transaction was entered as Entry No.
8191 in the Registry's Primary Entry Book and
FIRST DIVISION
[UDK No. 7671. June 23, 1988.]
DEVELOPMENT BANK OF THE PHILIPPINES, registrant-
appellant, vs. THE ACTING REGISTER OF DEEDS OF NUEVA
ECIJA, respondent-appellee.
DECISION
NARVASA, J p:
This case, rather cut-and-dried as far as factual background is concerned, turns upon
a determination of the true meaning and intendment of Section 56 ofPresidential
Decree No. 1529, 1 which in part reads:
"Sec. 56. Primary Entry Book; fees, certified copies. — Each
Register of Deeds shall keep a primary entry book in which, upon
payment of the entry fee, he shall enter, in the order of their
reception, all instruments including copies of writs and processes
filed with him relating to registered land. He shall, as a
preliminary process in registration, note in such book the date,
hour and minute of reception of all instruments, in the order in
which they were received. They shall be regarded as registered
from the time so noted, and the memorandum of each
instrument, when made on the certificate of title to which it
refers, shall bear the same date: Provided, that the national
government as well as the provincial and city governments shall
be exempt from the payment of such fees in advance in order to
be entitled to entry and registration.
xxx xxx xxx"
The facts are few and undisputed. On June 13, 1980, the Development Bank of the
Philippines (hereafter, DBP) presented for registration to the Register of Deeds of
Nueva Ecija, Cabanatuan City, a sheriff's certificate of sale in its favor of two parcels
of land covered by Transfer Certificates of Title Nos. NT-149033 and NT-149034, both
in the names of the spouses Andres Bautista and Marcelina Calison, which said
institution had acquired as the highest bidder at an extrajudicial foreclosure sale. The
DBP paid the requisite registration fees on the same day. Annotation of the sale on
the covering certificates of title could not, however be effected because the originals
of those certificates were found to be missing from the files of the Registry, where
they were supposed to be kept, and could not be located. 2 On the advice of the
Register of Deeds, DBP instituted proceedings in the Court of First Instance of Nueva
Ecija to reconstitute said certificates, and reconstitution was ordered by that court in
a decision rendered on June 15, 1982. 3 For reasons not apparent on the record, the
certificates of title were reconstituted only on June 19, 1984. 4
On June 25, 1984, DBP sought annotation on the reconstituted titles of the certificate
of sale subject of Entry No. 8191 on the basis of that same four-year-old entry. The
Acting Register of Deeds, being in doubt of the proper action to take on the
solicitation, took the matter to the Commissioner of Land Registration
by consulta raising two questions: (a) whether the certificate of sale could be
registered using the old Entry No. 8191 made in 1980 notwithstanding the fact that
the original copies of the reconstituted certificates of title were issued only on June
19, 1984; and (b) if the first query was answered affirmatively, whether he could sign
the proposed annotation, having assumed his duties only in July 1982. 5
The resolution on the consulta held that Entry No. 8191 had been rendered ". . .
ineffective due to the impossibility of accomplishing registration at the time the
document was entered because of the non-availability of the certificate (sic) of title
involved. For said certificate of sale to be admitted for registration, there is a need
for it to be re-entered now that the titles have been reconstituted upon payment of
new entry fees," and by-passed the second query as having been rendered moot and
academic by the answer to the first. 6
Unwilling to accept that result, the DBP appealed the resolution to the Court of
Appeals (then the Intermediate Appellate Court) 7 which, after reviewing the record,
certified the appeal to this Court as involving a question purely of law. 8 The appealed
resolution appears to be based upon a reading of the cited Section 56 of PD No. 1529,
and particularly of the provision therein referring to the Register's act of making a
primary entry as ". . . a preliminary process in registration . . .," as depriving of any
effect a primary entry without a corresponding annotation thereof on the certificate
of title to which the instrument subject of said entry refers. cdphil
That view fails to find support from a consideration of entire context of said Section
56 which in another part also provides that the instrument subject of a primary entry
". . . shall be regarded as registered from the time so noted . . .," and, at the very
least, gives such entry from the moment of its making the effect of putting the whole
world on notice of the existence the instrument so entered. Such effect (of
registration) clearly attaches to the mere making of the entry without regard to the
subsequent step of annotating a memorandum of the instrument subject of the entry
on the certificate of title to which it refers. Indeed, said Section, in also providing that
the annotation, ". . . when made . . . shall bear the same date . . ." as the entry, may
be said to contemplate unspecified intervals of time occurring between the making
of a primary entry and that of the corresponding annotation on the certificate of title
without robbing the entry of the effect of being equivalent to registration. Neither,
therefore, is the implication in the appealed resolution that annotation must follow
entry immediately or in short order justified by the language of Section 56.
Furthermore, it is amply clear that the four-year hiatus between primary entry and
proposed annotation in this case has not been of DBP's making. Though it was under
no necessity to present the owner's duplicates of the certificates of title affected for
purposes of primary entry, since the transaction sought to be recorded was an
involuntary transaction, 9 and the record is silent as to whether it presented them or
not, there is nonetheless every probability that it did so. It was the mortgagee of the
lands covered by those titles and it is usual in mortgage transactions that the owner's
duplicates of the encumbered titles are yielded into the custody of the mortgagee
until the mortgage is discharged. Moreover, the certificates of title were
reconstituted from the owner's duplicates,10 and again it is to be presumed that said
duplicates were presented by DBP, the petitioner in the reconstitution proceedings.
It is, furthermore, admitted that the requisite registration fees were fully paid and
that the certificate of sale was registrable on its face. 11 DBP, therefore, complied
with all that was required of it for purposes of both primary entry and annotation of
the certificate of sale. It cannot be blamed that annotation could not be made
contemporaneously with the entry because the originals of the subject certificates of
title were missing and could not be found, since it had nothing to do with their
safekeeping. If anyone was responsible for failure of annotation, it was the Register
of Deeds who was chargeable with the keeping and custody of those
documents. LLphil
It does not, therefore, make sense to require DBP to repeat the process of primary
entry, paying anew the entry fees as the appealed resolution disposes, in order to
procure annotation which through no fault on its part, had to be deferred until the
originals of the certificates of title were found or reconstituted. That it is hardly just
or equitable to do so also seems to have occurred to the Solicitor General, who dilutes
his argument in support of the appealed resolution with the suggestion that ". . . the
making of a new entry . . . would be the more orderly procedure," and that DBP
should not be made to pay filing fees anew. 12
Jurisprudence on the subject, while it has not been entirely consistent, is not wanting.
In Government vs. Aballe, 13 this Court ruled that ". . . (a)lthough a notice of
attachment has not been noted on the certificate of title, its notation in the book of
entry of the register of deeds produces all the effects which the law gives to its
registration or inscription." Seemingly, that ruling was abandoned in the wartime
case of Basa vs. Dela Rama, 14 where it was held that the entry of an instrument in
the primary entry book produces no legal effect unless a memorandum thereof is
noted on the certificate of title. Villasor vs. Camon, 15 however, clarified
that Aballe was never really abandoned or reversed insofar as it applied to
involuntary transactions. Said the Court in that case, which involved a voluntary
transaction — a deed of assignment of rights in a parcel of land and its improvements:
The appellant cannot invoke in support of her contention, the ruling laid down in the
case of Government of the Philippine Islands vs. Aballe, 60 Phil., 986, which was
followed in Director of Lands vs. Abad, 61 Phil. 479, to the effect that an attachment
entered upon the entry book is duly registered although the duplicate certificate is
not presented at the time of registration to the register of deeds. Appellant cannot
invoked said ruling, not because it has been abandoned by the Supreme Court during
the Japanese occupation in the case of Bass vs. De la Rama, et al., . . . in which it was
said that 'we are constrained to abandon the ruling in said two cases,' - it was not
abandoned for the decision was concurred by only two justices or less than a majority,
and said statement was not necessary or an obiter dictum and against the law, as
correctly stated by the two associate justices who dissented and only concurred in the
result, but because said ruling, subsisting and in force, does not support appellant's
contention, for it is only applicable to registration of involuntary instruments, such as
attachment, or other liens and adverse claims of any description. This ruling is correct
or in conformity with the provisions of section 72 of Act No. 496, which do not require
the production by the registrant of the duplicate certificate of the land to be affected,
. . . ." (emphasis supplied)
The decision in Villasor also quoted with approval the following excerpt from an
earlier case, Philippine National Bank vs. Fernandez: 16
"Coming now to the second ground on which the appellant bases
his claims, we find that when Simona Fausa executed the
document, Exhibit 3, on October 17, 1928, conveying her interest
in the land to the appellant, her interest therein had already been
attached by the provincial sheriff and also by him at public
auction to the Philippine National Bank, and the certificate of sale
filed in the office of the register of deeds in accordance with the
law (sections 429 and 450 of the Code of Civil Procedure). It was
not necessary for the sheriff to present the owner's duplicate of
the certificate of title when he filed notice of attachment with
the register of deeds, nor was it necessary for the Philippine
National Bank to present the owner's duplicate when the bank
filed its certificate of sale for registration (sections 71 and 72
of Act No. 496)."
Later cases appear to have applied the Aballe ruling that entry in the day book, even
without the corresponding annotation on the certificate of title, is equivalent to, or
produces the effect of, registration to voluntary transactions, provided the requisite
fees are paid and the owner's duplicates of the certificates of title affected are
presented. Thus, in Levin vs. Bass, et al., 17 it was held: prcd
". . . Under the Torrens system the act of registration is the
operative act to convey and affect the land. Do the entry in the
day book of a deed of sale which was presented and filed
together with owner's duplicate certificate of title with the office
of the Registrar of Deeds and full payment of registration fees
constitute a complete act of registration which operates to
convey and affect the land? In voluntary registration, such as a
sale, mortgage, lease and the like, if the owner's duplicate
certificate be not surrendered and presented or if no payment of
registration fees be made within 15 days, entry in the day book
of the deed of sale does not operate to convey and affect the
land sold. In involuntary registration, such as an attachment, levy
upon execution, lis pendens and the like, entry thereof in the day
book is a sufficient notice to all persons of such adverse claim. . .
. The pronouncement of the court below is to the effect that an
innocent purchaser for value has no right to the property
because he is not a holder of a certificate of title to such property
acquired by him for value and in good faith. It amounts to holding
that for failure of the Registrar of Deeds to comply and perform
his duty an innocent purchaser for value loses that character - he
is not an 'innocent holder for value of a certificate of title.' . .
. Neither violence to, nor stretching of the meaning of the law
would be done, if we should hold that an innocent purchaser for
value of registered land becomes the registered owner and in
contemplation of law the holder of a certificate thereof the
moment he presents the owner's duplicate certificate of title to
the property sold and pays the full amount of registration fees,
because what remains to be done lies not within his power to
perform. The Registrar of Deeds is in duty bound to perform it.
We believe that is a reasonable and practical interpretation of the
law under consideration — a construction which would lead to no
inconsistency and injustice." (emphasis supplied)
A similar ruling was made in Potenciano vs. Dineros, et al., 18 concerning land a deed
of sale of which was entered in the day book upon payment of the corresponding
fees and presentation of the owner's duplicate of the covering certificate of title, on
November 4, 1944. However, due to the confusion arising from the bombing of
Manila (this having happened during the final months of the Japanese Occupation),
the papers presented by the registrant were either lost or destroyed, no certificate
of title was issued to him and as far as the records of the Register of Deeds showed,
the property remained in the name of the vendor. Another party later sued the
vendor, obtained judgment against him and purchased the property on execution
sale. In affirming judgment annulling the execution sale in an action brought by the
original purchaser, this Court held:
"The judgment creditor contends that entry of the deed in the
day book is not sufficient registration. Both upon law and
authority this contention must be rejected. Section 56 of the
Land Registration Act says that deeds relating to registered land
shall, upon payment of the filing fees, be entered in the entry
book — also called day book in the same section — with notation
of the year, month, day, hour, and minute of their reception and
that 'they shall be regarded as registered from the moment so
noted.' And applying the provision in the cases of Levin vs. Bass,
etc., G.R. Nos. L-4340 to 4346, decided on May 28, 1952, this
Court held that 'an innocent purchaser for value of registered
land becomes the registered owner and in contemplation of law
the holder of a certificate thereof the moment he presents and
files a duly notarized and lawful deed the same is entered on the
day book and at the same time he surrenders or presents the
owner's duplicate certificate of title to the property sold and pays
the full amount of registration fees, because what remains to be
done lies not within his power to perform.'"
Current doctrine thus seems to be that entry alone produces the effect of
registration, whether the transaction entered is a voluntary or an involuntary one, so
long as the registrant has complied with all that is required of him for purposes of
entry and annotation, and nothing more remains to be done but a duty incumbent
solely on the register of deeds.
Therefore, without necessarily holding that annotation of a primary entry on the
original of the certificate of title may be deferred indefinitely without prejudice to
the legal effect of said entry, the Court rules that in the particular situation here
obtaining, annotation of the disputed entry on the reconstituted originals of the
certificates of title to which it refers is entirely proper and justified. To hold said entry
"ineffective," as does the appealed resolution, amounts to declaring that it did not,
and does not, protect the registrant (DBP) from claims arising, or transactions made,
thereafter which are adverse to or in derogation of the rights created or conveyed by
the transaction thus entered. That, surely, is a result that is neither just nor can, by
any reasonable interpretation of Section 56 of PD 1529 be asserted as warranted by
its terms. LLjur
The qualms implicit in the query of the respondent (and present appellee) register of
deeds about making annotation of an entry effected before he assumed that office
are more imagined than real. He would only be making a memorandum of an
instrument and of its entry based on or reciting details which are already of
indubitable record and, pursuant to the express command of the law, giving said
memorandum the same date as the entry. No part of that function is exclusive to the
incumbent of the office at the time entry was made or is forbidden to any of his
successors.
WHEREFORE, the appealed resolution of the Acting Commissioner of Land
Registration is SET ASIDE. The respondent-appellee Register of Deeds of Nueva Ecija,
or his successor, is ordered to annotate on the originals of the reconstituted Transfer
Certificates of Title Nos. NT-149033 and NT-149034 of his Registry a memorandum
of the certificate of sale in favor of appellant Development Bank of the Philippines as
entered under Entry No. 8191 dated June 13, 1980 of the Primary Entry (Day) Book
of said Registry. No pronouncement as to costs.
SO ORDERED.
||| (Development Bank of the Phils. v. Acting Register of Deeds of Nueva Ecija, UDK
No. 7671, [June 23, 1988], 245 PHIL 492-501)
FIRST DIVISION
[G.R. No. 149121. April 20, 2010.]
NATIONAL HOUSING AUTHORITY, petitioner, vs. AUGUSTO BASA, JR., LUZ BASA and
EDUARDO S. BASA, respondents.
DECISION
LEONARDO-DE CASTRO, J p:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to
set aside the Amended Decision 1 of the Court of Appeals dated November 27, 2000
and its Resolution dated July 19, 2001 denying the motion for reconsideration of
the National Housing Authority (NHA).
On April 19, 1983, spouses Augusto and Luz Basa loaned from NHA the amount of
P556,827.10 secured by a real estate mortgage over their properties covered by
Transfer Certificates of Title (TCTs) Nos. 287008 and 285413, located at No. 30 San
Antonio St., San Francisco del Monte, Quezon City. 2 Spouses Basa did not pay the
loan despite repeated demands. To collect its credit, the NHA, on August 9, 1990,
filed a verified petition for extrajudicial foreclosure of mortgage before the Sheriff's
Office in Quezon City, pursuant to Act No. 3135, as amended. 3
After notice and publication, the properties were sold at public auction where NHA
emerged as the highest bidder. 4 On April 16, 1991, the sheriff's certificate of sale
was registered and annotated only on the owner's duplicate copies of the titles in
the hands of the respondents, since the titles in the custody of the Register of
Deeds were among those burned down when a fire gutted the City Hall of Quezon
City on June 11, 1988. 5
On April 16, 1992, the redemption period expired, 6 without respondents having
redeemed the properties. Shortly thereafter, on April 24, 1992, NHA executed an
Affidavit of Consolidation of Ownership 7 over the foreclosed properties, and the
same was inscribed by the Register of Deeds on the certificates of title in the hand
of NHA under Entry No. 6572/T-287008-PR-29207. 8
On June 18, 1992, NHA filed a petition for the issuance of a Writ of Possession. The
said petition was granted by the Regional Trial Court (RTC) in an Order 9 dated
August 4, 1992.
A Writ of Possession 10 was issued on March 9, 1993 by the RTC, ordering spouses
Augusto and Luz Basa to vacate the subject lots. The writ, however, remained
unserved. This compelled NHA to move for the issuance of an alias writ of
possession on April 28, 1993.
Before the RTC could resolve the motion for the issuance of an alias writ of
possession, respondents spouses Basa and Eduardo Basa, on June 2, 1993, filed a
Motion for Leave to Intervene and Petition in Intervention (with Prayer for
Temporary Restraining Order and/or Writ of Preliminary Injunction). 11
Respondents anchored said petition for intervention on Section 8 12 of Act No.
3135, as amended, which gives the debtor/mortgagor the remedy to petition that
the sale be set aside and the writ of possession be cancelled. In the said petition for
intervention, respondents averred that the extrajudicial foreclosure of the subject
properties was a nullity since notices were not posted and published, written
notices of foreclosure were not given to them, and notices of sale were not
tendered to the occupants of the sold properties, thereby denying them the
opportunity to ventilate their rights. 13 Respondents likewise insisted that even
assuming arguendo that the foreclosure sale were valid, they were still entitled to
redeem the same since the one-year redemption period from the registration of the
sheriff's certificate of foreclosure sale had not yet prescribed. 14 Citing Bernardez v.
Reyes 15 and Bass v. De la Rama, 16 respondents theorized that the instrument is
deemed registered only upon actual inscription on the certificate of title in the
custody of the civil registrar. 17 Since the sheriff's certificate was only inscribed on
the owner's duplicate certificate of title, and not on the certificate of title in the
possession of the Register of Deeds, then there was no effective registration and
the one-year redemption period had not even begun to run. Thus, respondents
asked the RTC, among others, to declare the foreclosure sale null and void, to allow
the respondents to redeem the mortgaged properties in the amount of P21,160.00,
and to cancel the Writ of Possession dated March 9, 1993. HCTAEc
NHA opposed respondents' petition for intervention. 18 It countered that the
extrajudicial foreclosure sale was conducted validly and made in accordance with
Act No. 3135 as evidenced by the publication of the Notice of Sheriff's Sale in the
Manila Times in its issues dated July 14, 21 and 28, 1990. 19 NHA also said that
respondents had been furnished with a copy of the Notice of Sheriff's Sale as shown
at the bottom portion of said notice. 20 NHA maintained that respondents' right of
redemption had long expired on April 15, 1992 since the certificate of sale was
inscribed on their TCT Nos. 285413 and 287008 a year earlier, or on April 16, 1991.
It pointed out that the RTC, via its Order dated August 4, 1992, had already ruled
that respondents' right of redemption was already gone without them exercising
said right. Since said order had already attained finality, the ruling therein could no
longer be disturbed.
On January 2, 1995, the RTC issued the first assailed Order 21 with the following
directives: 1) granting the issuance of the alias writ of possession which allowed
NHA to take possession of the subject properties; 2) admitting the Petition in
Intervention and "treating the same as the petition to set aside sale mentioned in
[Sec. 8] of Act No. 3155"; and 3) granting the issuance of a Writ of Preliminary
Injunction in favor of respondents that ordered NHA to refrain from selling or
disposing of the contested properties. The pertinent portion of the order reads:
After examining the record and following precedents . . . this Court hereby orders:
1. The issuance of an alias writ of possession;
2. Admission of the "Petition in Intervention," treating the same as the "petition" to
set aside sale, etc., mentioned in [Sec. 8] of Act No. 3155;
3. The issuance of a writ of preliminary injunction, after a BOND in the amount of
P20,000.00 had been duly filed by intervenors, ordering movant National Housing
Authority, its agents and/or any other person acting under its command, to desist
and refrain from selling or in any manner from disposing of the subject properties
covered by TCT Nos. 287008 and 285413 and located at No. 30, San Antonio Street,
San Francisco del Monte, Quezon City, pending the termination of this proceeding
and/or unless a contrary order is issued by this Court;
4. Setting the hearing of the petition in intervention (to set aside) on March 17,
1995, at 8:30 a.m. 22
NHA filed a motion for reconsideration 23 assailing the RTC's Order insofar as it
admitted respondents' motion for intervention and issued a writ of preliminary
injunction. NHA argued that respondents should have assailed the foreclosure sale
during the hearing in the petition for the issuance of a Writ of Possession, and not
during the hearing in the petition for the issuance of an alias writ of possession
since the "petition" referred to in Section 8 of Act No. 3135 pertains to the original
petition for the issuance of the Writ of Possession and not the Motion for the
Issuance of an Alias Writ of Possession. NHA stressed that another reason why the
petition for intervention should be denied was the finality of the Order dated
August 4, 1992 declaring respondents' right of redemption barred by prescription.
Lastly, NHA asserted that the writ of possession was issued as a matter of course
upon filing of the proper motion and thereby, the court was bereft of discretion.
In the second assailed Order 24 dated September 4, 1995, the RTC denied NHA's
motion for reconsideration reasoning that the admission of the intervention was
sanctioned by Section 8 of Act No. 3135. As to the grant of preliminary injunction,
the RTC made the justification that if the NHA was not restrained, the judgment
which may be favorable to respondents would be ineffectual. The order partly
provides:
The motion is without merit. The admission of the intervention is sanctioned by Sec.
8 of Act No. 3135. And, because, otherwise or if no preliminary injunction is issued,
the movant NHA may, before final judgment, do or continue the doing of the act
with the intervenor asks the court to restrain, and thus make ineffectual the final
judgment rendered afterwards which may grant the relief sought by the intervenor.
ACCORDINGLY, the motion for reconsideration is DENIED. 25
Undaunted, NHA filed on November 24, 1995, a special civil action for certiorari and
prohibition before the Court of Appeals.
The Court of Appeals rendered a Decision 26 dated February 24, 2000, in favor of
the NHA. It declared null and void the assailed orders of the RTC dated January 2,
1995 and September 4, 1995, to the extent that the said orders admitted the
petition in intervention and granted the issuance of the preliminary injunction; but
it upheld the grant of the alias writ of possession, thus:
WHEREFORE, the petition is GRANTED, and the assailed order of January 2, 1995 is
declared NULL AND VOID except for the portion directing the issuance of an alias
writ of possession. Likewise declared NULL AND VOID is the second assailed order
of September 4, 1995 denying the petitioner's motion for reconsideration. Let an
alias writ of possession be issued and executed/implemented by the public
respondent without further delay. 27
The Court of Appeals defended its affirmation of the RTC's grant of the alias writ of
possession in NHA's favor by saying that it was a necessary consequence after the
earlier writ was left unserved to the party. It further explained that NHA was
entitled to the writ of possession as a matter of course after the lapse of the
redemption period. cDHAaT
As to the RTC's admission of respondents' petition for intervention, the appellate
court opined that it was improperly and erroneously made. The Court of Appeals
believed that the only recourse available to a mortgagor, in this case the
respondents, in a foreclosure sale is to question the validity of the sale through a
petition to set aside the sale and to cancel the writ of possession, a summary
procedure provided for under Section 112 of the Land Registration Act. It also
observed that the grant of the preliminary injunction by the RTC was uncalled for as
it would effectively defeat the right of NHA to possession, the latter having been
entitled by virtue of the grant of the alias writ of possession.
Respondents filed a motion for reconsideration. 28 They alleged that since they
raised the issue that their right of redemption had not prescribed, said fact should
have changed the whole scenario such that the issuance of a writ of possession
ceased to be summary in nature and was no longer ministerial. Respondents then
concluded that their right to redeem the properties against NHA's right to the writ
of possession must be threshed out in a hearing of the case on its merits.
With regard to the RTC Order dated August 4, 1992 granting the writ of possession
which, according to the NHA, became final and executory, respondents argued that
said order did not constitute res judicata so as to bar the filing of the petition for
intervention since the said order was not a judgment on the merits that could attain
finality.
Also, respondents would like the Court of Appeals to treat the petition for
intervention not only as an opposition to the issuance of the alias writ of
possession, but also as a proper remedy under Section 8 of Act No. 3135, as
amended, in view of the various issues raised.
On November 27, 2000, the Court of Appeals, in its Amended Decision,
reconsidered its earlier stance. It declared that the period of redemption had not
expired as the certificate of sale had not been registered or annotated in the
original copies of the titles supposedly kept with the Register of Deeds since said
titles were earlier razed by fire. Taking its cue from Bass v. De la Rama where the
Court purportedly made a ruling that entry of a document, such as sale of real
property, in the entry book is insufficient to treat such document as registered,
unless the same had been annotated on the certificate of title; the Court of Appeals
went on to say that the entry of the certificate of sale in the owner's duplicate of
the titles could not have been sufficient to register the same since anyone who
would wish to check with the Register of Deeds would not see any annotation.
Thus, entry made on the owner's duplicate of the titles cannot be considered notice
that would bind the whole world. Having been deprived of their right of
redemption, the Court of Appeals deemed it proper to allow respondents to
intervene. The dispositive part of the amended decision decrees:
WHEREFORE, the motion for reconsideration is GRANTED. Our decision dated
February 24, 2000, is RECONSIDERED and SET ASIDE and the petition DISMISSED. 29

