CHAPTER 1. PROVISIONS COMMON TO PLEDGE AND MORTGAGE (ARTS.

2085 2092
NCC)
I.

DURAN vs. IAC

G.R. No. L-64159 September 10, 1985

CIRCE S. DURAN and ANTERO S. GASPAR, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, ERLINDA B. MARCELO TIANGCO and RESTITUTO
TIANGCO,respondents.
RELOVA, J.:
The respondent then Court of Appeals rendered judgment, modifying the decision of the then Court of
First Instance of Rizal, which reads as follows:
(1) the complaint of the plaintiffs (herein petitioners) is hereby DISMISSED;
(2) the defendants-appellants spouses Erlinda B. Marcelo Tiangco and Restituto
Tiangco (herein private respondents) are hereby declared the lawful owners of the two
(2) parcels of land and all the improvements thereon including the 12-door apartment
thereon described in the complaint, in the counterclaim, in the cross-claim, and in the
Sheriff's Certificate of Sale;
(3) the plaintiffs-appellants and the defendant-appellee Fe S. Duran are hereby ordered
to deliver to (the Tiangcos) the two parcels of land and all the improvements thereon
including the 12-door apartment thereon, subject matter of the complaint,
counterclaim, and cross-claim, and in the Sheriff's Certificate of Sale;
(4) the plaintiffs-appellants and the defendant-appellee Fe S. Duran are hereby ordered
to pay solidarily to the Tiangcos the sum of Two Thousand Four Hundred Pesos (P2,400)
a month from May 16, 1972 until delivery of possession of the properties in question to
said Tiangco spouses, representing rentals collected by plaintiffs-appellants and
defendant- appellee Fe S. Duran;
(5) the plaintiffs-appellants and defendant-appellee Fe S. Duran are hereby ordered to
pay solidarily to the spouses Tiangco the sum of Twenty Thousand Pesos (P20,000) as
damages for attorney's fees, and the sum of Twenty-Five Thousand Pesos (P25,000) for
moral damages, and the costs. (pp. 149-150, Rollo)
The antecedent facts showed that petitioner Circe S. Duran owned two (2) parcels of land (Lots 5 and
6, Block A, Psd 32780) covered by Transfer Certificate of Title No. 1647 of the Register of Deeds of
Caloocan City which she had purchased from the Moja Estate. She left the Philippines in June 1954 and
returned in May 1966.
On May 13, 1963, a Deed of Sale of the two lots mentioned above was made in favor of Circe's mother,
Fe S. Duran who, on December 3, 1965, mortgaged the same property to private respondent Erlinda B.
Marcelo-Tiangco. When petitioner Circe S. Duran came to know about the mortgage made by her
mother, she wrote the Register of Deeds of Caloocan City informing the latter that she had not given
her mother any authority to sell or mortgage any of her properties in the Philippines. Failing to get an
answer from the registrar, she returned to the Philippines. Meanwhile, when her mother, Fe S. Duran,
failed to redeem the mortgage properties, foreclosure proceedings were initiated by private
respondent Erlinda B. Marcelo Tiangco and, ultimately, the sale by the sheriff and the issuance of
Certificate of Sale in favor of the latter.
Petitioner Circe S. Duran claims that the Deed of Sale in favor of her mother Fe S. Duran is a forgery,
saying that at the time of its execution in 1963 she was in the United States. On the other hand, the
adverse party alleges that the signatures of Circe S. Duran in the said Deed are genuine and,
consequently, the mortgage made by Fe S. Duran in favor of private respondent is valid.
With respect to the issue as to whether the signature of petitioner Circe S. Duran in the Deed of Sale is
a forgery or not, respondent appellate court held the same to be genuine because there is the
presumption of regularity in the case of a public document and "the fact that Circe has not been able
to satisfactorily prove that she was in the United States at the time the deed was executed in 1963.
Her return in 1966 does not prove she was not here also in 1963, and that she did not leave shortly
after 1963. She should have presented her old passport, not her new one. But even if the signatures
were a forgery, and the sale would be regarded as void, still it is Our opinion that the Deed of Mortgage
is VALID, with respect to the mortgagees, the defendants-appellants. While it is true that under Art.

