LAND TITLES | SEC.
31 TO 68 | D 2012
(1) GARCIA V. CA
FACTS: On August 9, 1918, a deed of sale for two parcels
of land, E and G, of the Hacienda Maysilo, located in
Malabon, Rizal and covered by Original Certificate of Title
No. 983, was executed in favor of Ismael Lapus a bona
fide occupant thereof. However, it seemed that, contrary
to official routine or standard operating procedure, the
deed of sale was not annotated on OCT No. 983 and that,
consequently, that title was apparently not cancelled.
As a result of the registration of that deed of sale,
Transfer Certificate of 'Title No. 4910 was issued to Lapus
for the two parcels of land, E and G, and a Transfer
Certificate of Title No. 4911 was issued for the remaining
five lots covered by OCT No. 983 (which embrace an area
of more than two hundred fifty-eight hectares registered
in the names of more than twenty-six-co-owners).
Meanwhile, in 1962, certain. alleged heirs (collectively
known as the Riveras) of the late Maria de la Concepcion
Vidal filed a motion in Land Registration Cases Nos. 4429
and 4496 of the Court of First Instance of Rizal, alleging
that they were deprived of their participation in the
Hacienda Maysilo covered by OCT No. 983 and for other
titles and that, since only OCT No. 983 was supposedly
unencumbered, all the land covered by that title should
be adjudicated to them. The court granted the motion. It
should be stressed that OCT No. 983 appears to have
remained uncancelled notwithstanding the sale to Lapus
of two parcels covered by it and the fact that it had been
replaced by TCT Nos. 4910 and 4911.
On June 7, 1963, OCT No. 983 was definitely cancelled
and in lieu thereof Transfer Certificate of Title No. 112236
was issued to the Riveras. Later, Lots 5 and 7 of the said
title (corresponding to parcels E and G which were sold to
Ismael Lapus in 1918 as stated earlier) were assigned by
Bartolome Rivera to Sergio Cruz and Pacifico Garcia and
TCT Nos. 112743 and 112742 were issued to Cruz and
Garcia, respectively. Thus, two sets of transfer
certificates of title for Lots E and G or 5 and 7, originally
covered by OCT No. 983, were issued, one to the heir of
Ismael Lapus and another set to the successors-in-interest
of the Riveras.
On October 22, 1964, Garcia subdivided Lot 7 (G) into
Lots A and B. Garcia retained Lot A and obtained TCT No.
134958 for it. He assigned Lot B to Antonio Muoz on
November 5, 1964. As a consequence of the assignment,
TCT No. 112742 was cancelled and TCT No. 134957 was
issued to Muoz. In 1965, he mortgaged Lot B to the
Associated Banking Corporation to secure a loan of
P200,000.
ISSUE: Whether the 1920 title issued to Lapus and the
titles derived therefrom should prevail over the 1963 title
issued to the Riveras and the subsequent titles derived
from it.
HELD: The title of Lapus and the titles derived therefrom
should be given effect. The title of the Riveras and the
titles springing from it are void.
There can be no doubt that Lapus was an innocent
purchaser for value. He validly transmitted to his
successors-in-interest his indefeasible title or ownership
over the disputed lots or parcels of land. That title could
not be nullified or defeated by the issuance forty-three
NOGRALES | FABIA K | ZARAGOSA | ANG | SIRON | MENDOZA J | HIPOLITO | MENDOZA R | FAJARDO | MULI
Years later to other persons of another title over the same
lots due to the failure of the register of deeds to cancel
the title preceding the title issued to Lapuz. This must be
so considering that Lapus and his interest remained in
possession of the disputed successors in lots and the rival
claimants never possessed the same.
The general rule is that in the case of two certificates
of title, purporting to include the same land, the earlier
in date prevail, whether the land comprised in the latter
certificate be wholly, or only in part, comprised in the
earlier certificate.
In case of voluntary registration of documents, an
innocent purchaser for value of registered land becomes
the registered owner, and, in contemplation of law the
holder of a certificate of title, the moment he presents
and files a duly notarized and valid deed of sale and the
same is entered in the day book and at the same time he
surrenders or presents the owner's duplicate certificate of
title covering the land sold and pays the registration fees,
because what remains to be done lies not within his power
to perform. The register of deeds is duty bound to
perform it. (See Potenciano vs. Dineros, 97 Phil. 196.)
