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LAW 133-H AY 2019-2020 | 1st semester

LAND TITLES AND


DEEDS
PROF. ZMD ABELLERA

GROUP 2

| Kyle Angelo Atega | Faith Arlette Bongco | Lizette Calilung | Robert Digay |
| Jules Bernard Guevarra | Cicero Gabriel Cid Lucagbo | Yvette Morales |
| Alexanda Pascua | Ven Gabriel Tan | Beatriz Zamora |
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

Certificate of Title ident as Register of Deeds of Caloocan because of irregular


issuances of TCTs which resulted in two sets of fraudulent
derivative titles. She was found administratively liable for
Carvajal vs. Court of Appeals, Oct. 9, 1987 agreeing to change the date of the registration in the OCT
DOCTRINE and allowing such change to reflect in the derivative titles.
An application for registration of an already titled land
constitutes a collateral attack on the existing title. It be- HELD
hooves a land registration court to determine the veracity The Supreme Court, in denying the present petition, held
of any and all adverse claims. The title may be challenged that Petitioner had knowledge of circumstances that sug-
only in a proceeding for that purpose, not in an application gested the existence of an irregularity in the issuance of the
for registration of a land already registered in the name of TCTs; and that she was remiss in her duties as a Register of
another person. After one year from its registration, the Deeds in failing to follow the proper procedure in issuing
title is incontrovertible and is no longer open to review. TCTs. More specifically, the Court found it surprising that
The remedy of the landowner, whose property has been petitioner consented to the acquisition by her children in
wrongfully or erroneously registered in another’s name, is July 1995 of a property titled in the name of one Norma
to institute an ordinary action for reconveyance or, if the Tirado; and that It was improbable that petitioner was un-
property has passed into the hands of an innocent purchaser aware of the supposedly altered date of registration of the
for value, for damages. OCT reflected in her children’s TCT considering the prox-
imity of the date of issuance of said TCTs to her letters to
FACTS the LRA Legal Department LRA Administrator.
Carvajal wanted to register his land; however, Solid Homes
already has a registered title over it under the Torrens Sys-
tem. As recommended by the Land Registration Authority,
the application for registration of petitioner Carvajal was Republic vs. Abrille, May 7, 1976
dismissed by respondent court. In addition, the Land Reg-
istration Authority submitted a report showing that there DOCTRINE
was indeed an overlapping of the four (4) parcels of land The approval of a subdivision plan cannot cover land which
applied for by petitioner and the properties of Solid Homes has not been previously registered.
under the TCT in question. Hence, considering that the
properties applied for were within the titled property and 13 requirements for a valid original registra-
could not be the subject of an application for registration tion of an incomplete or imperfect title:
was denied. The CA affirmed the dismissal. 1. Survey of land by the Bureau of Lands or a duly licensed
private surveyor;
HELD 2. Filing of application for registration by the applicant;
The Supreme Court dismissed the present petition and 3. Setting of the date for the initial hearing of the applica-
ruled that Carvajal cannot register it anymore since Sol- tion by the Court;
id Homes already has a TCT over the land. (see doctrine 4. Transmittal of the application and the date of initial hear-
for discussion on remedies) Moreover, The essence of due ing together with all the
process is the opportunity to be heard, and Petitioner was documents or other evidences attached thereto by the Clerk
afforded an opportunity to present witnesses in the hearing of Court to the Land Registration Commission;
wherein he was able to present three. 5. Publication of a notice of the filing of the application and
date and place of the
hearing in the Official Gazette;
6. Service of notice upon contiguous owners, occupants
and those known to have
interests in the property by the sheriff;
Alfonso vs. Office of the President, April 2, 7. Filing of answer to the application by any person wheth-
er named in the notice or
2007 not;
8. Hearing of the case by the Court;
DOCTRINE 9. Promulgation of judgment by the Court;
By failing to prevent the irregularities attending the issu- Issuance of the decree by the Court declaring the decision
ance of the TCTs, petitioner had tolerated the same and al- final and instructing the Land Registration Commission to
lowed such irregularities to wreak havoc on our land-titling issue a decree of confirmation and registration;
system. As a Register of Deeds, she should have the requi- 11. Entry of the decree of registration in the Land Registra-
site knowledge and expertise to suspect elements of fraud tion Commission;
and to take immediate steps to rectify such fraud. 12. Sending of copy of the decree of registration to the cor-
responding Register of
Deeds, and
FACTS 13. Transcription of the decree of registration in the regis-
tration book and the
The document central to the issue, OCT No. 994, was is- issuance of the owner’s duplicate original certificate of title
sued by the Register of Deeds of Rizal in the name of Maria to the applicant by the Register of Deeds, upon payment of
de la Concepcion Vidal. 45 years later, the CFI of Pasig the prescribed fees.
ordered the Register of Deeds in a civil case to cancel the
name of de la Concepcion Vidal in the OCT and to sub-
stitute the names of her alleged grandchildren. Partition FACTS
and accounting took place and different lots in the OCT A complaint for the annulment of the certificate of title held
of said lot were acquired by several persons which led to by the defendant estate of Luisa Villa Abrille was filed by
the issuance of several TCTs. Subsequently, Rivera, one of the Republic of the Philippines before the trial court. The
the subsidized owners of said OCT filed for partition and complaint was due to the issuance of the Register of Deeds
segregation and prayed for lots to be issued in her name. of Davao of a new transfer certificate of title in favor of the
An investigation was initiated and it was found that the respondents which included an extended area compared to
OCT is non-existent for being a ‘fabrication perpetrated what was described in the old TCT, a part which the peti-
by Vasquez, former Deputy Register of Deeds of Caloocan tioner alleged to be formerly a portion of the Davao river
City. Petitioner was also implicated for having acted mali- which dried up due to change of course. The respondents
ciously, fraudulently, and in bad faith when she signed the assailed the decision of the trial court to have the TCT can-
TCTs issued in the name of Rivera bearing a wrong date of celled for the reason that the increased area was validated
registration. by the approval of the subdivision plan which reflected the
Petitioner Alfonso was dismissed by the Office of the Pres- extended area as this cannot authorize the inclusion of land
which was not included in the titles.
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