Unfazed, NHA filed a motion for reconsideration, which the Court of Appeals denied
in its July 19, 2001 Resolution, to wit:
ACCORDINGLY, the Motion for Reconsideration dated February 24, 2000 is DENIED
for lack of merit. 30
Hence, the instant petition.
In its memorandum, NHA tendered the following issues:
1. WHETHER OR NOT THE ANNOTATION OF THE SHERIFF'S CERTIFICATE OF SALE IN
THE PRIMARY ENTRY BOOK OF THE REGISTER OF DEEDS AND ON THE OWNER'S
DUPLICATE TITLE IS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT OF LAW ON
REGISTRATION.
2. WHETHER OR NOT THE CASE OF BASS VS. DE LA RAMA HAS BEEN SUPERSEDED.
31
Respondents, on the other hand, offered the following as issues:
I
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THE LOWER
COURT DID NOT ACT WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN ADMITTING THE RESPONDENTS' INTERVENTION AND GRANTING
THE EQUITABLE WRIT OF INJUNCTION THEREBY DISMISSING THE PETITION FOR
CERTIORARI AND PROHIBITION.
II
WHETHER OR NOT THE INSTANT PETITION COMPLIES WITH THE REQUIREMENTS OF
RULE 45 OF THE RULES OF COURT. 32
On the procedural aspect, respondents question NHA's alleged failure to include in
its petition copies of material portions of the record such as pleadings filed in the
RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of
Court. Respondents also pointed out the purported defective verification of NHA in
view of the fact that it merely stated that the one verifying had read the allegations
of the petition and that the same were true and correct to the best of his
knowledge. According to respondents, such declarations were not in accordance
with the rules which require that a verified pleading must state that the affiant had
read the pleading and that the allegations therein were true and correct based on
his personal knowledge and not only to the "best" of his knowledge.
As to the merits, NHA stresses that the annotation and entry in the owner's
duplicate certificate of titles of the sheriff's certificate of sale are sufficient
compliance with the requirement of law on registration. To support this, NHA refers
to Land Registration Administration Circular No. 3 dated December 6, 1988, entitled
"Entry and Provisional Registration of Instruments Pending Reconstitution of Title"
which allegedly authorized all Registers of Deeds to accept for entry and provisional
registration instruments affecting lost or destroyed certificates of title pending
reconstitution of the original. The legality and validity of the disputed registration
on its duplicate copies of the sheriff's certificate of sale, NHA insists, are backed by
this Court's ruling in Development Bank of the Philippines v. Acting Register of
Deeds of Nueva Ecija, 33 where purportedly, this Court made a favorable
interpretation of Section 56 of Presidential Decree No. 1529. NHA says that the
inscription of the sheriff's certificate of sale only to the owner's duplicate copies,
but not to those in the custody of the register of deeds is justified as the latter were
burned down. Thus, it could not be blamed for the non-registration of the sale in
the original copies.
NHA faults the Court of Appeals' reliance on Bass v. De la Rama since the ruling
therein stating that entry and annotation of a sale instrument on the owner's
duplicate copy only as insufficient registration, was already abandoned in
Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija,
where it was allegedly ruled that the primary entry alone of the transaction
We dwell first with the procedural issues before the main controversy. Respondents
produces the effect of registration so long as the registrant has complied with all
contend that the instant petition is dismissible on the ground that NHA failed to
that is required of him for purposes of entry and annotation.
attach pleadings filed in the RTC and the Court of Appeals as required under Section
4, Rule 45 of the Rules of Court which partly provides:

In contrast, respondents submit that annotation of the sheriff's certificate of sale on

the owner's copy is inadequate to propel the running of the redemption period.
SEC. 4. Contents of petition. — The petition shall be filed in eighteen (18) copies,
They firmly believe that for the sale instrument to be considered as registered, the
with the original copy intended for the court being indicated as such by the
inscription must be made on the reconstituted titles. HCITAS
petitioner, and shall . . . (d) be accompanied by a clearly legible duplicate original, or
a certified true copy of the judgment or final order or resolution certified by the
clerk of court of the court a quo and the requisite number of plain copies thereof,
Respondents disagree with NHA's opinion that Bass v. De la Rama was superceded
and such material portions of the record as would support the petition; . . . .
by Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija.
They are of the persuasion that the ruling in DBP pertains exclusively to the unique
factual milieu and the issues attendant therein, but not to the instant case where
In its petition, NHA attached the February 24, 2000 Decision, the November 27,
Bass purportedly applies. Respondents also assail NHA's citation of Sta. Ignacia
2000 Amended Decision, and the July 19, 2001 Resolution all of the Court of
Rural Bank, Inc. v. Court of Appeals. 34 According to them, said case finds no
Appeals; copies of the transfer certificates of title of the disputed properties; and
application to the instant controversy because the issue involved in the former was
the June 13, 1994 Order of the Quezon City RTC ordering the reconstitution of the
whether the redemption period should be reckoned from the date of the auction
said titles. This Court finds that NHA substantially complied with the requirements
sale or the registration of the certificate of sale, which ostensibly is not the bone of
under Section 4 of Rule 45. The same conclusion was arrived at by this Court in
contention in this case.
Development Bank of the Philippines v. Family Foods Manufacturing Co., Ltd. 36
when it was faced with the same procedural objection, thus:

Ascribing NHA's inaction to have the burned titles reconstituted, respondents assert
that such neglect should not be used as a justification for the non-inscription in the
As held by this Court in Air Philippines Corporation v. Zamora:
original titles of the certificate of sale. Additionally, respondents insist that the
question of whether the redemption period should be reckoned from the
inscription on the owner's duplicate copies is a factual and legal issue that is
appropriately adjudicated in a hearing on the merits of their petition in [E]ven if a document is relevant and pertinent to the petition, it need not be
intervention, and not in the instant special civil action for certiorari and prohibition appended if it is shown that the contents thereof can also [be] found in another
which is limited in scope, namely, whether the RTC committed grave abuse of document already attached to the petition. Thus, if the material allegations in a
discretion amounting to lack of jurisdiction in admitting their petition in position paper are summarized in a questioned judgment, it will suffice that only a
intervention. certified true copy of the judgment is attached.

Respondents reiterate that the issuance of the writ of possession prayed for by NHA Third, a petition lacking an essential pleading or part of the case record may still be
before the RTC is no longer ministerial since it raised the issue of whether their given due course or reinstated (if earlier dismissed) upon showing that petitioner
period of redemption has already expired. They cite Barican v. Intermediate later submitted the documents required, or that it will serve the higher interest of
Appellate Court 35 as the authority to this argument. justice that the case be decided on the merits.
 imagined; and have been made in good faith. 37 To achieve this purpose, the
verification of a pleading is made through an affidavit or sworn statement
Nevertheless, even if the pleadings and other supporting documents were not
confirming that the affiant has read the pleading whose allegations are true and
attached to the petition, the dismissal is unwarranted because the CA records
correct of the affiant's personal knowledge or based on authentic records. 38
containing the promissory notes and the real estate and chattel mortgages were
elevated to this Court. Without a doubt, we have sufficient basis to actually and
completely dispose of the case.
The General Manager of NHA verified the petition as follows:

We must stress that cases should be determined on the merits, after all parties
3. I have read the allegations contained therein and that the same are true and
have been given full opportunity to ventilate their causes and defenses, rather than
correct to the best of my own personal knowledge. 39
on technicalities or procedural imperfections. In that way, the ends of justice would
be served better. Rules of procedure are mere tools designed to expedite the
decision or resolution of cases and other matters pending in court. A strict and rigid
application of rules, resulting in technicalities that tend to frustrate rather than A reading of the above verification reveals nothing objectionable about it. The
promote substantial justice, must be avoided. In fact, Section 6 of Rule 1 states that affiant confirmed that he had read the allegations in the petition which were true
the Rules shall be liberally construed in order to promote their objective of ensuring and correct based on his personal knowledge. The addition of the words "to the
the just, speedy and inexpensive disposition of every action and proceeding. best" before the phrase "of my personal knowledge" did not violate the
requirement under Section 4 of Rule 7, it being sufficient that the affiant declared
that the allegations in the petition are true and correct based on his personal
knowledge.
Contrary to respondents' assertion, NHA's verification conforms to the rule. Section
4, Rule 7 of the Rules of Court states:

Now, as to the merits of the case. The main issue before us is whether the
annotation of the sheriff's certificate of sale on the owner's duplicate certificate of
SEC. 4. Verification. — Except when otherwise specifically required by law or rule,
titles is sufficient registration considering that the inscription on the original
pleadings need not be under oath, verified or accompanied by affidavit. IcEACH
certificates could not be made as the same got burned.

A pleading is verified by an affidavit that the affiant has read the pleading and that
the allegations therein are true and correct of his personal knowledge or based on
authentic records.
A pleading required to be verified which contains a verification based on
"information and belief," or upon "knowledge, information and belief," or lacks a
proper verification, shall be treated as an unsigned pleading.
The reason for requiring verification in the petition is to secure an assurance that
the allegations of a pleading are true and correct; are not speculative or merely
Jurisprudence is replete with analogous cases. Of foremost importance is
Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija 40
where the Court listed cases where the transaction or instrument was annotated
not on the original certificate but somewhere else. In that case, DBP, following the
extrajudicial foreclosure sale where it emerged as the highest bidder, registered
with the Register of Deeds the sheriff's certificate of sale in its favor. After it had
paid the required fees, said transaction was entered in the primary entry book.
However, the annotation of the said transaction to the originals of the certificates
of title could not be done because the same titles were missing from the files of the
Registry. This prompted DBP to commence reconstitution proceedings of the lost
titles. Four years had passed before the missing certificates of title were
reconstituted. When DBP sought the inscription of the four-year old sale transaction
on the reconstituted titles, the Acting Register of Deeds, being in doubt of the
proper action to take, referred the matter to the Commissioner of the Land
Registration Authority by consulta, the latter resolved against the annotation of the
sale transaction and opined that said entry was "ineffective due to the impossibility
of accomplishing registration at the time the document was entered because of the
non-availability of the certificate (sic) of title involved." 41 In other words,
annotation on the primary book was deemed insufficient registration. The Court
disagreed with this posture. Considering that DBP had paid all the fees and
complied with all the requirements for purposes of both primary entry and
annotation of the certificate of sale, the Court declared that mere entry in the
primary book was considered sufficient registration since "[DBP] cannot be blamed
that annotation could not be made contemporaneously with the entry because the
originals of the subject certificates of title were missing and could not be found,
since it had nothing to do with their safekeeping. If anyone was responsible for
failure of annotation, it was the Register of Deeds who was chargeable with the
keeping and custody of those documents." 42 To buttress its conclusion, the Court
reviewed the relevant jurisprudence starting from 1934. The Court noted that
before the Second World War, particularly in Government of the Philippine Islands
v. Aballe, 43 the prevailing doctrine was an inscription in the book of entry even
without the notation on the certificate of title was considered as satisfactory and
produced all the effects which the law gave to its registration. During the war,
however, the Court observed that there was apparent departure from said ruling
since in Bass v. De la Rama, the holding was that entry of an instrument in the
primary entry book does not confer any legal effect without a memorandum
thereof inscribed on the certificate of title. 44 DBP noted that Bass v. De la Rama,
however, survived only for a little while since "later cases appear to have applied
the Aballe ruling that entry in the day book, even without the corresponding
annotation on the certificate of title, is equivalent to, or produces the effect of,
registration to voluntary transactions, provided the requisite fees are paid and the
owner's duplicates of the certificates of title affected are presented." 45
These later cases are Levin v. Bass 46 and Potenciano v. Dineros, 47 both of which
involve the issue of whether entry in the day book of a deed of sale, payment of the
fees, and presentation of the owner's duplicate certificate of title constitute a
complete act of registration. 48
Simply, respondents' resort to Bass v. De la Rama is futile as the same was
abandoned by the later cases, i.e., Bass, Potenciano and DBP.
In the recent case of Autocorp Group v. Court of Appeals, 49 the respondent was
awarded the foreclosed parcels of land. A sheriff's certificate of sale was thereafter
issued in its favor. Thereafter, petitioners in that case filed a complaint before the
RTC with a prayer for the issuance of an ex parte TRO aimed at preventing the
Register of Deeds from registering the said certificate of sale in the name of the
respondent and from taking possession of the subject properties. 50 Before the RTC
could issue a TRO, respondent presented the sheriff's certificate of sale to the
Register of Deeds who entered the same certificate in the primary book, even if the
registration fee was paid only the following day. Four days after, the RTC issued a
TRO directing the Register of Deeds to refrain from registering the said sheriff's
certificate of sale. A preliminary injunction was thereafter issued as the TRO was
about to expire. The preliminary injunction was questioned by therein respondent.
One of the main issues raised there was whether the entry of the certificate of sale
in the primary book was equivalent to registration such that the TRO and the
preliminary injunction issues would not lie anymore as the act sought to be
restrained had become an accomplished act. The Court held that the TRO and the
preliminary injunction had already become moot and academic by the earlier entry
of the certificate of sale in the primary entry book which was tantamount to
registration, thus:
In fine, petitioner's prayer for the issuance of a writ of injunction, to prevent the
register of deeds from registering the subject certificate of sale, had been rendered
moot and academic by the valid entry of the instrument in the primary entry book.
Such entry is equivalent to registration. Injunction would not lie anymore, as the act
sought to be enjoined had already become a fait accompli or an accomplished act.
51
Indeed, the prevailing rule is that there is effective registration once the registrant
has fulfilled all that is needed of him for purposes of entry and annotation, so that
what is left to be accomplished lies solely on the register of deeds. The Court thus
once held:
Current doctrine thus seems to be that entry alone produces the effect of
registration, whether the transaction entered is a voluntary or an involuntary one,
so long as the registrant has complied with all that is required of him for purposes
of entry and annotation, and nothing more remains to be done but a duty
incumbent solely on the register of deeds. 52
To hold said entry ineffective, as does the appealed resolution, amounts to
declaring that it did not, and does not, protect the registrant (DBP) from claims
arising, or transactions made, thereafter which are adverse to or in derogation of
the rights created or conveyed by the transaction thus entered. That, surely, is a
result that is neither just nor can, by any reasonable interpretation of Section 56 of
Presidential Decree No. 1529 be asserted as warranted by its terms. 57

