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Process by which a mortgagee acquires an absolute title to the, property of which OF PERSONAL PROPERTY AND INTEREST AND RIGHTS THEREIN AND JUDICIAL
he had previously been the conditional owner, or upon which he had previously a ACTION
mere lien or encumbrance.
ENCUMBERANCES
Burden upon land, depreciative of its value, such as lien, easement, or We will have problems in action re-conveyance and quieting of the title (No
servitude, which though adverse to the interest of the landowner, doesn't recording) ? It’s in the book.
conflict with his conveyance of the land in fee
CONVEYANCES AND TRANSFERS
LIEN Section 57. Procedure in registration of conveyances. An owner
desiring to convey his registered land in fee simple shall execute
Charge on the property Qualified right or a proprietary interest which may be and register a deed of conveyance in a form sufficient in law. The
exercised over the property of another Register of Deeds shall thereafter make out in the registration book
a new certificate of title to the grantee and shall prepare and
deliver to him an owner's duplicate certificate. The Register of
MEMORANDUM OF ENCUMBERANCES Deeds shall note upon the original and duplicate certificate the date
Dorsal side of the certificate of title of transfer, the volume and page of the registration book in which
All interests in the registered land less than ownership which shall serve as the new certificate is registered and a reference by number to the
a notice to third persons of the instrument affecting the property A similar last preceding certificate. The original and the owner's duplicate of
entry shall be made on the owner’s duplicate certificate of title. the grantor's certificate shall be stamped "canceled". The deed of
conveyance shall be filled and indorsed with the number and the
place of registration of the certificate of title of the land conveyed.
PRIMARY ENTRY BOOK OR DAY BOOK
The primary entry book or day book is a record of all instruments, including copies
of writs and processes, affecting registered lands, which are entered by the RD in
the order of their filing, upon payment of the proper fees, The recording is a PROCEDURE IN REGISTERING A DEED OF CONVEYANCE
preliminary process in registration and shall, note the date, hour, and minute of An owner who desires to convey the land covered by his title to another shall
receipt of said instruments, An instrument shall be regarded as registered only execute the proper deed of conveyance, in proper form, and present the same,
from the time, it is noted, Every deed of instrument shall be numbered and together with the owner’s duplicate certificate to the RD from entry and
endorsed by the, RD with proper reference to the certificate of title, All records registration The RD shall enter in the registration book the fact of conveyance and
and papers relative to registered land shall be open for examination by the public, prepare a new certificate of title in the name of the grantee, the owner’s duplicate
subject to such reasonable regulations as the RD may prescribe All deeds and of which shall be delivered to him The RD shall note the date of conveyance,
voluntary instruments and copies thereof shall be volume and page of the registration book in which the certificate is registered, and
a reference by number to the last preceding certificates
(assurance Fund) BUT A PURCHASER WHO HAS KNOWLEDGE OF DEFECT OF HIS VENDOR’S TITLE
There are instances where errors are committed by the RD and the error resulted CANNOT CLAIM GOOD FAITH.
from damage from the registered owner, RD Represent the government. Example
There is a land owner who suffered damages from the negligence of the RD can he A purchaser cannot close his eyes to facts which should put a reasonable
be paid damages? Remember that the employees of national government, the man upon his guard, and then claim that he acted in good faith under the
owner can file an action that he will be paid he can file a claim on the assurance belief that there was no defect in the title of the vendor
fund. The fund is intended to answer for damages that owners of property has
suffered by reason of operation of Torrens system, mostly the cases are His mere refusal to believe that such defect exists or his willful closing of
negligence or fault of government functionality, he will file a claim on the his eyes to the possibility of the existence of a defect in the vendor’s title,
assurance fund. But mind you in reality,, there is no records of the assurance will not make him an innocent purchaser for value, if it afterwards
fund. But in the law there is , you 1st have to file your Claim SG that will determine develops that the title was in fact defective, and it appears that he had no
if your claim is valid or not , assuming that you succeeded you file your Claim AF such notice of the defect as would have led to its discovery had he acted
in court with the consent of SG because it is tantamount to a suit against the with that measure of precaution which may reasonably be required of a
government that is why consent is need. It is the SG that will give the consent. prudent man in a like situation
The act of registration shall be the operative act to convey or affect the land
insofar as third persons are concerned It is the act of registration which creates a Then judicial and extrajudicial foreclosure of mortgage.