HELD
already registered rights over the land, subsisting or exist-
The SC affirmed the trial court in that the approval of a sub- ing at the time of the registration. The rights of these par-
division plan was not the proper proceeding to include the ties, who have registered their rights, are not put in issue
increased area in the TCT. In this case, the proper remedy when an instrument is subsequently presented for regis-
to the increase in the land due to an abandoned riverbed tration; nor are its effects on other instruments previously
was an institution of a proceeding for the registration of ti- registered put in issue by the procedure of registration.
tle. The Court further ruled that the approval of the respon- (2) The law on registration does not require that only valid
dents failed to notify all the interested parties in having the instruments shall be registered. It must follow as a neces-
subdivision plan approved which was a requirement for the sary consequence that registration must first be allowed,
registration of an imperfect or incomplete title to a land and validity or effect litigated afterwards.
under Act 496.
FACTS
Subsequent Registration John Tan Chin Eng, owner of land, entered into a mort-
gage with Calvo & Calvo. After such, petitioners entered
into a contract of lease with Chin Eng. After such, the
Fudot vs. Cattleya Land, Inc. September 13, pre-existing mortgage with Calvo & Calvo was cancelled
and a new one was executed in favor of Sps. Reyes. After
2007 such, the previous contract of lease with petitioners was
amended, extending the period of lease. Petitioners sought
DOCTRINE to be allowed by the respondents to take the certificates of
The act of registration does not validate petitioner’s oth- title on the land (which the respondents were holding as
erwise void contract. Registration is a mere ministerial act mortgagees) to annotate on the same the contracts of lease
by which a deed, contract, or instrument is sought to be in- that petitioners entered into with Chin Eng. When they
scribed in the records of the Office of the Register of Deeds were not able to get the certificates, they filed a motion
and annotated at the back of the certificate of title covering in Court so as to have those certificates of title delivered
the land subject of the deed, contract, or instrument. While to them. Respondents opposed this, arguing, in summary,
it operates as a notice of the deed, contract, or instrument to that their rights as mortgagees would be violated by such
others, it does not add to its validity nor converts an inval- registration.
id instrument into a valid one as between the parties, nor
amounts to a declaration by the state that the instrument is a
valid and subsisting interest in the land. The registration of HELD
petitioner’s void deed is not an impediment to a declaration Focusing on the fact that petitioners simply moved to have
by the courts of its invalidity. the certificates of title delivered to them for the sole sake
of registration, the Court held that the purpose of regis-
In interpreting Art. 1544(2), the governing principle is pri- tering an instrument is to give notice thereof to all per-
mus tempore, potior jure (first in time, stronger in right). sons; it is not intended by the proceedings for registration
Knowledge gained by the first buyer of the second sale can- to seek to destroy or otherwise affect already registered
not defeat the first buyer’s rights, except where the second rights over the land, subsisting or existing at the time of
buyer registers in good faith the second sale ahead of the the registration. The rights of these parties, who have reg-
first as provided by the NCC provision. Such knowledge of istered their rights, are not put in issue when an instru-
the first buyer does not bar him from availing of his rights ment is subsequently presented for registration; nor are
under the law, among them to register first his purchase as its effects on other instruments previously registered put
against the second buyer. However, knowledge gained by in issue by the procedure of registration. The objections,
the second buyer of the first sale defeats his rights even if as well as the relative rights of all parties who have reg-
he is first to register the second sale since such knowledge istered their deeds, shall be decided in the proper suit or
taints his prior registration with bad faith. It is thus essen- proceeding when the opportune occasion arises; but they
tial, to merit the protection of Art. 1544(2) that the second are not now in issue, nor may they be adjudicated upon,
realty buyer must act in good faith in registering his deed simply because petitioners-appellees have applied for the
of sale registration of their contract of lease.
Between two transactions concerning the same parcel of Furthermore, the supposed invalidity of the contracts of
land, the registered transaction prevails over the earlier un- lease is no valid objection to their registration, because
registered right. The act of registration operates to convey invalidity is no proof of their non-existence or a valid ex-
and affect the registered land so that a bona fide purchaser cuse for denying their registration. The law on registra-
of such land acquires good title as against a prior transfer- tion does not require that only valid instruments shall be
ee, if such prior transfer was unrecorded. registered. It must follow as a necessary consequence that
registration must first be allowed, and validity or effect
litigated afterwards.
FACTS
Cattleya Land, Inc. had someone to check the titles of 9
lots it intended to buy from Tecsons. It purchased the lots
from the latter. The Register of Deeds refused annotating
the deed of sale because of an existing notice of attachment Montano vs. Francisco (2009)
in the lots. Petitioner presented for registration in the titles DOCTRINE
of deed of sale purportedly executed by the Tecsons in her For purposes of the collection of real property taxes, the
favor. Cattleya protested and filed a complaint before the registered owner of the property is considered the taxpay-
RTC. Tecson claimed that she never signed any deed of er. Only the registered owner is entitled to a notice of tax
sale in favor or Fudot. The RTC ruled that the sale was delinquency and other proceedings relative to the tax sale.
invalid because the deed of sale was forged. Under a contract to sell, the vendor retains the ownership of
the property until after the same is fully paid by the vendee.
HELD
SC affirmed the decision of the CA that there was no dou-
ble sale. FACTS
The Montaños executed a Deed of Conditional Sale with
GSIS for a parcel of land in Jaro, Iloilo. However, Fran-
cisco claims that she owns the parcel of land, which she
Gurbax Singh Pabla & Co. vs. Reyes (1952) bought at a public auction sale of delinquent real property.
The Montaños are questioning the validity of the auction
DOCTRINE because they did not receive notice of the same.
(1) The purpose of registering an instrument is to give no-
tice thereof to all persons; it is not intended by the proceed-
ings for registration to seek to destroy or otherwise affect
GROUP 2 | 2
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

HELD fraud, the spouses were only right to rely on his title.
The Court upheld the validity of the Auction, finding that There was nothing to arouse suspicion. Although the deed
notices were given to GSIS, the registered owner of the of sale in favor of Legare was fraudulent, the fact remains
parcels of land. Only the registered owner is entitled to that he was able to secure a registered title to the house and
a notice of tax delinquency and other proceedings rela- lot. It was this title which he subsequently conveyed to the
tive to the tax sale. GSIS, as the registered owner of the herein petitioners. The negotiation and transaction which
property, was the taxpayer entitled to the notice of tax de- eventually caused the certificate of title to be transferred
linquency and that of the auction sale, as well as o ther from Legare to the spouses were conducted by a licensed
related notices. real estate broker. Moreover, Legare 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 dis-
honesty. The deed of sale was also found to be regular on
Campillo vs. Court of Appeals (1984) its face, and no one would have questioned its authenticity
since it was duly acknowledged before a notary public.
DOCTRINE For the spouses’ part, records show that they did not rely
Between a previous private sale that remained unregistered solely and fully upon the deed of sale in favor but in fact
at the Register of Deeds and a subsequent public sale which they demanded more while putting the payment on hold.
was in fact registered, the latter prevails.
The Court ruled that the spouses were innocent purchas-
FACTS ers for value and in good faith, and that despite John Le-
gare’s fraud, the spouses were only right to rely on his
In 1961, Simplicio Santos purchased two parcels of land title. There was nothing to arouse suspicion. Although the
from Tomas de Vera in a private sale, but failed to register deed of sale in favor of Legare was fraudulent, the fact
that sale. The following year, petitioner Sostenes Campillo remains that he was able to secure a registered title to the
obtained a judgment for a sum of money in a case against house and lot. It was this title which he subsequently con-
Tomas de Vera. Pursuant to a writ of execution, the City veyed to the herein petitioners. The negotiation and trans-
Sheriff levying three parcels of land, including the two action which eventually caused the certificate of title to be
parcels previously bought by Simplicio Santos. The par- transferred from Legare to the spouses were conducted by
cels were sold at a public auction to Sostenes Campillo a licensed real estate broker.
as the highest bidder. The Registry of Deeds then issued
TCTs to Sostenes Campillo covering the disputed parcels Moreover, Legare was the adopted son of Emilia, and, to
of land. Simplicio Santos filed an action to annul the sale the time that he was contracting with the spouses, he had
at public auction and final deed of sale. Campillo, on the not been known to commit crime or dishonesty. The deed
other hand, argued that he is an innocent purchaser for of sale was also found to be regular on its face, and no one
value. Furthermore, Campillo alleged that the private sale would have questioned its authenticity since it was duly
to Santos cannot be preferred over the sale at public auc- acknowledged before a notary public. For the spouses’
tion because the former was not registered. part, records show that they did not rely solely and fully
upon the deed of sale in favor but in fact they demanded
HELD more while putting the payment on hold.
The Court ruled in favor of Petitioner Campillo. A sale of
real estate, whether made as a result of a private transac-
tion or of a foreclosure or execution sale, becomes legally
effective against third persons only from the date of its
registration. The fact that at the time of levy the Register National Housing Authority vs. Basa (1988)
of Deeds recognized Tomas de Vera as the owner of the DOCTRINE
parcels means that the attachment, levy, and subsequent
sale were proper. The sale made in favor of Campillo Entry alone produces the effect of registration, whether the
transferred to him all the rights, interest, and participation transaction entered is a voluntary or an involuntary one, so
of Tomas de Vera in the properties. Section 51 of PD 1529 long as the registrant has complied with all that is required
states that “the act of registration shall be the operative of him for purposes of entry and annotation, and nothing
act to convey or affect the land insofar as third persons more remains to be done but a duty incumbent solely on
are concerned...” the register of deeds.