In this case, the deed of sale in favor of Lapus, which
was judicially authorized, was entered in the entry book
and a new title was issued to him. As already stated, and
this point should be underscored, the deed of sale in favor
of Lapus contains the notation that it was annotated on
the back of OCT No. 983 (presumably, the original and
owner's duplicate thereof).
(2) MINGOA V. LRC
FACTS: A deed of donation was executed by Mingoa in
favor of his children on June 15,1987. The deed was
forwarded to the Register of Deeds for registration by
registered mail on September 09,1988. It was entered in
the primary entry book of the Register of Deeds on
September 20, 1988. But the Register of Deeds suspended
the registration of the donation on the ground that under
RA 6657, any disposition of private agricultural lands made
before June 15,1988 must be registered within three
months from the said date (or BEFORE September 13,
1988) to be valid. But since the instrument was entered in
the primary books only on September 20, 1988, Mingoa is
7 days late, according to the LRA.
Mingoa, on the other hand, claims that the registration
of the instrument should have on September 09, 1988, or
the date when he sent forwarded the instrument to the
Register of Deeds.
ISSUE: In registration by registered mail, when should the
instrument be considered as registered?
HELD: The date of mailing (September 09, 1988) is
considered as the date of registration.
RA 6657 states that any sale, disposition or transfer of
possession of private agricultural lands made prior to June
15, 1988 shall be valid only if it is registered within three
months after (or before September 13, 1988).
So when is an instrument registered? PD 1529 states that
an instrument shall be considered as registered from the
time it is noted in the primary books of the Register of
Deeds. It also states that the Rules of Court shall be
LAND TITLES | SEC. 31 TO 68 | D 2012
applicable to land registration cases by analogy. PD 1529
is silent when it comes to registration by registered mail
so the Supreme Court applied Section 01, Rule 13 of the
Rules of Court.
It states that the date of mailing of motions, pleadings
or any other papers shall be considered as the date of
their filing, payment or deposit in Court. By analogy, the
date of the registration of Mingoas land is on September
9, 1988 or the date when he sent the deed of donation.
Therefore, he is within the three month rule mandated by
RA 6657.
(3) PILAPIL VS. CA
FACTS: Felix Otadora was the registered owner of 272,796
square meter parcel of land in Ormoc City known as Lot
8734. He died in 1940 survived by his wife, Leona Garbo
and their three children. The latter sold portions of Lot
8734 to separate buyers, leaving a segregated portion
known as L0t 8734 B-5 with an area of 51,019 sqm. When
Leona died, the Otadora siblings, together with Sergios
(another son of Felix) son Antonio, executed a deed of
extrajudicial partition and confirmation of sales, giving
each of them a undivided share in the remaining
property.
The two children of Otadora sold to petitioners Pilapil
an undivided portion, measuring 18,626 sqm, of lot 8734-
B-5. The deed of extrajudicial partition was annotated in
the OCT in Felixs name which was then cancelled and
replaced by the TCT of the children and the sale to Pilapil
was inscribed at the back of the TCT.
The petitioners names did not appear among the
owners, although in the memorandum of encumbrances at
the back of TCT regarding the sale to them by Vitaliana
and Agaton (two of Felixs children) was retained.
Despite the sale, Agaton again sold his share to his
daughter Carmen, Vitaliana also sold her share to Maxima
who then sold it to Bensig. With the issuance of these four
certificates of title, TCT in favor of the children was
finally cancelled.
Upon discovery of the new titles, Pilapil filed a protest
with the ROD requiring private resps to present their
(original) titles for proper annotation but was ignored.
Pilapil then filed a complaint for quieting of title,
annulment of deeds, cancellation of titles, partition, and
recovery of ownership with damages against private resps.
The RTC ruled in favor of private resps in that the sale
in favor of Pilapil was null and void because the latter
failed to surrender the owners duplicate copy of the title
in violation of sec 55 of the Land Registration Act (Act
496). The CA affirmed the decision of the RTC.
