PNB VS CA & CHU KIM KIT

GR NO. L-43972
JULY 24, 1990
FACTS: It was alleged that Chu Kim Kit, son of Boyano, is the owner of a commercial lot in
Tacloban City as it was registered under his name and under TCT. In 1945, CKK as he was
prevented from returning to the PH, requested CTU to take care of his property. Boyano
executed an affidavit stating that her son, CKK died and adjudicated to herself the subject
property and subsequently issued a TCT. Thereafter, she mortgaged the property to PNB to
secure a loan and about to dispose of the property. In 1968, Chu Kim Kit, represented by Chu
Tong U, filed in CFI of Leyte an action for cancellation of Boyano's CT. It was admitted by
Boyano that CKK was still aligned when she signed the affidafit but was not able to understand
the contents as said insturment was written in English. Moreover, she claimed that CTU is not
the real party in interest as he was only CKK's uncle. As mortgagees, Perez and PNB, were
allowed by TC to interevene. TC and favored CKK which declared null and void TCT of
Boyano, reinstated TCT in its original form and substance, declared null and void the mortgage
of property in favor of PNB and Perez but considered valid evidence of Boyano's debts to
mortgagees. CA affirmed the decision and declared CKK as the real party in interest. It also
recommended a remedy for the intervenors in good faith as they can file an action for recovery
of the loans. PNB seeks for the review of CA's deciison as it does not conform with evidence and
contrary to law and jurisprudence.
ISSUE: WON PNB IS A MORTGAGEE IN GOOD FAITH AND VALUE
HELD: Yes. CKK entrusted his TCT to his mother and allowed her to administer and enjoy the
property and fruits while he was away. This enabled the latter to cancel TCT and obtain such in
her name. She made the impression that she was the owner of property. Petitioner may be
partially blamed for the commission of fraud. PNB is a mortgagee in good faith and for value.
At the time the mortgage was constituted on the property, it was covered by TCT in the name of
Boyano. The title carried no annotation, defect or flaw that would have aroused suspicion as to
its authenticity. "The certificate of title was in the name of the mortgagor when the land was
mortgaged to the PNB. Thus, PNB had the right to rely on what appeared on the certificate of
title, and in the absence of anything to excite suspicion, it was under no obligation to look
beyond the certificate and investigate the title of the mortgagor appearing on the face of the
certificate. Both rulings which declared null and void the mortgage in favor of PNB as well as
the issuance of TCT, contradicts with jurisprudence. According to, LRA, a TCT under the name
of Boyano although defeasible in the hands of Boyano is conclusive and indefeasible in the
hands of the petitioner PNB which is an innocent mortgagee for value. There are instances when
a fraudulent document may be come the root of a valid title as where the TCT issued from the
name of the true owner to forger, the land was sold to an innocent purchases; vendee had rifght
to rely on the face of the certificate. Moreover, 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. CA's decision is reversed and set aside. The
complaint is dismissed. The real estate mortgages in favor of the PNB and Perez are valid, legal
and enforceable, without prejudice to the right of the property owner, Chu Kim Kit to exercise

the mortgagor's right of redemption and to claim reimbursement with damages from the
mortgagor, Felisa Boyano. Costs against the private respondent.
HEIRS OF LOPEZ, SR V HON. ENRIQUEZ
G.R. No. 146262
January 21, 2005
FACTS:
Sandoval and Ozaeta, Jr. filed an application for registration of title before RTC of Pasig City.
LR Court issued an order of general default and hearings on the application. Thereafter, the
application was granted and became final and executory.
LRA issued decrees under tha names of Sandoval and his wife Ruiz, and Ozaeta and his wife.
Petitioners filed a motion to consider the Dead of Absolute Sale made between Sandoval with
Ozaeta and Eugenio lopez in the registration case as well as issue decree of registration in their
na,es as successors-in-interest. RD of Marikina favored Sandoval and Ozaeta. Thus, petitioners
filed another motion to declare void the decrees and OCT issued. It was emphasized in the OCTs
that Administrator Enriquez signed the decreees before he assumed office and even before the
court issued the order. The dates were said to be inconsisted and LRA was requested to recall the
decrees. Request was denied. Petitioners filed with RD of Marikina an applciaiton to annotate
the notice of lis pendis at the back of OCTs. The latter denied the application. The case was
elevated to LRA. LRA agrred with RD that a notice of lis pendens based on a motion is not
reigstrable. Since LR case is a proceeding in rem, petitioners are just movants whose personality
is inadmissible. LRA ruled that petitioners should have filed a motion to lift the orde of general
default. The decision was appealed before CA but was dismissed for lack of merit. It reiterated
the LRA's ruling that only a party to a case has the legal personality to file a notice oflis pendens.
Petitioners have no legal personality because they failed to file a motion to lift the order of
general default in the land registration case.
ISSUE:
1)WON PETITIONERS' MOTION TO DECLARE VOID THE DECREES ISSUED BY LRA IS
A PROPER BASIS FOR FILING NOTICE OF LIS PENDENS?
2) WON PETITIONERS CAN FILE MOTION TO DECLARE VOID THE DECREES ISSUED
BY LR COURT DESPITE THE FACT THAT COURT HAS NOT LIFTED THE GENERAL
ORDER OF DEFAULT.
HELD:
1) NO. Lis pendis is a pending suit. It refers to the jurisdiction, power or conrtrol which a court
acquires over property involved in a suit, pending the continuance of the the action, and until
final judgment. It serves to protect the rights of the party causing the registration of the suit and
to advise third persons who purchase or contract on the subject property that they do so at their
peril and subject to the result of pending litigation. Creating right or lien that previously did not
exist is not one of the effects of filing a notice of lis pendens. Under Sec 76 of PD1529, a notice
of lis pendens should contian a statement of institution of an aciton or proceeding, the court
where same is pending, and date of isntutition. It must also contain a reference to number of

ceritifcate title of land, and adequate description of the land affected and its registered owner. RD
and LRA denied registration of the notive of lis pendens because the application was bereft of
original petition or complaint. The available remedy for petitioners is an action for reconveyance
against Sandoval, Ozaeta and their spouses. It is available on a property which was been
wrongfully registered under TS in another's name.
2) NO. Under Sec 26 of PD1529, the order of default includes petitioners. Petitioners' failure to
move to lift the default order did not give them standing in the case. As long as the court does not
lift the order of general default, petitioners have no legal standing to file the motion to declare
void the decreees of registration issued to the applicant. The motion filed by petitioners is
insufficient to given them standing in LR proceedings for filing an application of a notice of lis
pendes. However, petitioners need not to file a motion to lift the general default as the effect of
an order of default to the party defaulted. They are deemed movants whose personality as far as
the case is concerned is not yet admitted by the court considering that the order has not been
lifted. The petitioners took the role of oppositors to the application for land registration.
Petitioners failed to comply with the requiremenst of notice of lis pendis.
Petition is denied. CA's decision is affirmed.