FACTS
Subject of the controversy is the property originally
Fule vs. De Legare (1963) owned by the spouses Basa which was purchased by NHA
in a public auction following the foreclosure of the real
DOCTRINE estate mortgage over the properties of the spouses which
Where the certificate of title was already transferred from served as security for the amount they owe to NHA. As-
the name of the true owner to the forger, and while it re- sailed before the Court is the decision of the Court of Ap-
mained that way, the land was subsequently sold to an peals which declared that the period of the redemption
innocent purchaser, the vendee had the right to rely upon of the property has not expired as the certificate of sale
what appeared in the fraudulent certificate. had not been registered or annotated in the original copies
of the titles kept with the Register of Deeds since these
FACTS titles were razed by fire. The sheriff’s certificate of sale
in favor of NHA was only registered and annotated on the
Emilia de Legare owned a house in Sta. Mesa where she owner’s duplicate copies of the titles in the hands of the
lived together with her adopted son John Legare and maid respondents due to the fire which ravaged the titles in the
Purita Tarrosa. One day, an intruder entered into her house custody of the Register.
and demanded P10,000 from her. After telling the intruder
that she did not have the money, the intruder told her to
raise the money by the time he comes back the next day. HELD
Her son John Legare told her to sign a document that he It was held that the entry of the sheriff’s certificate of sale
claimed could secure for them the P10,000 from the US on the owner’s duplicate of certificate of title was suf-
Veterans Administration. Emilia signed because she did ficient compliance to the requirement under the law be-
not know how to read and write. It turned out that Emilia cause of the impossibility of the inscription on the original
actually sold a deed of sale to John, which John subse- certificate of titles which were destroyed by the fire. It
quently sold the land to the spouses Fule and Aragon. was not NHA’s fault that the certificate of sale was not
annotated on the TCT nor can it be blamed for the fact
HELD that there were no reconstituted titles available at the time
The Court ruled that the spouses were innocent purchasers of the inscription. Further, the petition for the issuance of
for value and in good faith, and that despite John Legare’s a writ of injunction to prevent the register of deeds from

3 | GROUP 2
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

registering the certificate of sale has been rendered moot Boyano, before he left for mainland China and allowed his
and academic by the valid entry of the instrument in the mother to administer the property, and to enjoy its fruits
primary entry book of the register which is found to be in his absence. Boyano, despite knowing his son Chu Kim
equivalent to registration. Kit was in China and still alive, executed an affidavit ad-
judicating to herself, as his sole heir, the same property,
SC affirmed the decision of the CA that there was no dou- securing a TCT No. T-1439 in her name. Thereafter, she
ble sale. mortgaged the property to the PNB. Now, Chu Kim Kit,
through his uncle, filed an action for cancellation of the
latter Certificate of Title.
Chu Kim Kit entrusted his TCT No. T-1412, covering his
L.P. Leviste & Co. vs. Noblejas (1979) commercial lot and building property, to his mother, Felisa
Boyano, before he left for mainland China and allowed his
DOCTRINE mother to administer the property, and to enjoy its fruits
The rule is that between two involuntary documents, the in his absence. Boyano, despite knowing his son Chu Kim
earlier prevails. Ordinarily, therefore, a prior adverse claim Kit was in China and still alive, executed an affidavit ad-
is entitled to precedence over a later one. But an adverse judicating to herself, as his sole heir, the same property,
claim, notwithstanding its prior registration, cannot affect securing a TCT No. T-1439 in her name. Thereafter, she
an adverse claim on a different lot. mortgaged the property to the PNB. Now, Chu Kim Kit,
through his uncle, filed an action for cancellation of the
Purpose of an adverse claim: The annotation of an ad- latter Certificate of Title.
verse claim is a measure designed to protect the interest
of a person over the piece of real property where the reg-
istration of such interest or right is not otherwise provid- HELD
ed for by the land Registration Act, and serves as a notice There is no question that the petitioner PNB is a mortgag-
and warning to third parties dealing with said property that ee in good faith and for value. The certificate of title was
someone is claiming an interest on the same or a better in the name of the mortgagor when the land was mort-
right than the registered owner thereof. gaged to the PNB. Such being the case, petitioner PNB
had the right to rely on what appeared on the certificate of
Special remedy of adverse claim: For the special rem- title, and in the absence of anything to excite suspicion,
edy of adverse claim to be availed of, it must be shown that it was under no obligation to look beyond the certificate
there is no other provision in the law for registration of the and investigate the title of the mortgagor appearing on the
claimant’s alleged right or interest in the property. As the face of the certificate. In accordance with the provisions
Land Registration Act specifically prescribes the procedure and the underlying policies and intentions of the Land
for registration of the vendee’s right on a registered proper- Registration Law, a Transfer Certificate of Title appearing
ty (Section 57), the filing of an adverse claim is ineffective in the name of Felisa Boyano although defeasible in the
for the purpose of protecting the vendee’s right. hands of Felisa Boyano is conclusive and indefeasible in
the hands of the petitioner which is an innocent mortgagee
FACTS for value.
Respondent Villanueva filed an adverse claim covering
the disputed lot, based on an agreement to sell executed in
her favor by Garcia Realty. She did not present the own-
er’s duplicate certificate of title, as required by section 55 Veloso vs. Court of Appeals (1996)
of Art. 496 nor did she register the agreement to sell as
provided in section 52 thereof. Subsequently, petitioners DOCTRINE
separately registered notices of attachments covering the The right of an innocent purchaser for value must be re-
disputed lot, issued in separate cases filed against Gar- spected and protected, even if the seller obtained his title
cia Realty. Thereafter the Garcia Realty consummated the through fraud. The REMEDY of the person prejudiced is
contract of sale over the lot. When Villanueva sought to to bring an action for damages against those who caused or
have the sale registered and title issued in her favor, free employed the fraud, and if the latter are insolvent, an action
from any encumbrance, the Register of Deeds refused un- against the Treasurer of the Philippines may be filed for
less the attachments on the disputed lot annotated on the recovery of damages against the Assurance Fund.
title subsequent to Villanueva’s adverse claim were car-
ried over. The Register of Deeds also wanted to carry over FACTS
certain prior adverse claims, which however, did not refer
to the disputed lot. The Land Registration Commission en Petitioner Veloso filed an action for annulment of docu-
consulta decreed the issuance of a new transfer certificate ments, reconveyance of property with damages and pre-
of title on the disputed lot in the name of Villanueva, free liminary injunction against private respondent Escario
of any encumbrance. alleging that he was the absolute owner of a land in Ton-
do, and that he never authorized anyone to sell it. The
transfer of property was supported by a General Power
HELD of Attorney and Deed of Absolute Sale executed by Irma
The Supreme Court set aside the resolution of the Land Veloso, wife of the petitioner. Petitioner denied executing
Registration Commission and held that the remedy pro- the power of attorney and contended that the transfer was
vided for in Section 110 of Act 496, which was resorted to void. Escario alleged that she was a buyer in good faith
by Villanueva is ineffective for the purpose of protecting and relied on the power of attorney.
her right or interest on the disputed lot.
HELD
The Court held that the general power of attorney was
valid, as the special power to execute a valid sale was
Philippine National Bank vs. CA and Chu already mentioned in the general one. The Court agrees
Kim Kit (1990) with the conclusion of the lower court that private respon-
dent was an innocent purchaser for value. Escario relied
DOCTRINE on the power of attorney presented by petitioners wife,
Irma. Being the wife of the owner and having with her the
The right or lien of an innocent mortgagee for value upon title of the property, there was no reason for the private
the land mortgaged must be respected and protected, even if respondent not to believe in her authority. Moreover, the
the mortgagor obtained his title through fraud. The remedy power of attorney was notarized and as such, carried with
of the persons prejudiced is an action for damages against it the presumption of its due execution.
the persons who caused the fraud, and if the latter be insol-
vent, an action against the Treasurer of the Philippines may
be filed for recovery for damages from the Assurance fund.
Remalante vs. Tibe (1988)
FACTS DOCTRINE
Chu Kim Kit entrusted his TCT No. T-1412, covering his Where the prior registration of a deed of sale is a result of
commercial lot and building property, to his mother, Felisa forgery, it cannot prevail over a subsequent sale.
GROUP 2 | 4
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