ISSUE:
(1) W/N the annotation of the sale in their favor is
ineffectual
(2) W/N the deeds of sale respectively executed by
Agaton and Vitaliana in favor of Carmen and
Maxima are valid and superior to that executed
earlier by A and V in their favor
(3) W/N their entry into the parcel of land is illegal
(4) W/N the corporation is a buyer in good faith
when it was at least negligent in not verifying or
inspecting the land or title of its vendors.
NOGRALES | FABIA K | ZARAGOSA | ANG | SIRON | MENDOZA J | HIPOLITO | MENDOZA R | FAJARDO | MULI
RULING: NO. The CA was correct in ruling that the
annotation in the certificates of title was not made in
accordance with law. To affect the land sold, the
presentation of the deed of sale and its entry in the day
book must be done with the surrender of the owners
duplicate of the certificate of title. Production of the
owners duplicate of the certificate is required by Sec 55
of Act 496 (now Sec 53 of PD 1529) and only after
compliance with this and other reqts shall actual
registration retroact to the date of entry in the day book.
The daughter and the sister of the private resps and the
subsequent sale in favor of them could not be considered
purchasers in good faith because they are not considered
as third parties who are not bound by the prior sale bet
private resps and Pilapil because there is privity of
interest between them and their predecessors. The reason
for this is that the validity of a title to a piece of property
depends on the buyers knowledge, actual or constructive,
of a prior sale. Maxima and Carmen are deemed to have
constructive knowledge by virtue of their relationship to
both Agaton and Vitaliana. Thus, it is immaterial if the
sale to petitioners was properly annotated on the correct
certificate or not.
When Carmen sold the property to H. Serafica
corporation, she no longer had any rights of dominion to
transmit since her own father who sold to her the
property had himself earlier relinquished his owership
rights in favor of Pilapil. Thus, she transmitted no right to
the corporation.
DOCTRINE: Failure to surrender owners duplicate of
certificate of title is immaterial when the subsequent
purchasers are not buyers in good faith because of the
preence of privity of relations thus not deemed as third
persons who can be considered buyers in good faith.
Validity of a title to a piece of property depends on the
buyers knowledge, actual or constructive of a prior sale
which was not manifested in this case by the private
resps.
(4) EGAO V. CA
FAST FACTS: This case is dispute over a land between Egao
and the two Sevaro. The land is owned by Egao by virtue
of a land patent grant. The land was sold by Egao to
Marfori before the OCT was issued to Egao, which the
latter subsequently sold to the Sevaro.
FACTS: This case is about a dispute over a land,
designated as lot 662, covered by OCT no. P-3559 and
registered in the name of Apolonio Egao.
Private Respondents Severos alleged that the wife of
Egao transferred the ownership of the land to a certain
Roberto N. Marfori per deed of abosolite sale executed
before a Notary Public of Cagayan De Oro, dated June 3,
1965.
Thereafter, on December 21, 1979 the same land was
sold by Marfori to the Sevaros via a deed of absolute sale.
Under which it was acknowledged that the certificate of
title has not transferred to the Marfori yet by the spouses
Egao, but the Marfori was in actual possession of the land
free from any lien and encumbrance.
LAND TITLES | SEC. 31 TO 68 | D 2012
Allegedly, upon the purchase by Sevaros, improvements
were introduced and taxes were paid by them. That
sometime in June 1983, spouses Egao allegedly occupied
the portions of the land bought by the Sevaros
Hence, a case for Quieting of title and/or Recovery of
Possession and Ownership were filed by Sevaros against
the spouses Egao.
The spouses Egao, answered saying that the land was
owned by Apolonio and that it was never sold to anyone
due to the restriction under the CA no. 141, which
prohibits them from alienating the land within 5 years of
the grant of the free patent.
The lower court ruled in favor of Egao, stating that even
assuming that there was a Sale between Egao and Marfori,
the same was done before the issuance of the free patent,
therefore when the patent was issued on Aug. 12, 1965
the said Sale was ipso facto cancelled or superseded by
the Patent, additionally Egao never vacated the land and
that the title is in his name, being the best evidence of
Title granted by the government, the Title must be
honored and respected by courts.