In the case under consideration, NHA presented the sheriff's certificate of sale to
the Register of Deeds and the same was entered as Entry No. 2873 and said entry What is more, in Autocorp Group v. Court of Appeals, 58 the pertinent DBP ruling
was further annotated in the owner's transfer certificate of title. 53 A year later and was applied, thereby demonstrating that the said ruling in DBP may be applied to
after the mortgagors did not redeem the said properties, respondents filed with the other cases with similar factual and legal issues, viz.:
Register of Deeds an Affidavit of Consolidation of Ownership 54 after which the
same instrument was presumably entered into in the day book as the same was
annotated in the owner's duplicate copy. 55 Just like in DBP, Levin, Potenciano and Petitioners contend that the aforecited case of DBP is not apropos to the case at
Autocorp, NHA followed the procedure in order to have its sheriff's certificate of bar. Allegedly, in DBP, the bank not only paid the registration fees but also
sale annotated in the transfer certificates of title. There would be, therefore, no presented the owner's duplicate certificate of title. We find no merit in petitioner's
reason not to apply the ruling in said cases to this one. It was not NHA's fault that posture . . . .
the certificate of sale was not annotated on the transfer certificates of title which
were supposed to be in the custody of the Registrar, since the same were burned.
Neither could NHA be blamed for the fact that there were no reconstituted titles
xxx xxx xxx
available during the time of inscription as it had taken the necessary steps in having
the same reconstituted as early as July 15, 1988. 56 NHA did everything within its
power to assert its right. DTEcSa
Like in DBP v. Acting Register of Deeds of Nueva Ecija, the instrument involved in
the case at bar, is a sheriff's certificate of sale, We hold now, as we held therein,
that the registrant is under no necessity to present the owner's duplicates of the
While it may be true that, in DBP, the Court ruled that "in the particular situation
certificates of title affected, for purposes of primary entry, as the transaction sought
here obtaining, annotation of the disputed entry on the reconstituted originals of
to be recorded is an involuntary transaction.
the certificates of title to which it refers is entirely proper and justified," this does
not mean, as respondents insist, that the ruling therein applies exclusively to the
factual milieu and the issue obtaining in said case, and not to similar cases. There is
nothing in the subject declaration that categorically states its pro hac vice character. xxx xxx xxx
For in truth, what the said statement really conveys is that the current doctrine that
entry in the primary book produces the effect of registration can be applied in the
situation obtaining in that case since the registrant therein complied with all that . . . Such entry is equivalent to registration. Injunction would not lie anymore, as the
was required of it, hence, it was fairly reasonable that its acts be given the effect of act sought to be enjoined had already become a fait accompli or an accomplished
registration, just as the Court did in the past cases. In fact the Court there continued act. 59
with this pronouncement:

Moreover, respondents' stand on the non-applicability of the DBP case to other

cases, absent any statement thereof to such effect, contravenes the principle of
stare decisis which urges that courts are to apply principles declared in prior
decisions that are substantially similar to a pending case. 60
Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition
the [Regional Trial Court] of the province or place where the property or any part
thereof is situated, to give him possession thereof during the redemption period,
Since entry of the certificate of sale was validly registered, the redemption period
furnishing bond in an amount equivalent to the use of the property for a period of
accruing to respondents commenced therefrom, since the one-year period of
twelve months, to indemnify the debtor in case it be shown that the sale was made
redemption is reckoned from the date of registration of the certificate of sale. 61 It
without violating the mortgage or without complying with the requirements of this
must be noted that on April 16, 1991, the sheriff's certificate of sale was registered
Act. Such petition shall be made under oath and filed in the form of an ex parte
and annotated only on the owner's duplicate copies of the titles and on April 16,
motion in the registration or cadastral proceedings if the property is registered, or
1992, the redemption period expired, without respondents having redeemed the
in special proceedings in the case of property registered under the Mortgage Law or
properties. In fact, on April 24, 1992, NHA executed an Affidavit of Consolidation of
under section one hundred and ninety-four of the Administrative Code, or of any
Ownership. Clearly, respondents have lost their opportunity to redeem the
other real property encumbered with a mortgage duly registered in the office of any
properties in question.
register of deeds in accordance with any existing law, and in each case the clerk of
the court shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act Numbered Four
As regards respondents' allegation on the defect in the publication and notice Hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and
requirements of the extrajudicial foreclosure sale, the same is unavailing. The rule is sixty-six, and the court shall, upon approval of the bond, order that a writ of
that it is the mortgagor who alleges absence of a requisite who has the burden of possession issue, addressed to the sheriff of the province in which the property is
establishing such fact. 62 This is so because foreclosure proceedings have in their situated, who shall execute said order immediately.
favor the presumption of regularity and the burden of evidence to rebut the same is
on the party who questions it. 63 Here, except for their bare allegations,
respondents failed to present any evidence to support them. In addition, NHA
This provision of law authorizes the purchaser in a foreclosure sale to apply for a
stated in its Comment to Motion for Leave of Court to Intervene that it had
writ of possession during the redemption period by filing an ex parte motion under
complied with the publication of the Notice of Sheriff's Sale in the Manila Times in
oath for that purpose in the corresponding registration or cadastral proceeding in
the latter's issues dated July 14, 21 and 28, 1990. 64 It also claimed that an Affidavit
the case of property with Torrens title. 68 Upon the filing of such motion and the
of Publication of said newspaper was attached as Annex "B" in the said comment.
approval of the corresponding bond, the law also in express terms directs the court
65 NHA also said that respondents had been furnished with a copy of the Notice of
to issue the order for a writ of possession. 69
Sheriff's Sale as shown at the bottom portion of said notice. 66 From all these, it
would tend to show that respondents' aspersion of non-compliance with the
requirements of foreclosure sale is a futile attempt to salvage its statutory right to
The time-honored precept is that after the consolidation of titles in the buyer's
redeem their foreclosed properties, which right had long been lost by inaction.
name, for failure of the mortgagor to redeem, the writ of possession becomes a
matter of right. 70 Its issuance to a purchaser in an extrajudicial foreclosure is
merely a ministerial function. 71 The writ of possession issues as a matter of course
Considering that the foreclosure sale and its subsequent registration with the
upon the filing of the proper motion and the approval of the corresponding bond.
Register of Deeds were done validly, there is no reason for the non-issuance of the
The judge issuing the writ following these express provisions of law neither
writ of possession. A writ of possession is an order directing the sheriff to place a
exercises his official discretion nor judgment. 72 As such, the court granting the writ
person in possession of a real or personal property, such as when a property is
cannot be charged with having acted without jurisdiction or with grave abuse of
extrajudicially foreclosed. 67 Section 7 of Act No. 3135 provides for the rule in the
discretion. 73 To accentuate the writ's ministerial character, the Court disallowed
issuance of the writ of possession involving extrajudicial foreclosure sales of real
injunction to prohibit its issuance despite a pending action for annulment of
estate mortgage, to wit:
mortgage or the foreclosure itself. 74
 In fine, this Court finds that the Court of Appeals committed reversible error in
ruling that the annotation of NHA's sheriff's certificate of sale on the duplicate
Believing that the instant case does not come within the penumbra of the foregoing
certificates of title was not effective registration and in holding that respondents'
rule, respondents resort to the ruling in Barican v. Intermediate Appellate Court. 75
redemption period had not expired.
Unfortunately for them, the instant case does not even come close to the cited
case. There, the Court deemed it inequitable to issue a writ of possession in favor of
the purchaser in the auction sale considering that the property involved was already
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The
in the possession of a third person by virtue of a deed of sale with assumption of
Amended Decision of the Court of Appeals dated November 27, 2000 is SET ASIDE.
mortgage even before the purchaser could register the sheriff's certificate of sale.
Also, the auction buyer therein unreasonably deferred to exercise its right to
acquire possession over the property. These circumstances are not present in the
instant case. SO ORDERED.

Moreover, in Fernandez v. Espinoza, 76 the Court refused to apply the ruling in ||| (National Housing Authority v. Basa, Jr., G.R. No. 149121, [April 20, 2010], 632
Barican v. Intermediate Appellate Court 77 and Cometa v. Intermediate Appellate PHIL 471-500)
Court, 78 two cases which are exemptions to the stated rule, reasoning that:
DAEaTS

In Cometa, which actually involved execution of judgment for the prevailing party in
a damages suit, the subject properties were sold at the public auction at an
unusually lower price, while in Barican, the mortgagee bank took five years from
the time of foreclosure before filing the petition for the issuance of writ of
possession. We have considered these equitable and peculiar circumstances in
Cometa and Barican to justify the relaxation of the otherwise absolute rule. None of
these exceptional circumstances, however, attended herein so as to place the
instant case in the same stature as that of Cometa and Barican. Instead, the ruling
in Vaca v. Court of Appeals is on all fours with the present petition. In Vaca, there is
no dispute that the property was not redeemed within one year from the
registration of the extrajudicial foreclosure sale; thus, the mortgagee bank acquired
an absolute right, as purchaser, to the issuance of the writ of possession. Similarly,
UOB, as the purchaser at the auction sale in the instant case, is entitled as a matter
of right, to the issuance of the writ of possession.

Just as in Fernandez, this Court does not see any compelling reason to veer away
from the established rule.
FIRST DIVISION Levy on Attachment was annotated in TCT No. R-17571's Memorandum of
Encumbrances on the same day, June 17, 2004.

[G.R. No. 179884. January 25, 2012.]

On July 13, 2004, respondent Candice S. Bona (Candice) filed a Motion seeking leave
to intervene in Civil Case No. 04-7240. Attached to said Motion was Candice's
DURAWOOD CONSTRUCTION AND LUMBER SUPPLY, INC., petitioner, vs. CANDICE S. Answer in Intervention, her Third Party Claim addressed to Sheriff Leyva, and a copy
BONA, respondent. of TCT No. R-17571. Candice claimed therein that she is a co-owner of the property
covered by TCT No. R-17571. She alleged that LBB Construction had sold the
property to her and her siblings, Michael Angelo S. Bona, Diane Sheila S. Bona,
Glenda May S. Bona and Johann Louie Sebastian S. Bona, through a Deed of
DECISION
Absolute Sale dated June 2, 2004. Candice asserted that the sale is the subject of
Entry No. 30549 dated June 16, 2004 in the books of the Registry of Deeds of
Antipolo City, while the levy on attachment is only Entry No. 30590 dated June 17,
LEONARDO-DE CASTRO, J p: 2004. What was attached to the Motion was a copy of TCT No. R-17571, and not a
title in Candice and her co-owners' names.

This is a Petition for Review on Certiorari assailing the Decision 1 of the Court of
Appeals in CA-G.R. SP No. 94479 dated April 18, 2007 and its Resolution 2 dated On August 11, 2004, the RTC issued an Order granting Candice's Motion to
September 18, 2007. Intervene. cASIED

On June 3, 2004, petitioner Durawood Construction and Lumber Supply, Inc. LBB Construction and Barber filed their Answer in Civil Case No. 04-7240, but failed
(Durawood) filed an action for sum of money plus damages with a prayer for the to attend the scheduled hearings, including the pre-trial. Consequently, Durawood
issuance of a writ of preliminary attachment against LBB Construction and was allowed to present its evidence ex parte.
Development Corporation (LBB Construction) and its president Leticia Barber
(Barber) before the Regional Trial Court (RTC) of Antipolo. In said suit, which was
docketed as Civil Case No. 04-7240, Durawood prayed for the sum of P665,385.50
On July 21, 2005, the RTC rendered its Decision 3 in Civil Case No. 04-7240 in favor
as payment for construction materials delivered to LBB Construction.
of Durawood. The dispositive portion of the Decision reads:

On June 14, 2004, the RTC issued an Order granting Durawood's prayer for the
WHEREFORE, in view of the foregoing consideration, judgment is rendered in favor
issuance of a writ of attachment. On June 16, 2004, the corresponding writ was
of the plaintiff and against the defendants, viz.:
issued.

1. Ordering the defendants to pay plaintiff the sum of Six Hundred Sixty[-]Five
On June 17, 2004, Sheriff Rolando C. Leyva (Sheriff Leyva) levied on a 344-square
Thousand Three Hundred Eighty[-]Five Pesos and Fifty Centavos (P665,385.50) plus
meter parcel of land in Richdale Subdivision, Antipolo City covered by Transfer
two percent (2%) interest per month from May 11, 2004 up to the present;
Certificate of Title (TCT) No. R-17571 in the name of LBB Construction. A Notice of
2. Ordering the defendants to pay plaintiff twenty-five percent (25%) of the amount
due to the plaintiff by way of attorney's fees; and
7. The records of this case reveal that in the Third Party Claim filed by Candice Bona
sometime in July 2004, there was never any mention of any recording about a Deed
of Absolute Sale in the Memorandum of Encumbrances in TCT No. R-17571. It is
3. To pay the costs of suit. 4
difficult to comprehend that Atty. Hernando U. Salvador, Bona's lawyer, would miss
mentioning that a Deed of Absolute Sale was inscribed ahead of the notice of levy
on attachment if ever such sale was made on June 16, 2004.
The Decision became final and executory. On September 12, 2005, Durawood filed a
Motion for the Issuance of a Writ of Execution. On November 15, 2005, the RTC
issued a Writ of Execution. It was when this Writ was about to be enforced that
8. Thus, under the circumstances, plaintiff corporation cannot help speculate that
Durawood discovered the cancellation of TCT No. R-17571 and the issuance of TCT
[the] Deed of Sale between LBB Construction and the Bonas was made to appear to
No. R-22522 in the name of Candice and her siblings.
have been recorded a day before the attachment.

It would appear from the records that on June 16, 2004, the supposed Register of
9. While the Notice of Levy on Attachment was inscribed in TCT No. R-17571 ahead
Deeds of Antipolo City, Atty. Randy A. Rutaquio (Atty. Rutaquio), cancelled TCT No.
and before of the Deed of Sale between LBB Construction Co., Inc. and the Bonas,
R-17571 and issued TCT No. R-22522 in the name of Candice and her co-owners.
the said notice was not carried over in TCT No. R-22522 despite the fact that there
The parties, however, do not dispute that said cancellation of the old TCT and
was no order coming from this Honorable Court dissolving the Writ of Preliminary
issuance of the new one was antedated, since Atty. Rutaquio was still the Register
Attachment dated June 16, 2004.
of Deeds of Malabon on said date. 5 According to a certification of the Land
Registration Authority, 6 it was a certain Atty. Edgar D. Santos (Atty. Santos) who
was the Acting Register of Deeds of Antipolo City on June 16, 2004.
10. Randy Rutaquio's unauthorized acts of cancelling TCT No. R-17571 and issuing
TCT No. R-22522 without inscribing the Notice of Levy on Attachment despite the
absence of a court order dissolving the writ of Preliminary Attachment constitute
Durawood filed a Motion to Reinstate Notice of Levy on Attachment in TCT No. R-
improper conduct tending to directly or indirectly to impede, obstruct or degrade
22522 and Cite Atty. Randy A. Rutaquio for Contempt 7 on the following grounds:
the administration of justice. 8 SACHcD

5. The cancellation of TCT No. R-17571 and the issuance of TCT No. R-22522 was
Atty. Rutaquio filed a Manifestation alleging that the sale was entered in the
made by Atty. Randy A. Rutaquio who, on June 2004, was not the Register of Deeds
Primary Entry Book prior to the Levy on Attachment. The two transactions were
of Antipolo City. As evidence of such fact, plaintiff corporation was issued a
assigned to different examiners and it just so happened that the examiner to whom
certification by LRA Human Resource Management Officer IV Loreto I. Orense that
the levy on attachment was assigned was able to inscribe the memorandum ahead
Atty. Edgar D. Santos was the Acting Register of Deeds of Antipolo City from June 1-
of the sale, although the inscription of the sale was entered ahead of the levy. The
30, 2004.
levy on attachment was not inscribed on TCT No. R-22522 because allegedly the
sale should have priority and preference. The cancellation of TCT No. R-17571 and
the issuance of TCT No. R-22522 was already completed when he took over the
6. While the Deed of Sale annotated in TCT No. R-17571 appears to have been made position of Atty. Santos as Acting Register of Deeds and was therefore already
on June 16, 2004, the fact of its inscription was made after that of the levy on clothed with the authority to issue and sign TCT No. R-22522.
attachment as it obviously appears below and next to it.
 Candice filed a Motion for Reconsideration of the above Order. In the meantime, on
March 13, 2006, Sheriff Leyva issued a Notice of Sheriff's Sale setting the sale of the
Atty. Rutaquio also submitted a letter dated June 25, 2004 from Atty. Santos to
property covered by TCT No. R-22522 at public auction on April 11, 2006 at 10:00
Land Registration Authority (LRA) Administrator Benedicto B. Ulep (Administrator
a.m., pursuant to the November 15, 2005 Writ of Execution. Candice filed an Urgent
Ulep) consulting the latter as regards the registration of the Deed of Absolute Sale
Ex-Parte Motion to Order the Branch Sheriff to Desist from the Sale of Intervenor's
and the Notice of Levy on Attachment. 9 In said letter received by the LRA on July 1,
Property for Being Premature, which was granted by the RTC in an Order dated
2004, Atty. Santos stated that he had not acted on the Deed of Absolute Sale since
March 29, 2006.
the required registration fees were not paid therefor. 10 Administrator Ulep was
able to reply to said letter on October 6, 2004, when Atty. Rutaquio was already the
Acting Register of Deeds. Administrator Ulep stated that since the Deed of Sale was
On March 8, 2006, the new Acting Register of Deeds Jose S. Loriega, Jr. complied
considered registered on June 16, 2004, the same shall take precedence over the
with the March 6, 2006 Order of the RTC by reinstating in TCT No. R-22522 the
Notice of Levy on Attachment registered on June 17, 2004. 11
Notice of Levy on Attachment in favor of Durawood.

Acting on the Motion to Reinstate Notice of Levy on Attachment in TCT No. R-22522
On April 7, 2006, the RTC issued an Order denying Candice's Motion for
and Cite Atty. Randy A. Rutaquio for Contempt, the RTC issued an Order 12 dated
Reconsideration. In said Order, the RTC highlighted its observation that in TCT No.
March 2, 2006, ruling in favor of Durawood. The RTC gave great weight to the
R-17571, the inscription of the levy on attachment by Atty. Santos dated June 17,
certification by LRA Human Resource Management Officer IV Loreto I. Orense that
2004 was in page A (the dorsal portion) of the title, while the supposedly earlier
Atty. Santos was the Acting Register of Deeds from June 1-30, 2004, and held that
inscription of the Deed of Sale by Atty. Rutaquio dated June 16, 2004 was found in
this proves the fact that Atty. Santos was the only person authorized to sign and
page B (a separate page) of the title. The RTC found this fact, as well as the above-
approve all the transactions with the Registry of Deeds of Antipolo City at the time.
mentioned certification that Atty. Santos was the Acting Register of Deeds of
Moreover, according to the RTC, the alienation of LBB Construction in favor of the
Antipolo City from June 1 to 30, 2004, sufficient proof of the irregularity of the June
Bonas without leaving sufficient property to pay its obligation is considered by law
16, 2004 inscription of the Deed of Sale.
in fraud of creditor under Articles 1381 13 and 1387 14 of the Civil Code.

On April 11, 2006, Sheriff Leyva sold the subject property at public auction for
The RTC did not rule on Durawood's prayer to cite Atty. Rutaquio for contempt. The
P1,259,727.90 with Durawood being the lone bidder, and issued the corresponding
dispositive portion of the March 2, 2006 Order reads:
Certificate of Sale. The sale was inscribed in TCT No. R-22522 on the same date. 16
DEHaTC

WHEREFORE, premises considered, the instant motion to reinstate notice of levy on

attachment in TCT No. R-22522 now in the name of the intervenors is hereby
Candice filed with the Court of Appeals a Petition for Certiorari and Prohibition
GRANTED its non-inscription therein having been made without order of this Court.
assailing the March 2, 2006 and April 7, 2006 Orders of the RTC.