FACTS FACTS
Cornelia Tibe sought the annulment of certain contracts Assailed before the court is the decision of the Court of
and documents which became the bases for the transfer Appeals which ruled in the favor of respondent Domi-
of six parcels of land to petitioner Remalante. Tibe was nador and Ernesto Alzona involving the complaint for
made to sign three affidavits of transfer, purporting them- annulment of mortgage and of auction sale filed by the
selves to be bail bonds, which transferred three parcels of petitioners for the reconveyance of the land purchased by
land to Remalante. For the other three parcels, petitioner the respondents in a mortgage sale. The subject property
forged her signature in a deed of absolute sale. Remalante in this case was the land of Maria Sales which was al-
argues that he bought the first three parcels from Silvino legedly made the subject of a real estate contract execut-
Alminario before they were bought by Tibe. Therefore, ed by Maria, who was dead at the time of the execution,
Tibe was a buyer in bad faith of a property that was the and her husband Bernardo. The mortgage was foreclosed
subject of a double sale. As to the latter three parcels, Re- due to the failure of the spouses to settle their obligation
malante argued that they were sold to him voluntarily by to Dominador Alzona and the property was purchased by
Tibe. Ernesto Alzona, the highest bidder in the public auction.

HELD HELD
The Civil Code provision (Article 1544) on double sale The Court found the respondents to be mortgagees in
transfers the ownership to the person who has first ac- good faith such that even if the mortgagor is not the own-
quired the land and recorded it in the Registry of Proper- er of the property mortgaged, the mortgage contract and
ty. However, that provision is not applicable in this case, the subsequent foreclosure sale are given effect by reason
where there is only one sale. In this case, the three parcels of public policy and are entitled to protection. The Court
of land were never sold by Silvino Alminario to petitioner. took into account the necessary precaution exercised by
There was only one sale— the one to respondent Comelia the respondents such as the credit investigation conduct-
Tibe. Since the lands were never sold to him, the result- ed by Ernesto before approving the loan sought in order
ing registration of the deeds of sale were fraudulent and to ascertain the status of the property and the identity of
results of forgery. In the case of forgery, the prior registra- the mortgagors. Estelita and other petitioners, children of
tion of the deed of sale cannot prevail. the spouses Sales, were found to be guilty of representing
themselves as their parents when the respondents visited
the property to discuss the loan agreement.

Gatioan vs. Gaffud (1969)


DOCTRINE
When a conveyance has been properly recorded, such re- Manlapat vs. Court of Appeals (2005)
cord is constructive notice of its contents and all interests, DOCTRINE
legal and equitable, included therein. The conveyance is In a valid subsequent registration, what is required is the
recorded in the public registry, and it is never issued unless production of the owner’s duplicate certificate, whenever
and until it is recorded. Thus, it serves as a notice to the any voluntary instrument is presented for registration, and
world that such land is registered, and it is presumed that a the same shall be conclusive authority from the registered
purchaser has examined every instrument of record affect- owner to the Register of Deeds to enter a new certificate or
ing the title of the land he purchased. This presumption is to make a memorandum of registration in accordance with
not rebuttable; otherwise, the very purpose of the system such instrument, and the new certificate or memorandum
providing for records of conveyance will be negated shall be binding upon the registered owner and upon all
persons claiming under him, in favor of every purchaser for
FACTS value and in good faith.
Encarnacion Gatioan bought a parcel of land originally
registered in the name of Rufino Permison, who acquired FACTS
it on the basis of a free patent. Gatioan had the Origi- A land located at Obando, Bulacan had been originally in
nal Certificate of Title of the land cancelled, in lieu of a Eduardo’s grandfather’s name. Before the lot was titled in
Transfer Certificate of Title issued in his name. The land the name of Eduardo, he sold a portion to Ricardo, owner
in question was then mortgaged three times for three dif- of the fishpond adjacent. Another portion was sold to Ri-
ferent loans acquired by her from the Philippine National cardo in order to have access to his fishpond from the pro-
Bank.. Sixto Gaffud and Villamora Logan, also acquired vincial road. Eduardo’s atty-in-fact, executed a mortgage
a free patent over the same land as Gatioan, and an OCT with a bank (RBSP) with the lot as collateral. Ricardo died
was issued in their favor.The Secretary of Agriculture and w/o learning of the issuance of a title in Eduardo’s name.
Natural Resources ordered the cancellation of the second His heirs, the Cruzes, were not aware of the sale between
title. The defendant bank filed an appeal questioning the Eduardo and Ricardo. Upon learning of their right to the
part of the judgment stating that the mortgage executed by subject lot, they tried to confront petitioners on the mort-
Gaffud and Logan was null and void and unenforceable, gage and obtain the surrender of the OCT but to no avail.
and claiming that the bank is a mortgagee in good faith They went to RBSP which had custody of the owner’s du-
and for value. PNB sought to have the annotation of the plicate certificate of the OCT, to borrow the owner’s dupli-
mortgage on the OCT of Gaffud and Logan to be carried cate certificate for the purpose of photocopying the same
over to the TCT of Gatioan as an encumbrance. and thereafter showing a copy thereof to the Register of
Deeds. The Register cancelled the OCT and issued 2 TCTs
HELD in the name of Eduardo. The Manlapats eventually learned
PNB failed to exercise a higher degree of diligence in of the dealings. The RTC decided in favor of the heirs of
granting the loans of the parties, as well as in checking Eduardo, that petitioners were bona fide mortgagors. CA
the mortgaged properties and the titles thereto. The pe- on the other hand reversed saying Eduardo misled the bank
titioner already mortgaged the property three times; it into accepting the entire area as a collateral even if a por-
should have noticed that the defendants’ mortgaged prop- tion did not belong to him.
erty was exactly the same as that of the petitioner’s. Under
the circumstances, appellant had absolutely no excuse for HELD
approving the application of the defendant spouses and The court found that the Cruzes have sufficiently proven
giving the loans in question. their claim over a portion of the lot in controversy. It was
found that the execution of the deed of sale was rendered
beyond doubt by Eduardo’s admission in his Sinumpaang
Salaysay. The fact that the deed of sale was not annotated
Llanto vs. Alzona (2005) to the OCT does not make the contract invalid. As a re-
sult, the Manlapats had no right to constitute mortgage over
DOCTRINE the disputed portion since they were not absolute owners
A mortgagee in good faith is protected by public policy of said portion; and respondents’ TCTs are valid since the
even if the mortgagor is not the owner of the mortgaged presented a genuine owner’s duplicate certificate even if it
property.
GROUP 2 | 5
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