However this was reversed by the Court of Appeals, by
declaring that Marfori and Egao was in pari delicto, when
they executed the Sale for violating the 5 years
prohibition under Sec. 118 of CA No. 141. Furtheremore
the CA declared that the Sevaros were purchasers in good
faith when they obtained the owners duplicate from
Marfori, which was then still in the name of Egao.
Therefore the CA ordered that Sevaros was the owner of
the land in dispute and ordered the RD to register the
same under their name.
The decision of the CA is then appealed by Egao to the
SC, raising he issues that the CA erred:
ISSUE: W/N the Sevaros are indeed innocent purchaser
for value?
RULING: The SC ruled that the Sevaros were not innocent
purchaser for value, the court states that where a
purchaser neglects to make the necessary inquiries and
closes his eyes to facts which should put a reasonable man
on his guard as to the possibility of the existence of a
defect in his vendors title, and relying on the belief that
there was no defect in the title of the vendor, purchases
the property without making any further investigation is
not a purchaser in good faith and for value.
In the case at bar, when the Sevaros bought the land
from Marfori, they were aware that the owners duplicate
given to them by Marfori was still in the name of Egao,
their failure to inquire and conduct investigation as to
ascertain the transfer from Egao to Marfori, makes them
negligent hence not a purchaser in good faith and value.
Furthermore the court ruled that, No title passed
between Egao and Marfori even assuming that the sale did
occur, the fact that the sale was done within the
prohibited period makes the sale null and void, adding to
that fact that the sale was never registered as the
operative act under sec. 51 of 1529 nothing was
transferred to Marfori, hence Marfori cannot have validly
sale something that he doesnt have.
NOGRALES | FABIA K | ZARAGOSA | ANG | SIRON | MENDOZA J | HIPOLITO | MENDOZA R | FAJARDO | MULI
(5) FRANCISCO V. CA
FACTS: Nicolasa Resurreccion is the owner of three (3)
parcels of land in Taytay, Rizal, designated in her Transfer
Certificate of Title (TCT) as Lots No. 1, 3, and 9,
containing an area of 54,321, 86, and 21 square meters,
respectively.
In 1925, she sold Lots No. 3 and 9 to one Agustin
Esguerra. The latter, three (3) months after, sold the same
to spouses, Pedro Francisco and Francisca Tolentino
(Francisco Spouses), who registered the sale under Act No.
3344, as amended, and declared the property for taxation
purposes under Pedros name. Afterwards, the property
was declared in the name of their son, Candido Francisco
(herein petitioner), who continued in possession until his
parents demise.
Three (3) years later, Ressurreccion executed another
deed of sale conveying all three (3) parcels of land in
favor of one Felisa Afable. In other words, the sale
consisted not only of Lot No. 1, but likewise Lots No. 3
and 9 already sold to Esguerra. Afable registered the sale
under the Torrens Act and obtained a title in her own
name.
More than 30 years later, Afable sold the property to
Casimiro, Onofre, Potenciana, etc., all surnamed Espiritu,
and herein respondents. The Espiritus obtained a Torrens
title in their names. Shortly thereafter, they asked
Candido to vacate Lots No. 3 and 9, which the latter
occupied and on which built his house, but the latter, as
expected, refused. They then sued him for a recovery of
title and possession.
The trial court ruled against the Espiritus and declared
Candido as the rightful owner. It pointed out that while a
Torrens title is indefeasible, it can be issued by mistake;
the registration of the sale by Resurreccion to Esguerra
was binding on third parties and specially the parties to
the sale themselves, so that when Resurreccion re-sold
the property including Lot No. 1 to Afable, the sale
couldnt have been valid as regards Lot Nos. 3 and 9 since
she was no longer the owner thereof.
The Court of Appeals reversed. It ruled that the
registration by Candidos parents of the deed of sale in
their favor under Act No. 3344 was ineffectual to bind the
registered land, as held in decided cases; that the
Espiritus must be deemed purchasers in good faith
considering that no annotation of the prior sale appeared
in the title of Afable and Resurreccion. It further
adversely applied the principlethat as between two
innocent purchasers of the same property, the party
negligent must sufferto Candido since his parents and
were negligent in omitting to have the sale annotated in
their favor.