2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the property
mortgaged, and while as between the daughter and the mother, it was the daughter who still owned
the lots, STILL insofar as innocent third persons are concerned the owner was already the mother (Fe
S. Duran) inasmuch as she had already become the registered owner (Transfer Certificates of Title Nos.
2418 and 2419). The mortgagee had the right to rely upon what appeared in the certificate of title, and
did not have to inquire further. If the rule were otherwise, the efficacy and conclusiveness of Torrens
Certificate of Titles would be futile and nugatory. Thus the rule is simple: the fraudulent and forged
document of sale may become the root of a valid title if the certificate has already been transferred
from the name of the true owner to the name indicated by the forger (See De la Cruz v. Fable, 35 Phil.
144; Blondeau et al. v. Nano et al., 61 Phil. 625; Fule et al. v. Legare et al., 7 SCRA 351; see also Sec.
55 of Act No. 496, the Land Registration Act). The fact that at the time of the foreclosure sale
proceedings (1970-72) the mortgagees may have already known of the plaintiffs' claim is immaterial.
What is important is that at the time the mortgage was executed, the mortgagees in good faith
actually believed Fe S. Duran to be the owner, as evidenced by the registration of the property in the
name of said Fe S. Duran (pp. 146-147, Rollo)."
In elevating the judgment of the respondent appellate court to Us for review, petitioners discussed
questions of law which, in effect and substance, raised only one issue and that is whether private
respondent Erlinda B. Marcelo-Tiangco was a buyer in good faith and for value.
Guided by previous decisions of this Court, good faith consists in the possessor's belief that the person
from whom he received the thing was the owner of the same and could convey his title (Arriola vs.
Gomez dela Serna, 14 Phil. 627). Good faith, while it is always to be presumed in the absence of proof
to the contrary, requires a well-founded belief that the person from whom title was received was
himself the owner of the land, with the right to convey it (Santiago vs. Cruz, 19 Phil. 148). There is
good faith where there is an honest intention to abstain from taking any unconscientious advantage
from another (Fule vs. Legare, 7 SCRA 351). Otherwise stated, good faith is the opposite of fraud and it
refers to the state of mind which is manifested by the acts of the individual concerned. In the case at
bar, private respondents, in good faith relied on the certificate of title in the name of Fe S. Duran and
as aptly stated by respondent appellate court "[e]ven on the supposition that the sale was void, the
general rule that the direct result of a previous illegal contract cannot be valid (on the theory that the
spring cannot rise higher than its source) cannot apply here for We are confronted with the
functionings of the Torrens System of Registration. The doctrine to follow is simple enough: a
fraudulent or forged document of sale may become the ROOT of a valid title if the certificate of title
has already been transferred from the name of the true owner to the name of the forger or the name
indicated by the forger." (p. 147, Rollo)
Thus, where innocent third persons relying on the correctness of the certificate of title issued, acquire
rights over the property, the court cannot disregard such rights and order the total cancellation of the
certificate for that would impair public confidence in the certificate of title; otherwise everyone dealing
with property registered under the torrens system would have to inquire in every instance as to
whether the title had been regularly or irregularly issued by the court. Indeed, this is contrary to the
evident purpose of the law. Every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind
the certificate to determine the condition of the property. Stated differently, an innocent purchaser for
value relying on a torrens title issued is protected. A mortgagee has the right to rely on what appears
in the certificate of title and, in the absence of anything to excite suspicion, he is under no obligation
to look beyond the certificate and investigate the title of the mortgagor appearing on the face of said
certificate.
Likewise, We take note of the finding and observation of respondent appellate court in that petitioners
were guilty of estoppel by laches "in not bringing the case to court within a reasonable period. Antero
Gaspar, husband of Circe, was in the Philippines in 1964 to construct the apartment on the disputed
lots. This was testified to by Circe herself (tsn., p. 41, Nov. 27, 1973). In the process of construction,
specifically in the matter of obtaining a building permit, he could have discovered that the deed of sale
sought to be set aside had been executed on May 13, 1963 (the building permit needed an application
by the apparent owner of the land, namely, Circe's mother, Fe S. Duran). And then again both plaintiffs
could have intervened in the foreclosure suit but they did not. They kept silent until almost the last
moment when they finally decided, shortly before the sheriff's sale, to file a third-party claim. Clearly,
the plaintiffs can be faulted for their estoppel by laches." (p. 148, Rollo)
IN VIEW OF THE FOREGOING, We find the petition without merit and hereby AFFIRMED in toto the
decision of respondent appellate court promulgated on August 12, 1981.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Gutierrez, Jr., De la Fuente and Patajo, JJ., concur.

II.

