CREDIT TRANSACTIONS (2011-2013 Doctrines)

Accommodation mortgagor
The Court held that it is not necessary that the accommodation mortgagor be
apprised the entire amount of the loan nor should it be determined before the execution of
the SPA in favor of the debtor. This is applicable especially when it can be indicated
from the contract that the mortgage serves as a continuing security for credit obtained as
well as future loan availments. Sps. Ramos v. Oispo an! "E#TC$ %.R. No. 1&3'0($
"er)ar* 2+$ 2013
Appropriation of thing loaned
A debtor can appropriate the thing loaned without any responsibility or duty to his
creditor to return the very thing that was loaned or to report how the proceeds were used
nor can he be compelled to return the proceeds and fruits of the loan, for there is
nothing under our laws that compel a debtor in a contract of loan to do so. Rep),ic vs.
San!i-ana*an$ .(' SCRA (+
Corporate ehabilitation
!uring the rehabilitation, the only payment sanctioned by the "nterim ules are
those made to creditors in accordance with the provisions of the plan. E/press
Investments 0t!. an! E/port Dev1t Cana!a vs. #a*anTe,$ .'+ SCRA 20
Sec. #$d%, ule & of the "nterim ules provides that the rehabilitation plan shall
include the means for the execution of the rehabilitation plan, which may include
conversions of debts or any portion thereof to e'uity, restructuring of debts, dacion en
pago, or sale of assets or of the controlling interest. E/press Investments 0t!. an!
E/port Dev1t Cana!a vs. #a*anTe,$ .'+ SCRA 20
(xcessive interest rates
Pursuant to the case of Garcia v. Court of Appeals, the Court held that a )&*
interest rate per annum, which was agreed by the parties, was not unconscionable.
Therefore, the interest rate of )+* p.a., or less than )* per month, as agreed upon by the
parties in this cases, is not excessive. There is no need for the Court to reduce the rate.
Sps. 3a,,ari v. 4r)!entia, #an5$ %.R. No. 1&+'.1$ 6)ne 2$ 2013.
,inancial ehabilitation and "nsolvency Act $,"A%
The ,"A now provides for court proceedings in the rehabilitation or li'uidation
of debtors, both -uridical and natural persons. 3a7orit* Stoc58o,!ers o9 R)*
In!)stria, Corp. vs. 0im$ .20 SCRA (.1
.nder .A. /0/&), 1nown as ,"A, the right of a secured creditor to enforce his
lien during li'uidation proceedings is retained. :n-son$ 6r. vs. 4N#$ .+' SCRA ((+
,oreclosure of 2ortgage
.nless the parties stipulate, personal notice to the mortgagor in extra-udicial
foreclosure proceedings is not necessary because Section +/ of Act 3o. +/+# only
re'uires posting of the notice of sale in three public places and the publication of that
notice in a newspaper of general circulation. Ramire; v. T3#C$ %.R. No. 1&''00$
Decemer 11$ 2013.
.nder the ural 4an1s Act, the foreclosure of mortgages covering loans granted
by rural ban1s and executions of -udgments thereon involving real properties levied upon
by a sheriff shall be exempt from publication where the total amount of the loan,
including interests due and unpaid, does not exceed P/0,000.00. 3en;on v. R)ra, #an5
o9 #)enavista$ Inc.$ %.R. 1+'031$ A)-)st 2'$ 2013.
Thus, absent an adverse claimant or any evidence to the contrary, all accessories
and accessions accruing or attached to the mortgaged property are included in the
mortgage contract and may thus also be foreclosed with the principal property in the case
of non5payment of the debt secured. 4N# v. 3ara<on$ %.R. No. 1'&31.$ 6),* 1$ 2013.