Hence, this petition for review on certiorari.
ISSUE: W/N under the admitted facts, the Espiritus are
buyers in good faith, and therefore entitled to the full
protection of the Torrens Act.
HELD: No, the Espiritus are not buyers in good faith.
Considered in context, the evidence shows quite
persuasively that Casimiro Espiritu knew definitely where
his friend of many years, Candido Francisco, was residing,
and that indeed Candido and his family had been living in
that place for many, many years; that when he viewed the
LAND TITLES | SEC. 31 TO 68 | D 2012
property then being sold by Afable, he could not but have
noticed that Candidos house was in that area; that when
Afable pointed out the 3 lots to them (one big lot and two
smaller ones), Casimiro could not but have become
aware, if not of the actuality, at least of the possibility,
that the smaller contiguous lots appeared to be that in
which his friend was living. At any rate, it is rather
incredulous that Casimiro and his sister had limited
themselves to viewing and asking questions about the big
lot only, completely refraining from inquiring about the
two other lots subject of the projected sale, placing
unquestioning reliance on Afables certificate of title.
There were sufficiently strong indications to impel a
closer inquiry into the location and condition of the two
smaller lots embraced in the sale. That inquiry is in truth
dictated by common sense, expected of a man of ordinary
prudence. Indeed, when a man proposed to buy or deal
with realty, his first duty is to look and see who is there
upon it, and what his rights are.
A purchaser cannot close his eyes to facts which should
put a reasonable man upon his guard, and then claim that
he acted in good faith under the belief that there was no
defect in the title of the vendor. His mere refusal to
believe that such defect exists, or his willful closing of the
eyes to the possibility of the existence of a defect in his
vendors title will not make him an innocent purchaser for
value, if it afterwards develops that the title was in fact
defective
Had that inquiry been made, Candidos adverse claim
over the two small lots would have immediately been
discovered and the controversy would have died a-
borning. The Espiritus failure to undertake such inquiry
precludes their successful invocation of the character of
purchasers in good faith.
On the other hand, while the registration of the deed of
sale of Lots No. 3 and 9 under Act No. 3344 could not and
never operated to bind the land, or third persons, the
bona fides of that purchase by Candidos parents and by
their predecessor has not at al been put at issue, nor the
fact of the Franciscos possession for more than 30 years.
(6) QUINIANO V. CA
FACTS: Fabiano and Tomasa Sarmiento were originally the
owners of the disputed parcels of land. They had two
children: Jose, father of private respondents, and
Joaquina, mother of principal petitioner Marta Quinano.
The parcels were eventually partitioned and was
adjudicated to Jose. However, Quinano filed an
application for free patent (1941). She was successful and
as a result of which an OCT was issued to her. Private
respondents were unaware of her machinations. During
the early part Japanese Occupation, she was able to take
possession of the land. It was only when some sort of
peace and order had been restored that private
respondents were able to file for reconveyance. It was
learned thereafter that Quinano had sold 2 and lots to
Felix Capito and the to Antero Sanchez. Capito
transferred his rights to Celedonio Fermin. Not subsequent
certificates of title were issued.
ISSUES:
(1) W/N reconveyance is availing and W/N the action
for reconveyance has prescribed.
NOGRALES | FABIA K | ZARAGOSA | ANG | SIRON | MENDOZA J | HIPOLITO | MENDOZA R | FAJARDO | MULI
(2) W/N Fermin is an innocent purchaser for value.
HELD:
(1) The sole remedy of the land owner whose property
has been wrongfully or erroneously registered in the
name of another is, after one year from the date of
the decree, not to set aside the decree, but,
respecting the decree as incontrovertible, to bring
an ordinary action for reconveyance, or if the
property has passed to an innocent purchaser for
value, for damages. The system of registration must
not serve as a protecting mantle to cover and shelter
bad faith. Moreover, the patent was obtained in 1941
and the action was filed in 1943. Actions for fraud
prescribe in 4 years and. Actions for reconveyance
prescribe in 10 years.