HELD Voluntary Dealings with


was irregularly obtained (they borrowed it from the bank). Registered Lands
Hence, the SC affirmed the CA’s decision that said portion
was validly sold to the Cruzes. The court added that Rural
Bank of San Pascual is ordered to pay the Manlapats nomi- Sec. 51, PD 1529
nal damages for lending the OCT to the Cruzes without the Conveyance and other dealings by registered
Manlapats’ permission. owner. An owner of registered land may convey,
mortgage, lease, charge or otherwise deal with the
The court found that the Cruzes have sufficiently proven same in accordance with existing laws. He may use
their claim over a portion of the lot in controversy. It was such forms of deeds, mortgages, leases or other
found that the execution of the deed of sale was rendered voluntary instruments as are sufficient in law. But
beyond doubt by Eduardo’s admission in his Sinumpaang no deed, mortgage, lease, or other voluntary instru-
Salaysay. The fact that the deed of sale was not annotated ment, except a will purporting to convey or affect
to the OCT does not make the contract invalid. As a result, registered land shall take effect as a conveyance or
the Manlapats had no right to constitute mortgage over the bind the land, but shall operate only as a contract
disputed portion since they were not absolute owners of between the parties and as evidence of authority to
said portion; and respondents’ TCTs are valid since the pre- the Register of Deeds to make registration.
sented a genuine owner’s duplicate certificate even if it was
irregularly obtained (they borrowed it from the bank). The act of registration shall be the operative act to
convey or affect the land insofar as third persons
Hence, the SC affirmed the CA’s decision that said portion are concerned, and in all cases under this Decree,
was validly sold to the Cruzes. The court added that Rural the registration shall be made in the office of the
Bank of San Pascual is ordered to pay the Manlapats nomi- Register of Deeds for the province or city where
nal damages for lending the OCT to the Cruzes without the the land lies.
Manlapats’ permission.

Formal requirements of contracts involving


real property
Chua vs. Soriano (2007) (Mirror Principle)
Contracts are obligatory in whatever form they may have been
DOCTRINE entered into, provided all essential requirements for their valid-
The reliance by a party on the notarial acknowledgment ity are present:
found in the duly notarized SPA is sufficient evidence of 1. Consent of the contracting parties
good faith. One need not prove anything more for it is al- 2. Object certain (subject matter of the contract)
ready the function of the notarial acknowledgment to es- 3. Cause of the obligation
tablish the appearance of the parties to the document, its
due execution and authenticity.
FACTS Pertinent provisions of the Civil Code on Form of
Soriano owned a parcel of land. Celestino, first cousin and Contracts:
godson of Soriano, asked Soriano to lend him the TCT as
a security for a loan to be used which Soriano granted by Article 1356. Contracts shall be obligatory, in what-
executing a SPA. A fire gutted a portion of QC Hall and ever form they may have been entered into, pro-
destroyed the original copy of the TCT on file. Soriano vided all the essential requisites for their validity
executed a SPA authorizing Celestino to initiate admin- are present. However, when the law requires that
istrative reconstitution proceedings. Soriano then found a contract be in some form in order that it may be
out that his reconstituted title was canceled by another valid or enforceable, or that a contract be proved
TCT because Celestino, by virtue of a SPA with Soriano’s in a certain way, that requirement is absolute and
purported signature, sold to Spouses Chua the property indispensable. In such cases, the right of the parties
in an Absolute Deed of Sale.. Soriano filed a case for the stated in the following article cannot be exercised.
cancelation of title and reconveyance alleging that his sig-
nature in the SPA was forged and that the Chuas are not Article 1357. If the law requires a document or other
purchasers in good faith. special form, as in the acts and contracts enumer-
ated in the following article, the contracting parties
may compel each other to observe that form, once
HELD the contract has been perfected. This right may be
PNB failed to exercise a higher degree of diligence in exercised simultaneously with the action upon the
granting the loans of the parties, as well as in checking contract.
the mortgaged properties and the titles thereto. The pe-
titioner already mortgaged the property three times; it Article 1358. The following must appear in a public
should have noticed that the defendants’ mortgaged prop- document:
erty was exactly the same as that of the petitioner’s. Under (1) Acts and contracts which have for their object
the circumstances, appellant had absolutely no excuse for the creation, transmission, modification or extin-
approving the application of the defendant spouses and guishment of real rights over immovable property;
giving the loans in question. sales of real property or of an interest therein are
governed by articles 1403, No. 2, and 1405;
(2) The cession, repudiation or renunciation of he-
reditary rights or of those of the conjugal partner-
ship of gains;
(3) The power to administer property, or any oth-
er power which has for its object an act appearing
or which should appear in a public document, or
should prejudice a third person;
(4) The cession of actions or rights proceeding
from an act appearing in a public document.
All other contracts where the amount involved ex-
ceeds five hundred pesos must appear in writing,
even a private one. But sales of goods, chattels or
things in action are governed by articles, 1403, No.
2 and 1405.