constructive notice to the whole world and binds third persons Absent such
registration, a conveyance doesn’t affect or bind the land the purchaser has Extrajudicial and judicial foreclosure
examined every instrument of record affecting the title He is charged with notice
of every fact shown by the record and is presumed to know every fact shown Extra- judicial- no case file, registers the real estate mortgage to the RD, when the
by the record and is presumed to know every fact which an examination of the obligation is already due and demandable and the mortgagor has not paid the
record would have disclosed Since it is the act of registration which transfers obligation there is a letter of demand and the loan obligation has matured
ownership of the land sold, it has been held that a subsequent claimant cannot pursuant to the provision of the real estate mortgage there is a special power of
claim a better right over the land which had been previously registered in the Attorney where in the owner of the land the mortgagor appoint the mortgagee to
name of another. A notice of lis pendens serves as a warniong to a prospective cause the extrajudicial foreclosure of the mortgage. Assuming that the bank is the
purchaser or encumbrancer that the particular property is in litigation and that he where you mortgage your property, So the bank has the choice to avail the
should keep his hands off the same, unless he intends to gamble on the results of remedy of Extra-Judicial Foreclosure, they just have to go to court and file a for
the litigation extrajudicial foreclosure, it will apply, it is just a mere letter in the RTC clerk of
court, the cleark f court is automatically the sheriff, they are lawyers. Try to visit
the RTC you will see offices labeled: office of the Clerk of court. That is where you payment of registration fees and the inconvenience of preparing so many
file extrajudicial foreclosure. You have to register it to the RD to foreclose it. Under mortgage contract.
the to Torrens system. It has to be annotated in the MOE.
There is such thing as 1st mortgage and 2nd mortgage although seldom lang Will continue on extrajudicial foreclosure; remember that you cannot foreclose the
nangyayari yan, let say the property is a commercial lot with 1000 sq with 10 mortgage if it is not register in the registry of deeds. So it will be annotated in the
stories building located at Davao City dyan sa downtown and it is valuated 500 government copy as well as you ODC memorandum of encumbrance, you pay
million assuming kung ang loan nya is 20 million tapos e mortgage sya the there then , the sheriff will schedule a public sale it will be sold in a public auction,
encumbrance is worth 20 million then a year later the owner mortgage the same there are procedure that strictly needs to be followed pero there must be notice by
property to another say PNB it depends on the discretion of the bank whether the publication in Newspaper of general circulation in the province or city where the
bank want to accept the mortgage. So the 1st mortgage will reflect the MOE so as property is located not only that the sheriff if required to post a notice in the
2nd mortgage all the mortgage will reflect the MOE . input na natin to court’s building or bulletin board of the court and the bulletin board of RD and
This came out twice already in the Bar Exam. Municipal building if this requirement is not followed any aggrieved party can file a
We have this thing called “DRAG NET CLAUSE” In the contract of mortgage, in petition in court to declared the foreclosure land null, because this part of due
the previous bar exam this may come out in civil law, commercial law or land title process, many petitions in court was annulled because of lack of publication. What
and deeds. So take note of this, open your minds to this you will take this up when is the purpose there, the general public should be notified that this property
you reach mercantile law or special contract. should be sold. to the highest bidder. What is the purpose of the law why it should
What is the nature of this drag net clause? This is of American origin. What is the be sold to the highest bidder and not the lowest bidder? Why? To protect the
picture of this? I am a good client of a bank, the bank they have this employees debtor that his property will be able to satisfy this obligation aron ma deduct iyang
that canvass depositor, actually the essence of banking they collect money from utang naa pay mabalik sa iya sobra. Because kung lowest lay luoy the creditor will
depositor and which they gave out as loan to the public. always be in bad terms you know the law is fair, humane and just it protects the
EXAMPLE: debtor that he will not be taken advantage by the creditor this is the humane side
MR. Robinos LYR, he has many property of course it will be known to the bank he of the law that is why there is anti-usury law, to protect because if there is a need
is a depositor, and then he creates a credit line “like” to the bank. He then say to protect this people it must be it the debtor because he will be the one who will
pautangin mo ako mo ako ng 1b my property is 2b , kasi ipapautang nya din pero cost the property, that is why there is this schedule the sale is important so the
yung 1b hindi nya yan kukunin lahat siguro every month he withdraw around 50 whole world will be notified to acquire the property then pataasan ng bid, that is
million from the 1 b he intends to borrow. this is where the drag net clause will where due process is required through notice. There is now an action sale
apply, they will make a contract with a bank that consist of a drag net clause, then assuming maraming nag bid the highest bidder will win, the sheriff will declared
he will submit a title that he mortgage it, with a value of say 2billions then kukuha the highest bidder, what will the sheriff do they will prepared the certificate of
sya from that mortgage an amount 10 million on staggered basis or whenever he sale. This time the sheriff will be the one to sign the certificate of sale in favor of
wants, it would just be noted or listed. Now the Real estate mortgage it is not the highest bidder. In real estate mortgage there is this attached a special power
registered, although he has a contract that has open application of such. It is not of attorney authorizing the mortgagee to cost the foreclosure, there is now a
registered because it will be expensive, 2 nd to avoid inconvenience, because of the certificate of sale in favor of the highest bidder with the registry of deed and shall
long process of engaging to mortgage, the effect of this clause is if hindi na maka be annotate in the MOE in the governments copy and ODC sold na sya, but then
bayad dun na sya e foreclose or register. Pero he already sign an internal under the mortgage law one yr from the registration it is a mandatory in favor of
agreement. the mortgagor that the latter will have the right of redemption within one yr form
registration of the highest bidder . That is the right of redemption, which is a right
DRAG NET CLAUSE- it is a business practice, usually between banks and under the law. So if you’re an owner of a property by means of public auction, you
their borrowers, where in the borrower signs in blank a real estate are not yet an owner in fee simple title. Your ownership is inchoate because the
mortgage contract of his properties as collateral as security for loans original owner has the right to exercise this Redemption, this being a right the
which are not totally withdrawn upon signing on staggered basis and the owner may transfer it to any person for consideration.
real estate mortgage is not registered in the RD meantime to avoid Q: after 1 yr na expire na sya?