(2) Fermin cannot come within the purview of an
innocent purchaser. He purchased the property from
Capito who did not have a certificate of title issued
in his favor. Jurisprudence holds that where a person
buys land not from the registered owner but from
one whose right to the land has been merely
annotated on the certificate of title, and such
purchaser merely had his deed of sale annotated on
the certificate of title, he is not considered an
innocent purchaser and for value.
(7) PNB V. CA
FACTS: In 1937 in a cadastral proceeding, Spouses Inigo
Bitanga and Rosa Ver obtained an OCT over a property in
Ilocos Norte. However, 2 years prior to the issuance of the
OCT, Bitanga died; and Ver mortgaged the property in
favor of PNB to secure a P500 loan. The mortgage
document was registered in the books of the RD in 1936,
but the lien was not annotated when the OCT was issued.
Ver defaulted with her obligation with Manila Trading
Company. Thus, said company levied upon her share in the
property in 1939, which was later on sold at a public
auction, at which the company was the highest bidder. In
1940, Manila Trading Company sold its rights over the
property to Santiago Sambrano, who secured the
annotation of the sale on the title in 1941.
Since Ver defaulted with her obligation with PNB, the
bank sold at public auction the whole lot that Ver
mortgaged. PNB emerged as the highest bidder and
consolidated its title over it after expiration of the
redemption period. However, the document of
consolidation was not annotated upon the owner's
duplicate certificate of title since Ver failed to surrender
it. In 1954, PNB sold the property to Felizardo Reyes, in
which a new owner's duplicate certificate of title was
issued in favor of the latter.
RTC ruled that the mortgage in favor of PNB was not an
existing lien since it was not annotated in the decree of
registration; that Felizardo Reyes was not a purchaser for
value and in good faith; and that PNB's and Reyes' titles
over the property are null and void.
ISSUES:
(1) W/N the mortgage in favor of PNB was valid and
existing only with respect to 1/2 portion of the
property allegedly belonging to Ver as her share
LAND TITLES | SEC. 31 TO 68 | D 2012
in the conjugal partnership
(2) W/N the mortgage in favor of PNB was no longer
subsisting simply because it was not annotated on
the face of the OCT in favor of the spouses
(3) W/N the heirs of Inigo Bitanga are estopped and
barred by laches in claiming their 1/2 undivided
share of the property as their inheritance from
their father
(4) W/N the acquisition of the other half portion of
the property by intervenor-spouses Lagpacan and
Malacas are valid and regular
HELD:
(1) YES. The property belonged to the conjugal
partnership of Inigo Bitanga and Rosa Ver. Thus,
when Bitanga died, his 1/2 share in the property was
transmitted to the heirs (children), and a co-
ownership was established between them and Rosa
Ver. Hence, Ver, by herself alone, could NOT have
validly mortgaged the whole property to PNB. Only
1/2 of the entire property mortgaged to PNB was
valid. PNB could not also rely upon a Tax Declaration
in the name of Ver, for it is not a conclusive proof of
ownership and cannot alter the conjugal character of
the property.
(2) YES. Since a clean title was issued in the name of
spouses Bitanga and Ver in 1937, and PNB did not
contest or move to have it re-opened for a period of
one year, it became incontrovertible. Thus, PNB's
failure to claim interest in the property deprived it
from the mortgage. There is no showing that MTC
had any knowledge or notice of the prior mortgage in
favor of PNB. Thus, MTC acquired the rights of Ver
and Bitanga as an innocent purchaser for value and
free from all incumbrances. From the MTC, rights of
Bitanga and Ver passed to Sambrano, and from the
latter to intervenor-spouses Lagpacan and Malacas.
The intervenors merely stepped into the shoes of
MTC, a prior purchaser in good faith, and thereby
became entitled to all the defenses available to the
company, including those arising from the acquisition
of the property in good faith and for value.
PD 1529, Secs 29, 30, 31, and 32 states that after 1
year, every decree or certificate of title issued shall
be incontrovertible.
PD 1529, Sec 44 states that every subsequent
purchaser of registered lang who takes a certificate
of title for value in good faith shall hold the same
free from all encumbrances except those noted on
the certificate.
