LTD sec 51 to 60 cases

SAN LORENZO DEVELOPMENT CORPORATION, petitioner,

vs.
COURT OF APPEALS, PABLO S. BABASANTA, SPS. MIGUEL LU and PACITA
ZAVALLA LU, respondents

FACTS

On 20 August 1986, the Spouses Lu purportedly sold two parcels of land to

respondent Pablo Babasanta, for the price of fifteen pesos (P15.00) per square
meter. Babasanta made a downpayment of (P50,000.00) as evidenced by a
memorandum receipt issued by Pacita Lu of the same date.
Babasanta wrote a letter to Pacita Lu to demand the execution of a final deed of
sale in his favor so that he could effect full payment of the purchase price. In
response, Pacita Lu wrote a letter to Babasanta wherein she reminded
Babasanta that when the balance of the purchase price became due, he
requested for a reduction of the price and when she refused, Babasanta backed
out of the sale
herein petitioner San Lorenzo Development Corporation (SLDC) filed a Motion
for Intervention. SLDC alleged that it had legal interest in the subject matter
under litigation because on 3 May 1989, the two parcels of land involved had
been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it was a
buyer in good faith and for value and therefore it had a better right over the
property in litigation
Respondent Babasanta, however, argued that SLDC could not have acquired
ownership of the property because it failed to comply with the requirement of
registration of the sale in good faith. He emphasized that at the time SLDC
registered the sale in its favor on 30 June 1990, there was already a notice of lis
pendens annotated on the titles of the property made as early as 2 June 1989.
Hence, petitionerʼs registration of the sale did not confer upon it any right.

ISSUE:
Did the
pendens obliterate the effects of delivery and possession in good faith which
admittedly had occurred prior to SLDCʼs knowledge of the transaction in favor of
Babasanta?