"t is settled that if the proceeds of the sale are insufficient to cover the debt in an
extra-udicial foreclosure of mortgage, the mortgagee is entitled to claim the deficiency
from the debtor6 7hile Act. 3o. +/+# does not discuss the mortgagee8s right to recover
the deficiency, neither does it contain any provision expressly or impliedly prohibiting
recovery. #4I vs. Aveni!o$ ..1 SCRA +2'
"n an extra-udicial foreclosure of real property, when the foreclosed property is in
the possession of a third party holding the same adversely to the -udgment obligor, the
issuance by the trial court of a writ of possession in favor of the purchaser of said real
property ceases to be ministerial and may no longer be done ex parte, but for the
exception to apply, the property need not only be possessed by a third party, but also held
by the third party adversely to the -udgment debtor. #4I vs. %o,!en 4o=er Diese, Sa,es
Center$ .3& SCRA (02
4an1s are expected to exercise more care and prudence than private individuals in
their dealings because their business is impressed with public interest and their standard
practice is to conduct an ocular inspection of the property offered to be mortgaged and
verify the genuineness if the title to determine the real owner or owners thereof, hence,
the inapplicability of the rule that a mortgagee need not loo1 beyond the title does not
apply to them. De,a 4e<a vs. Avi,a$ ..2 SCRA 223
The family home is exempt from execution, forced sale or attachment, except for
debts secured by mortgages on the premises before or after such constitution. "orta,e;a
vs. 0apitan$ .+' SCRA (.&
7here the parties have stipulated in their agreement, mortgage contract and
promissory note that the mortgagee is authori9ed to foreclose the mortgage upon the
mortgagor8s default, the mortgagee has a clear right to the foreclosure in case of the
mortgagor8s default. De,os Santos vs. 3#TC$ .'( SCRA (10
A creditor is not precluded from recovering any unpaid balance on the principal
obligation if the extra-udicial foreclosure sale of the property sub-ect of the real estate
mortgage results in a deficiency. #4I vs. Re*es$ ..( SCRA +00
An ex parte petition for writ of possession under Act +/+# is, strictly spea1ing,
not a -udicial, or litigious proceedings, because an extra-udicial foreclosure of mortgage
is accomplished by filing a petition, not with any court of -ustice, but with the office of
the sheriff of the place where the sale is made. 3a!ria-a vs. C8inaan5$ .++ SCRA
2.0
:uaranty
The liability of a guarantor is only subsidiary, and all the properties of the
principal debtor must first be exhausted before the guarantor may be held answerable for
the debt. Thus, the creditor may hold the guarantor liable only after -udgment has been
obtained against the principal debtor and the latter is unable to pay. A-,iot vs. Santia$
.'+ SCRA 2'3
"nterest on loans
Pursuant to Article ))0; of the Civil Code, except as provided under Central 4an1
Circular 3o. ;0#, and now under 4ang1o Sentral ng Pilipinas Circular 3o. <;;, which
too1 effect on =uly /, )0/+, the respondent may be awarded interest of six percent $>*%
of the -udgment amount by way of actual and compensatory damages. S.C. 3e-a=or,!
v. 4ara!a$ %.R. No. 1'3'0($ Septemer 11$ 2013.
The Court has previously held as valid the proviso in loans that the interest rate
would be made to depend on the prevailing mar1et rate. 0otto Resta)rant Corp. vs.
#4I$ .(. SCRA .&&
2ortgages
The rights of the first mortgage creditor or mortgage over the mortgaged
properties are superior to those of a subse'uent attaching creditor and other -unior
mortgagees. 0ee vs. #an-5o5 #an5 4),ic Compan*$ 0t!. .(2 SCRA ((+
The mortgagee5ban1 has no right to include in the foreclosure of the land the
portion of the loan separately secured by chattel mortgage. 7here the ban1 collected the
entire amount of the loan from the proceeds of the foreclosure sale, including the portion
that was not covered by the foreclosure of the real estate mortgage, it must return the
excess amount. R)ra, #an5 o9 Taoso vs. A-toto$ .(. SCRA 2''
A mortgagor is allowed to ta1e a second or subse'uent mortgage on a property
already mortgaged, sub-ect to prior rights of the previous mortgages. 4a,a!a vs.
So,i!an5 Corp.$ .23 SCRA 10
The sale or transfer of the mortgaged property cannot affect or release the
mortgage6 thus, the purchaser or transferee is necessarily bound to ac1nowledge and
respect the encumbrance. %arcia vs. >i,,ar$ .+2 SCRA '0
A ?blan1et mortgage clause@, also 1nown as a ?dragnet clause@ in American
-urisprudence, is one which is specifically phrased to subsume all debts of past or future
origins. A mortgage which provides a dragnet clause is in the nature of a continuing
guaranty and constitutes an exception to the rule that an action to foreclose a mortgage
must be limited to the amount mentioned in the mortgage contract. 4CSO vs. Ne=
Da-)pan 3etro %as Corp.$ .+. SCRA 12.