(3) NO. Not all the respondent heirs signed the mortgage
deed as instrumental witnesses. Only Guillermo
Bitanga signed to attest that Ver signed the
instrument inhis presence and he is not bound to
know the contents of the document. There is also no
evidence to show that PNB relied upon the signature
of Guillermo on the mortgage deed or that he made
any representations with the PNB for the acceptance
of the mortgage. Thus, there is no estoppel where
there is no reliance upon representations and where
there is no deliberate misleading of another.
Furthermore, respondents are NOT guilty of laches
for having slept on or neglected to assert their right
to the land after the lapse of more thatn 19 years
NOGRALES | FABIA K | ZARAGOSA | ANG | SIRON | MENDOZA J | HIPOLITO | MENDOZA R | FAJARDO | MULI
from the time the mortgage was executed by Ver.
Mere lapse of time cannot give efficacy to the
contracts that are null, void and inexistent.
(4) YES. The intervenor-spouses Lagpacan and Malacas
acquired their right to the shares of Ver and
Guillermo Bitanga in the same property from MTC,
which acquired all the rights, title, interests, and
participations which Guillermo Bitanga and Rosa Ver
have or might gave over the property more than 2
years after the decree of registration was entered in
the name of Bitanga spouses. Thus, since MTC has a
better right over the property than PNB, it follows
that intervenor-spouses, who obtained their rights
from MTC, validly acquired title over the 3/5 share
on the property (1/2 coming from Ver, 1/5 from
Guillermo Bitanga).
(8) BERNALES V. IAC
(9) SOLIVEL V. FRNACISCO
(10) LLANZO V. ALZONA
FACTS: Bernardo Sales and Maria Sales were husband and
wife. Maria was the registered owner of a certain parcel
of land in Cabuyao, Laguna. Until the spouses died, they
lived together with some of their children on the said land
and in the house they constructed thereon. Maria died on
August 27, 1986 and Bernardo died on January 1, 1997.
On January 29, 1990, a real estate mortgage contract
was purportedly executed by Maria, who was already
deceased at that time, and Bernardo in favor of
Dominador Alzona. Estela Sales Pelongco, one of the
daughters of Bernardo and Maria, signed as an
instrumental witness to the mortgage contract. Ernesto
Alzona was a co-mortgagee of his brother Dominador even
if his name does not appear on the mortgage contract.
The mortgage was subsequently foreclosed for alleged
failure of the spouses to settle their obligation. The
property was sold in a mortgage sale where Ernesto
Alzona was the highest bidder.
The children of Bernardo and Maria (except for Estela
Sales Pelongco) filed before RTC a complaint for
Annulment of the Mortgage and of Action Sale, with
Reconveyance of title and Damages.
RTC ruled in favor of the mortgagees.
CA affirmed the decision of RTC.
ISSUE: W/N Ernesto and Dominador are mortgagees in
good faith.
HELD: Yes they are mortgagees in good faith.
The principle of innocent purchasers for value is
applicable even in a case where the mortgagors were
impostors who pretended as the real owners of the
property. The general rule is a mortgage executed by a
person who is not the absolute owner of the property is
null and void. An exception to this rule is the doctrine of
mortgagee in good faith. Under this doctrine, even if
the mortgagor is not the owner of the mortgaged
property, the mortgage contract and any foreclosure sale
arising therefrom are given effect by reason of public
policy. The principle is based on the rule that all persons
LAND TITLES | SEC. 31 TO 68 | D 2012
dealing with property covered by a TCT, as buyers and
mortgagees, are not required to go beyond what appears
on the face of the title. Mortgagee has a right to rely in
good faith on the certificate of title of the mortgagor to
the property given as security and in the absence of any
sigh that might arouse suspicion, has no obligation to
undertake further investigation.
For persons, more particularly those who are engaged in
real estate or financing business like herein respondents,
jurisprudence requires that they should take the
necessary precaution expected of a prudent man to
ascertain the status and condition of the properties
offered as collateral and to verify the identity of the
persons they transact business with, particularly those
who claim to be registered property owners.