GROUP 2 | 6
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

• Contracts are obligatory in whatever form they may have Rule in case of sale of real property; pricing
been For real property, the contract of sale is valid and ef- agreement
fective even if not complete in form, so long as the essential
requisites (consent, object, and cause) concur and they are • In real estate, parties may choose between two types of
clearly established pricing agreement:
• Unit price contract: Purchase price is determined by way of
• Under Art. 1357 of the Civil Code, its enforceability is reference to a states rate per unit area (e.g. P1,000 per sqm)
recognized as each contracting party is granted the right to • Lump sum contract: States a full purchase price for an
compel the other to execute the proper public instrument so immovable area (e.g. P1 M for 1,000 sqm)
that the valid contract of sale of registered land can be duly • Where both the area and boundaries of the immovable are
registered and thus bind third persons.
declared, the area covered within the boundaries of the im-
movable prevails over the stated area
Form is important for validity, convenience, and • In case of conflict between areas and boundaries, the latter
enforceability prevails
• Use of “more or less” or similar words in designating quan-
tity covers only a reasonable excess or deficiency
General Rule: Form is not important for the validity of the
concontract, as long as the three requisites are present Rule in case of sale of real property; pricing
• Applies only to consensual contracts agreement
Exception: When the law requires a contract to be in some form • Any alienation or encumbrance made by the husband of
for it to be valid and enforceable, or that a contract be proved the conjugal partnership property without the consent of the
in a certain way, that requirement is absolute and indispensable. wife is void

Examples Art. 124 of the Family Code


• Donation of real property: Must be in a public instrument • Absence of the consent of one renders the entire sale null
to be valid and void
• Mortgage: Must be recorded in the Registry of Deeds • However, if the sale was made before the effectivity of the
• Agreements mentioned in Statute of Frauds: Must be in Family Code on August 3, 1988, Art. 173 of the Civil Code
writing and subscribed by the party charged (e.g. agree- applies which says the disposition of conjugal property
ment for sale of real property) without the wife’s consent is not void, but merely voidable
• Wife may, during the marriage and within 10 years from
the questioned transaction, ask the courts for annulment of
• Sale of real estate, whether made as a result of private trans- any contract:
action or of foreclosure of execution sale, becomes legally • the husband entered into without her consent when such is
effective against third persons only from the date of its reg-
istration required
• Conveyance of land made in a private document does not • any act or contract of the husband which tends to defraud
affect its validity her or impair her interest in the conjugal partnership prop-
• Art. 1358 does not require the accomplishment of the acts erty
or contracts in a public instrument in order to validate the • Should the wife fail to exercise this right, she or her heirs,
act or contract but only to insure its efficacy, so that after after the dissolution of the marriage, may demand the value
the existence of said contract has been admitted, the party of property fraudulently alienated by the husband
bound may be compelled to execute the proper document. • Voidable contracts, however, are susceptible to ratification

Contracts in a public instrument is only for


convenience
Contract of sale vs contract to sell
• Contracts stated in Art. 1358 of the Civil Code, which re- Contract of sale Contract to sell
quires it to be embodied in a public instrument, is only for
convenience Title to the property pass- Ownership is, by agree-
• Registration of the instrument only adversely affects third es to the vendee upon the ment, reserved in the ven-
parties delivery of the thing sold dor and does not pass
• Non-compliance does not adversely affect the validity of
the contract or the contractual rights and obligations of the to the vendee until full
parties payment of the purchase
price
Contract perfected by mere consent
Vendor loses ownership Title is retained by the
over the property and vendor until full payment
• Contract of sale: Perfected once there is a meeting of cannot recover it until and of the price
minds upon the thing which is the object of the contract and unless the contract is re-
upon the price solved or rescinded
• Meeting of the minds: Intent of the parties in enter-
ing into the contract respecting the subject matter and the Payment of the price is a Payment of the price is a
consideration negative resolutory positive suspensive
• If the words of the contract appear to be contrary to the condition condition
evident intention of the parties, the latter shall prevail over
the former
Seller conveys ownership Failure to pay is not
• Perfection of contract, however, should not be confused
with its consummation of the property to the breach but an event that
• In relation to acquisition and transfer of ownership: Sale is buyer upon the perfection prevents the obligation of
not a mode, but merely a title of the contract the vendor to convey title
• Contract of sale is deemed consummated when the sellers from becoming effective
and buyers have performed their respective obligations un- Should the buyer default If the buyer defaults in
der the contract in the payment of the pur- payment, the seller can
• Seller: Transfer ownership and deliver the thing sold chase price, seller may ei- only sue for damages
• Buyer: Pay a price certain to seller
• Ownership of the thing sold is transferred to the vendee ther sue for the collection
upon its actual or constructive delivery thereof or have the con-
tract judicially resolved
and set aside
7 | GROUP 2
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

Delivery as a mode of transmission, real or Dacion en Pago


constructive
• Delivery and transmission of ownership of a thing by the
• In a contract of sale, the buyer acquires the thing sold only debtor to the creditor as an accepted equivalent of the per-
upon its delivery in any of the ways specified in Articles formance of the obligation
1497 to 1501, or in any other manner signifying an agree- • Special mode of payment where the debtor offers another
ment that the possession is transferred from the vendor to thing to the creditor, who accepts it as an equivalent of the
the vendee payment of an outstanding debt
• Objective novation of the obligation
Article 1497. The thing sold shall be understood as • Thing offered as an accepted equivalent of the performance
delivered, when it is placed in the control and pos- of an obligation: Object of the contract if sale
session of the vendee. • Debt: Considered as the purchase price

Article 1498. When the sale is made through a pub-


lic instrument, the execution thereof shall be equiv-
alent to the delivery of the thing which is the object Roque vs. Aguado, April 7, 2014
of the contract, if from the deed the contrary does DOCTRINE
not appear or cannot clearly be inferred. In a contract to sell, there being no previous sale of the
property, a third person buying such property despite the
With regard to movable property, its delivery may fulfillment of the suspensive condition such as the full pay-
also be made by the delivery of the keys of the ment of the purchase price, for instance, cannot be deemed
place or depository where it is stored or kept. a buyer in bad faith and the prospective buyer cannot seek
the relief of reconveyance of the property.
Article 1499. The delivery of movable proper-
ty may likewise be made by the mere consent or FACTS
agreement of the contracting parties, if the thing Sps. Roque bought a portion of Lot 18089 from Rivero, et
sold cannot be transferred to the possession of the al under a contract to sell. However, Sabug applied for a
vendee at the time of the sale, or if the latter al- free patent over the entire lot (executing a Joint Affidavit
ready had it in his possession for any other reason. with Rivero acknowledging the portion of the Sps. Roque),
who then sold the Lot to Aguado, who in turn mortgaged it
to Land Bank Sps. Roque filed a complaint against herein
Article 1500. There may also be tradition constitu- respondent, praying that they be declared as the true own-
tum possessorium. ers of a portion of Lot 18089, the entirety of which had
fallen to the possession of Land Bank. NCCP, of which
Article 1501. With respect to incorporeal property, Sabug used to be a part of, also filed a separate complaint,
the provisions of the first paragraph of article 1498 claiming to be the real owner of the lot through a Deed of
shall govern. In any other case wherein said provi- Absolute Sale executed with Sabug. Both cases were con-
sions are not applicable, the placing of the titles of solidated.
ownership in the possession of the vendee or the
use by the vendee of his rights, with the vendor’s
consent, shall be understood as a delivery. HELD
The Court ruled that it is incumbent upon the Sps. Roque
Incorporeal property to prove that they have a claim superior to that of Land
Bank, and that the property had not yet fallen in the hands
of an innocent purchaser for value. In the instant case, the
• Art. 1498 lays down the general rule: Execution of a public Court found that the Sps. Roque never perfected their claim
instrument gives rise only to a prima facie presumption of over their portion of the Lot, as they never paid the balance
delivery of the purchase price. They also never took active steps in
• Presumption is destroyed when delivery is not effected due protecting their ownership of such portion, as they never
to a legal impediment registered the Deed of Conditional Sale, nor did they seek
the actual or physical segregation of their portion despite
their knowledge that the entire Lot was registered in Sa-
• The word “delivered” should not be taken restrictively to bug’s name. Thus, the Court held Land Bank to have a val-
mean transfer of actual physical possession of the property id title over the entirety of Lot 18089.