ARENAS vs. RAYMUNDO (19 PHIL.46)

G.R. No. L-5741

March 13, 1911

ESTANISLAUA ARENAS, ET AL., plaintiffs-appellees,

vs.
FAUSTO O. RAYMUNDO, defendant-appellant.
A.D. Gibbs, for appellant.
Gabriela La O, for appellees.
TORRES, J.:
This is an appeal field by the defendant from a judgment of conviction rendered by the Hon. Judge
Araullo.
On the date of August 31, 1908, the attorneys for the plaintiffs, Estanislaua Arenas and Julian La O,
brought suit against Fausto O. Raymundo, alleging, as a cause of action, that Estanislaua Arenas was
the owner and proprietor of the jewelry described below with the respective value thereof:

Two gold tamborin rosaries, without bow or reliquary at

P40 each

One lady's comb for fastening the hair, made of gold and
silver, adorned with pearls of ordinary size and many
small pearls, one of which is missing

One gold ring set with a diamond of ordinary size

One gold bracelet with five small diamonds and

eightbrillantitos de almendras

One pair of gold picaporte earrings with two diamonds of

P80

80

1,000

700

1,100

ordinary size and two small ones

The plaintiffs alleged that the said jewelry, during the last part of April or the beginning of May, 1908,
was delivered to Elena de Vega to sell on commission, and that the latter, in turn, delivered it to
Conception Perello, likewise to sell on commission, but that Perello, instead of fulfilling her trust,
pledged the jewelry in the defendant's pawnshop, situated at No. 33 Calle de Ilaya, Tondo, and
appropriated to her own use the money thereby obtained; that on July 30, 1908, Conception Perello
was prosecuted for estafa, convicted, and the judgment became final; that the said jewelry was then
under the control and in the possession of the defendant, as a result of the pledge by Perello, and that
the former refused to deliver it to the plaintiffs, the owners thereof, wherefore counsel for the plaintiffs
asked that judgment be rendered sentencing the defendant to make restitution of the said jewelry and
to pay the costs.
In the affidavit presented by the attorney for the plaintiffs dated September 2, 1908, after a statement
and description of the jewelry mentioned, it is set forth that the defendant was retaining it for the
reason given in the complaint, and that it was not sequestrated for the purpose of satisfying any tax or
fine or by reason of any attachment issued in compliance with any judgment rendered against the
plaintiffs' property.
In discharge of the writ of seizure issued for the said jewelry on the 2nd of September, 1908,
aforementioned, the sheriff of this city made the return that he had, on the same date, delivered one
copy of the bond and another of the said writ to the defendant personally and, on the petition and
designation of the attorney for the plaintiffs, proceeded to seize the jewelry described in the writ,
taking it out of the defendant's control, and held it in his possession during the five days prescribed by
law.
On the 15th of the same month and year, five days having elapsed without the defendant's having
given bond before the court, the sheriff made delivery of all the jewelry described in the said order to
the attorney for the plaintiff to the latter's entire satisfaction, who with the sheriff signed the return of
the writ.
After the demurrer to the complaint had been overruled the defendant answered, setting forth that he
denied each and all of the allegations thereof which were not specifically admitted, explained, or
qualified, and as a special defense alleged that the jewelry, the subject matter of the complaint was
pledged on his pawnshop by Conception Perello, the widow of Pazos, as security for a loan of P1,524,
with the knowledge, consent, and mediation of Gabriel La O, a son of the plaintiffs, as their agent, and
that, in consequence thereof, the said plaintiffs were estopped from disavowing the action of the said
Perello; the defendant therefore prayed that the complaint be dismissed and that the jewelry seized at
the instance of the plaintiffs, or the amount of the loan made thereon, together with the interest due,
be returned to the defendant, with the costs of the suit against the plaintiffs.
The case came up for hearing on March 17, 1909, and after the presentation of oral testimony by both
parties, the count, on June 23 of the same year, rendered judgment sentencing the defendant to
restore to the plaintiff spouses the jewelry described in the complaint, the right being reserved to the
defendant to institute his action against the proper party. The counsel for the defendant excepted to
this judgment, asked that the same be set aside, and a new trial granted. This motion was denied,
exceptions was taken by the appellant, and the proper bill of exceptions was duly approved certified
to, and forwarded to the clerk of this court.
This is an action for the replevin of certain jewelry delivered by its owner for sale on commission, and
pledged without his knowledge by Concepcion Perello in the pawnshop of the defendant, Fausto O.
Raymundo, who refuses to deliver the said jewelry unless first redeemed.
The said Concepcion Perello, who appropriated to herself the money derived from the pledging of the
jewels before mentioned, together with others, to the prejudice of their owner Estanislaua Arenas, was
prosecuted in the Court of First Instance of this City in cause No. 3955 and sentenced on July 30, 1908,
to the penalty of one year eight months and twenty-one days of prision correccional, to restore to the
offended party the jewelry specified in the complaint, or to pay the value thereof, amounting to
P8,660, or, in case of insolvency, to suffer the corresponding subsidiary imprisonment, and to pay the
costs. This judgment is attested by the certified copy attached under letter D to folio 26 of the record
of the proceedings in the case of the same plaintiff against Antonio Matute the pledgee of the other
jewelry also appropriated by the said Concepcion Perello which record forms a part of the evidence
in this cause.
Perello having pledged the jewelry in question to the defendant Raymundo, and not having redeemed
it by paying him the amount received, it follows that the convicted woman, now serving the sentence
imposed upon her, could not restore the jewelry as ordered in that judgment, which has become final
by the defendant's acquiescence.
Article 120 of the Penal Code prescribes:
The restitution of the thing itself must be made, if be in the possession of a third person, who
had acquired it in a legal manner, reserving, however, his action against the proper person.