The Register of Deeds of Antipolo City is directed to reinstate the notice of levy on
On April 18, 2007, the Court of Appeals rendered the assailed Decision in favor of
attachment in TCT No. R-22522 in the names of intervenors immediately upon
Candice. According to the Court of Appeals, the sequence of presentation of the
receipt of this Order. 15
entries in the TCT cannot control the determination of the rights of the claimants
over a disputed property. It is the registration in the Primary Entry Book (also
referred to in other cases as the day book) that establishes the order of reception of of creditors cannot be instituted except when the party suffering damage has no
instruments affecting registered land. As explained by Atty. Rutaquio, the entry in other legal means to obtain reparation for the same. 18
the day book is only the preliminary step in the registration. The inscription of the
levy on attachment on TCT No. R-17571 (which was made before the inscription of
the Deed of Sale on said title) retroacts to the date of entry in the Primary Entry The dispositive portion of the Decision reads:
Book, which is June 17, 2004. However, the inscription of the Deed of Sale on TCT
No. R-17571, although made after the inscription of the levy on attachment,
retroacts to the earlier date of entry in the Primary Entry Book, which is June 16,
WHEREFORE, in view of the foregoing, the assailed Orders of public respondent
2004.
judge ordering the reinstatement of the subject notice of levy on attachment in TCT
No. R-22522 are hereby ANNULLED and SET ASIDE. As a result thereof, the public
auction sale carried out pursuant to said levy is also declared null and void. 19
As regards the issuance by Atty. Rutaquio of TCT No. R-22522 on June 16, 2004
despite the fact that he was not yet the Register of Deeds of Antipolo City at that
time, the Court of Appeals held that there was substantial compliance with the
Durawood filed a Motion for Reconsideration, but the same was denied by the
National Land Titles and Deeds Registration Administration (NALTDRA; now the
Court of Appeals in its Resolution dated September 18, 2007.
Land Registration Authority [LRA]) Circular No. 94 on "Certificates of title and
documents left unsigned by former Register of Deeds," which provides:

Durawood filed the instant Petition for Review, with the following Assignment of
Errors:
It has been brought to the attention of this Registration that, in some Registries,
there are certificates of title with the full transcriptions and inscriptions, including
the volume and page numbers, the title number, the date and the name of the
former Register of Deeds, already typewritten thereon but which, for some reasons, I.
cannot anymore be signed by the former official. In such cases and to resolve this
problem, the present Register of Deeds may, without changing or altering the
transcriptions and inscriptions, affix his signature below the name of the former THE COURT OF APPEALS IGNORED THE FACT THAT NON-PAYMENT OF THE
Register of Deeds but placing the actual date and time of signing enclosed in REQUIRED REGISTRATION FEES BY CANDICE S. BONA AND HER SIBLINGS DID NOT
parenthesis below his signature. 17 COMPLETE THE REGISTRATION OF THE DEED OF ABSOLUTE SALE ON JUNE 16, 2004.

The Court of Appeals accepted Atty. Rutaquio's manifestation that he signed TCT II.
No. R-22522 subsequent to June 16, 2004, on a date when he was already the
Acting Register of Deeds of Antipolo City. Since the entry in the Primary Entry Book
was made at the time of the incumbency of Atty. Santos, the name of the latter still THE COURT OF APPEALS GRAVELY ERRED WHEN IT DISREGARDED THE FACT THAT
appears on the document. According to the Court of Appeals, Candice cannot be NALTDRA CIRCULAR NO. 94 WAS NOT COMPLIED WITH BY ATTY. RANDY RUTAQUIO.
made to suffer for the failure of Atty. Rutaquio to affix the date when he signed the
document. Furthermore, a certificate of title, once registered, cannot be impugned,
altered, changed, modified, enlarged or diminished except in a direct proceeding III.
permitted by law. Finally, an action for rescission of contracts entered into in fraud
THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO CONSIDER THAT THE
ENTRIES IN TCT NO. R-17571 (THE PREDECESSOR OF TCT NO. R-22522) ARE
EVIDENCES OF THE FACTS STATED THEREIN.
IV.
THE COURT OF APPEALS OVERLOOKED THE FACT THAT THE REAL PROPERTY
COVERED BY TCT NO. R-17571 AND SUBSEQUENTLY BY TCT NO. R-22522 HAS
ALREADY BEEN ATTACHED BUT WAS UNILATERALLY RELEASED FROM THE COURT'S
JURISDICTION BY A USURPER. 20
All these allegations are specific matters to be resolved by this Court in determining
the overriding issue of the case at bar: whether the Court of Appeals correctly
granted Candice's Petition for Certiorari and Prohibition on its finding that the RTC
committed grave abuse of discretion in issuing its March 2, 2006 and April 7, 2006
Orders. In other words, the main issue to be determined by this Court is whether or
not there was grave abuse of discretion in the RTC's order to reinstate the notice of
levy on attachment in TCT No. R-22522. "Grave abuse of discretion" signifies "such
capricious and whimsical exercise of judgment that is equivalent to lack of
jurisdiction. The abuse of discretion must be grave as where the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility, and
must be so patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined by or to act all in contemplation of
law." 21
The Court of Appeals, in considering the date of entry in the day book of the
Registry of Deeds as controlling over the presentation of the entries in TCT No. R-
17571, relied on Section 56 of Presidential Decree No. 1529 which provides that:
SEC. 56. Primary Entry Book; fees; certified copies. — Each Register of Deeds shall
keep a primary entry book in which, upon payment of the entry fee, he shall enter,
in the order of their reception, all instruments including copies of writs and
processes filed with him relating to registered land. He shall, as a preliminary
process in registration, note in such book the date, hour and minute of reception of
all instruments, in the order in which they were received. They shall be regarded as
registered from the time so noted, and the memorandum of each instrument, when
made on the certificate of title to which it refers, shall bear the same date:
Provided, that the national government as well as the provincial and city
governments shall be exempt from the payment of such fees in advance in order to
be entitled to entry and registration. (Emphasis supplied.) AIaDcH
The consequence of the highlighted portion of the above section is two-fold: (1) in
determining the date in which an instrument is considered registered, the reckoning
point is the time of the reception of such instrument as noted in the Primary Entry
Book; and (2) when the memorandum of the instrument is later made on the
certificate of title to which it refers, such memorandum shall bear the same date as
that of the reception of the instrument as noted in the Primary Entry Book.
Pursuant to the second consequence stated above, the Court of Appeals held that
Atty. Rutaquio correctly placed the date of entry in the Primary Entry Book as the
date of the memorandum of the registration of the deed of sale in TCT No. R-17571.
As regards the first consequence, this Court has applied the same in several cases.
Thus, in the old cases of Levin v. Bass, 22 Potenciano v. Dineros, 23 and
Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija, 24
as well as in the fairly recent cases of Autocorp Group v. Court of Appeals, 25 Armed
Forces and Police Mutual Benefit Association, Inc. v. Santiago, 26 and National
Housing Authority v. Basa, Jr., 27 we upheld the entry of instruments in the Primary
Entry Book to be equivalent to registration despite even the failure to annotate said
instruments in the corresponding certificates of title.
Based on this alone, it appears that the RTC was in error when it considered the
registration of the Absolute Deed of Sale on June 16, 2004 inferior to the
registration of the Notice of Levy on Attachment on June 17, 2004 on the ground
that the Attachment was annotated on TCT No. R-17571 earlier than the Deed of
Sale. As discussed in the above-mentioned cases, the annotation in the certificate of
title is not determinative of the effectivity of the registration of the subject
instrument.
However, a close reading of the above-mentioned cases reveals that for the entry of
instruments in the Primary Entry Book to be equivalent to registration, certain
SEC. 56. Primary Entry Book; fees; certified copies. — Each Register of Deeds shall
requirements have to be met. Thus, we held in Levin that:
keep a primary entry book in which, upon payment of the entry fee, he shall enter,
in the order of their reception, all instruments including copies of writs and
processes filed with him relating to registered land. He shall, as a preliminary
Do the entry in the day book of a deed of sale which was presented and filed
process in registration, note in such book the date, hour and minute of reception of
together with the owner's duplicate certificate of title with the office of the
all instruments, in the order in which they were received. They shall be regarded as
Registrar of Deeds and full payment of registration fees constitute a complete act of
registered from the time so noted, and the memorandum of each instrument, when
registration which operates to convey and affect the land? In voluntary registration,
made on the certificate of title to which it refers, shall bear the same date:
such as a sale, mortgage, lease and the like, if the owner's duplicate certificate be
Provided, that the national government as well as the provincial and city
not surrendered and presented or if no payment of registration fees be made
governments shall be exempt from the payment of such fees in advance in order to
within 15 days, entry in the day book of the deed of sale does not operate to convey
be entitled to entry and registration.
and affect the land sold. . . . . 28

In Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija,

Levin, which was decided in 1952, applied Section 56 of the Land Registration Act 29
30 this Court applied the provisions of Presidential Decree No. 1529 and modified
which provides:
the doctrine as follows:

Sec. 56. Each register of deeds shall keep an entry book in which, upon payment of
Current doctrine thus seems to be that entry alone produces the effect of
the filing fee, he shall enter in the order of their reception all deeds and other
registration, whether the transaction entered is a voluntary or an involuntary one,
voluntary instruments, and all copies of writs or other process filed with him
so long as the registrant has complied with all that is required of him for purposes
relating to registered land. He shall note in such book the year, month, day, hour,
of entry and annotation, and nothing more remains to be done but a duty
and minute of reception of all instruments in the order in which they were received.
incumbent solely on the register of deeds. 31
They shall be regarded as registered from the time so noted, and the memorandum
of each instrument when made on the certificate of title to which it refers shall bear
the same date; Provided, however, That no registration, annotation, or
This pronouncement, which was reiterated in National Housing Authority v. Basa,
memorandum on a certificate of title shall be made unless the fees prescribed
Jr., 32 shows that for the entry to be considered to have the effect of registration,
therefor by this Act are paid within fifteen days' time after the date of the
there is still a need to comply with all that is required for entry and registration,
registration of the deed, instrument, order or document in the entry book or day
including the payment of the prescribed fees. Thus, in Autocorp Group v. Court of
book, and in case said fee is not paid within the time above mentioned, such entry
Appeals, 33 this Court compared the date when the required fees were paid with
shall be null and void: Provided further, That the Insular Government and the
the therein assailed writ of preliminary injunction:
provincial and municipal governments need not pay such fees in advance in order to
be entitled to entry or registration. (Emphasis supplied.)

Petitioners contend that payment of the entry fee is a condition sine qua non
before any valid entry can be made in the primary entry book. Allegedly, the Court
This provision is the precursor of the aforequoted Section 56 of Presidential Decree
of Appeals resorted to judicial legislation when it held that the subsequent payment
No. 1529, which seems to have dispensed with the provision nullifying the
of the entry fee was curative and a substantial compliance with the law. Petitioners
registration if the required fees are not paid:
claim that the ruling in DBP vs. Acting Register of Deeds of Nueva Ecija does not
apply to this case. As there was no valid registration, petitioners conclude that the
order of the trial court issuing a writ of preliminary injunction was proper,
Sir:
considering the irregularities present in the conduct of the extrajudicial foreclosure
....

This has reference to the TCT No. R-17571/T-87 registered under the name of LBB
Construction and Development Corporation relative to the Deed of Absolute Sale
We find the petition bereft of merit.
with Entry No. 30549, which was sought to be registered on 16 June 2004 at 11:20
a.m. (a photocopy of which is hereto attached as Annex "A").

First. The objection as to the payment of the requisite fees is unavailing. There is no
question that the fees were paid, albeit belatedly. Respondent bank presented the
However, on 17 June 2004 at 11:45 a.m. a Notice of Levy on Attachment (a
certificate of sale to the Office of the Register of Deeds of Cebu City for registration
photocopy of which is hereto attached as Annex "B") with Entry No. 30590 was filed
on January 21, 1999 at 4:30 p.m. As the cashier had already left, the Office could
and annotated against TCT No. R-17571/T-87.
not receive the payment for entry and registration fees, but still, the certificate of
sale was entered in the primary entry book. The following day, respondent bank
paid the requisite entry and registration fees. Given the peculiar facts of the case,
we agree with the Court of Appeals that the payment of respondent bank must be In view of the foregoing, we are now in a quandary as to what proper steps should
deemed to be substantial compliance with the law; and, the entry of the instrument be taken. It should be noted further that the required registration fees of the
the day before, should not be invalidated. In any case, even if we consider the entry abovementioned sale was not paid the reason for which the same was not
to have been made on January 22, the important fact is that the entry in the immediately acted upon by the undersigned. 35
primary entry book was done prior to the issuance of the writ of injunction [on
February 15, 1999; TRO issued on January 25, 1999] by the trial court. 34 (Emphases
supplied.) Since there was still no compliance of "all that is required . . . for purposes of entry
and annotation" 36 of the Deed of Sale as of June 25, 2004, we are constrained to
rule that the registration of the Notice of Levy on Attachment on June 17, 2004
Records in the case at bar reveal that as of June 25, 2004, the date of the letter of should take precedence over the former. Considering that the Notice of Levy on
Atty. Santos seeking the opinion of the LRA as regards the registration of the Deed Attachment was deemed registered earlier than the Deed of Sale, the TCT issued
of Sale and the Notice of Levy on Attachment, the required registration fees for the pursuant to the latter should contain the annotation of the Attachment.
Deed of Sale has not yet been paid: ECHSDc

In view of the foregoing, we find that the RTC was, in fact, acting properly when it
25 June 2004 ordered the reinstatement of the Notice of Levy on Attachment in TCT No. R-22522.
Since the RTC cannot be considered as to have acted in grave abuse of its discretion
[received by the LRA: July 01, 2004] in issuing such Order, the Petition for Certiorari assailing the same should have
been dismissed.

HON. BENEDICTO B. ULEP

WHEREFORE, premises considered, the instant Petition for Review on Certiorari is
Administrator
hereby GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 94479
This Authority
dated April 18, 2007 and its Resolution dated September 18, 2007 are REVERSED
and SET ASIDE.

SO ORDERED.

||| (Durawood Construction and Lumber Supply, Inc. v. Bona, G.R. No. 179884,
[January 25, 2012], 680 PHIL 215-233)
SECOND DIVISION
[G.R. No. 179751. August 5, 2015.]
HERMINIA L. MENDOZA, in her capacity as OIC of the Register of Deeds of Lucena
City, petitioner, vs. SPOUSES ARMANDO and ANGELA GARANA and FAR EAST BANK
& TRUST CO., INC., respondents.
DECISION
BRION, J p:
We resolve in this petition for review on certiorari 1 the challenge to the February
14, 2007 decision 2 and the September 11, 2007 resolution 3 of the Court of
Appeals (CA) in CA-G.R. CV No. 70027. These assailed CA rulings annulled the
October 10, 2000 order 4 of the Regional Trial Court of Lucena City, Br. 58 (trial
court), which ordered the annotation of a notice of lis pendens on Transfer
Certificate Title (TCT) No. T-77739, registered under the names of respondent-
spouses Armando and Angela Garana (Spouses Garana).
Factual Antecedents
On October 6, 1993, the heirs of Manuel Uy Ek Liong (heirs of Manuel Uy),
represented by Belen Uy, sought the registration of a notice of lis pendens with the
Register of Deeds of Lucena City (RD Lucena). This notice of lis pendens intended to
bind the properties covered by the following titles: TCT Nos. T-72027, T-72028, T-
72029, T-72030, T-72031, T-72032, and T-72033, 5 which were the subject of an
action for specific performance with damages (Civil Case No. 93-176) that the heirs
of Manuel Uy filed, to compel the owners 6 to sell these properties to them. 7
At 1:30 pm of the same date, after paying the required fees, the notice of lis
pendens for all these titles was entered as Entry No. 56142 in Volume VI, page 241
of RD Lucena's primary entry book or day book. 8 Atty. Alberto P. Marquez (Atty.
Marquez), then registrar of RD Lucena, also wrote a letter to the properties'
respective owners, asking them to surrender their owner's duplicate copies of the
titles so the annotation of the notice of lis pendens could be made. 9 Among those
notified was Leovina Jalbuena (Jalbuena), the registered owner of TCT No. T-72029,
who did not surrender her duplicate copy for annotation.
Even before the notice of lis pendens was sought, Belen Uy already caused the
annotation of an adverse claim on all the titles on August 16, 1993. However, this
annotation was subsequently cancelled on October 4, 1994, upon the filing of an
affidavit with RD Lucena by one Bienaflor C. Umali.
Meanwhile, RD Lucena annotated the notice of lis pendens on all the affected titles
except for TCT No. T-72029 (subject land), whose original at that time was missing
from RD Lucena's vault. 10 Added to this was Jalbuena's failure to surrender her
owner's duplicate copy for annotation. 11
As it turned out, the original of TCT No. T-72029 was in the custody of one
Carmelina Rodriguez (Rodriguez), 12 a clerk at RD Lucena. She processed another
transaction involving this title but, after this transaction, totally forgot the
annotation on TCT No. T-72029 of the notice of lis pendens of the heirs of Manuel
Uy.
Sometime in 1994, the Spouses Garana started inquiries about Jalbuena's land for a
possible purchase. They found out that it was then the subject of Belen Uy's
adverse claim annotated on August 16, 1993. When they subsequently learned that
this annotation had been cancelled by Bienaflor C. Umali on October 4, 1994, the
Spouses Garana immediately proceeded to buy 13 the land from Jalbuena on
November 7, 1994. 14 CAIHTE
In accordance with the sale, RD Lucena cancelled TCT No. T-72029, and issued TCT
No. T-77739 under the names of the Spouses Garana. Since the October 6, 1993
notice of lis pendens of the heirs of Manuel Uy did not appear in the cancelled title,
it was also not reflected in the new title of the Spouses Garana.
The CA noted that the subject land is registered under the Torrens System. On this
basis, any person dealing with it must be able to safely rely on the correctness of
the certificate of title that the RD Lucena issued. Thus, the Spouses Garana should
Subsequently, the Spouses Garana mortgaged the subject property with respondent
not be obliged to go beyond the certificate of title to determine the property's
Far East Bank and Trust Company (now Bank of the Philippine Islands or BPI) as
condition. To allow provisional annotations such as the trial court's order would
security for their loan. 15
erode the value of the indefeasibility of titles registered under the Torrens System.
20

Meanwhile, the heirs of Manuel Uy learned that Jalbuena had sold the subject land
to the Spouses Garana and that a new title had been issued in their favor without
Guided by this doctrine, the CA ruled that the Spouses Garana were innocent
indicating their notice of lis pendens. Thus, they notified RD Lucena of this
purchasers for value. They relied on the clean title of Jalbuena when they bought
procedural lapse and asked for the annotation of the notice of lis pendens on the
from her the subject land. Since the notice of lis pendens was not annotated on this
Spouses Garana's new title. 16
title, the Spouses Garana had no way of knowing the pending litigation involving the
claims of the heirs of Manuel Uy. The recording of the notice of lis pendens in RD
Lucena's primary entry book did not operate as notice to third persons who dealt
To remedy its oversight, RD Lucena through Atty. Marquez, now substituted by with the subject land. 21
petitioner Herminia Mendoza or petitioner, filed a petition with the trial court to
allow RD Lucena to annotate the notice of lis pendens on the Spouses Garana's new
title. 17
The Petition

The Spouses Garana and BPI opposed this petition and argued that the annotation
The petitioner admits its own omission to annotate the notice of lis pendens and its
was too late and would prejudice them. The Spouses Garana argued that their
oversight in allowing the cancellation of TCT No. T-72029, and in the issuance of a
reliance on the clean title of TCT No. T-72029 should not diminish their status as
new one, without reflecting the notice of lis pendens registered by the heirs of
innocent purchasers for value. For its part, BPI submitted that when the land was
Manuel Uy.
mortgaged to them, there was no indication that it was the subject of a pending
litigation. 18

However, the petitioner submits that despite this omission, the entry of the notice
of lis pendens in RD Lucena's primary entry book already amounted to a valid
The trial court ruled in favor of RD Lucena and ordered the annotation of the notice
registration. 22 Their office's failure to annotate should not prejudice the heirs of
of lis pendens on the Spouses Garana's new title. This prompted the Spouses
Manuel Uy who had validly undertaken all the necessary steps, e.g., the filing with
Garana and BPI to file an appeal with the CA. 19
RD Lucena and the payment of the registration fees, in submitting their notice of lis
pendens for registration. DETACa