HELD:NO
• It must be stressed that as early as 11 February 1989, the Spouses Lu
executed the Option to Buy in favor of SLDC upon receiving P316,160.00 as
option money from SLDC. After SLDC had paid more than one half of the agreed
purchase price, the Spouses Lu subsequently executed on 3 May 1989 a Deed
of Absolute Sale in favor or SLDC. At the time both deeds were executed, SLDC
had no knowledge of the prior transaction of the Spouses Lu with Babasanta.
Simply stated, from the time of execution of the first deed up to the moment of
transfer and delivery of possession of the lands to SLDC, it had acted in good
faith and the subsequent annotation of lis pendens has no effect at all on the
consummated sale between SLDC and the Spouses Lu.
• A purchaser 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 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 person in the property.
• We rule that SLDC qualifies as a buyer in good faith since there is no evidence
extant in the records that it had knowledge of the prior transaction in favor of
Babasanta. At the time of the sale of the property to SLDC, the vendors were
still the registered owners of the property and were in fact in possession of the
lands.
• In assailing knowledge of the transaction between him and the Spouses Lu,
Babasanta apparently relies on the principle of constructive notice incorporated
in Section 52 of the Property Registration Decree (P.D. No. 1529) which reads,
thus:
Sec. 52. Constructive notice upon registration. – Every conveyance, mortgage,
lease, lien, attachment, order, judgment, instrument or entry affecting registered
land shall, if registered, filed, or entered in the office of the Register of Deeds for
the province or city where the land to which it relates lies, be constructive notice
to all persons from the time of such registering, filing, or entering.
• However, the constructive notice operates as such by the express wording of
Section 52 from the time of the registration of the notice of lis pendens which in
this case was effected only on 2 June 1989, at which time the sale in favor of
SLDC had long been consummated insofar as the obligation of the Spouses Lu
to transfer ownership over the property to SLDC is concerned
G.R. No. 92871 August 2, 1991
MARIA P. VDA. DE JOMOC, ET AL., petitioners, vs. THE COURT OF APPEALS,
REGIONAL TRIAL COURT OF MISAMIS ORIENTAL, 10th Judicial Region, Br. 25,
respondents.
G.R. No. 92860 August 2, 1991
SPOUSES LIM LEONG KANG & LIM PUE KING, petitioners, vs. MAURA SO &
HON. COURT OF APPEALS (Eleventh Division), respondents.
Doctrine:
Facts:
-
--
-
---
The contract of sale of real property even if not complete in form, so long as the
essential requisites of consent
of the contracting parties, object, and cause of the obligation concur and they
were clearly established to be present, is
valid and effective as between the parties. Public document is only needed to
bind third persons.
A parcel of land in Cagayan de Oro owned by late Pantaleon Jomoc was
fictitiously sold to third persons in which the last transferee are the spouses
Mariano and Maria So. Maria Vda de Jomoc, as administrarix of Pantaleon
Jomocʼs estate, filed suit to recover the property.
The case was decided in favor of Jomoc and was accordingly appealed by
Mariano So and one Gaw Sur
Cheng to the Court of Appeals.
While pending appeal, Vda de Jomoc executed executed a Deed of Extrajudicial
Settlement and Sale of Land
with private respondent for P300,000.00. The document was not yet signed by
all the parties nor notarized but
in the meantime, Maura So had made partial payments amounting to
P49,000.00.
Mariano So, the appellant in the recovery proceeding, agreed to settle the case
by executing a Deed of
Reconveyance of the land in favor of the heirs of Pantaleon Jomoc. The
reconveyance was in compliance with
the decision in the recovery case and resulted in the dismissal of his appeal.
The heirs of Jomoc executed
another extra-judicial settlement with absolute sale in favor of intervenors Lim
Leong Kang and Lim Pue filing
claiming that they believe that So already backed-out from the agreement..
Later, Maura So demanded from the
Jomoc family the execution of a final deed of conveyance. They ignored the
demand.
Maura So sued petitioners-heirs for specific performance to compel them to
execute and deliver the proper
registrable deed of sale over the lot.
The lower court, finding that there was no sufficient evidence to show
complainant-respondents' withdrawal
from the sale.
On appeal, the trial court decision was affirmed.
Issue/s: WON the sale is enforceable.
Held:
- Since petitioners admit the existence of the extra-judicial settlement, the
court finds that there was meeting of the minds between the parties and hence,
there is a valid contract that has been partly executed.
- The contract of sale of real property even if not complete in form, so long as
the essential requisites of consent of the contracting parties, object, and cause
of the obligation concur and they were clearly established to be present, is valid
and effective as between the parties. Public document is only needed to bind
third persons.
- The payment made by So is a clear proof of her intention to acquire the
property and the petitioners cannot claim about the respondent backing out.
The sale to the intervenors Lim cannot be recognized because when they
bought the property, there was already a notice of lis pendens and the sale
cannot be said to be in good faith.
Dispositive: WHEREFORE, the petitions are hereby DISMISSED for lack of merit.
The decision of the Court of Appeals dated September 13, 1989 and its
resolution dated April 2, 1990 are AFFIRMED.