Restitution shall be made, even though the thing may be in the possession of a third person,
who had acquired it in a legal manner, reserving, however, his action against the proper
person.
This provision is not applicable to a case in which the third person has acquired the thing in the
manner and with the requisites established by law to make it unrecoverable.
The provisions contained in the first two paragraphs of the preinserted article are based on the
uncontrovertible principle of justice that the party injured through a crime has, as against all others, a
preferential right to be indemnified, or to have restored to him the thing of which he was unduly
deprived by criminal means.
In view of the harmonious relation between the different codes in force in these Islands, it is natural
and logical that the aforementioned provision of the Penal Code, based on the rule established in
article 17 of the same, to wit, that every person criminally liable for a crime or misdemeanor is also
civilly liable, should be in agreement and accordance with the provisions of article 464 of the Civil Code
which prescribes:
The possession of personal property, acquired in good faith, is equivalent to a title thereto.
However, the person who has lost personal property or has been illegally deprived thereof may
recover it from whoever possesses it.
If the possessor of personal property, lost or stolen, has acquired it in good faith at a public
sale, the owner can not recover it without reimbursing the price paid therefor.
Neither can the owner of things pledged in pawnshops, established with the authorization of
the Government, recover them, whosoever may be the person who pledged them, without
previously refunding to the institution the amount of the pledge and the interest due.
With regard to things acquired on exchange, or at fairs or markets or from a merchant legally
established and usually employed in similar dealings, the provisions of the Code of Commerce
shall be observed.
On January 2, 1908, this court had occasion to decide, among other cases, two which were entirely
analogous to the present one. They were No. 3889, Varela vs. Matute, and No. 3890, Varela vs.
Finnick (9 Phil., 479, 482).
In the decisions in both cases it appears that Nicolasa Pascual received various jewels from Josefa
Varela to sell on commission and that, instead of fulfilling the trust or returning the jewels to their
owner, she pledged some of them in the pawnshop of Antonio Matute and others in that of H.J. Finnick
and appropriated to herself the amounts that she received, to the detriment of the owner of the
jewelry.
Tried estafa in cause No. 2429, the said Pascual was convicted and sentenced to the penalty of one
year and eleven months of prision correccional, to restore to Varela, the jewelry appropriated, or to pay
the value thereof, and, in case of insolvency, to subsidiary imprisonment; this judgment became final,
whereupon the defendant began to serve her sentence. The case just cited is identical to that of
Concepcion Perello.
Josefa Varela, in separate incidental proceedings, demanded the restitution or delivery of possession of
the said jewelry; the pledgees, the pawnbrokers, refused to comply with her demand, alleging, among
other reasons, that they were entitled to possession. The two cases were duly tried, and the Court of
First Instance pronounced judgment, supporting the plaintiff's claims in each. Both cases were
appealed by the defendants, Matute and Finnick, and this court affirmed the judgments on the same
grounds, with costs, and the decisions on appeal established the following legal doctrines:
1. Crimes against property; criminal and civil liability. Where, in a proceeding instituted by
reason of a crime committed against property, the criminal liability of the accused has been
declared, it follows that he shall also be held civilly liable therefor, because every person who
is criminally responsible on account of a crime or misdemeanor is also civilly liable.
2. Id.; Recovery of property unlawfully in possession. Whoever may have been deprived this
property in consequence of a crime is entitled to the recovery thereof, even if such property is
in the possession of a third party who acquired it by legal means other than those expressly
stated in article 464 of the Civil Code.
3. Personal property; title by possession. In order that the possession of personal property
may be considered as a title thereto it is indispensable that the same shall have been acquired
in good faith.
4. Id.; Ownership; prescription. The ownership of personal property prescribes in the manner
and within the time fixed by articles 1955 and 1962, in connection with article 464, of the Civil
Code.
In the cause prosecuted against Perello, as also in the present suit, it was not proven that Estanislaua
Arenas authorized the former to pawn the jewelry given to her by Arenas to sell on commission.