The CA's Ruling

To support its argument, the petitioner invokes the case of Levin v. Bass, 23 where
the Court ruled that in cases of involuntary registration such as an attachment, levy,
The CA granted the Spouses Garana's and BPI's appeal.
execution, and a notice of lis pendens, entry in the primary book or day book is
already sufficient notice to all persons of such adverse claim. 24
Under these circumstances, even without the annotation on the physical title of TCT
No. T-72029, the notice of lis pendens remains. The existence of a record in their
primary entry book amounted to notice to the whole world and should bind all
persons dealing with the subject land, including the Spouses Garana and BPI. Hence,
they should not be exempt from the effects of the pending litigation that the
petitioner recorded.
Lastly, the petitioner submits that the Spouses Garana were not innocent
purchasers for value. Before buying the land, the Spouses Garana already knew of
Belen Uy's first annotation of an adverse claim on TCT No. T-72029. They only
waited for its cancellation on October 4, 1994. Thus, shortly after this, on November
7, 1994, they bought the subject land from Jalbuena. This indicated that the
Spouses Garana knew all along of the claim of the heirs of Manuel Uy on the subject
land.
The Issue
The main issue before us is whether the entry of a notice of lis pendens in the
primary entry book or day book of the Register of Deeds serves as notice to third
persons of the existence of such claim against a registered land. Thus, even in the
absence of an annotation on the title, the notice of lis pendens is still binding on all
persons dealing with the land.
The Court's Ruling
We GRANT the petition.
The facts of this case are not new. In the past, the Court has already addressed the
issue of the recognition of an encumbrance not annotated on the certificate of title
but recorded in the Register of Deeds' primary entry book or day book.
Our rulings trace their roots from the 1951 case of Villasor v. Camon, 25 which was
subsequently reiterated in the 1952 case of Levin v. Bass. 26
In Villasor, the Court analyzed the provisions of Act No. 496 (or the early Land
Registration Act) and had occasion to distinguish the registration requirements of a
voluntary instrument from an involuntary instrument.
The Court noted that in the registration of a voluntary instrument such as a sale, a
mortgage, or a lease, the owner's production of his duplicate certificate of title is
necessary before registration. Since the instrument sought to be registered is the
wilful act of the owner, he is expected to produce all the necessary documents that
will facilitate its registration. 27
On the other hand, an involuntary instrument such as an attachment, a lien, a
notice of lis pendens, and the like, are adverse to the claims of the registered
owner. Thus, he cannot be expected to provide all the necessary documents such as
his owner's duplicate copy of the title.
For this reason, the law does not require the presentation as well as the annotation
of the involuntary instrument on the owner's duplicate title, or even on the original
title. The mere recording of the involuntary instrument in the primary entry book or
day book is sufficient to bind the registered land and affect third persons dealing
with it. 28
Following these pronouncements, the Court subsequently reiterated in Levin, that
in involuntary registration, the entry of the instrument in the primary entry book or
day book already serves as adequate notice to all persons of another person's or
entity's adverse claim over a registered land. 29 aDSIHc
Notably, Villasor and Levin were decided under Act No. 496, which contained the
following relevant provisions:
Section 51. Every conveyance, mortgage, lease, lien, attachment, order, decree,
instrument, or entry affecting registered land which would under existing laws, or
recorded, filed, or entered in the office of the register of deeds, affect the real
estate to which it relates shall, if registered, filed, or entered in the office of the
register of deeds in the province or city where the real estate to which such
instrument relates lies, be notice to all persons from the time of such registering,
filing, or entering.
Section 55. No new certificate of title shall be entered, no memorandum shall be
made upon any certificate of title by the clerk, or by any register of deeds, in
pursuance of any deed or other voluntary instrument, unless the owner's duplicate
certificate is presented for such indorsement, except in cases expressly provided for
in this Act, or upon the order of the court, for cause shown; and whenever such
order is made, a memorandum thereof shall be entered upon the new certificate of
title and upon the owner's duplicate. . . .
Section 56. Each register of deeds shall keep an entry book in which he shall enter in
the order of their reception all deeds and other voluntary instruments, and all
copies of writs and other process filed with him relating to registered land. He shall
note in such book the year month, day, hour, and minute of reception of all
instruments, in the order in which they are received. They shall be regarded as
registered from the time so noted, and the memorandum of each instrument when
made on the certificate of title to which it refers shall bear the same date.
[Emphases supplied.]
From these provisions, one can conclude that an instrument, once noted or entered
in the primary entry book or day book of the Register of Deeds, is already deemed
registered from the date of such entry. 30 Such registration, entry or filing already
amounts to notice to all persons dealing with the registered land from the time of
registration, entry or filing. 31
However, Section 55 of this law provides for an additional requirement in the
registration of voluntary instruments. In voluntary registration, mere entry in the
primary book or day book is not enough. The registered owner must present not
only the instrument sought to be registered, but also his owner's duplicate copy for
a complete registration to take place. 32
Sections 51, 55, and 56 of Act No. 496 were carried over into PD No. 1529 or the
Property Registration Decree. These provisions now correspond to Sections 52, 33
53, 34 and 56 35 of PD No. 1529, the current law governing land registration.
In these lights, the Court's pronouncements in Villasor and Levin continue to be the
governing rulings under our present land registration system (PD No. 1529). The
invocation of the Court's ruling in these earlier cases, and their reiteration in the
more recent cases of Caviles v. Bautista, 36 Armed Forces and Police Mutual Benefit
Association v. Santiago, 37 and Saberon v. Ventanilla, 38 remain to be valid.
In all these subsequent cases, the Court was confronted with the issue of
recognizing an involuntary instrument that was not annotated on the certificate of
title but was duly entered in the primary entry book or day book of the Register of
Deeds.
In Caviles, the Court acknowledged that bad faith could not be imputed on the
buyers of a land whose certificate of title did not contain an annotation of someone
else's notice of attachment. In the same manner, the persons who caused the
registration of the notice of attachment should not be held negligent for not
checking if the Register of Deeds actually performed its obligation to annotate the
instrument on the title. The duty to annotate rests with the Register of Deeds and
not with the registrant. As the Court explained: ETHIDa
Petitioners paid the corresponding fees for the annotation of the notice of
attachment and they had every right to presume that the register of deeds would
inscribe said notice on the original title covering the subject property. The register
of deeds had the duty to inscribe the notice on the original title. This was not a duty
of petitioners. This Court has held that a party which delivers its notice of
attachment to the register of deeds and pays the corresponding fees therefor has a
right to presume that the official would perform his duty properly. 39 [Emphases
supplied.]
Given this parity of good faith, the Court held in Caviles that the person who first
registered his instrument had a superior right over the other. The Court thus upheld
in this case the better right of the registrant of the notice of attachment despite its
non-annotation on the title, since in involuntary instruments, entry in the primary
entry book or day book is deemed registration.
Consistent with Caviles, the Court in Armed Forces also gave preference to a prior
registered attachment, although the notice was not annotated on the certificate of
title. The subsequent registration of a sale did not diminish the preference given to
the notice of attachment first registered. In this case, the Court held that the
notation in the book of entry of the Register of Deeds produced all the effects that
the law gives to a registration or inscription. Thus, the earlier registered notice of
attachment took precedence over the subsequent sale.
In the more recent case of Saberon, the Court reapplied its ruling in Caviles and held
that neither the registrant of the involuntary instrument nor the buyer of the
property affected with the encumbrance not annotated on the title, may be
considered to be in bad faith. But in the order of things, the first person to register
his instrument has a superior right over the others. Thus, if entry in the primary
entry book or day book of the Register Deeds precedes the registration of the sale,
such involuntary registration will prevail over the subsequent sale of the land.
In all these cases, the Court consistently ruled that entry or notation of an
involuntary instrument in the primary entry book or day book amounts to a valid
registration. In accordance with Section 56 in relation to Section 52 of PD No. 1529,
such registration constitutes notice to all persons dealing with the registered land
from the date of entry or notation.
The Court notes however, that unlike the vendees in the cases of Caviles and
Saberon, the Spouses Garana did not entirely act in good faith when they bought
the land from Jalbuena.
A thorough examination of TCT No. T-72029 reveals that even before the heirs of
Manuel Uy sought the registration of their notice of lis pendens on October 6, 1993,
they already annotated on August 16, 1993, an adverse claim over the same title
through their representative, Belen Uy. However, this inscription was later (on
October 4, 1994) cancelled through an affidavit executed by one Bienaflor C. Umali.
For a clearer understanding, these annotations are quoted in verbatim below:
ENTRY NO. 53932KIND: Affidavit of Adverse Claim
EXECUTED IN FAVOR OF: Belen Lim Uy Vda. de Uy
CONDITIONS: Executed by Belen Lim Vda. de Uy, declaring that she has a
legitimate claim over the property described in this title together with T.C.T. No. T-
72027-33, 40 consisting of 30,233 sq. meters, as per Doc. No. 387, page No. 75,
Book No. LXXVI, series of 1993 of Atty. Walter D. Abela, Not. Pub. for and in the City
of Lucena, File No. T-72027-33.
DATE OF THE INSTRUMENT: August 6, 1993
DATE OF THE INSCRIPTION: August 16, 1993 at 3:30 p.m.
Signed
ALBERTO P. MARQUEZ
Register of Deeds
 More importantly, before buying the property, the Spouses Garana already knew of
Belen Uy's annotation of an adverse claim on TCT No. T-72029 on August 16, 1993.
ENTRY NO. 70460KIND: Cancellation of Adverse Claim
The Spouses Garana did not rebut the petitioner's allegation that upon knowing
that this first annotation was cancelled by Bienaflor C. Umali on October 4, 1994,
they immediately proceeded with their purchase of the subject land from Jalbuena
EXECUTED IN FAVOR OF: Leovina Jalbuena a month after, or on November 7, 1994. They did not even bother to check further
with Jalbuena, or inquire from Belen Uy, knowing well that it was not she who
caused the cancellation of her adverse claim.
CONDITIONS: Executed by Bienaflor C. Umali declaring that the Adverse Claim
entered under Entry No. 53932 is hereby cancelled as per Doc. No. 369, Page No.
75, Book No. 1, series of 1993 of Elpidio G. Jorvina, Not. Pub. For Lucena City. T- These circumstances dispute the Spouses Garana's assertion that they were totally
72029. unaware of any claim that the heirs of Manuel Uy had over the subject land. The
existing circumstances before their purchase should have compelled them to check
beyond the four corners of TCT No. T-72029. Their failure to do so negated their
DATE OF THE INSTRUMENT: September 30, 1993 claim that they were innocent purchasers for value.

DATE OF THE INSCRIPTION: October 4, 1994 at 11:00 a.m. The same is true with BPI which should have exercised a higher degree of diligence
when it dealt with TCT No. T-77739 and its antecedent title, TCT No. T-72029. If BPI
had conducted proper due diligence, it would have discovered that Belen Uy's
adverse claim was cancelled by a different person. This is an irregularity that it
should have easily noticed since under Section 70 43 of PD No. 1529, an adverse
Signed claim may only be cancelled at the instance of the trial court or the claimant. As a
banking institution, BPI is expected to exert a higher degree of diligence, care, and
ALBERTO P. MARQUEZ
prudence than ordinary individuals in handling its real estate transactions. 44
Register of Deeds

In Casimiro Development Corporation v. Mateo, 41 the Court held that the
presence of anything that excites or arouses suspicion should prompt the vendee to
look beyond the certificate and to investigate the title of the vendor appearing on
the face of said certificate. 42
To our mind, the mere fact that a different person (Bienaflor C. Umali) sought the
cancellation of Belen Uy's adverse claim on Jalbuena's property should have
triggered the Spouses Garana's suspicion regarding the real condition of the land
covered by TCT No. T-72029.
In these lights, the Court rules that the notice of lis pendens of the heirs of Manuel
Uy should be annotated on TCT No. T-77739 to uphold their registered right to
subject the disputed land to the result of their pending litigation, and to make the
entry in RD Lucena's primary entry book consistent with the inscription on TCT No.
T-77739 (which was only derived from TCT No. T-72029). The recording of the
notice of lis pendens in RD Lucena's primary entry book amounted to a valid
registration; thus notice was thereby served to all persons, including the Spouses
Garana and BPI.
In addition, the Court notes that the Spouses Garana and BPI should not be allowed
to raise the defense of the doctrine of indefeasibility of title as they did not act in
good faith. They disregarded glaring facts and circumstances that should have
prompted them to inquire beyond the four corners of TCT No. T-72029. SDAaTC

As a final note, the Court reminds the various Registers of Deeds, as well as their
officers and employees, to strictly and faithfully observe prudence and
conscientiousness in the conduct of their duties. The integrity of the Torrens System
is partly dependent on the men and women whose primary function is to ensure
the strict application of our various registration laws.

A dependable and reliable registration system that protects land property

ownerships can only be achieved if those involved in the registration process would
faithfully and diligently perform their respective roles.

WHEREFORE, premises considered, we hereby GRANT the present petition and

REVERSE the Court of Appeals' decision dated February 14, 2007, and resolution
dated September 11, 2007, in CA-G.R. CV No. 70027.

The Register of Deeds of Lucena City is hereby ordered to annotate the notice of lis
pendens registered by the heirs of Manuel Uy Ek Liong on Transfer Certificate Title
No. T-77739, registered under the names of the Spouses Armando T. Garana and
Angela I. Garana. Costs against the respondents.

SO ORDERED.

||| (Mendoza v. Spouses Garana, G.R. No. 179751, [August 5, 2015])

THIRD DIVISION
[G.R. No. 148846. September 25, 2007.]
CECILIA AMODIA VDA. DE MELENCION, VENERANDA AMODIA, FELIPE AMODIA,
EUTIQUIO AMODIA and GO KIM CHUAN, petitioners, vs. HONORABLE COURT OF
APPEALS and AZNAR BROTHERS REALTY COMPANY, respondents.
DECISION
NACHURA, J p:
Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules
of Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision 2 dated
March 30, 2001 and praying that the Decision 3 of the Regional Trial Court (RTC) of
Lapu-Lapu City, dated February 18, 1993, be upheld.
The Facts
The subject property is a 30,351 square meter parcel of land (subject property)
particularly denominated as Lot No. 3368, located at Suba-basbas, Marigondon,
Lapu-Lapu City, Cebu, and part of a total area of 30,777 square meters covered by
Transfer Certificate of Title (TCT) No. 20626 4 (entire property) in the name of the
late petitioner Go Kim Chuan (Go Kim Chuan). 5
The entire property was originally owned by Esteban Bonghanoy 6 who had only
one child, Juana Bonghanoy-Amodia, 7 mother of the late Leoncia Amodia and
petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia,
and Eutiquio Amodia 8 (the Amodias). The entire property was brought under the
operation of the Torrens System. 9 However, the title thereto was lost during the
Second World War. DISEaC
On July 10, 1964, the Amodias allegedly executed an Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale 10 whereby they extra-judicially settled the
estate of Esteban Bonghanoy and conveyed the subject property to respondent
Aznar Brothers Realty Company (AZNAR) for a consideration of P10,200.00. On
August 10, 1964, the said Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale was registered under Act 3344 11 as there was no title on file at the
Register of Deeds of Lapu-Lapu City (Register of Deeds). Thereafter, AZNAR made
some improvements and constructed a beach house thereon.
On February 18, 1989, petitioners Cecilia Amodia Vda. de Melencion, Veneranda
Amodia, Felipe Amodia and Eutiquio Amodia 12 (petitioners Amodias) executed a
Deed of Extra-Judicial Settlement with Absolute Sale, 13 conveying the subject
property in favor of Go Kim Chuan for and in consideration of P70,000.00. The lost
title covering the subject property was reconstituted pursuant to Republic Act (RA)
No. 26. 14 A reconstituted title particularly designated as Original Certificate of Title
(OCT) No. RO-2899 was issued in the name of Esteban Bonghanoy 15 and,
subsequently, a derivative title (TCT No. 20626) was issued in the name of Go Kim
Chuan on December 1, 1989. Thereafter, Go Kim Chuan exercised control and
dominion over the subject property in an adverse and continuous manner and in
the concept of an owner.
On February 14, 1990, AZNAR wrote a letter 16 to petitioners Amodias asking the
latter to withdraw and/or nullify the sale entered into between them and Go Kim
Chuan. On the same date, a Notice of Adverse Claim 17 was annotated by AZNAR
on TCT No. 20626. Because petitioners did not heed AZNAR's demand, on April 25,
1990, AZNAR filed a case against petitioners Amodias and Go Kim Chuan for
Annulment of Sale and Cancellation of TCT No. 20626 18 alleging that the sale to Go
Kim Chuan was an invalid second sale of the subject property which had earlier
been sold to it. Petitioners Amodias denied that they executed the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR, claiming that
their purported signatures thereon were forged. 19 Trial on the merits ensued.
CSIcHA
The RTC's Decision
On February 18, 1993, the RTC dismissed AZNAR's complaint and declared Go Kim
Chuan as the real owner of the subject property. The RTC ratiocinated that the
signatures of the Amodias in the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale executed in favor of AZNAR were found by the document examiner of
the Philippine Constabulary (PC) Crime Laboratory to be forged, thus, the said deed
did not convey anything in favor of AZNAR. Moreover, the subject property had
been brought under the Land Registration Act; hence, all transactions involving the
same should have complied with the said law. Finally, the RTC held that AZNAR
failed to show that Go Kim Chuan acquired the subject property in bad faith.
(1) Declaring plaintiff-appellant Aznar Brothers Realty Company as the real owner of
the land in question;
(2) Declaring both the Deed of Extra-judicial Settlement with Absolute Sale dated
February 1, 1989 executed by Felipe Amodia, Cecilia Amodia, Veneranda A. Ibag and
Eustaquio Amodia in favor of Go Kim Chuan and the Transfer Certificate of Title No.
20626 in the name of Go Kim Chuan as NULL AND VOID;

(3) Ordering Go Kim Chuan to deliver to the aforesaid plaintiff-appellant the

Aggrieved, AZNAR appealed the RTC Decision to the CA. 20 possession of the land in question and to execute a registrable deed of conveyance
of the subject property to the said plaintiff-appellant. aATEDS

The CA's Decision

No costs.

On March 30, 2001, the CA rendered a Decision holding that the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale executed by the Amodias in SO ORDERED. 21
favor of AZNAR was registered ahead of the Deed of Extra-Judicial Settlement with
Absolute Sale in favor of Go Kim Chuan, thus, pursuant to Article 1544 of the New
Civil Code, the former deed should be given preference over the latter; that
Petitioners filed a Motion for Reconsideration 22 which the CA denied in its
AZNAR's adverse claim was annotated earlier than the execution of the Deed of
Resolution 23 dated June 5, 2001.
Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan; hence, the
latter should have respected said adverse claim and should have made inquiries as
to possible defects that may exist in the title over the subject property; and that in
the absence of a final determination by a court of proper jurisdiction on the alleged Hence, this Petition based on the following grounds:
forged signatures of the Amodias in the Extra-Judicial Partition of Real Estate with
Deed of Absolute Sale, the finding of the document examiner was insufficient for
the RTC to rule in favor of the petitioners. I