EDILBERTO CRUZ, ET AL. vs. BANCOM FINANCE CORPORATION (NOW UNION

BANK OF THE PHILIPPINES), G.R. No. 147788, 19 March 2002
Facts:
In 1978, Norma Sulit offered to purchase an agricultural land owned by brothers
Rev. Fr. Edilberto Cruz and Simplicio Cruz. The asking price was P700,000, but
Sulit only had P25,000, which Fr. Cruz accepted as earnest money. Sulit failed to
pay the balance.
Capitalizing on the close relationship of a Candelaria Sanchez with the brothers,
Sulit succeeded in having Cruz execute a document of sale of the land in favor
of Sanchez for P150,000. Pursuant to the sale, Sulit was able to transfer the title
of the land in her name.
Evidence show that aside from the P150,000, Sanchez undertook to pay the
brothers the amount of P655,000, representing the balance of the actual price
of the land. Later, in a Special Agreement, Sulit assumed Sanchezʼs obligation to
pay said amount. Unbeknownst to the Cruz brothers, Sulit managed to obtain a
loan from Bancom secured by a mortgage over the land.
Upon failure on the part of Sulit to pay the balance, the Cruz brothers filed this
complaint for reconveyance of the land.
Meanwhile, Sulit defaulted in her payment to the bank so her mortgage was
foreclosed. Bancom was declared the highest bidder and was issued a
certificate of title over the land.
Issue: whether or not Bancom was a mortgagee in good faith. Ruling: NO.
As a general rule, every person dealing with registered land may safely rely on
the correctness of the certificate of title and is no longer required to look behind
the certificate in order to determine the actual owner.
This rule is, however, subject to the right of a person deprived of land through
fraud to bring an action for reconveyance, provided the rights of innocent
purchasers for value and in good faith are not prejudiced. An innocent purchaser
for value or any equivalent phrase shall be deemed, under Section 38 of the Act
496, to include an innocent lessee, mortgagee or any other encumbrancer for
value.
Bancom claims that, being an innocent mortgagee, it should not be required to
conduct an exhaustive investigation on the history of the mortgagorʼs title
before it could extend a loan.
Bancom, however, is not an ordinary mortgagee; it is a mortgagee-bank. As
such, unlike private individuals, it is expected to exercise greater care and
prudence in its dealings, including those involving registered lands. A banking
institution is expected to exercise due diligence before entering into a mortgage
contract. The ascertainment of the status or condition of a property offered to it
as security for a loan must be a standard and indispensable part of its
operations.

Jurisprudence provides that:

“The rule that persons dealing with registered lands can rely solely on the
certificate of title does not apply to banks.
“Banks, indeed, should exercise more care and prudence in dealing even with
registered lands, than private individuals, for their business is one affected with
public interest, keeping in trust money belonging to their depositors, which they
should guard against loss by not committing any act of negligence which
amounts to lack of good faith by which they would be denied the protective
mantle of the land registration statute, Act [No.] 496, extended only to
purchasers for value and in good faith, as well as to mortgagees of the same
character and description.”

FACTS:
NATIONAL HOUSING AUTHORITY VS. BASA, Jr. GR No. 149121. April 20, 2010
Spouses Basa loaned from NHA secured by a real estate mortgage over their
properties. Spouses Basa did not pay the loan despite repeated demands. To
collect its credit, the NHA filed a verified petition for extrajudicial foreclosure of
mortgage before the Sheriffʼs Office in Quezon City.
After notice and publication, the properties were sold at public auction where
NHA emerged as the highest bidder. On April 16, 1991, the sheriffʼs certificate of
sale was registered and annotated only on the ownerʼs 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.
On April 16, 1992, the redemption period expired, without respondents having
redeemed the properties. Shortly thereafter, on April 24, 1992, NHA executed an
Affidavit of Consolidation of Ownership over the foreclosed properties, and the
same was inscribed by the Register of Deeds on the certificates of title in the
hand of NHA.
NHA moved for the issuance of an alias writ of possession. Before the RTC could
resolve the motion for the issuance of an alias writ of possession, respondents,
filed a Motion for Leave to Intervene and Petition in Intervention.
Respondents theorized that the instrument is deemed registered only upon
actual inscription on the certificate of title in the custody of the civil registrar.
Since the sheriffʼs certificate was only inscribed on the ownerʼs 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.
NHA maintained that respondentsʼ 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.
RTC issued an Order admitting the Petition in Intervention and treating the same
as the petition to set aside sale.
NHA filed a special civil action for certiorari and prohibition before the Court of
Appeals.
The Court of Appeals rendered a Decision in favor of the NHA. Respondents
filed a motion for reconsideration.
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.

