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PNB v.

On November 28, 1952, Donata Montemayor, through her son, Salvador M. Vitugm
mortgaged to the Philippine National Bank (PNB) several parcels of land to
guarantee the loan granted by PNB to Salvador Jaramilla and Pedro Bacani. Donata
also mortgaged in favor of PNB certain properties to guarantee the payment of the
loan account of her son. All of the Transfer Certificates of Titles covering said
properties were all in the name of Donata Montemayor and were free from all hens
and encumbrances. Salvador Vitug, as well as, Salvador Jaramilla and Pedro Bacani
failed to settle their accounts with the PNB so the latter foreclosed the properties
which were sold at pubic auction and likewise PNB was the highest bidder thereof.
Pragmacio and Maximo Vitug, sons of Cloualdo Vitug and Donanta Montemayor,
filed an action for partition and reconveyance of the the said properties with
damages. The subject of the action is 30 parcels of land which they claim to be the
conjugal property of the spouses Donata Montemayor and Clodualo Vitug of which
they claim a share of 2/11 of thereof. They assailed the mortgage of pNB and the
public action of the properties as null and void. The lower court dismissed the
complaint. Plaintiffs then interposed an appeal to the Court of Appeals and the latter
reversed and set aside the decision of the lower court.
Whether the public auction of the assailed mortgage to the PNB is valid as the
properties involved were registered exclusively in the name of Donata Montemayor
The petition is impressed with merit. Article 160 of the Civil Code provides that all
property of the marriage is presumed to belong to the conjugal partnership, unless
it be proved that it pertains exclusively to the husband or to the wife. In the instant
case, when the subject properties were mortgage to the PNB they were registered in
the name of Donata Montemayor, widow. The well-known rule in this jurisdiction is
that a person dealing with a registred land has a right to rely upon the face of the
torrens certificate of title and to dispense with the need of inquiring further, except
when the party concerned has actual knowledge of facts and circumstances that
would impel reasonably cautious man makes such inquiry. The Court held that the
presumption applies to property acquired during the lifetime of the husband and
wife and that the PNB only relied as to what appears on the face of the title that the
properties were acquired by Donata Montemayor when she was already a widow.
Therefore, the decision of the Court of Appeals is reversed and set aside.