
    Roca v. The Banco Territorial y Agrícola et al.
    Appeal from the District Court of Mayagiiez.
    No. 14.
    Decided April 22, 1904.
    Mortgage Law. — The cardinal principles upon which the mortgage legislation is based consist in.-the security of credits guaranteed by real estate and the publicity of the transactions of the Registry of Property, to the end that the true condition of the property may be ascertained; and the person who, in good faith, contracts with reference thereto, cannot be made to suffer any damage by reason of having relied upon the security furnished him by the real estate, constituting the subject-matter of the obligation.
    Id. — Ownership of Real Estate. — The person whose name appears in the Registry of Property as having a right to real estate is the owner thereof for the purposes of the Mortgage Law.
    Id. — Third Persons — Conjugal Property. — An estate having been recorded in favor of a surviving spouse, subsequent to the dissolution of the conjugal partnership, without stating in the entry that said estate is impressed with the character of community property, the person who contracts with reference thereto cannot be made to suffer the consequences of acts which do not clearly, manifestly, and explicitly appear from the Registry; and therefore such person, if he entered into contractual relations with the one who, according to the Registry, appeared to have the right to do so, occupies the position of a third person with respect to any other person asserting a right to the same property.
    Id. — Liquidation, of the Conjugal Partnership. — The circumstance that an estate originally belonged to a conjugal partnership is not sufficient in itself to consider it as community property, and therefore divisible by halves between the surviving spouse and the heirs of the deceased, unless it appears that a .liquidation of the common property and a division of the net surplus among the interested parties were made at the time of the dissolution of the partnership.
    Nullity or Cancellation oe Entries. — A declaration of nullity or. cancellation of -the entries made in the Registry is proper only in the cases specified in articles 30, 79 and 80 of the Mortgage Law.
    Action for Annulment or Determination -of Title — Error, Deceit or Falsity of Consideration. — An action for the annulment of an instrument subject to record is equivalent to an action for the determination of a title, which latter, in eases of error, deceit or falsity of the consideration, is barred in four years computed from the consummation of the contract.
    Id. — Third Persons. — Actions for the rescission or determination of a title cannot be maintained against third persons who have recorded their title in the Registry, except in the cases prescribed by article 37 of the Mortgage Law.
    Costs. — Costs should be imposed upon the party whose claims are wholly rejected.
    