ISSUE: Whether or not the annotation of the sheriffʼs certificate of sale in the
primary entry book of the register of deeds and on the ownerʼs duplicate title is
sufficient compliance with the requirement of law on registration.
HELD:
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.
NHA followed the procedure in order to have its sheriffʼs certificate of sale
annotated in the transfer certificates of title. It was not NHAʼs fault that 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 available during the time of inscription as it had taken the
necessary steps in having the same reconstituted as early as July 15, 1988. NHA
did everything within its power to assert its right.
Since entry of the certificate of sale was validly registered, the redemption
period accruing to respondents commenced therefrom, since the one-year
period of redemption is reckoned from the date of registration of the certificate
of sale.

Fule v. Legare
Facts:
Emilia E. De Legare, was the owner of a parcel of land, together with a
residential house erected thereon at Sta. Mesa Blvd. Ext., as evidenced by TCT
No. 21253. In the evening of March 29, 1953, an intruder entered her home and
at knife point, demanded for an amount of P10,000.00. Emilia said she does not
have the money and the intruder told her to raise the said amount until he
comes back the next day. When the intruder left, her adopted son, John Legare
told her to sign papers that would allow him to receive cash due to her from the
US Veterans Administration. Emilia, being unable to read and write except to
sign her name, signed the said papers as witnessed by her househelp Purita. It
turned out that said paper was a deed of sale of the lot and house in favor of
John Legare for the sum of P12,000.00, and that it was supposed to have been
executed on the 7th day of April 1953, and acknowledged before a notary public
on that date.
John approached Elias Fermin, the real estate broker who intervened in the
securing of a prior loan contracted by Emilia from Tomas Q. Soriano, and sought
said broker's help to sell Emiliaʼs house and lot. Fermin offered the property to
defendants Sps. Conrado Fule and Lourdes Aragon. The spouses agreed to
purchase the property for P12,000.00 on condition that the sum of P7,000, the
unpaid balance of Emilia's indebtedness to Tomas Q. Soriano secured by a
mortgage thereon, would be deducted from the price, and that Fule would
assume said mortgage.
After the terms were agreed upon, John caused to transfer Emiliaʼs Title to his
name by virtue of the purported Deed of Sale. After which, he executed a Deed
of Sale in favor of Sps. Fule and Aragon, which cancelled the transferred title to
John and re-registered to their names with the annotation for the deed of
mortgage in favour of Soriano. Thereupon, the spouses delivered the agreed
amount minus the mortgage due to Soriano.
Upon discovery that Emiliaʼs house and lot had been sold to Sps. Fule and
Aragon, she filed for the cancellation of new titles based on her adopted sonʼs
fraudulent acts. The trial court ordered the cancellation of the new titles and
making valid the title of Emilia de Legare. CA affirmed said judgment by the
lower court.
Issue:
W/N Sps. Fule and Aragon are innocent purchasers in good faith and for value of
the properties contested.
Ruling:
Yes, Sps. Fule and Aragon are innocent purchasers for value of the house and
lot here disputed and they are here adjudged the lawful owners thereof.
A purchaser 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 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. Good faith
consists in an honest intention to abstain from taking any unconscientious
advantage of another.
In the instant case, nothing in John Legare's person or behaviour suggested
anything suspicious to cause further inquiry from Sps. Fule and Aragon. John
was the adopted son of Emilia, and, to the time that he was contracting with the
spouses, he had not been known to commit crime or dishonesty. On the
contrary, John has had previous dealings with the real estate broker during
which he exhibited the expected degree of trustworthiness. The diligence and
precaution observed by the spouses could hardly be wanting.
Under Section 5 of Act 496, as amended, John's possession of the certificate
and his subsequent production of it to the herein petitioners operated as a
"conclusive authority from the registered owner to the register of deeds to enter
a new certificate." The doctrine that favour innocent purchasers for value in
instances when such a fraudulent document may become the root of a valid title
applies in this case.

Guillermo Adriano, petitioner, vs. Romulo Pangilinan, respondent. [G.R. No.