Two principal modes of delivery


1. Actual delivery
2. Legal or constructive delivery Bernabe vs. CA, July 21, 2008
DOCTRINE
In a contract of sale, the vendor loses ownership over the
Execution of a public document equivalent to de- property and cannot recover it unless the contract is re-
livery solved or rescinded; whereas in a contract to sell, title is
• Execution of a public instrument shall be equivalent to the retained by the vendor until full payment of the price.
delivery of the thing object of the contract, but this only
gives rise to a prima facie presumption of delivery FACTS
• Deemed nagated by the failure of the vendee to take actual Respondent Titan Construction Corporation filed a com-
possession of the land sold plaint for performance and damages against petitioners
• Exceptions: When mere presumptive and not conclusive because the latter sold their share in the properties to the
delivery is created in case where the buyer fails to take ma- former under a Deed of Sale of Real Estate for seventeen
terial possession of the subject of sale million, seven hundred pesos. Under the deed, Titan was
• A person who does not have actual possession of the thing to pay one million pesos upon the signing, and the balance
sold cannot transfer constructive possession by the execu- should be paid within 60 days after Titan’s acquisition of
tion and delivery of a public instrument the land. Titan alleged that it had already paid a substantial
portion of the down payment and was still waiting for the
petitioners’ compliance with their undertaking which they
had failed to perform. Petitioners, on the other hand, can-
celled the deed of sale for Titan’s alleged failure to comply

GROUP 2 | 8
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

with the terms of the deed. The parties then entered into a Unchuan vs. Court of Appeals, May 31, 1988
compromise agreement whereby the petitioners would sell DOCTRINE
their share in the property and in exchange Titan would The Civil Code provides that if the same immovable prop-
waive its cause of action for damages. As a result of the erty is sold to different vendees, “the ownership shall
compromise agreement, Deeds of Conditional Sale were belong to the person acquiring it who in good faith first
entered into by Titan and petitioners. The RTC decided in recorded it in the Registry of Property” [Art. 1544, Civil
favor of Titan, upholding the validity of the Deed of Sale Code.] Presidential Decree No. 1529 extends the protec-
and Deeds of Conditional sale. Petitioners in this case con- tion given to an innocent purchaser for value to an innocent
tend that the deeds are contracts to sell and not contracts of mortgagee.
sale. Therefore, Titan has no cause of action to file the com-
plaint for performance since it failed to pay the purchase FACTS
price in full as agreed upon in the contracts. Flora Jaldon mortgaged a parcel of land located in Cagay-
an De Oro City. Unchuan, claiming to be the owner of
Respondent Titan Construction Corporation filed a com- one-half of the mortgaged property, caused to be annotat-
plaint for performance and damages against petitioners ed on the title an adverse claim. Subsequently, the Phil-
because the latter sold their share in the properties to the ippine Banking Corporation extrajudicially foreclosed the
former under a Deed of Sale of Real Estate for seventeen mortgage over the property and in the public sale, the bank
was the highest bidder. As the property was not redeemed
million, seven hundred pesos. Under the deed, Titan was within the reglementary period, a deed of final conveyance
to pay one million pesos upon the signing, and the balance was executed. The bank led a petition for the cancellation
should be paid within 60 days after Titan’s acquisition of of the annotations on its title and for the issuance of a writ
the land. Titan alleged that it had already paid a substantial of possession. The trial court issued an order directing the
portion of the down payment and was still waiting for the issuance of a writ of possession in favor of the bank. Un-
petitioners’ compliance with their undertaking which they chuan brought a petition for certiorari with the Court of
had failed to perform. Petitioners, on the other hand, can- Appeals which denied the petition for lack of merit.
celled the deed of sale for Titan’s alleged failure to comply
with the terms of the deed. The parties then entered into a HELD
compromise agreement whereby the petitioners would sell It is too late in the day for Unchuan to question the summa-
their share in the property and in exchange Titan would ry nature of the proceedings in the lower court. He is now
waive its cause of action for damages. As a result of the estopped from questioning the procedure adopted by the
compromise agreement, Deeds of Conditional Sale were trial court.
entered into by Titan and petitioners.
The land involved is a Torrens-titled property. It is basic
The RTC decided in favor of Titan, upholding the validity that a person dealing with registered property need not go
of the Deed of Sale and Deeds of Conditional sale. Peti- beyond, but only has to rely on, the title. He is charged with
notice only of such burdens and claims which are annotat-
tioners in this case contend that the deeds are contracts to ed on the title, for registration is the operative act that binds
sell and not contracts of sale. the property.Other than Unchuan’s bare allegation, the only
proof he presented in court is a handwritten receipt for the
Therefore, Titan has no cause of action to file the complaint payment of his contribution to realty taxes allegedly signed
for performance since it failed to pay the purchase price in by Flora Jaldon. He has not bothered to prove the authen-
full as agreed upon in the contracts. ticity of the private writing.
Granting that Unchuan indeed bought one-half of the prop-
HELD erty “long before November 3, 1976,” since he filed his ad-
In a contract of sale, the vendor loses ownership over the verse claim only after the land was mortgaged to the bank,
property and cannot recover it unless the contract is re- the right of the bank to the property is superior to that of
solved or rescinded; whereas in a contract to sell, title is re- Unchuan. The petition is Denied.
tained by the vendor until full payment of the price. In this
case, the first Deed of Sale was a contract of sale, and the
later Deeds of Conditional Sale were contracts to sell. Titan
was suing for specific performance because the petition- Arguelles vs. Malarayat Rural Bank, March
ers did not honor the contract of sale after it had paid the
downpayment. Petitioners argue that Titan’s failure to pay 19, 2014
the remainder of the purchase price constitutes a failure to
perform its obligation under the deed and thus a ground DOCTRINE
for resolution. Resolution (Art. 1191, New Civil Code), is Where the mortgagee does not directly deal with the reg-
applicable to reciprocal obligations, and is a remedy only istered owner of the real property, the law requires that a
higher degree of prudence be exercised by the mortgagee
available to the party that has already performed its own in ascertaining the ownership of the land being mortgaged
obligations or is willing and ready to do so. and the authority of the supposed agent executing the mort-
gage. Otherwise, it cannot be considered an innocent mort-
Under the deed of conditional sale, the balance of the pur- gagee or a mortgagee in good faith.
chase price should be paid within 60 days from the fulfil-
ment of several conditions. At the time of the complaint, FACTS
not all of the conditions were present, therefore the pay- The subject property is the south portion of the land of Fer-
ment of the balance had not yet been due. The condition mina Guia which she sold to the spouses Arguelles through
that was not been fulfilled was the acquisition of a right a Deed of Sale which was neither registered with the Reg-
of way over the northern part of the property. It was only ister of Deeds nor annotated on the original certificate of
during the trial that Titan waived this condition, and se- title of Fermina. The petitioners never received the corre-
cured its willingness to pay the purchase price even before sponding TCT from the son of Fermina and his wife even
the right of way was secured. Therefore, while the Deed of after repeated demands. The same portion of the larger lot,
Conditional Sale remains valid, Titan now had the obliga- which has been subdivided, was used by the son of Fermina
tion to pay the balance and petitioners had the obligation to to obtain a loan from Malarayat Bank and its correspond-
accept the payment and execute the deed of absolute sale. ing TCT was annotated with the Real Estate Mortgage and
Special Power of Attorney executed by Fermina in favor of
her son. In the complaint for the annulment of the mortgage
and the cancellation of mortgage lien filed was Arguelles