      STATEMENT OE THE OASE.
    This is an action for the recovery of real estate and for the annulment of a mortgage’entry, prosecuted by Cristina Eoca de Yélez, as plaintiff, represented by her counsel, Eduardo Acuña, against the defendants, the “Banco Territorial y Agrícola,” represented by its counsel, Juan de (xuz-mán Benitez, and Lucia Gregory, who has made no appearance before this Supreme Court notwithstanding the fact that she was cited and summoned to appear, pending before us on an appeal in cassation taken by counsel for the plaintiff, Cristina Eoca de Yélez, from the judgment rendered by the said District Court of Mayagüez, on January 10, 1902, and which judgment reads as follows:
    “Judgment. — In the city of Mayagüez, January 10, 1902. An oral and public hearing was had in the declaratory action prosecuted before this court by the plaintiff, Cristina Roca, a resident of San German, of legal age, married to Miguel Yélez, and represented, first by Attorney Ignacio Hidalgo, and later by Attorney Alfredo Arnaldo, against the defendants the ‘Banco Territorial y Agrícola de Puerto Rico, ’ represented by its counsel, Juan de Guzman Benitez and Ramón Roura; and Lucia Gregory, a widow, of legal age, represented by Attorney Juan Quintero, for the cancellation of a mortgage entry.
    “The plaintiff prays for the cancel]ation of the mortgage entry made at folio 224 (reverse side) of volume 15 of the municipality of San Germán, and that she be left to the free disposition of her co-ownership in the aforesaid tract of land consisting of 40/100 parts thereof, and that defendants be adjudged to pay the costs. The plaintiff bases her complaint on the fact that Lucia Gregory, together with her husband, Tomás Roca, by deed executed in San Germán, on November 24, 1860, before José Demetrio Quinones y Ramos, then an escribano (notary public), acquired for a valuable consideration the rural estate called ‘La Lucia,’ situated in barrio ‘Sabana Eneas’ (now known as ‘Maresua’), within the municipal district of San Germán, composed of one hundred and ten cnerdas of land, more or less, planted to coffee, plantains, cacao, different varieties of fruit trees, woodland and pasture, there being situated thereon a single-story frame dwelling-house, Avith a flat tile roof and a kitchen built of the same material. The said deed of purchase was recorded in the Registry of Property. On the same date, November 24, 1860, the spouses, Roca and Gregory, executed before the same escribano (notary public) a joint will, in the fifth clause whereof they designated their daughter Cristina, the plaintiff herein, as their sole and universal heir to their remaining properties, their rights and actions, and stating in the sixth clause thereof that their property consisted of the aforementioned estate. Tomás Roca died leaving the said will on December 7, 1886. On February 26, 1886, Lucia Gregory, being then a widow, contracted with the ‘Banco Territorial y Agrícola’ for a loan secured by the mortgage of the aforesaid estate, the same being erroneously stated therein to be the exclusive property of Mrs. Gregory, notwithstanding the fact that it appears from the title of ownership that she acquired it jointly with her husband, Tomás Roca, and in spite of that fact the said mortgage was entered in the Registry of Property. The plaintiff for a number of years occupied and enjoyed the material possession of her share of the co-o,wnership of the estate, but is at the present time deprived of said possession, for which reason she claims the material loss which she has thereby suffered, and demands that her title be recorded, that is to say, the title of inheritance, free from incumbrance, to which she is entitled.
    ‘ ‘ The 'plaintiff attached to the complaint the deed of purchase of the estate, a copy of the will executed by Tomás Roca and Lucía Gregory, and a certified copy of the record of the death of Tomás Roca.
    “Notice of the complaint having been served upon the defendants, the ‘Banco Territorial y Agricola’ answered the same praying that the said complaint be dismissed and that it be released therefrom on the ground that the cancellation of the mortgage prayed for cannot be decreed unless the contract is null; and in case the court should not sustain this view, that it dismiss the complaint and release the defendants therefrom on the ground that the plaintiff has no cause of action against the ‘Banco Territorial y Agrícola,’ first, for the reason that it is the third party, and, second, because she has presented no title recorded in the Registry of Property, and because the time within which an action for annulment can be brought has expired, and that the costs be taxed against the said plaintiff. Defendant alleges in support of its answer that Lucia Gregory, as the absolute owner of the property in and the title to the estate, and by a special power of attorney conferred upon Manuel F. Rossy on February 6, 1896, before Notary José R. Nazario ele Figueroa, plaintiff acknowledged by a deed executed on tbe 26th of the same month before Notary Mauricio Guerra that she owed the ‘Banco Territorial y Agrícola’ the sum of five thousand dollars, which she received as a loan guaranteed by mortgage upon the said property, the said incumbrance being recorded in the Registry of Property; that Cristina Roca, who claims to be the owner of an interest in the said estate, was well aware of that transaction, since even her husband, Miguel Vélez, took part in the same, she not having made any protest against incumbering the estate, and without having taken the trouble of having her alleged rights recorded in the Registry of Property, notwithstanding the fact that many years have passed since the death of her father, Tomás Roca, and that she had reached her majority; that now that the ‘Banco Territorial y Agrícola’ has been obliged to foreclose the mortgage upon the estate, Cristina Roca makes her claim against acts consummated by her mother; that Cristina has been and is living with her mother, and co-operated with her husband in assisting her mother Gregory to secure a loan from the bank; that she enjoyed the benefits of the loan and never claimed her rights as owner, and did not pay the taxes on the estate, nor did she advise the bank in due time of her right, concealing the same while she enjoyed the benefits of the contract whose annulment she demands now that the bank attempts to collect what is due it; that according to the Registry of Property and the declaration of Lucia Gregory, upon receiving the loan from the bank she was the absolute owner of the mortgaged estate, the rights of Cristina Roca not being made clearly and explicitly to appear, she having permitted more than four years to elapse while aware of the existence of the mortgage held by the bank, and without making any claim against the same; and in spite of the fact that Tomás Roca died on December 7, 1886, Cristina has never taken steps to secure a determination of her alleged rights and the admission thereof to record in the Registry of Property, notwithstanding the fact that she knew perfectly well that her mother Lucia Gregory, with whom she was living, mortgaged the estate to the bank to secure the amount of the loan which was delivered to her by the said bank. The defendant Lucia Gregory admitted the facts alleged in the complaint.
    “The parties having been summoned to appear and propose their evidence, only the plaintiff and the ‘Banco Territorial y Agrícola’ appeared, making such allegations in writing as they deemed proper, and the evidence was introduced and admitted.
    
