the proviso under discussion, the Torrens system with that proviso is  ruined.  But, on the  other  hand,  if 10,000 owners of  Torrens lands  can, without the proviso, irrevocably  lose  those lands in  a single day in the city of Manila by forgery and theft, then also is the Torrens system without the proviso ruined; for no  system can  stand which exposes ownership in lands to such risks.  But, if we accept the probabilities and satisfy ourselves that not more than two cases of loss by forgery will occur in the Philippine Islands  in 20 years, then the Torrens system, as a system, will be wholly unaffected  whoever is required to lose. As a necessary result, this cry about "emasculating" the system and destroying its "symmetry" and the  loss of confidence in  it because the innocent purchaser instead of the  owner must lose, is as  devoid  of practical as it is of theoretical basis.  All I contend for is  that, when there is a loss,  it shall not be placed on the only one who, under settled law and in all  justice and equity, ought not to lose.

I have never heard that this  right to recover stolen personal property has made the business of the purchase and sale  of  personal property impossible or  the title thereto insecure; and the volume of the business of buying and selling personal property is many  times that which relates to real estate for any given  period.  I have  never heard that the right  of the owner to retake a stolen automobile has impeded the automobile  business anywhere.  It  is  clear that, as a practical matter,  the  requirement that the innocent purchaser  and not the owner of real estate lose in  cases of  forgery will not affect the practical  value of the system.

I do not discuss the assurance fund.  It has no bearing on the question involved.  If it had it would be far more just that the innocent purchaser rather than the innocent owner be required to go to it.  Besides, if an  owner be outraged by a forgery of titles to his lands, that fact furnishes no reason why the State should outrage him again by taking advantage of the forgery to deprive him of those lands and turn them over to another, offering him in place thereof the privilege of  beginning a lawsuit to  see if  he can get pay from the assurance fund for the lands of which the Government materially assisted  in robbing him.

Judgment reversed.