The CA disposed of the case in this wise:
WHEREFORE, premises considered, the assailed decision dated February 18, 1993 of
the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No. 2254-L is
hereby REVERSED and SET ASIDE and a new one is hereby entered as follows:
Lot 3368 was already a registered land under Act 496, thus, the registration by
respondent of the Deed of Sale in 1964 under Act 3344 produces no legal effect
whatsoever;
II
Even assuming arguendo that the lot in question was duly registered under Act
3344 as an unregistered land, it is without prejudice to better rights and the
provision of Article 1544 of the New Civil Code would be inapplicable;
III
The Honorable Court of Appeals erred in holding that an adverse claim was already
existing at the time the subject land was sold to petitioner Go Kim Chuan; on the
contrary, the latter had purchased the said land in good faith and for value, without
notice of any fact that would reasonably impel a closer inquiry as to the possibility
of a defect in the vendor's title; and
IV
The Court of Appeals has misapplied the case of Heirs of Severa Gregorio v. CA, 300
SCRA 565, cited in support of its ruling that the court a quo committed error in
appreciating the testimony of an expert witness as to the forgery of the first Deed
of Sale. 24
In its Comment 25 dated September 18, 2001, AZNAR argued, among others, that
the Petition is dismissible because the Verification and Certification of Non-forum
Shopping were not signed by all the petitioners, invoking this Court's Decision in the
case of Loquias v. Office of the Ombudsman, 26 and that the same were signed only
by one April Socorro Go, daughter of the late Go Kim Chuan, who did not even
appear to be authorized to file the instant case in behalf of the other petitioners.
HTCISE
In their Reply 27 dated October 22, 2001, petitioners contended that April Socorro
Go is one of the legitimate children and an heir of the late Go Kim Chuan and, as
such, she has personal knowledge of the truth of the facts alleged in the Petition.
Petitioners submitted that they substantially complied with the Rules of Court by
attaching the required Verification and Certification of Non-Forum Shopping and
since the same are required simply to facilitate and promote the orderly
administration of justice, compliance therewith should not be imposed with
absolute literalness.
On December 19, 2001, petitioners, through counsel, filed a Motion 28 for Leave to
Admit Amended Petition 29 for Review on Certiorari (Amended Petition).
Petitioners manifested that they were seeking to correct a defect in the designation
of parties and prayed that the Heirs of Go Kim Chuan, namely, Estrella S. Go, Sonia
Beth Go-Reynes, Daryl Go, and April Socorro Go be impleaded as petitioners instead
of the earlier designated petitioners, Cecilia Amodia Vda. de Melencion, Veneranda
Amodia, Felipe Amodia, Eutiquio Amodia, and Go Kim Chuan. Counsel for
petitioners admitted that he inadvertently included the petitioners Amodias in the
initial Petition for Review on Certiorari (Original Petition), as they were parties
before the RTC and CA. The counsel also manifested that he was only representing
the Heirs of Go Kim Chuan in this case. Lastly, he claimed that other than the
substitution of the original petitioners, both the Original Petition and Amended
Petition uniformly raised the same issues and should be given due course in the
greater interest of justice and that the instant Motion was not interposed for delay.
Per directive of the Court, 30 AZNAR filed its Comment 31 on the said motion
wherein AZNAR manifested that it had no serious objection to the admission of the
Amended Petition if the same was intended merely to implead the Heirs of Go Kim
Chuan as petitioners. However, AZNAR interposed strong opposition to the
Amended Petition's admission since the names of the petitioners Amodias were
deleted without their written consent.
In their Reply, 32 the Heirs of Go Kim Chuan, through counsel, claimed that
petitioners Amodias were excluded from the Amended Petition because they can
no longer be located despite diligent efforts exerted by counsel. The counsel claims
that after the rendition of the assailed CA Decision, he sent several letters to
petitioners Amodias but they did not reply; hence, the Heirs of Go Kim Chuan, left
with no choice, filed the instant case before this Court on their own.
The Court issued a Resolution 33 dated September 16, 2002 giving due course to
the Petition and requiring the parties to submit their respective Memoranda.
EcAISC
In their Memorandum, 34 petitioners Heirs of Go Kim Chuan reiterate the same
issues raised in the Original Petition and the Amended Petition. They argue that Act
3344 only refers to transactions affecting lands or interests therein not previously
registered under the Spanish Mortgage Law or under the Torrens system; that if
AZNAR could not have registered the sale in 1964 under Act 496 because the title
over the subject property was lost, AZNAR should have availed itself of the remedy
of reconstitution; that registration under Act 3344 is without legal effect and could
not operate as constructive notice to petitioners and third persons, hence, may not
be used as basis for the application of Art. 1544 of the New Civil Code; that the
Notice of Adverse Claim of AZNAR was annotated on TCT No. 20626 only on
February 14, 1990 after the execution of the Deed of Extra-Judicial Settlement with
Absolute Sale in favor of Go Kim Chuan on February 18, 1989, hence, the CA erred
when it held that Go Kim Chuan was not a buyer in good faith for supposedly having
knowledge of such adverse claim; and that the doctrine laid down in Heirs of Severa
Gregorio v. CA 35 is inapplicable since it referred to a case wherein the original copy
of the document under review was not produced in evidence while in the instant
case, the original copy of the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale executed by the Amodias in favor of AZNAR was presented before the
trial court judge.
On the other hand, in its Memorandum, 36 AZNAR maintains that the Original
Petition is dismissible because the Verification and Certification of Non-Forum
Shopping thereof were not signed by all the petitioners. AZNAR further claims that
the Amended Petition was filed in order to cure a fatal defect which should not be
countenanced by this Court. AZNAR also contends that Go Kim Chuan was a buyer
in bad faith as he had prior constructive notice that the subject property was sold to
AZNAR because the sale was registered with the Register of Deeds under Act 3344;
that the 1964 sale was registered under Act 3344 because the subject property was
not actually covered by a Torrens title at the time; that there was no other mode of
registration except under Act 3344; that Go Kim Chuan had to wait for the
reconstitution of the lost title, hence, it could not be said that he examined any
certificate of title and could feign ignorance of the sale in favor of AZNAR; that the
second sale did not transfer the subject property to Go Kim Chuan since it was no
longer within the vendors' power to convey; that with respect to the issue of
forgery, the finding of the document examiner is not conclusive; and that such issue
was belied by petitioner Veneranda Amodia herself when she declared that the
negotiated sale in 1964 between AZNAR and the Amodias was not consummated
because the latter did not receive the full consideration for the subject property.
Before resolving the main issues raised, the Court shall first deal with an apparent
procedural lapse in this case.
Counsel for petitioners filed a Motion for Leave to Admit Amended Petition for
Review on Certiorari in order to implead the Heirs of the late Go Kim Chuan as the
new petitioners and to delete the names of petitioners Amodias because they could
no longer be located. Said petitioners sought the relaxation of the rules so that in
the interest of justice, the case can be decided on the merits. AZNAR opposes the
Amended Petition because it was allegedly filed to cure a fatal defect in the original
petition — non-compliance with the rules on Verification and Certification of Non-
Forum Shopping.
In this regard, the case of Iglesia ni Cristo v. Ponferrada 37 is instructive, viz.:
The purpose of verification is simply to secure an assurance that the allegations of
the petition (or complaint) have been made in good faith; or are true and correct,
not merely speculative. This requirement is simply a condition affecting the form of
pleadings, and noncompliance therewith does not necessarily render it fatally
defective. Indeed, verification is only a formal, not a jurisdictional requirement.
The issue in the present case is not the lack of verification but the sufficiency of one
executed by only one of plaintiffs. This Court held in Ateneo de Naga University v.
Manalo, that the verification requirement is deemed substantially complied with
when, as in the present case, only one of the heirs-plaintiffs, who has sufficient
knowledge and belief to swear to the truth of the allegations in the petition
(complaint), signed the verification attached to it. Such verification is deemed
sufficient assurance that the matters alleged in the petition have been made in
good faith or are true and correct, not merely speculative. TADCSE
The same liberality should likewise be applied to the certification against forum
shopping. The general rule is that the certification must be signed by all plaintiffs in
a case and the signature of only one of them is insufficient. However, the Court has
also stressed in a number of cases that the rules on forum shopping were designed
to promote and facilitate the orderly administration of justice and thus should not
be interpreted with such absolute literalness as to subvert its own ultimate and
We resolve the first question in the negative.
legitimate objective. The rule of substantial compliance may be availed of with
respect to the contents of the certification. This is because the requirement of strict
compliance with the provisions merely underscores its mandatory nature in that the
certification cannot be altogether dispensed with or its requirements completely Forgery cannot be presumed. It must be proved by clear, positive and convincing
disregarded. evidence and the burden of proof rests on the party alleging forgery. Handwriting
experts are usually helpful in the examination of forged documents because of the
technical procedure involved in analyzing them. But resort to these experts is not
mandatory or indispensable. A finding of forgery does not depend entirely on the
Thus, we held in Iglesia ni Cristo that the commonality of interest is material and
testimonies of handwriting experts, because the judge must conduct an
crucial to relaxation of the Rules.
independent examination of the questioned signature in order to arrive at a
reasonable conclusion as to its authenticity. 39

In the case at bench, the petitioners in the Amended Petition are Heirs of the late
Go Kim Chuan. They represent their predecessor-in-interest in whose favor a title
The RTC's finding with respect to the issue of forgery reads: acCETD
was issued covering the subject property and said title is sought to be canceled by
AZNAR. Clearly, there is presence of the commonality of interest referred to in
Iglesia ni Cristo. Under the circumstances, the rules may be reasonably and liberally
construed to avoid a patent denial of substantial justice, because it cannot be After a thorough study of the pleadings and evidence of the parties, the court finds
denied that the ends of justice are better served when cases are determined on the that preponderance of evidence heavily tilts in favor of the defendants. The
merits — after all parties are given full opportunity to ventilate their causes and document relied upon by the plaintiff in its claim of ownership over the land in
defenses — rather than on technicality or some procedural imperfections. 38 question, the extrajudicial partition and sale, has been found by the document
examiner of the PC Crime Laboratory to be a forgery. Being a forgery, said
document conveyed nothing in favor of the plaintiff. Hence, plaintiff's claim of
ownership over the same has no more leg to stand on. . . . 40
The Issues

While it is true that the original document was produced before the RTC, the finding
We now proceed to the merits of the case. From the issues raised, there are
of forgery relies wholly on the testimony of the document examiner. It falls short of
ultimately two questions that require resolution:
the required independent examination to be conducted by the trial court judge.
Other than the statement of the document examiner, the RTC decision contains no
other basis to support its conclusion of the existence of forgery. Accordingly, the CA
First, did the CA misapply the doctrine in Heirs of Severa Gregorio v. CA in ruling
was correct in rejecting the RTC's finding and in applying the doctrine laid down in
that the RTC committed an error in appreciating the testimony of an expert witness
the case of Heirs of Severa Gregorio v. CA.
as to the forgery of the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale?

However, we resolve the second question in favor of Go Kim Chuan.

Second, who between Go Kim Chuan and AZNAR has the better right over the
subject property?
Without doubt, we have here a case of double sale of registered land. Apropos is
Article 1544 of the New Civil Code which provides:
ART. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in
good faith was first in the possession; and, in the absence thereof, to the person
who presents the oldest title, provided there is good faith.
We have already ruled that the registration contemplated in this provision refers to
registration under the Torrens System, which considers the act of registration as the
operative act 41 that gives validity to the transfer or creates a lien upon the land. 42
This rule precisely applies to cases involving conflicting rights over registered
property and those of innocent transferees who relied on the clean title of the
properties. 43 Thus, we held that registration must be done in the proper registry in
order to bind the same. 44 cSCTEH
In the case at bench, it is uncontroverted that the subject property was under the
operation of the Torrens System even before the respective conveyances to AZNAR
and Go Kim Chuan were made. AZNAR knew of this, and admits this as fact. Yet,
despite this knowledge, AZNAR registered the sale in its favor under Act 3344 on
the contention that at the time of sale, there was no title on file. We are not
persuaded by such a lame excuse.
Act 3344 provides for the system of recording of transactions or claims over
unregistered real estate 45 without prejudice to a third party with a better right. 46
But if the land is registered under the Land Registration Act (and therefore has a
Torrens Title), and it is sold and the sale is registered not under the Land
Registration Act but under Act 3344, as amended, such sale is not considered
registered, as the term is used under Art. 1544 of the New Civil Code. 47
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale in favor of AZNAR was registered under Act No. 3344 and not under Act No.
496, the said document is deemed not registered. 48 Rather, it was the sale in favor
of Go Kim Chuan which was registered under Act No. 496.
AZNAR insists that since there was no Torrens title on file in 1964, insofar as the
vendors, AZNAR, and the Register of Deeds are concerned, the subject property was
unregistered at the time. The contention is untenable. The fact that the certificate
of title over the registered land is lost does not convert it into unregistered land.
After all, a certificate of title is merely an evidence of ownership or title over the
particular property described therein. 49 This Court agrees with the petitioners that
AZNAR should have availed itself of the legal remedy of reconstitution of the lost
certificate of title, instead of registration under Act 3344. We note that in Aznar
Brothers Realty Company v. Aying, 50 AZNAR, beset with the similar problem of a
lost certificate of title over a registered land, sought the reconstitution thereof. It is
unfortunate that, in the instant case, despite the sale of the subject property way
back in 1964 and the existence of the remedy of reconstitution at that time, AZNAR
opted to register the same under the improper registry (Act 3344) and allowed such
status to lie undisturbed. From 1964 to 1989, AZNAR did not bother to have the lost
title reconstituted or even have the subject property declared under its name for
taxation purposes. Vigilantibus, non dormientibus, jura subveniunt. Laws must
come to the assistance of the vigilant, not of the sleepy. 51 IEaCDH
Although it is obvious that Go Kim Chuan registered the sale in his favor under Act
496 while AZNAR did not, we still cannot make an outright award of the subject
property to the petitioners solely on that basis. For the law is clear: mere
registration of title is not enough. Good faith must accompany the registration.
Thus, to be able to enjoy priority status, the second purchaser must be in good
faith, i.e., he must have no knowledge of the previous alienation of the property by
the vendor to another. Notably, what is important for this purpose is not whether
the second buyer is a buyer in good faith, but whether he registers the second sale
in good faith, meaning, he does so without knowledge of any defect in the title over
the property sold. 52
To fully resolve the second question, therefore, it is imperative that we determine
whether Go Kim Chuan was a registrant in good faith.
The CA found that AZNAR registered its Notice of Adverse Claim ahead of the Deed
of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan. Because of
this, the CA declared that Go Kim Chuan was not a buyer in good faith, because he
should have respected such adverse claim or, at least, inquired into the validity
thereof.
We do not agree.
While factual issues are not within the province of this Court, as it is not a trier of
facts and is not required to examine the oral and documentary evidence de novo,
this Court has the authority to review and, in proper cases, reverse the factual
findings of lower courts in the following instances: (a) when the findings of fact of
the trial court are in conflict with those of the appellate court; (b) when the
judgment of the appellate court is based on a misapprehension of facts; and, (c)
when the appellate court manifestly overlooked certain relevant facts which, if
properly considered, would justify a different conclusion. 53
The instant case falls squarely within the foregoing exceptions.
Concededly, inscription of an adverse claim serves as a warning to third parties
dealing with a piece of real property that someone claims an interest therein or that
there is a right superior to that of the titled owner. 54 However, as pointed out by
petitioners and as admitted by AZNAR, the Notice of Adverse Claim was annotated
on TCT No. 20626 only on February 4, 1990, after the lost certificate of title was
reconstituted and after the issuance of said TCT in the name of Go Kim Chuan on
December 1, 1989. It is, therefore, absurd to say that Go Kim Chuan should be
bound by an adverse claim which was not previously annotated on the lost title or
on the new one, or be shackled by a claim which he did not have any knowledge of.
AcSEHT
Citing Santiago v. Court of Appeals, 55 AZNAR contends that even if the adverse
claim was annotated on TCT No. 20626 only on February 4, 1990, the prior
registration of the sale in its favor under Act 3344 served as constructive notice to
Go Kim Chuan and thus negates the latter's claim of good faith, since the Court held
in that case, "Registration, however, by the first buyer under Act 3344 can have the
effect of constructive notice to the second buyer that can defeat his right as such
buyer in good faith."
AZNAR's reliance on Santiago is misplaced. In Santiago, the first buyers registered
the sale under the Torrens System, as can be inferred from the issuance of the TCT
in their names. There was no registration under Act 3344. Conversely, in the instant
case, AZNAR registered the sale in its favor under Act 3344 despite its full
knowledge that the subject property is under the operation of the Torrens System.
To repeat, there can be no constructive notice to the second buyer through
registration under Act 3344 if the property is registered under the Torrens system.
56
Moreover, before buying the subject property, Go Kim Chuan made verifications
with the Office of the City Assessor of Lapu-Lapu City and the Register of Deeds. He
likewise visited the premises of the subject property and found that nobody
interposed any adverse claim against the Amodias. After he decided to buy the
subject property, he paid all taxes in arrears, caused the publication of the Deed of
Extra-Judicial Settlement with Absolute Sale in a newspaper of general circulation,
caused the reconstitution of the lost certificate of title and caused the issuance of
the assailed TCT in his name. 57 Given these antecedents, good faith on the part of
Go Kim Chuan cannot be doubted.
We also note that AZNAR's complaint for cancellation of title contains no allegation
that the (second) purchaser was aware of defects in his title. In the absence of such
an allegation and proof of bad faith, it would be grossly inappropriate for this Court
to render judgment against the purchaser who had already acquired title not only
because of lack of evidence, but also because of the indefeasibility and
conclusiveness of such title. 58
Finally, it is worth stressing that the Torrens system was adopted in this country
because it was believed to be the most effective measure to guarantee the integrity
of land titles and to insure their indefeasibility once the claim of ownership is
established and recognized. If a person purchases a piece of land on the assurance
that the seller's title thereto is valid, he should not run the risk of losing his
acquisition. If this were permitted, public confidence in the system would be eroded
and land transactions would have to be attended by complicated and not
necessarily conclusive investigations and proof of ownership. 59 AaIDCS

WHEREFORE, the instant petition for review is GRANTED. The Decision of the Court
of Appeals in CA-G.R. CV No. 51814 is REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No. 2254-L, is
REINSTATED. No costs.

SO ORDERED.

||| (Vda. de Melencion v. Court of Appeals, G.R. No. 148846, [September 25, 2007],
560 PHIL 334-356)
FIRST DIVISION
[G.R. No. 164961. June 30, 2014.]
HECTOR L. UY, petitioner, vs. VIRGINIA G. FULE; HEIRS OF THE LATE AMADO A.
GARCIA, namely: AIDA C. GARCIA, LOURDES G. SANTAYANA, AMANDO C. GARCIA,
JR., MANUEL C. GARCIA, CARLOS C. GARCIA, and CRISTINA G. MARALIT; HEIRS OF
THE LATE GLORIA GARCIA ENCARNACION, namely: MARVIC G. ENCARNACION,
IBARRA G. ENCARNACION, MORETO G. ENCARNACION, JR., and CARINA G.
ENCARNACION; HEIRS OF THE LATE PABLO GARCIA, namely: BERMEDIO GARCIA,
CRISTETA GARCIA, HONORATO GARCIA, VICENTE GARCIA, PABLO GARCIA, JR., and
TERESITA GARCIA; HEIRS OF THE LATE ELISA G. HEMEDES, namely: ROEL G.
HEMEDES, ELISA G. HEMEDES, ROGELIO G. HEMEDES, ANDORA G. HEMEDES, and
FLORA G. HEMEDES, respondents.
DECISION
BERSAMIN, J p:
The decisive question here is whether or not the petitioner was a purchaser in good
faith of the property in litis. The standard is that for one to be a purchaser in good
faith in the eyes of the law, he should buy the property of another without notice
that some other person has a right to, or interest in, such property, and should pay
a full and fair price for the same at the time of such purchase, or before he has
notice of the claim or interest of some other persons in the property. 1 He buys the
property with the belief that the person from whom he receives the property was
the owner and could convey title to the property. 2 Indeed, a purchaser cannot
close his eyes to facts that should put a reasonable man on his guard and still claim
he acted in good faith. 3
The Case
Under appeal by petition for review on certiorari is the decision promulgated on
February 17, 2004, 4 whereby the Court of Appeals upheld the judgment rendered
in favor of the respondents on June 30, 2000 by the Regional Trial Court, Branch 32,
in Pili, Camarines Sur (RTC). 5
Antecedents
The dispute herein involves the parcel of land registered under Transfer Certificate
of Title (TCT) No. 30111 of the Registry of Deeds of Camarines Sur with an area of
180,150 square meters located in San Agustin, Pili, Camarines Sur that was part of
the vast tract of land covered by TCT No. 1128 registered in the name of the late
Conrado Garcia. TCT No. 1128 was derived from Original Certificate of Title (OCT)
No. 854 registered on November 23, 1933 in the Registration Book of the Register
of Deeds of Camarines Sur pursuant to Decree No. 517240, No. 854, issued in LRC
GLRO Record No. 47802. aCATSI
Upon the death of Conrado Garcia on November 23, 1972, his heirs entered into an
extrajudicial settlement of his estate, including the vast tract of land. Thereafter, his
heirs caused the registration on March 7, 1973 of the vast tract of land under TCT
No. RT-8922 (16498), covering Lot 1, PSU-81269 and Lot 2, PSU-81269. 6
In September 1985, the Department of Agrarian Reform (DAR) engaged Geodetic
Engr. Rolando A. Sales (Engr. Sales) to conduct a survey of the disputed land,
referring to it as Lot 562, Cad. 291 (Csd-05-003874). Together with DAR
Technologist Carmen Sorita and DAR Team Leader Julian F. Israel, Engr. Sales issued
a joint certification dated August 30, 1988 to the effect that the disputed land was
an "untitled" property owned by Conrado Garcia. The joint certification dated
August 30, 1988 was buttressed by the certification issued on January 30, 1989 by
the Office of the Register of Deeds of Camarines Sur to the effect that no title
covering Lot 562, Cad. 291 (Csd-05-003874) appeared on record. As a result, the
disputed land was included in the Operation Land Transfer (OLT) program of the
DAR pursuant to Presidential Decree No. 27.
In 1988, the DAR and the Office of the Register of Deeds of Camarines Sur
respectively issued emancipation patents (EPs) and original certificates of title
5. To Salvador Pedimonte, OCT Nos. 8545 and 8546;
(OCTs) covering the disputed land to the farmers-beneficiaries, namely: Catalino
Alcaide, Mariano Ronda, Ponciano Ermita, Felipe Marcelo, Salvador Pedimonte,
Fabiana Pedimonte and Leonila Pedimonte (farmers-beneficiaries). 7
6. To Fabiana Pedimonte, OCT No. 9848; and