      “It appears from tbe evidence of the plaintiff that an authentic copy of the will executed by Tomás Roca and Lucía Gregory on November 24, 1860, was introduced.
    “It appears from the evidence of the ‘Banco Territorial y Agrí-cola’ that the said bank produced a communication signed by Miguel Vélez, addressed to the Registry of Property of San Germán, in regard to charges upon or freedom from incumbrance of the estate ‘Lucia,’ recorded at folio 123 of volume 15 of San Germán, and the certificate issued by the registrar which follows; several receipts for taxes upon real estate in favor of Lucia Gregory issued on the 12th of June last. The bank also introduced a certificate embodying the deed constituting the loan executed by Lucia Gregory in favor of the bank, which deed appears in the record of the executory action prosecuted by the latter against the former before this court to recover the amount of said loan; a certificate of the registrar of property of San Ger-mán containing the inscription of the estate called ‘Lucia’ in the name of Salvador Gregory, who acquired the same by purchase; the inscription of the mortgage executed upon the said estate by Lucia Gregory in favor of the ‘Banco Territorial y Agrícola,’ the registrar stating that no inscription whatever of that estate has either been made in favor of Cristina Roca, or applied for by her as the heir of Tomás Roca, and that no document referring thereto had been presented, and that there only appears the cautionary notice of this action. The bank also introduced a certificate of the office of the mayor of San Germán, showing that on the assessment rolls of agricultural property for the year 1895-96 to the year 1900-01, Lucia Gregory de Roca appears as a taxpayer to the Insular Treasury and to the municipality upon a rural estate situated in barrio ‘Maresua,’ consisting of one hundred cuerdas, it not appearing that Cristina Roca de Vélez paid any taxes thereon during the said period; and finally, at the oral trial, Cristina Roca testified that she had no knowledge of the mortgage, it being fifteen years since her father died, she having filed this action last year; and her husband, Miguel Vélez, ácimowledged that the signature and rubric affixed to the writing addressed to the registrar of property, and appearing on folio 56, was his and that it was made in his own handwriting.
    “On the date and hour fixed therefore the vote was taken upon the judgment herein in open court.
    “All the legal provisions have been complied with in the conduct of this proceeding.
    
      “Presiding Judge Arturo Aponte Rodríguez prepared the judgment in this case, it being impossible for Judge Erwin to do so.
    ‘ ‘ The question at issue in this ease is whether it is proper to order the cancellation of a mortgage executed in favor of the ‘Banco Territorial y Agrícola de Puerto Rico ’ by Lucia Gregory y Lugo, after she had become a widow, on February 26, 1896, before Mauricio Guerra y Mondragón, of San Juan, when she acquired the estate incumbered by the mortgage during the existence of her married life with Tomás Roca by purchase from her legitimate father, Salvador Gregory, and therefore should be considered' as community property and consequently that in the absence of a liquidation of the assets of the husband, and without the authorization of all the parties who might legally succeed Roca, the contract could not be legally executed and is null and void as to the 40/100 parts of the value of the estate which belongs to Cristina Roca.
    “The cardinal principles upon which the Mortgage Law for Porto Rico is based consist in the security of credits guaranteed by real estate and the publicity of the transactions of the Registry, to the end that a person who may have a lawful interest in ascertaining the condition of property, and the person entering into contracts and having examined the same may not suffer loss or injury when, in good faith his only object in entering into the obligation was the stability of the security offered by the real estate upon which the transaction was based.
    “For the purposes of the Mortgage Law, the owner of real estate is the person in whose name the same appears in the Registry, and it is clear that if the estate mortgaged to the ‘Banco Territorial y Agrí-cola de Puerto Rico’ by Lucia Gregory y Lugo is recorded in its name in the Registry of Property since March 21, 1893, approximately seven years after the death of her husband, if no allusion is made in the said entry to the nature of the community property of the right recorded, and if on the other hand the title of acquisition, which is the origin of the ownership, is presented with no incumbrance other than a prior mortgage which appeared in the Registry, the mortgagee, which in this case is the ‘Banco Territorial y Agrícola de Puerto Rico,’ cannot be made to suffer the consequences of facts which did not clearly, explicitly, and manifestly appear in the Registry, according to the provisions of article 34 of the Mortgage Law.
    “It cannot be alleged by the plaintiff that the ‘Banco Territorial y Agrícola de Puerto Rico’ is not a third person, on the ground that wbat is sought, is the annulment or cancellation of a contract to which the former is a party, because that objection may be answered by saying that the bank is a third person with respect to Tomás Roca and his daughter, Cristina, who succeeded the said Tomás Roca as his heir, and further that the said ‘Banco Territorial y Agrícola de Puerto Rico’ contracted with the person to whom, according to the Registry of Property, the ownership of the estate belonged and who could mortgage the same, this latter requisite being one of the essential conditions of every obligation according to article 1857 of the Civil Code and article 138 of the Mortgage Law.
    “Based upon these principles, which have been upheld by the Supreme Court of Justice in an appeal in cassation, decided May 10, 1879, Cristina Roca cannot call herself the owner of a 40/100 interest in the mortgaged estate, for the reason that she has not proved the right under which she makes her demand by the presentation of a title duly recorded in her name in the Registry of Property.
    “Even supposing that the plaintiff did possess some rights, she has not shown that the inscription is wanting in the condition prescribed by articles 30 of the Mortgage Law, or that any of the causes specified in articles 79 and 80 of the said legal text exists.
    “An application for the annulment of an instrument subject to record in the Registry of Property is equivalent to an action for the determination of title, and it is well known that actions of this character, according to article 1301 of the Civil Code, are barred after four years counted in cases of error, deceit or falsity of the consideration from the date of the execution of the contract, and in the present case said period has more than expired.
    “Actions for rescission and actions for the determination of title will not lie against a third person who has recorded his title in the Registry of Property, except in the cases mentioned in article 37 of the Mortgage Law, and the one alleged by Cristina Roca does not come within those mentioned in the aforesaid article, since no cause whatever appears from the Registry which would prevent the inscription of the mortgage involved in this ease.
    “Notwithstanding the foregoing facts, if any right of action exists in favor of Cristina Roca, it is either against Lucia Gregory, or possibly, against the registrar of property, for the title recorded was improperly classified, as she may think best, but not against the party who entered into the contract after consulting the registrar in regard to the status of the real estate.
    