Because of the mere fact of Perello's having been convicted and sentenced for estafa, and for the very
reason that she is now serving her sentence must be complied with, that is, the jewelry
misappropriated must be restored to its owner, inasmuch as it exists and has not disappeared this
restitution must be made, although the jewelry is found in the pawnshop of Fausto O. Raymundo and
the latter had acquired it by legal means. Raymundo however retains his right to collect the amounts
delivered upon the pledge, by bringing action against the proper party. This finding is in accord with
the provisions of the above article 120 of the Penal Code and first paragraph of article 464 of the Civil
Code.
The aforementioned decision, No. 3890, Varela vs. Finnick, recites among other considerations, the
following:
The exception contained in paragraph 3 of said article is not applicable to the present case
because a pawnshop does not enjoy the privilege established by article 464 of the Civil Code.
The owner of the loan office of Finnick Brothers, notwithstanding the fact that he acted in good
faith, did not acquire the jewels at a public sale; it is not a question of public property,
securities, or other such effects, the transfer, sale, or disposal of which is subject to the
provisions of the Code of Commerce. Neither does a pawnshop enjoy the privilege granted to
a monte de piedad; therefore, Josefa Varela, who lost said jewels and was deprived of the same
in consequence of a crime, is entitled to the recovery thereof from the pawnshop of Finnick
Brothers, where they were pledged; the latter can not lawfully refuse to comply with the
provisions of article 120 of the Penal Code, as it is a question of jewels which has been
misappropriated by the commission of the crime of estafa, and the execution of the sentence
which orders the restitution of the jewels can not be avoided because of the good faith with
which the owner of the pawnshop acquired them, inasmuch as they were delivered to the
accused, who was not the owner nor authorized to dispose of the same.
Even supposing that the defendant Raymundo had acted in good faith in accepting the pledge of the
jewelry in litigation, even then he would not be entitled to retain it until the owner thereof reimburse
him for the amount loaned to the embezzler, since the said owner of the jewelry, the plaintiff, did not
make any contract with the pledgee, that would obligate him to pay the amount loaned to Perello, and
the trial record does not disclose any evidence, even circumstantial, that the plaintiff Arenas consented
to or had knowledge of the pledging of her jewelry in the pawnshop of the defendant.
For this reason, and because Conception Perello was not the legitimate owner of the jewelry which she
pledged to the defendant Raymundo, for a certain sum that she received from the latter as a loan, the
contract of pledge entered the jewelry so pawned can not serve as security for the payment of the sum
loaned, nor can the latter be collected out of the value of the said jewelry.
Article 1857 of the Civil Code prescribes as one of the essential requisites of the contracts of pledge
and of mortgage, that the thing pledged or mortgaged must belong to the person who pledges or
mortgages it. This essential requisite for the contract of pledge between Perello and the defendant
being absent as the former was not the owner of the jewelry given in pledge, the contract is as devoid
of value and force as if it had not been made, and as it was executed with marked violation of an
express provision of the law, it can not confer upon the defendant any rights in the pledged jewelry,
nor impose any obligation toward him on the part of the owner thereof, since the latter was deprived of
her possession by means of the illegal pledging of the said jewelry, a criminal act.
Between the supposed good faith of the defendant Raymundo and the undisputed good faith of the
plaintiff Arenas, the owner of the jewelry, neither law nor justice permit that the latter, after being the
victim of the embezzlement, should have to choose one of the two extremes of a dilemma, both of
which, without legal ground or reason, are injurious and prejudicial to her interest and rights, that is,
she must either lose her jewelry or pay a large sum received by the embezzler as a loan from the
defendant, when the plaintiff Arenas is not related to the latter by any legal or contractual bond out of
which legal obligations arise.
It is true that the plaintiffs' son, attorney Gabriel La O, intervened and gave his consent when the
Concepcion Perello pawned the jewelry in litigation with Fausto Raymundo for P1,524? In view of the
evidence offered by the trial record, the answer is, of course, in the negative.
The parents of the attorney Gabriel La O being surprised by the disagreeable news of the
disappearance of various jewels, amounting in value to more than P8,600, delivered to Elena Vega for
sale on commission and misappropriated by Conception Perello, who received them from Vega for the
same purpose, it is natural that the said attorney, acting in representation of his parents and as an
interested party, should have proceeded to ascertain the whereabouts of the embezzled jewelry an to
enter into negotiations with the pawnshop of Fausto O. Raymundo, in whose possession he had finally
learned were to be found a part of the embezzled jewels, as he had been informed by the said Perello
herself; and although, at first, at the commencement of his investigations, he met with opposition on
the part of the pledgee Raymundo, who objected to showing him the jewels that he desired to see in
order to ascertain whether they were those embezzled and belonging to his mother, the plaintiff
Arenas, thanks to the intervention of attorney Chicote and to the fact that they succeeded in obtaining
from the embezzler, among other papers, the pawn ticket issued by Raymundo's pawnshop, Exhibit E,
of the date of May 4, 1908, folio 19 of the record in the case against Matute, Gabriel La O succeeded in
getting the defendant to show him the jewelry described in the said ticket together with other jewels
that did not belong to La O's mother, that had been given the defendant by Ambrosia Capistrano,
Perello's agent, in pledge or security for a loan of P170.
Gabriel La O, continuing the search for other missing jewelry belonging to his mother, found that
Fausto O. Raymundo was in possession of it and had received it from the same embezzler as security