A: pag nag expire na sya wala na talaga.
When the one year period has expired and the mortgagor failed to redeem the that fault alone on the debtor has the right now to go to court because of the
property the buyer in auction sale will petition the RD to consolidate the property breach and the action now is judicial foreclosure of mortgage, there is factual
in his name. what does consolidate mean, cancel na yung name ng pervious issue, is it true that borrower removed the machineries so the bank needs to go to
owner and will be changed to the new owner that one who brought it on auction court, or there is a breach or failure to fulfill the obligation. That is why the bank
sale, there are provision on Public land act if the property is homestead in addition use judicial foreclosure as a remedy there is a case file to the court, there is a
to the one year redemption period the mortgagor has another 1 yr under public complaint the borrower the debtor shall file differences to be determined by the
land act to redeem the property so favored yung original patentee, remember he court. They will prove it there whether recession is proper , it is an ordinary case
must be an original patentee meaning maging 2 yrs sya and not only that in the the disadvantage is it could be appealed, unlike extrajudicial mablis basta
case of government banks i dunno if its been amended parang may another 1 yr complete ang papers and publication. This is seldom use by bank, kasi masyadong
pa syang redemption period, so I think the additional 1 yr is still there. Pero kng mahal. The judgment becomes final the mortgagee after the finality will file a
private banks wala kang matakbohan nyan. motion for reissuance for order of auction sale it will go to the same process of
Q: usually kasi most buyer in PA are bankers? extrajudicial e.g positing of notice then the sheriff will conduct the auction sale.
A: in the auction if there is no buyer so the mortgagee is the buyer palitun na sya next there is an auction sale then the sheriff will make a report in the auction sale
withstand the utang minus expenses. But under the banking laws it will be register ,then the mortgagee will file a motion for approval of the auction sale, the judge
in their name, but there is this law that banks cannot hold real property within 5 will issue an order for approval, wbakit e heararing pa kasi baka may protesta
years they have to dispose it after 5 yrs because the private purpose why they are yung nag participate nag reklamo sya or due process then the court will conduct
established under the corporation code is not their porpose to acquire real the hearing to hear the motion of approval of the sale, the court will then issue a
properties, because if there is no such provisions under the banking law ma ubus an order for the registration of the Certificate of sale now take note of this
lahat ng lupa, ang kanila na mang purpose if the purpose of funds and just to According to jurisprudence for as long as the Certificate of sale is not yet register
engage in private business not in agriculture. That is why marunong may pera in the RD even upon the hearing of motion of approval of auction sale, the
saan sila ppumupnta dun sa banko na foreclose na land. Chances are hindi mataas borrower if he wants to redeem the property he can still redeem until it is not
they are require to dispose it within 5 years, dun ka makaka bili ng lupa na mura. register, hangat hindi pa sya na register yan pwd ma nyang bayaran, pag na
register na he has 3 months to redeem the property. So anong difference nya sa
The bank in actual practice they will circumvent the law, they don’t avail the extrajudicial 1 yr from the registration nang redemption period sa judicial 90 days
remedy of foreclosure ano ginagawa nila matured na ang gagawin nila they will another difference take note of this if there is a difference in the auction sale what
avail Dacion in Pago. Parang pinag bili ng may utang ang kanyang property sa is require for the mortgagee is not an action for deficiency judgment but he will
banko he cannot pay he will sell it to the bank with the provision to buy back the file motion for deficiency judgment after the expiration of the period of
property so the owner still remain the owner of the property. redemption. Bakit SA extrajudicial diffiency judgement talaga pero SA judicial
Halimbawa na sold ang property it was sold in PA and the price is comparatively Motion nalang? Sinong magaling dyan?
low, let’s say the obligation is 1m but the property is sold 500,000 so lugi ang
bangko. This was foreclose extra-judicially, under the law the bank can file an
action for deficiency judgment. A form the student: because the case is already filed.
Action for deficiency judgment is the case where the mortgagee files against the DEAN: YES! Because there is already a case filed correct. Motion is only an
mortgagor when there is a deficiency in the price of the land in the auction sale interlocutory. Motion is only an action if there is a case file.
and the obligation of the borrower has not been satisfied.
Judicial
Judicial through the court, the bank has a choice whether it avails judicial or Homework agad. Together with sample Petition for issuance of title.
extrajudicial. Ang judiciacial naman may arise from bridge from loan agreement or
you fail to pay the obligation. The creditor can go to court to collect since there is
a mortgage . for example the loan collateral is a rice field may dryer may makina
now the borrower as if there is fraud so say there is a breach of contract even if
the obligation is not due and demandable and there is this breach then on that on