      ‘ ‘ Costs should be taxed against the party whose demands have been in all things denied.
    “In view of the legal provisions cited, and articles 18, 27, 36, 105 and 139 of the Mortgage Law, and article 63 of General Order 118, series of 1899, we adjudge that we should dismiss and do dismiss this complaint, releasing the ‘Banco Territorial y Agrícola’ therefrom, with costs against the plaintiff, reserving to her her rights in order that she may exercise the same against whomsoever she may deem proper.
    “Thus by this our judgment, finally adjudging, do we pronounce, command and sign.’’
    From this judgment counsel for Cristina Eoca took an appeal in cassation for error of law, which was allowed, and the record having been sent to this Supreme Court, and the parties having been summoned and cited, and they having entered their appearance here, with,the exception of the defendant, Lucia Gregory, and the appeal having been perfected by the appellant, the procedure was. followed herein which is provided for by the act of the Legislative Assembly of this Island of March 12, 1903, converting this Supreme Court into a court of appeals, and the parties having been cited for judgment and a day having been set. for a hearing, the same took place in due time, counsel for all the parties being present.
    
      Mr. Acuña (Eduardo), for appellant.
    
      Mr. Guzman Benitez (Juan), for respondent.
    The other party did not appear.
   Mb. Justice- MacLeaby,

after stating the foregoing facts, delivered the opinion of the court.

The findings of fact and conclusions of law of the judgment appealed from are accepted.

Furthermore, although it may be considered that the title of purchase to the rural estate involved in this case originally resided in the conjugal partnership entered into by the spouses, Tomás Epca and Lucia Gregory, this circumstance is not sufficient in itself for holding that the estate in question is community property, and therefore divisible by halves between the surviving spouse and the heirs of the deceased, inasmuch as it does not appear that at the time of the dissolution of the conjugal' partnership by the death of the husband that a liquidation of the common property had been made and that a division of the net surplus among the interested parties had been effected, and that the share claimed in the said estate had been awarded to the plaintiff as heir of her deceased father, and that she therefore failed to establish the title of ownership necessary to maintain the action set forth in the complaint.

Having examined the legal provisions cited in said judgment, we adjudge that we ought to affirm and do affirm the judgment appealed from, with costs against the appellant.

Chief Justice Quiñones and Justices Hernández and Fi-gueras concurred.

Mr. Justice Sulzbaeher did not sit at the hearing of this case.  