In the interim, farmer-beneficiary Mariano Ronda sold his portion to Chisan Uy who
then registered his title thereto under TCT No. 29948 and TCT No. 29949 of the
Registry of Deeds of Camarines Sur. On the other hand, the heirs of farmer-
beneficiary Mariano Ronda (Isabel Ronda, et al.) sold their land to petitioner Hector
Uy for P10 million. The petitioner registered his title thereto under TCT No. 31436
and TCT No. 31437, both of the Registry of Deeds of Camarines Sur. SDECAI
In 1997, TCT No. RT-8922 (16498) was cancelled following the partition of the
property covered therein. Subsequently, TCT No. 30136 and TCT No. 30111 were
issued in the names of respondents heirs of the late Conrado Garcia. TCT No. 30111
covered the disputed land. 8
In 1998, the President, acting through the DAR Secretary, issued EPs to the farmers-
beneficiaries pursuant to P.D. No. 27 and P.D. No. 266, to wit:
7. To Leonila Pedimonte, OCT No. 9849. 9
On December 21, 1998, the respondents filed a complaint for cancellation of titles,
quieting of title, recovery of possession, and damages against the DAR Secretary;
the Municipal Agrarian Reform Officer of Pili, Camarines Sur; DAR Technologist
Carmen Sorita; DAR Team Leader Julian Israel; Engr. Sales; and Regional Director
Antonio Nuesa of DAR Regional Office No. V (public defendants) and the farmer-
beneficiaries (private defendants) in the Regional Trial Court (RTC) in Pili, Camarines
Sur, alleging that they had been denied due process; and that the titles of the
defendants (who included the petitioner) in the disputed land constituted clouds on
their own title. They prayed that the private defendants' certificates of title,
including those of their purchasers Chisan Uy and the petitioner, be cancelled; that
the private defendants be ordered to surrender the possession of the disputed land
to them; and that in default thereof the private defendants be ordered to pay the
fair market value of the property, with reparation for damages in either case. 10

1. To Catalino Alcaide, OCT No. 8534 and OCT No. 8549, which were cancelled by
Ruling of the RTC
TCT No. 29948 and TCT No. 29949 in the name of Chisan Uy;

On June 30, 2000, 11 the RTC resolved in favor of the respondents by finding that
2. To Mariano Ronda, OCT No. 9852 and OCT No. 9853, which were cancelled by
no notice of the inclusion of the disputed land under the operation of P.D. No. 27
TCT No. 301120 and TCT No. 301121; and, in turn, TCT No. 301120 and TCT No.
had been given to them. The RTC decreed thusly: ITDHcA
301121 were cancelled by TCT No. 31436 and TCT No. 31437 in the name of
petitioner Hector Uy;

IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby rendered:

3. To Ponciano Ermita, OCT 8539;

1. Declaring plaintiffs as the owners of the lands covered by TCT No. 30111 and
declaring said title as VALID, BINDING AND EFFECTIVE, against the whole world;
4. To Felipe Marcelo, OCT No. 8542;
2. Declaring null and void all the proceedings taken by public defendants in the
generation of the certificates of land transfer and emancipation patents, on the
bases of which the OCTs mentioned in paragraphs 2 and 3 of this decision were
issued by the Register of Deeds of Camarines Sur;
3. Ordering the Register of Deeds of Camarines Sur to cancel all the OCTs and TCTs
mentioned in paragraphs 2 and 3 of this decision;
4. Ordering defendants whose titles were cancelled to surrender the possession of
the lands covered by their cancelled titles to the plaintiffs and condemning them to
PERPETUAL SILENCE in so far as TCT 30111 is concerned.
NO COSTS.
SO ORDERED. 12 cACHSE
Decision of the CA
Isabel Ronda, et al.(heirs of deceased farmer-beneficiary Mariano S. Ronda),
Catalino Alcaide, Julia Casaysayan, Chisan Uy, and the petitioner appealed to the
CA.
The defendant public officials did not appeal. 13 Also not appealing were
defendants farmers-beneficiaries (with their respective OCTs) Spouses Salvador R.
Pedimonte and Herminia Barrientos (OCT Nos. 8545 and 8546); Spouses Angeles C.
Ronda and Consolacion Pedimonte (OCT No. 9851); Spouses Felipe Marcelo and
Isabel Nacario (OCT No. 8542); Leonila S. Pedimonte (OCT No. 9849); Ponciano
Ermita (OCT No. 8539); and Fabiana R. Pedimonte (OCT No. 9848). 14 Accordingly,
on September 5, 2003, the Clerk of Court of the RTC issued the certificate of finality
as to them, as well as a writ of partial execution.
Isabel Ronda, et al.raised the following errors on appeal, namely: (1) that the court
a quo erred in acquiring jurisdiction over the case; and (2) the court a quo erred in
ordering the ejectment of the appellants, heirs of deceased spouses, Mariano S.
Ronda and Fidela Cortez-Ronda. 15
On their part, Catalino Alcaide, Julia Casaysayan, and Chisan Uy claimed that the
RTC erred in assuming jurisdiction over the case when in fact it had no such
jurisdiction; in holding that the titles issued to the tenants Spouses Alcaides and
Chisan Uy were void; and in holding that the proceedings taken by the public
defendants in generating the CLTs and EPs were void. 16
In his appeal, the petitioner insisted that the RTC gravely erred in holding that he
had not been an innocent purchaser in good faith and for value; and in declaring
void and ordering the cancellation of TCT No. 31436 and TCT No. 31437, among
others. 17
For their part, the respondents asserted that the disputed land, being originally
registered under OCT No. 854, and later on under TCT No. 1128, and still later on
under TCT No. RT-8922, and now under TCT No. 30111, did not lose its character as
registered land; and that as registered land, the disputed land should not have been
subject of another land registration proceeding from which the EPs and the
certificates of title of the private defendants could be derived. 18
In its decision promulgated on February 17, 2004, 19 the CA ruled in favor of
respondents, viz.: ACaEcH
WHEREFORE, this appeal is DENIED. The assailed Decision dated June 30, 2000 of
the Regional Trial Court of Pili, Camarines Sur, Branch 32 in Civil Case No. P-2167 is
hereby AFFIRMED.
SO ORDERED.
On the inclusion of the disputed land under the DAR's OLT Program (P.D. No. 27), On whether the petitioner and Chisan Uy had been purchasers in good faith and for
the CA observed: value without any notice of any defect in the title of the seller (i.e., the heirs of the
farmers-beneficiaries), the CA decreed:

Significantly, the disputed land was earlier extra-judicially settled by the plaintiffs-
appellees as heirs of the original owner. The disputed land was already titled to
plaintiffs-appellees at the time that public respondent DAR included it in the
operation of PD No. 27. The DAR's finding that the same was an "untitled" property
is belied not only by the records but, more so, by the failure of defendants-
appellants to refute plaintiffs-appellees' assertion to the contrary.
We disagree. Even assuming arguendo that they had no notice of any defect in their
transferors' titles, and the lands sold to them should be included in the DAR's
Operation Land Transfer (OLT) program, no valid title could have passed to them
because the transfers are void under PD 27. PD 27 explicitly provides:

xxx xxx xxx

Moreover, for a valid application of PD No. 27, the procedures outlined under PD
No. 266 should have been observed, among which is the duty of the Register of
Deeds to notify the registered owner concerning such application within a
reasonable time. However, as found by the Trial Court, no such notice was served
on plaintiffs-appellees, precisely due to the erroneous premise that the disputed
land was "untitled property".
Title to land acquired pursuant to this Decree or the Land Reform Program of the
Government shall not be transferable except by hereditary succession or to the
Government in accordance with the provisions of this Decree, the Code of Agrarian
Reforms and other existing laws and regulations;

Prescinding from the said wrong premise that the disputed land was an untitled xxx xxx xxx (Emphasis supplied)
property, no payment of just compensation was made to the registered owners.
Such failure or absence of payment violates the very law (PD 27) from which the
titles of defendants were purportedly derived. Hence, the land transfer initiated by
Based on the above-quoted provision, appellant-purchasers Hector and Chisan Uy
the DAR involving the disputed land is not only irregular but also unlawful for having
are clearly not the qualified transferees of the lands sold to them.
been undertaken in violation of the law.

More importantly, the policy of the State in passing PD 27 is to emancipate the tiller
Moreover, a land covered by a title which is outstanding cannot be the subject of an
of the soil from his bondage by transferring to him the ownership of the land he
application for registration unless the existing title which has become indefeasible is
tills. The prohibition against its transfer is for the purpose of preserving the land for
first nullified by a proper court proceeding. Consequently, the Emancipation Patents
the sole benefit and enjoyment of the farmer and his family. To sustain the transfer
and the Certificates of Titles issued as a result of the DAR's Operation Land Transfer
of the lands to appellants-purchasers would clearly not achieve that purpose. It
program over an already registered land have no legal foundation or basis. Such
would, in fact, defeat it.
subsequent titles must be cancelled because they cast clouds on the earlier existing,
valid and uncancelled title of plaintiffs-appellees. For all intents and purposes, they
are redundant titles that cannot supplant or supersede existing valid titles. 20
CSEHcT The titles of appellant-purchasers Hector Uy and Chisan Uy are, therefore, voided.
Ownership of the lands unlawfully transferred to them, remains with plaintiffs-
appellees. However, this is without prejudice to whatever legal remedies these
appellant-purchasers may avail to recover what they had paid to their transferors.
21
In its resolution of August 18, 2004 denying the petitioner's motion for
reconsideration, the CA, citing Baltazar v. Court of Appeals, 22 correctly observed:
the property is untitled, and from an irregular or procedurally flawed
implementation of the agrarian reform law (as there was no notice to the registered
owner that the subject property would be placed under the Operation Land
Transfer program, and there was no payment of just compensation). Accordingly,
Hector and Chisan Uy's titles are likewise void. 24 TSHEIc
Issues

The property subject of the said Baltazar case was titled in the name of the private
respondent Good Earth Enterprises, Inc. Petitioner therein, Baltazar, claimed Hence, the petitioner has appealed, along with Chisan Uy, Catalino Alcaide and Julia
ownership of the property, tracing his rights from an alleged vast Spanish grant to Casaysayan. The petition for review on certiorari of Chisan Uy, Alcaide and
one "Don Hermogenes Rodriguez, Governor General of Intramuros, Manila" down Casaysayan was docketed as G.R. No. 165320, and that of petitioner Hector Uy as
to a deed of sale over the subject lots allegedly executed by one Pedro Asedillo (for G.R. No. 164961.
whose mother, Baltazar had been a tenant sharing in the rice harvest from the lots).
Baltazar filed a case for declaration of ownership and reconveyance, and was
declared by the court as the true owner of the property. Consequently, Good On January 21, 2008, the Court promulgated a resolution in G.R. No. 165320,
Earth's title was cancelled and another one issued in Baltazar's name. Baltazar pertinently stating:
promptly sold the land to third parties. Good Earth filed a case for annulment of
judgment and reconveyance. Baltazar argued that his vendees are innocent
purchasers for value. The Supreme Court, in upholding Good Earth's title, declared:
. . . It appearing that Atty. Nelson P. Paraiso, counsel for petitioners in G.R. No.
IcSEAH
165320, failed to file reply to the comment on the petition for review on certiorari
as required in the Resolution dated 24 August 2005 within the extended period
which expired on 01 December 2006, the petition is hereby ordered DENIED for
We might assume for the moment and for purposes of argument only that failure to comply with said resolution, which amounts to failure to prosecute.
Baltazar's vendees had successfully proven they were purchasers in good faith and
for value. Even so, as between two persons both of whom are in good faith and
both innocent of any negligence, the law must protect and prefer the lawful holder
In any event, petitioner failed to sufficiently show that the Court of Appeals
of registered title over the transferee of a vendor bereft of any transmissible rights.
committed any reversible error in the challenged decision and resolution as to
Under the foregoing principle derived from the above case law, Baltazar's vendees
warrant the exercise of this Court's discretionary appellate jurisdiction. Besides, the
have no rights as against Good Earth. Their recourse is against Baltazar himself."
issues raised are factual in nature. 25
(Emphasis supplied.) 23

xxx xxx xxx
Like Baltazar, Hector and Chisan Uy's transferors had no transmissible rights
because their titles were void, having emanated from an erroneous declaration that
As such, only the petitioner's appeal remains unresolved. Towards that end, he
insists that the CA erred: (a) in failing to find that he was an innocent purchaser for
value who had the better right than the respondents over the disputed land; and (b)
in failing to find that the law applicable to the dispute was R.A. No. 6657 (approved
on June 10, 1988), not P. D. No. 27. 26
The petitioner argues that he paid a full and fair price of P10,000,000.00 to Isabel
Ronda, et al. for the lots in dispute, said lots having a base market value of only
P7,717,000.00; 27 that all the documents shown to him by the vendors (Isabel
Ronda, et al.) did not indicate any defect in the title or any claim by the respondents
in the lots in dispute; that, accordingly, before he and the vendors (Isabel Ronda, et
al.) entered into the deed of sale, there was absolutely nothing in the documents
that showed any defect in the title conveyed to him; that, specifically, OCT No. 9852
and OCT No. 9853, which were on file in the Registry of Deeds, showed that the lots
in dispute had been awarded to a bona fide tenant-beneficiary as part of the land
reform program, that is, OCT No. 9852 and OCT No. 9853 showed that as early as
November 21, 1997: (a) the encumbrance in favor of Land Bank of the Philippines
had been cancelled; (b) the records of the DAR indicated that Mariano Ronda had
been awarded OCT No. 9852 and OCT No. 9853 as the bona fide tenant-beneficiary;
and (c) the extra-judicial settlement revealed to him that he was then dealing with
the children of Mariano Ronda. 28 aTcIAS
The petitioner concludes that the absence of any irregularities in the documents
presented to him, coupled with the fact that it was Isabel Ronda, et al., not the
respondents, who were then in the possession of the lots in dispute, clearly evinced
to him that he did not have to look beyond the titles presented to him; that,
consequently, he could not have been aware of the respondents' claim over the
disputed lots; 29 that he should be deemed an innocent purchaser for value
because the only time that he could have been charged with constructive notice of
the respondents' claim to the lots in dispute was after the annotation of their
adverse claim on the title of the lot, which they made five months after the sale to
him; 30 and that according to Tenio-Obsequio v. Court of Appeals, 31 "the rule of
law and justice that should apply in this case is that as between two innocent
persons, one of whom must suffer the consequences of a breach of trust, the one
who made it possible by his act of confidence must bear the loss. The right of the
innocent purchaser for value must be respected and protected, even if the seller
obtained his title through fraud." 32
Anent the applicability of P.D. No. 27, 33 the petitioner contends that the RTC and
the CA's reliance on P.D. No. 27 to support their rulings to the effect that the
transfer to him had been void, in that the alienation had not been made in favor of
the Government or by hereditary succession, was misplaced; that it was Section 27
34 of R.A. No. 6657 (Comprehensive Agrarian Reform Law), not P.D. No. 27, that
should apply to the controversy; 35 that Section 27 of R.A. No. 6657 amended P.D.
No. 27 in view of the former law's repealing clause (Section 76); 36 and that, as a
result, the perpetual prohibition against transfer contained in P.D. No. 27 must be
deemed inconsistent with and repealed by Section 27 of R.A. No. 6657, which
provides a prohibition for only 10 years.
According to the petitioner, the evidence established that Mariano Ronda had
secured OCT No. 9852 and OCT No. 9853 on July 7, 1998; that the first transfer of
the lots (from Mariano Ronda to Isabela Ronda, et al.) by virtue of the deed of
extra-judicial settlement had been by hereditary succession, which was not in
breach of either P.D. No. 27 or R.A. No. 6657; that the second transfer of the lots on
July 31, 1998, whereby Isabel Ronda, et al. sold the lots to the petitioner, was
beyond the ten-year prohibited period under Section 27 of R.A. No. 6657 due to
said period having expired on July 6, 1988; and that, consequently, the sale from
Isabela Ronda, et al. to the petitioner was outside the ambit of the ten-year
prohibited period under Section 27 of R.A. No. 6657. 37
The respondents counter, however, that their action for quieting of title was
premised on the illegal acquisition of their decreed and titled property by the DAR
under its OLT Program as a result of the DAR's declaration of their property as
"untitled" and "abandoned"; that their title did not lose its character as "valid,
existing, binding, effective, and uncancelled" since November 23, 1933, the time
when the OCT was issued; and that the DAR officials, by not appealing the RTC's
decision, were implicitly "recognizing, acknowledging and admitting" the decision.
38
The respondents deny the petitioner's claim of good faith. They point out that he
did not exercise due diligence in examining the title of the heirs of Mariano Ronda
given that said title had been previously, but wrongfully, acquired through the OLT
Program of the DAR; that the express prohibition contained in OCT No. 9852 and
OCT No. 9853, which the petitioner unavoidably saw, made it clear that the lots
thereby covered "shall not be transferred except by hereditary succession or to the
Government in accordance with the provisions of Presidential Decree No. 27",
thereby belying the petitioner's assertion of being an innocent purchaser for value
and in good faith; 39 that the nullity of the DAR proceedings and the void character
of the OCTs issued by DAR did not supersede the valid, existing, binding and
uncancelled title of the respondent. 40 DIcSHE
Ruling of the Court
We affirm the decision of the CA.
We stated at the start that in determining whether or not a buyer of property is a
purchaser in good faith, he must show that he has bought the property without
notice that some other person had a right to, or interest in, such property, and he
should pay a full and fair price for the same at the time of his purchase, or before he
had notice of the claim or interest of some other persons in the property. 41 He
must believe that the person from whom he receives the property was the owner
and could convey title to the property, 42 for he cannot close his eyes to facts that
should put a reasonable man on his guard and still claim he acted in good faith. 43
In Bautista v. Silva, 44 the Court enunciates the requisites for the buyer to be
considered a purchaser in good faith, viz.:
A buyer for value in good faith is one who buys property of another, without notice
that some other person has a right to, or interest in, such property and pays full and
fair price for the same, at the time of such purchase, or before he has notice of the
claim or interest of some other persons in the property. He buys the property with
the well-founded belief that the person from whom he receives the thing had title
to the property and capacity to convey it.
To prove good faith, a buyer of registered and titled land need only show that he
relied on the face of the title to the property. He need not prove that he made
further inquiry for he is not obliged to explore beyond the four corners of the title.
Such degree of proof of good faith, however, is sufficient only when the following
conditions concur: first, the seller is the registered owner of the land; second, the
latter is in possession thereof; and third, at the time of the sale, the buyer was not
aware of any claim or interest of some other person in the property, or of any
defect or restriction in the title of the seller or in his capacity to convey title to the
property.
Absent one or two of the foregoing conditions, then the law itself puts the buyer on
notice and obliges the latter to exercise a higher degree of diligence by scrutinizing
the certificate of title and examining all factual circumstances in order to determine
the seller's title and capacity to transfer any interest in the property. Under such
circumstance, it was no longer sufficient for said buyer to merely show that he had
relied on the face of the title; he must now also show that he had exercised
reasonable precaution by inquiring beyond the title. Failure to exercise such degree
of precaution makes him a buyer in bad faith. 45 THcaDA
An examination of the deed of sale executed between Isabel Ronda, et al. and the
petitioner respecting the portions covered by TCT No. 31120 and TCT No. 31121
indicates that the TCTs were issued only on August 17, 1998 but the deed of sale
was executed on July 31, 1998. While it is true, as the petitioner argues, that
succession occurs from the moment of death of the decedent pursuant to Article
777 of the Civil Code, 46 his argument did not extend to whether or not he was a
buyer in good faith, but only to whether or not, if at all, Isabel Ronda, et al., as the
heirs of Mariano Ronda, held the right to transfer ownership over their
predecessor's property. The argument did not also address whether or not the
transfer to the petitioner was valid.
Evidently, the petitioner entered into the deed of sale without having been able to
inspect TCT No. 31120 and TCT No. 31121 by virtue of such TCTs being not yet in
existence at that time. If at all, it was OCT No. 9852 and OCT No. 9853 that were
available at the time of the execution of the deed of sale, and such OCTs were
presumably inspected by petitioner before he signed the deed of sale. It is notable
that said OCTs categorically stated that they were entered pursuant to an
emancipation patent of the Ministry of Agrarian Reform pursuant to the Operation
Land Transfer (OLT) Program of the government. Furthermore, said OCTs plainly
recited the following prohibition: ". . . it shall not be transferred except by
hereditary succession or to the Government in accordance with the provisions of
Presidential Decree No. 27, Code of Agrarian Reforms of the Philippines and other
existing laws and regulations. . . ."
The foregoing circumstances negated the third element of good faith cited in
Bautista v. Silva, i.e., that "at the time of sale, the buyer was not aware of any claim
or interest of some other person in the property, or of any defect or restriction in WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision of
the title of the seller or in his capacity to convey title to the property." As we have the Court of Appeals promulgated on February 17, 2004; and ORDER the petitioner
ruled in Bautista v. Silva, 47 the absence of the third condition put the petitioner on to pay the costs of suit.
notice and obliged him to exercise a higher degree of diligence by scrutinizing the
certificates of title and examining all factual circumstances in order to determine
the seller's title and capacity to transfer any interest in the lots. Consequently, it is SO ORDERED.
not sufficient for him to insist that he relied on the face of the certificates of title,
for he must further show that he exercised reasonable precaution by inquiring
beyond the certificates of title. Failure to exercise such degree of precaution
||| (Uy v. Fule, G.R. No. 164961, [June 30, 2014], 737 PHIL 290-310)
rendered him a buyer in bad faith. "It is a well-settled rule that 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." 48 ACDIcS

The petitioner was not an innocent purchaser for value; hence, he cannot be
awarded the disputed land.