137471] [January 16, 2002]
FACTS:
Guillermo Adriano is the registered owner of a parcel of land. Sometime Nov
1990, he entrusted the TCT of the land to Angelina Salvador, a distant relative,
for the purpose of securing a mortgage.
W/o the knowledge & consent of Adriano, Salvador mortgaged the property
to Romulo Pangilinan.
Upon verifying the status of his title in the Registry of Deeds, Adriano was
surprised to discover that there is a REM annotated in the TCT, supposedly
executed by one Guillermo Adriano in favor of Pangilinan.
Adriano denied that he executed the deed of mortgage and denounced his
signature thereon as forgery.
Adriano repeatedly demanded from Pangilinan the return or reconveyance of
the said land to him but the demands were ignored or disregarded.
Pangilinan in his defense testified that he was a businessman engaged in the
buying and selling as well as in the mortgage of real estate properties; that
Salvador, together with a person w/ Macanaya and a person who introduced
himself as Guillermo Adriano came up to him to inquire on how they could
secure a loan over a parcel of land; that petitioner voluntarily entrusted his title
to the subject property to Salvador for the purpose of securing a loan, thereby
creating a principal-agent relationship between the plaintiff and Salvador
RTC
The signature on the REM was forged therefore; the court set aside and
nullified the said REM. CA
Did not dispute the findings of the RTC but said that it is undeniable and
irrefutable that Adriano did in fact entrusted the TCT to Salvador as a security or
collateral for the purpose of securing a REM debt of loan.
ISSUE:
W/N there is a property execution of mortgage
HELD: NO
Petitioner contends that because he did not give his consent to the real estate
mortgage (his signature having been forged), then the mortgage is void and
produces no force and effect. Article 2085 of the Civil Code enumerates the
essential requisites of a mortgage, as follows:
Art. 2085. The following requisites are essential to the contracts of pledge and
mortgage:
(1) That they be constituted to secure the fulfillment of a principal obligation;
(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or
mortgaged;
(3) That the persons constituting the pledge or mortgage have the free disposal
of their property, and in the absence thereof, that they be legally authorized for
that purpose.
Third persons who are not parties to the principal obligation may secure the
latter by pledging or mortgaging their own property. (1857)
In the case at bar, not only was it proven in the trial court that the signature of
the mortgagor had been forged, but also that somebody else -- an impostor --
had pretended to be the former when the mortgagee made an ocular inspection
of the subject property.
In Parqui v. Philippine National Bank, this Court affirmed the trial courts ruling
that a mortgage was invalid if the mortgagor was not the property owner:
After carefully considering the issue, we reach the conclusion that His Honors
decision was correct. One of the essential requisites of a valid mortgage, under
the Civil Code is that the thing pledged or mortgaged be owned by the person
who pledges or mortgages it (Art. 1857, par. 2); and there is no question that
Roman Oliver who pledged the property to the Philippine National Bank did not
own it. The mortgage was consequently void.
The next question to be answered was petitioner negligent in entrusting and
delivering his TCT to a relative who was supposed to help him find a money
lender? And if so, was such negligence sufficient to deprive him of his property?
It is crucial to determine whether herein respondent was an innocent mortgagee
for value. After a careful review of the records and pleadings of the case, we
hold that he is not, because he failed to observe due diligence in the grant of the
loan and in the execution of the real estate mortgage.
Respondent testified that he was engaged in the real estate business, including
the grant of loans secured by real property mortgages. Thus, he is expected to
ascertain the status and condition of the properties offered to him as collaterals,
as well as to verify the identities of the persons he transacts business with.
Specifically, he cannot simply rely on a hasty examination of the property
offered to him as security and the documents backing them up. He should also
verify the identity of the person who claims to be the registered property owner.
From the testimony of respondent, he dismally failed to verify whether the
individual executing the mortgage was really the owner of the property. The
