Facts:

The case revolves around Francisco Abelarde and Adela Araullo, the plaintiffs-appellants, and Maria Lopez, the defendant-appellee. The events leading to this legal dispute began with a sale of several sugar haciendas on October 15, 1936, as documented in a deed of conveyance (Exhibit 12). This deed confirmed that the appellants sold Maria Lopez various plantations (known as Canaan Nos. 1 and 2, Milagros, and Patrocinio) associated with the North Negros Sugar Co. After a court decision favored a creditor, Sing Sui Eng, who had sued the appellants for a significant amount due to foreclosure, the appellants conveyed the haciendas to Maria Lopez as a form of “dacion en pago,” meaning payment through the conveyance of property, effectively settling their debt.

The deed stipulated that the appellants acknowledged their indebtedness to Maria Lopez and agreed to withdraw their appeal of the foreclosure case. Moreover, it included a clause wherein the appellants waived any rights related

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Facts:

Background of the Case

• The case arises from a sale transaction involving certain sugar haciendas owned by Francisco Abelarde and Adela Araullo (plaintiffs-appellants) and sold to Maria Lopez (defendant-appellee).
• The central controversy focuses on whether the sale included a sugar quota of 34,227.34 piculs as provided under Act No. 4166.

Transaction Details and Deed of Conveyance

• On October 15, 1936, a deed of conveyance (Exhibit 12) was executed, wherein the husband and wife sold the haciendas, specifically identified as Canaan Nos. 1 and 2, and plantations Nos. 28-3, 28-4, 28-5, and 28-6, all within the North Negros Sugar Co. Central area.
• The deed stated that the transfer was in satisfaction of a mortgage judgment from Civil Case No. 6050 in the Court of First Instance of Negros Occidental, which had ordered Abelarde and Araullo to pay a substantial sum along with interest, costs, and attorney’s fees.
• It was acknowledged in the deed that the conveyance was executed as a “dacion en pago” (payment in kind) of the said judgment, with Maria Lopez having acquired all rights previously assigned by Sing Sui Eng, a mortgage creditor.

Inclusion of the Sugar Quota

• The deed contained an express stipulation where the parties waived "cualquier derecho, titulo, interes, participacion, accion, renta" in relation to the haciendas, which expressly signified that any interest in the sugar quota was abandoned by the sellers.
• The absence of any specific clause excluding the sugar quota indicated an understanding that the quota was an inherent part of the property, in line with Section 1, Act 4166, which treats the sugar allotment as an "improvement attaching to the land."

Subsequent Events and Legal Proceedings

• Plaintiffs-appellants later initiated a suit against Maria Lopez and the North Negros Sugar Co. Inc. for an amount equivalent to 5% of the sugar quota’s value to recover payment for its use, but the trial court ultimately absolved Maria Lopez.
• Appellants contended that the registration requirements under Executive Order No. 873 and the non-execution of formal transfer forms by them were grounds to exclude the sugar quota from the conveyance.
• In February 1939, during an attempt by appellee’s attorney to secure the execution of the mandatory forms, one appellant signed provisionally while the other objected, leading to an eventual refusal to comply with the formalities.

Issue:

Inclusion of the Sugar Quota in the Conveyance

• Whether the sugar quota of 34,227.34 piculs, as provided under Act No. 4166, was intentionally included in the sale of the haciendas even if not expressly itemized separately.
• The significance of the waiver clause in the deed regarding “cualquier derecho, titulo, interes, participacion, accion, renta” in connection with the land and its attached sugar allotment.

Compliance with Registration and Formalities

• Whether the noncompliance with Executive Order No. 873—specifically, the failure to register the instrument and execute the required forms for the assignment of the sugar quota—renders the transfer ineffective.
• The legal implications of the appellants refusing to sign the forms required by law after having already consummated the conveyance.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)