9 | GROUP 2
LAW 133 LAND TITLES AND DEEDS PROF. ZMD ABELLERA

against Malarayat Bank, the Court of Appeals ruled that the gage was then cancelled. Dr. Rosario acquired another loan
unregistered sale could not affect Malarayat Bank because from PNB, secured by the smaller lot and other properties.
of the failure of the petitioners to register such so that Ma- Dr. Rosario and his wife, Duque-Rosario (spouses Rosa-
larayat has a better right over the property. rio), acquired a third loan from Banco Filipino. The spous-
es Rosario again constituted mortgage on the lot. Torbela
The subject property is the south portion of the land of Fer- siblings filed before the RTC Complaint for recovery of
mina Guia which she sold to the spouses Arguelles through ownership and possession. Sps. Rosario afterwards failed
a Deed of Sale which was neither registered with the Reg- to pay their loan from Banco Filipino. Banco Filipino ex-
ister of Deeds nor annotated on the original certificate of trajudicially foreclosed the mortgaged lot. Sps. Rosario
title of Fermina. The petitioners never received the corre- instituted before the RTC on March 4, 1988 a case for an-
sponding TCT from the son of Fermina and his wife even nulment of extrajudicial foreclosure and damages, which
after repeated demands. The same portion of the larger lot, the Torbela siblings intervened to. The RTC dismissed the
which has been subdivided, was used by the son of Fermina case without prejudice to the spouses Rosario’s failure to
to obtain a loan from Malarayat Bank and its correspond- prosecute. Torbela siblings tried to redeem but their efforts
ing TCT was annotated with the Real Estate Mortgage and were unsuccessful.
Special Power of Attorney executed by Fermina in favor
of her son. The Torbela siblings thereafter filed before the RTC for
annulment of the Certificate of Final Sale. Banco Filipino
In the complaint for the annulment of the mortgage and the filed before the RTC. RTC released an Amended Decision
cancellation of mortgage lien filed was Arguelles against dismissing the complaint of [the Torbela siblings] and issu-
Malarayat Bank, the Court of Appeals ruled that the unreg- ing a Writ of Possession. CA ordered Dr. Rosario to pay the
istered sale could not affect Malarayat Bank because of the Torbela siblings Php1.2m as actual damages plus interest,
failure of the petitioners to register such so that Malarayat moral and exemplary damages; CA ruled that Banco Filipi-
has a better right over the property. no is entitled to the writ of possession.

A land in Urdaneta City, Pangasinan was originally part of


HELD a larger parcel of land, in the name of Valeriano Semilla,
The Supreme Court ruled that Malarayat is not a mortgagee married to Potenciana Acosta. He gave the lot to Sps. Tor-
in good faith and as such is not entitled to the protection of bel which was later on transferred to the Torbela siblings.
its mortgage lien. Since the land was not mortgaged by the Under unexplained circumstances, Valeriano gave the
owner as it was mortgaged by the son of Fermina by means
of a special power of attorney, law requires that a higher smaller lot to his sister Marta, married to Eugenio Torbela
degree of prudence be exercised by the bank as mortgag- (spouses Torbela). Upon the deaths of the sps. Torbela, it
ee which the bank, in this case, failed to comply with. As was adjudicated in equal shares among their children, the
such, spouses Arguelles were deemed to have a better right Torbela siblings. Thela siblings executed a Deed of Abso-
over the property. lute Quitclaim in favor of Dr. Rosario. Another Deed of
Absolute Quitclaim was subsequently executed, this time
by Dr. Rosario, acknowledging that he only borrowed from
the Torbela siblings and was already returning the same to
Duque-Rosario vs. Banco Filipino Savings the latter. The aforequoted Deed was notarized, but was
not immediately annotated Following the issuance of the
and Mortgage Bank, Dec. 7, 2011 TCT, Dr. Rosario obtained a loan from DBP secured by a
mortgage constituted on the smaller lot. Cornelio T. Tosino
DOCTRINE (Cornelio) executed an Affidavit of Adverse Claim, on be-
half of the Torbela siblings. The construction of a four-sto-
A trustee who obtains a Torrens title over a property held rey building was eventually completed. Dr. Rosario was
in trust for him by another cannot repudiate the trust by able to fully pay his loan from DBP. Mortgage was then
relying on the registration.
cancelled. Dr. Rosario acquired another loan from PNB,
The right of the purchaser to the possession of the fore- secured by the smaller lot and other properties. Dr. Rosario
closed property becomes absolute upon the expiration of and his wife, Duque-Rosario (spouses Rosario), acquired a
the redemption period. The basis of this right to possession third loan from Banco Filipino. The spouses Rosario again
is the purchaser’s ownership of the property. constituted mortgage on the lot. Torbela siblings filed be-
fore the RTC Complaint for recovery of ownership and
FACTS possession. Sps. Rosario afterwards failed to pay their loan
A land in Urdaneta City, Pangasinan was originally part of from Banco Filipino. Banco Filipino extrajudicially fore-
a larger parcel of land, in the name of Valeriano Semilla, closed the mortgaged lot. Sps. Rosario instituted before the
married to Potenciana Acosta. He gave the lot to Sps. Tor- RTC on March 4, 1988 a case for annulment of extrajudi-
bel which was later on transferred to the Torbela siblings. cial foreclosure and damages, which the Torbela siblings
Under unexplained circumstances, Valeriano gave the intervened to. The RTC dismissed the case without preju-
smaller lot to his sister Marta, married to Eugenio Torbela dice to the spouses Rosario’s failure to prosecute. Torbela
(spouses Torbela). Upon the deaths of the sps. Torbela, it siblings tried to redeem but their efforts were unsuccessful.
was adjudicated in equal shares among their children, the The Torbela siblings thereafter filed before the RTC for
Torbela siblings. Thela siblings executed a Deed of Abso- annulment of the Certificate of Final Sale. Banco Filipino
lute Quitclaim in favor of Dr. Rosario. Another Deed of filed before the RTC. RTC released an Amended Decision
Absolute Quitclaim was subsequently executed, this time dismissing the complaint of [the Torbela siblings] and issu-
by Dr. Rosario, acknowledging that he only borrowed from ing a Writ of Possession. CA ordered Dr. Rosario to pay the
the Torbela siblings and was already returning the same to Torbela siblings Php1.2m as actual damages plus interest,
the latter. The aforequoted Deed was notarized, but was moral and exemplary damages; CA ruled that Banco Filipi-
not immediately annotated Following the issuance of the no is entitled to the writ of possession.
TCT, Dr. Rosario obtained a loan from DBP secured by a HELD
mortgage constituted on the smaller lot. Cornelio T. Tosino
(Cornelio) executed an Affidavit of Adverse Claim, on be- The SC affirmed the CA’s ruling and ruled in favor of the
half of the Torbela siblings. The construction of a four-sto- Torbela siblings.
rey building was eventually completed.

Dr. Rosario was able to fully pay his loan from DBP. Mort-
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