In view of the result thus reached by us, it becomes superfluous to settle the issue
of which between P.D. No. 27 and Section 27 of R.A. No. 6657 should control, and
whether or not the R.A. No. 6657 has repealed P.D. No. 27. Even so, the Court has
expressly clarified that R.A. No. 6657 did not repeal or supersede P.D. No. 27,
stating in Sigre v. Court of Appeals: 49

Finally, the Court need not belabor the fact that R.A. 6657 or the CARP Law
operates distinctly from P.D. 27. R.A. 6657 covers all public and private agricultural
land including other lands of the public domain suitable for agriculture as provided
for in Proclamation No. 131 and Executive Order No. 229; while, P.D. 27 covers rice
and corn lands. On this score, E.O. 229, which provides for the mechanism of the
Comprehensive Agrarian Reform Program, specifically states: "(P)residential Decree
No. 27, as amended, shall continue to operate with respect to rice and corn lands,
covered thereunder. . . . ." It cannot be gainsaid, therefore, that R.A. 6657 did not
repeal or supersede, in any way, P.D. 27. And whatever provisions of P.D. 27 that
are not inconsistent with R.A. 6657 shall be suppletory to the latter, and all rights
acquired by the tenant-farmer under P.D. 27 are retained even with the passage of
R.A. 6657.
SECOND DIVISION
[G.R. No. 196577. February 25, 2013.]
LAND BANK OF THE PHILIPPINES, petitioner, vs. BARBARA SAMPAGA POBLETE,
respondent.
DECISION
CARPIO, J p:
The Case
This Petition for Review on Certiorari 1 seeks to reverse the Court of Appeals'
Decision 2 dated 28 September 2010 and its Resolution 3 dated 19 April 2011 in CA-
G.R. CV No. 91666. The Court of Appeals (CA) affirmed in toto the Decision 4 of the
Regional Trial Court (RTC) of San Jose, Occidental Mindoro, Branch 46, in Civil Case
No. R-1331.
The Facts
The facts, as culled from the records, are as follows:
Petitioner Land Bank of the Philippines (Land Bank) is a banking institution
organized and existing under Philippine laws. Respondent Barbara Sampaga Poblete
(Poblete) is the registered owner of a parcel of land, known as Lot No. 29, with an
area of 455 square meters, located in Buenavista, Sablayan, Occidental Mindoro,
under Original Certificate of Title (OCT) No. P-12026. In October 1997, Poblete
obtained a P300,000.00 loan from Kabalikat ng Pamayanan ng Nagnanais Tumulong
at Yumaman Multi-Purpose Cooperative (Kapantay). Poblete mortgaged Lot No. 29
to Kapantay to guarantee payment of the loan. Kapantay, in turn, used OCT No. P-
12026 as collateral under its Loan Account No. 97-CC-013 with Land Bank-Sablayan
Branch.
In November 1998, Poblete decided to sell Lot No. 29 to pay her loan. She
instructed her son-in-law Domingo Balen (Balen) to look for a buyer. Balen referred
Angelito Joseph Maniego (Maniego) to Poblete. According to Poblete, Maniego
agreed to buy Lot No. 29 for P900,000.00, but Maniego suggested that a deed of
absolute sale for P300,000.00 be executed instead to reduce the taxes. Thus,
Poblete executed the Deed of Absolute Sale dated 9 November 1998 (Deed dated 9
November 1998) with P300,000.00 as consideration. 5 In the Deed dated 9
November 1998, Poblete described herself as a "widow." Poblete, then, asked Balen
to deliver the Deed dated 9 November 1998 to Maniego and to receive the
payment in her behalf. Balen testified that he delivered the Deed dated 9
November 1998 to Maniego. However, Balen stated that he did not receive from
Maniego the agreed purchase price. Maniego told Balen that he would pay the
amount upon his return from the United States. In an Affidavit dated 19 November
1998, Poblete stated that she agreed to have the payment deposited in her Land
Bank Savings Account. 6 aEcTDI
Based on a Certification issued by Land Bank-Sablayan Branch Department Manager
Marcelino Pulayan on 20 August 1999, 7 Maniego paid Kapantay's Loan Account No.
97-CC-013 for P448,202.08. On 8 June 2000, Maniego applied for a loan of
P1,000,000.00 with Land Bank, using OCT No. P-12026 as collateral. Land Bank
alleged that as a condition for the approval of the loan, the title of the collateral
should first be transferred to Maniego.
On 14 August 2000, pursuant to a Deed of Absolute Sale dated 11 August 2000
(Deed dated 11 August 2000), 8 the Register of Deeds of Occidental Mindoro issued
Transfer Certificate of Title (TCT) No. T-20151 in Maniego's name. On 15 August
2000, Maniego and Land Bank executed a Credit Line Agreement and a Real Estate
Mortgage over TCT No. T-20151. On the same day, Land Bank released the
P1,000,000.00 loan proceeds to Maniego. Subsequently, Maniego failed to pay the
loan with Land Bank. On 4 November 2002, Land Bank filed an Application for Extra-
judicial Foreclosure of Real Estate Mortgage stating that Maniego's total
indebtedness amounted to P1,154,388.88.
 WHEREFORE, by preponderance of evidence, judgment is hereby rendered in favor
of the plaintiff and against the defendants, as follows:
On 2 December 2002, Poblete filed a Complaint for Nullification of the Deed dated
11 August 2000 and TCT No. T-20151, Reconveyance of Title and Damages with
Prayer for Temporary Restraining Order and/or Issuance of Writ of Preliminary
1. Declaring the Deed of Sale dated August 11, 2000 over O.C.T. No. P-12026, as null
Injunction. Named defendants were Maniego, Land Bank, the Register of Deeds of
and void;
Occidental Mindoro and Elsa Z. Aguirre in her capacity as Acting Clerk of Court of
RTC San Jose, Occidental Mindoro. In her Complaint, Poblete alleged that despite
her demands on Maniego, she did not receive the consideration of P900,000.00 for
Lot No. 29. She claimed that without her knowledge, Maniego used the Deed dated 2. Declaring Transfer of Certificate of Title No. T-20151 as null and void, it having
9 November 1998 to acquire OCT No. P-12026 from Kapantay. Upon her verification been issued on the basis of a spurious and forged document;
with the Register of Deeds, the Deed dated 11 August 2000 was used to obtain TCT
No. T-20151. Poblete claimed that the Deed dated 11 August 2000 bearing her and
her deceased husband's, Primo Poblete, supposed signatures was a forgery as their 3. The preliminary [i]njunction issued directing the defendants to refrain from
signatures were forged. As proof of the forgery, Poblete presented the Death proceedings [sic] with the auction sale of the plaintiff's properties, dated February
Certificate dated 27 April 1996 of her husband and Report No. 294-502 of the 10, 2002, is hereby made permanent;
Technical Services Department of the National Bureau of Investigation showing that
the signatures in the Deed dated 11 August 2000 were forgeries. Accordingly,
Poblete also filed a case for estafa through falsification of public document against 4. Ordering defendant Angelito Joseph Maniego to return to the plaintiff O.C.T. No.
Maniego and sought injunction of the impending foreclosure proceeding. HIAEaC P-12026; and

On 7 January 2003, Land Bank filed its Answer with Compulsory Counterclaim and 5. Ordering defendant Angelito Joseph Maniego to pay plaintiff the amount of
Cross-claim. Land Bank claimed that it is a mortgagee in good faith and it observed P50,000.00, as and for reasonable attorney's fees.
due diligence prior to approving the loan by verifying Maniego's title with the Office
of the Register of Deeds. Land Bank likewise interposed a cross-claim against
Maniego for the payment of the loan, with interest, penalties and other charges.
Judgment is furthermore rendered on the cross-claim of defendant Land Bank of
Maniego, on the other hand, separately filed his Answer. Maniego denied the
the Philippines against defendant Angelito Joseph Maniego, as follows: ESCTIA
allegations of Poblete and claimed that it was Poblete who forged the Deed dated
11 August 2000. He also alleged that he paid the consideration of the sale to
Poblete and even her loans from Kapantay and Land Bank.
A. Ordering defendant Angelito Joseph Maniego to pay his co-defendant [L]and
Bank of the Philippines his loan with a principal of P1,000,000.00, plus interests,
penalties and other charges thereon; and
The Ruling of the Regional Trial Court

B. Ordering defendant Angelito Joseph Maniego to pay the costs of this suit.
On 28 December 2007, the RTC of San Jose, Occidental Mindoro, Branch 46,
rendered a Decision in favor of Poblete, the dispositive portion of which reads:

SO ORDERED. 9
 1. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION) ERRED IN
UPHOLDING THE FINDING OF THE TRIAL COURT DECLARING TCT NO. T-20151 AS
The RTC ruled that the sale between Poblete and Maniego was a nullity. The RTC
NULL AND VOID. THE COURT OF APPEALS MISCONSTRUED AND MISAPPRECIATED
found that the agreed consideration was P900,000.00 and Maniego failed to pay
THE EVIDENCE AND THE LAW IN NOT FINDING TCT NO. T-20151 REGISTERED IN THE
the consideration. Furthermore, the signatures of Poblete and her deceased
NAME OF ANGELITO JOSEPH MANIEGO AS VALID.
husband were proven to be forgeries. The RTC also ruled that Land Bank was not a
mortgagee in good faith because it failed to exercise the diligence required of
banking institutions. The RTC explained that had Land Bank exercised due diligence,
2. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION) MISCONSTRUED
it would have known before approving the loan that the sale between Poblete and
THE EVIDENCE AND THE LAW IN NOT FINDING LAND BANK A MORTGAGEE IN GOOD
Maniego had not been consummated. Nevertheless, the RTC granted Land Bank's
FAITH.
cross-claim against Maniego.

3. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION) MISCONSTRUED

In an Order dated 17 March 2008, the RTC denied the Motion for Reconsideration
THE EVIDENCE AND THE LAW IN NOT FINDING THE RESPONDENT AND ANGELITO
filed by Land Bank for want of merit. Thereafter, Land Bank and Maniego separately
JOSEPH MANIEGO AS IN PARI DELICTO.
challenged the RTC's Decision before the CA.

4. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION) ERRED IN NOT

The Ruling of the Court of Appeals
APPLYING THE PRINCIPLE OF ESTOPPEL OR LACHES ON RESPONDENT IN THAT THE
PROXIMATE CAUSE OF HER LOSS WAS HER NEGLIGENCE TO SAFEGUARD HER
RIGHTS OVER THE SUBJECT PROPERTY, THEREBY ENABLING ANGELITO JOSEPH
On 28 September 2010, the CA promulgated its Decision affirming in toto the
MANIEGO TO MORTGAGE THE SAME WITH LAND BANK. 13
Decision of the RTC. 10 Both Land Bank and Maniego filed their Motions for
Reconsideration but the CA denied both motions on 19 April 2011. 11

The Ruling of the Court

In a Resolution dated 13 July 2011, 12 the Second Division of this Court denied the
Petition for Review on Certiorari filed by Maniego. This Resolution became final and
We do not find merit in the petition. AEIDTc
executory on 19 January 2012.

On the other hand, Land Bank filed this petition. HcSaTI
The Issues
Land Bank seeks a reversal and raises the following issues for resolution:
A petition for review under Rule 45 of the Rules of Court specifically provides that
only questions of law may be raised, subject to exceptional circumstances 14 which
are not present in this case. Hence, factual findings of the trial court, especially if
affirmed by the CA, are binding on US. 15 In this case, both the RTC and the CA
found that the signatures of Poblete and her deceased husband in the Deed dated
11 August 2000 were forged by Maniego. In addition, the evidence is preponderant
that Maniego did not pay the consideration for the sale. Since the issue on the
genuineness of the Deed dated 11 August 2000 is essentially a question of fact, we
are not duty-bound to analyze and weigh the evidence again. 16
 There is indeed a situation where, despite the fact that the mortgagor is not the
owner of the mortgaged property, his title being fraudulent, the mortgage contract
It is a well-entrenched rule, as aptly applied by the CA, that a forged or fraudulent
and any foreclosure sale arising therefrom are given effect by reason of public
deed is a nullity and conveys no title. 17 Moreover, where the deed of sale states
policy. 26 This is the doctrine of "the mortgagee in good faith" based on the rule
that the purchase price has been paid but in fact has never been paid, the deed of
that buyers or mortgagees dealing with property covered by a Torrens Certificate of
sale is void ab initiofor lack of consideration. 18 Since the Deed dated 11 August
Title are not required to go beyond what appears on the face of the title. 27
2000 is void, the corresponding TCT No. T-20151 issued pursuant to the same deed
However, it has been consistently held that this rule does not apply to banks, which
is likewise void. In Yu Bun Guan v. Ong, 19 the Court ruled that there was no legal
are required to observe a higher standard of diligence. 28 A bank whose business is
basis for the issuance of the certificate of title and the CA correctly cancelled the
impressed with public interest is expected to exercise more care and prudence in its
same when the deed of absolute sale was completely simulated, void and without
dealings than a private individual, even in cases involving registered lands. 29 A
effect. In Ereña v. Querrer-Kauffman, 20 the Court held that when the instrument
bank cannot assume that, simply because the title offered as security is on its face
presented for registration is forged, even if accompanied by the owner's duplicate
free of any encumbrances or lien, it is relieved of the responsibility of taking further
certificate of title, the registered owner does not thereby lose his title, and neither
steps to verify the title and inspect the properties to be mortgaged. 30
does the mortgagee acquire any right or title to the property. In such a case, the
mortgagee under the forged instrument is not a mortgagee protected by law. 21

Applying the same principles, we do not find Land Bank to be a mortgagee in good
faith.
The issue on the nullity of Maniego's title had already been foreclosed when this
Court denied Maniego's petition for review in the Resolution dated 13 July 2011,
which became final and executory on 19 January 2012. 22 It is settled that a
Good faith, or the lack of it, is a question of intention. 31 In ascertaining intention,
decision that has acquired finality becomes immutable and unalterable and may no
courts are necessarily controlled by the evidence as to the conduct and outward
longer be modified in any respect, even if the modification is meant to correct
acts by which alone the inward motive may, with safety, be determined. 32
erroneous conclusions of fact or law and whether it will be made by the court that
rendered it or by the highest court of the land. 23 This is without prejudice,
however, to the right of Maniego to recover from Poblete what he paid to Kapantay
for the account of Poblete, otherwise there will be unjust enrichment by Poblete. Based on the evidence, Land Bank processed Maniego's loan application upon his
presentation of OCT No. P-12026, which was still under the name of Poblete. Land
Bank even ignored the fact that Kapantay previously used Poblete's title as
collateral in its loan account with Land Bank. 33 In Bank of Commerce v. San Pablo,
Since TCT No. T-20151 has been declared void by final judgment, the Real Estate
Jr., 34 we held that when "the person applying for the loan is other than the
Mortgage constituted over it is also void. In a real estate mortgage contract, it is
registered owner of the real property being mortgaged, [such fact] should have
essential that the mortgagor be the absolute owner of the property to be
already raised a red flag and which should have induced the Bank . . . to make
mortgaged; otherwise, the mortgage is void. 24
inquiries into and confirm . . . [the] authority to mortgage . . . . A person who
deliberately ignores a significant fact that could create suspicion in an otherwise
reasonable person is not an innocent purchaser for value."
Land Bank insists that it is a mortgagee in good faith since it verified Maniego's title,
did a credit investigation, and inspected Lot No. 29. The issue of being a mortgagee
in good faith is a factual matter, which cannot be raised in this petition. 25
The records do not even show that Land Bank investigated and inspected the
However, to settle the issue, we carefully examined the records to determine
property to ascertain its actual occupants. Land Bank merely mentioned that it
whether or not Land Bank is a mortgagee in good faith. IAcDET
inspected Lot No. 29 to appraise the value of the property. We take judicial notice
of the standard practice of banks, before approving a loan, to send representatives
to the premises of the land offered as collateral to investigate its real owners. 35 In first time on appeal, as such a recourse would be offensive to the basic rules of fair
Prudential Bank v. Kim Hyeun Soon, 36 the Court held that the bank failed to play, justice and due process, since the opposing party would be deprived of the
exercise due diligence although its representative conducted an ocular inspection, opportunity to introduce evidence rebutting such new issue. 41
because the representative concentrated only on the appraisal of the property and
failed to inquire as to who were the then occupants of the property. CEIHcT
WHEREFORE, we DENY the petition. We AFFIRM the 28 September 2010 Decision
and the 19 April 2011 Resolution of the Court of Appeals in CA-G.R. CV No. 91666.
Land Bank claims that it conditioned the approval of the loan upon the transfer of The injunction against the foreclosure proceeding, issued by the Regional Trial
title to Maniego, but admits processing the loan based on Maniego's assurances Court of San Jose, Occidental Mindoro, Branch 46, is made permanent. Costs
that title would soon be his. 37 Thus, only one day after Maniego obtained TCT No. against Land Bank. CaSAcH
T-20151 under his name, Land Bank and Maniego executed a Credit Line Agreement
and a Real Estate Mortgage. Because of Land Bank's haste in granting the loan, it
appears that Maniego's loan was already completely processed while the collateral SO ORDERED.
was still in the name of Poblete. This is also supported by the testimony of Land
Bank Customer Assistant Andresito Osano. 38
||| (Land Bank of the Phils. v. Poblete, G.R. No. 196577, [February 25, 2013], 704
PHIL 610-625)
Where the mortgagee acted with haste in granting the mortgage loan and did not
ascertain the ownership of the land being mortgaged, as well as the authority of the
supposed agent executing the mortgage, it cannot be considered an innocent
mortgagee. 39

Since Land Bank is not a mortgagee in good faith, it is not entitled to protection. The
injunction against the foreclosure proceeding in the present case should be made
permanent. Since Lot No. 29 has not been transferred to a third person who is an
innocent purchaser for value, ownership of the lot remains with Poblete. This is
without prejudice to the right of either party to proceed against Maniego.

On the allegation that Poblete is in pari delicto with Maniego, we find the principle
inapplicable. The pari delicto rule provides that "when two parties are equally at
fault, the law leaves them as they are and denies recovery by either one of them."
40 We adopt the factual finding of the RTC and the CA that only Maniego is at fault.

Finally, on the issues of estoppel and laches, such were not raised before the trial
court. Hence, we cannot rule upon the same. It is settled that an issue which was
neither alleged in the complaint nor raised during the trial cannot be raised for the