In the case at bar, the Court is duly convinced that the
mortgagees exercised due diligence in ascertaining the
status and condition of the properties offered as
collateral and to verify the identity the persons they
transact business with. Ernesto conducted a credit
investigation before he approved the loan sought and the
property mortgaged.
(11) PHILIPPINE VETERANS BANK V. MONILLAS
FACTS: Benjamin and brother Ireneo inherited from their
father a parcel of land from their father. On 1973
Benjamin executed a deed of sale in favor of Ireneo under
the latters representation that he would use the deed to
facilitate the procurement of a loan for a planned housing
project on the piece of land. Ireneo caused the transfer of
the title in his name and its subdivision. He then
mortgaged 22 lots to Philippine Veterans Bank (PVB)
Three years later (1983), Benjamin asked the court for
the nullification of the deed of sale. On 1984 the
mortgage was foreclosed in which PVB was the highest
bidder. On 1985, Benjamin caused the annotation of
notices of lis pendens and on 1988 the court declared the
1973 sale void. But because of the foreclosure the TCTs of
the land was cancelled and a new one was issued in the
name of PVB on 2002.
Benjamin prayed for the cancellation of the mortgage,
the invalidation of the foreclosure and the declaration of
the nullity of the titles of PVB. The court granted the
petition on the ground that PVB was bound by the
outcome of the case for the nullity of the sale because of
the notice of lis pendens . Though the mortgage preceded
the notice of lis pendens is of no importance because the
effect of the notices was that PVB acquired knowledge of
an impediment against its interest and as a matter of fact
slept on its rights.
Hence this petition.
ISSUE: W/N the prior registered mortgage and the already
concluded foreclosure should prevail over the subsequent
annotation of the notice of lis pendens.
NOGRALES | FABIA K | ZARAGOSA | ANG | SIRON | MENDOZA J | HIPOLITO | MENDOZA R | FAJARDO | MULI
HELD: YES. Settled in this jurisdiction is the doctrine that
a prior registration of a lien creates a preference hence
the subsequent annotation of an adverse claim cannot
defeat the rights of a mortgagee or the purchaser at the
auction sale. PVB is an innocent mortgagee for value.
When the lots was mortgaged to it by Ireneo it was in the
latters name and they showed no vice nor infirmity. In
accepting the mortgage the petitioner was not required to
make any further investigation of the titles to the
properties being given as security and could rely on the
title.
The public interest in upholding the indefeasibility of a
certificate of title, as evidence of a lawful ownership of
the land or of any encumbrance thereon protects a buyer
or a mortgagee who, in good faith, relied upon what
appears on the face of the certificate of title.
PVB cannot be considered to have slept on their rights
even though they only registered the Sheriffs certificate
of sale after the lapse of 15 years because it registered its
prior mortgage and has already foreclosed the same.
Petitioner therefore had every reason to expect its rights
were amply protected.
(12) LAND BANK OF THE PHIL V. REPUBLIC
FACTS: OCT No. P-2823 was issued on Sept. 26, 1969 in
favor of Bugayong. Said mother title emanated from Sales
Patent No. 5476 issued in Bugayongs name on Sept. 22
1969. It covered a parcel of land in Davao. The land was
subdivided into four lots. One of the lots was acquired by
Lourdes Farms. Thereafter Lourdes farms mortgaged this
land to petitioner LBP.
After some time, it was found out that at the time the
Sales Patent 4576 was issued to Bugayong, the land was
still within the forest zone. Bureau of Lands believed that
sales patent in favor of Bugayong was illegally issued.
SolGen filed a complaint for the cancellation of title
covered by OCT No. P-2823. LBP claimed that it is a
mortgagee in good faith and for value. Therefore, title
should not be cancelled.
ISSUE: W/N title should be cancelled?
HELD: YES. A Certificate of Title is void ab initio if the
land covers forest land. Any title issued covering non-
disposable lots even in the hands of an alleged innocent
purchaser for value should be cancelled.
In this case, LBP obtained its title through a mortgage
contract with Lourdes Farms. This title must be cancelled
because it was derived from OCT P-2823 which was
invalidly issued to Bugayong because the title covers
forest land, a property of public dominion.
* END *