ocular inspection respondent conducted was primarily intended to appraise the
value of the property in order to determine how much loan he would grant. He
did not verify whether the mortgagor was really the owner of the property
sought to be mortgaged. Because of this, he must bear the consequences of his
negligence.
As between petitioner and respondent, we hold that the failure of the latter to
verify essential facts was the immediate cause of his predicament. If he were an
ordinary individual without any expertise or experience in mortgages and real
estate dealings, we would probably understand his failure to verify essential
facts. However, he has been in the mortgage business for seven years. Thus,
assuming that both parties were negligent, the Court opines that respondent
should bear the loss. His superior knowledge of the matter should have made
him more cautious before releasing the loan and accepting the identity of the
mortgagor.
Given the particular circumstances of this case, we believe that the negligence
of petitioner is not enough to offset the fault of respondent himself in granting
the loan. The former should not be made to suffer for respondentʼs failure to
verify the identity of the mortgagor and the actual status of the subject property
before agreeing to the real estate mortgage. While we commiserate with
respondent -- who in the end appears to have been the victim of scoundrels --
his own negligence was the primary, immediate and overriding reason that put
him in his present predicament.
 G.R. No. 150824
LAND BANK OF THE PHILIPPINES, petitioner, vs.
REPUBLIC OF THE PHILIPPINES
FACTS:
On September 26, 1969, an original certificate of title was issue in favor of
Bugayong, which emanated from a sales patent issued in Bugayong's name on
September 22, 1969. The original certificate of title was cancelled and was
replaced by 4 transfer certificate of titles, all in the name of Bugayong.
Bugayong then sold all 4 lots to different people.
One of the lots was sold to the spouses Du. Afterwards, Du divided the land into
2 lots. One of the lots was sold to Lourdes Farms, Inc., who then mortgaged the
property to Land Bank of the Philippines.
The validity of the original certificate of title was then question by some
residents of the land who filed a formal petition before the Bureau of Lands. The
Bureau of Lands found out that at the time the sales patent was issued to
Bugayong, the land was still classified as a forest zone; it was declared as
alienable and disposable land only on March 25, 1981.
The Bureau of Lands instituted a complaint against Bugayong and other present
owners and mortgagees of the land, such as Lourdes Farms, Inc. and the latter's
mortgagee, petitioner LBP. the RTC and the CA Ruled against LBP. Hence, this
petition
Issues:
Whether or not the LBP has a valid interest over the land as a mortgagee
Whether or not there was impairment of contracts
Whther or not LBP is entitled to a cross claim
Ruling
The contention that LBP has an interest over the subject land as a mortgagee
has no merit. The mortgagor, Lourdes Farms, Inc. from which LBP supposedly
obtained its alleged interest has never been the owner of the mortgaged land.
Acquisition of the subject land by Lourdes Farms, Inc. is legally impossible as
the land was released as alienable and disposable only on March 25, 1981.
Hence, LBP acquired no rights over the land. Since Lourdes Farms, Inc. is not
the owner of the land, it does not have the capacity to mortgage it to LBP.
mortgagees of non-disposable lands, titles to which were erroneously issued,
acquire no protection under the Land Registration Law
The constitutional guarantee of non-impairment of contracts may not likewise
be used by LBP to validate its interest over the land as mortgagee. The State's
restraint upon the right to have an interest or ownership over forest lands does
not violate the constitutional guarantee of non-impairment of contracts. Said
restraint is a valid exercise of the police power of the State. Preservation of our
forest lands could entail intrusion upon contractual rights as in this case but it is
justified by the Latin maxims Salus populi est suprema lex and Sic utere tuo ut
alienum non laedas, which call for the subordination of individual interests to the
benefit of the greater number.

It may be true that Lourdes Farms, Inc. still has an obligation to LBP but We
cannot make a ruling regarding the same for lack of factual basis. There is no
evidence-taking on the cross-claim. No evidence was adduced before the RTC
or the CA regarding it. No factual finding or ruling was made by the RTC or the
CA about it.