for a debt, although the defendant Raymundo would not exhibit it until he issued the pawn tickets
corresponding to such jewels; therefore, at Raymundo's request, Perello, by means of the document
Exhibit C, signed by herself and bearing date of June 10, 1908, folio 28 of the record, authorized her
son Ramon to get from the defendant, in her name, the pawn tickets of the said other jewelry, for
which such tickets had not yet been issued; Raymundo then wrote out the tickets Exhibits L, LL, and
M, all dated June 22, 1908, and found on folios 20, 21 and 22 of the record of the aforesaid
proceedings against Matute in the presence of the attorney Gabriel La O, who kept the said three
pawn tickets, after he had made sure that the jewels described therein and which Raymundo, taking
them out of his cabinet, exhibited to him at the time, were among those embezzled from his mother.
So that, when the three aforementioned pawn tickets, Exhibits L, LL, and M, from the pawnshop of the
defendant were made out, the latter already, and for some time previous, had in his possession as a
pledge the jewelry described in them, and the plaintiffs' son naturally desiring to recover his parent's
jewelry, was satisfied for the time being with keeping the three pawn tickets certifying that such
jewelry was pawned to the defendant.
Moreover, the record discloses no proof that the attorney Gabriel La O consented to or took any part in
the delivery of the jewelry in question to the defendant as a pledge, and both the said defendant,
Raymundo, and the embezzler Perello, averred in their respective testimony that the said attorney La
O had no knowledge of and took no part in the pledging of the jewelry, and Perello further stated that
she had received all the money loaned to her by the defendant Raymundo. (Folios 13 to 14, and 76 to
80 of the record in the case against Matute.)
The business of pawnshops, in exchange for the high and onerous interest which constitutes its
enormous profits, is always exposed to the contingency of receiving in pledge or security for the loans,
jewels and other articles that have been robbed, stolen, or embezzled from their legitimate owners;
and as the owner of the pawnshop accepts the same and asks for money on it, without assuring
himself whether such bearer is or is not the owner thereof, he can not, by such procedure, expect from
the law better and more preferential protection than the owner of the jewels or other articles, who was
deprived thereof by means of a crime and is entitled to be excused by the courts.
Antonio Matute, the owner of another pawnshop, being convinced that he was wrong, refrained from
appealing from the judgment wherein he was sentenced to return, without redemption, to the
plaintiffs, another jewel of great value which had been pledged to him by the same Perello. He
undoubtedly had in mind some of the previous decisions of this court, one of which was against
himself.
For the foregoing reasons, whereby the errors attributed to the judgment of the Court of First Instance
have been discussed and decided upon, and the said judgment being in harmony with the law, the
evidence and the merits of the case, it is proper, in our opinion, to affirm the same, as we hereby do,
with the costs against the appellant. So ordered.
Arellano, C.J., and Mapa, J., concur.
Carson, Moreland, and Trent, JJ., concur in the result.