2ortgagee in good faith
7hen a mortgagee relies upon what appears on the face of a Torrens title and
lends money in all good faith on the basis of the title in the name of the mortgagor, only
thereafter to learn that the latter8s title was defective, being thus an innocent mortgagee
for value, his or her right or lien upon the land mortgaged must be respected and
protected. 3a8ina* vs. %a5o$ 6r.$ ..1 SCRA 2+(
.nder the !octrine of ?2ortgagee in :ood ,aith@, even if the mortgagor is not
the owner of the mortgaged property, the mortgage contract and any foreclosure sale
arising therefrom are given effect by reason of public policy6 (ven if the mortgagor is not
the rightful owner of, or does not have a valid title to, the mortgaged property, the
mortgagee in good faith is, nonetheless, entitled to protection. Tore,a vs. Rosario$ ..1
SCRA .33
2ortgage liability
As a general rule, a mortgage liability is usually limited to the amount mentioned
in the contract6 Aowever, the amounts named as consideration in a contract of mortgage
do not limit the amount for which the mortgage may stand as security if from the four
corners of the instrument the intent to secure future and other indebtedness can be
gathered. Ramos vs. 4N#$ ..2 SCRA (+&
edemption
The tender of redemption money may be made to the purchaser of the land or to
the sheriff6 "f made to the sheriff, it is his duty to accept the tender and execute the
certificate of redemption. :ap vs. D*$ Sr.$ .2( SCRA 2&3
The doctrine of indivisibility of mortgage does not apply once the mortgage is
extinguished by a complete foreclosure thereof. 3othing in the law prohibits the
piecemeal redemption of properties sold at one foreclosure proceedings. :ap vs. D*$ Sr.$
.2( SCRA 2&3
The general rule in redemption is that it is not sufficient that a person offering to
redeem manifests his desire to do so6 The statement of intention must be accompanied by
an actual and simultaneous tender of payment6 "n case of disagreement over the
redemption price, the redemptioner may preserve his right of redemption through -udicial
action, which in every case, must be file within the one5year period of redemption.
Tore,a vs. Rosario$ ..1 SCRA .33
The right of legal redemption must be exercised within specified time limits.
Aowever, the statutory period of redemption can be extended by agreement of the parties.
Rep),ic vs. 3ara=i-3arantao %enera, ?ospita,$ .'. SCRA 2(.
ehabilitation eceiver
As an officer of the court and an expert, the rehabilitation receiver plays an
important role in corporate rehabilitation proceedings6 The purpose of the law in directing
the appointment of receivers is to protect the interests of corporate investors and
creditors. Soic8i "is8er* Enterprise$ Inc. vs. #4I$ .2& SCRA '1+
The receiver shall not ta1e over the management and control of the debtor but
shall closely oversee and monitor its operations during the pendency of the rehabilitation
proceeding. E/press Investments 0t!. an! E/port Dev1t Cana!a vs. #a*anTe,$ .'+
SCRA 20
Pactum commissorium
Pactum commissorium is ?a stipulation empowering the creditor to appropriate
the thing given as guaranty for the fulfillment of the obligation in the event the obligor
fails to live up to his underta1ings, without further formality, such as foreclosure
proceedings, and a public sale. E!ra,in vs. 48i,. >eterans #an5$ .(2 SCRA +2
The following are the elements of pactum commissoriumB $/% There should be a
property mortgaged by way of security for the payment of the principal obligation6 and
$)% There should be a stipulation for automatic appropriation by the creditor of the thing
mortgaged in case of non5payment of the principal obligation within the stipulated
period. %arcia vs. >i,,ar$ .+2 SCRA '0
Pledge
"n case of doubt as to whether a transaction is one of pledge or dacion en pago,
the presumption is that it is a pledge as this involved a lesser transmission of rights and
interests. @nion #an5 vs. 6)niat$ .22 SCRA 1&
Third persons who are not parties to the principal obligation may secure the latter
by pledging or mortgaging their own property. C8inaan5 vs. A#RO "is8in-
Enterprises$ ... SCRA 2&&
Surety
Sureties, whose liability is solidary cannot claim protection from the rehabilitation
court, they not being the financially5distressed corporation that may be restored. 6AR40
Deve,opment Corp. vs. Sec)rit* #an5$ .20 SCRA .(2
Although the contract of suretyship is secondary only to a valid principal
obligation, the surety8s liability to the creditor is direct, primary and absolute. American
?ome Ins)rance o9 N: vs. ".". Cr); B Co.$ Inc.$ .22 SCRA 2('
"t bears stressing that the contract of suretyship imports entire good faith and
confidence between the parties in regard to the whole transaction, although it has been
said that the creditor does not stand as a fiduciary in his relation to the surety, after all
obligations arising from contracts have the force of law between the parties and should be
complied with in good faith. "irst 0epanto-Tais8o Ins)rance Corp. vs. C8evron
48i,s.$ ..3 SCRA 30&
A surety on a counter5bond given to secure the payment of a -udgment becomes
liable for the payment of the amount due uponB $/% demand made upon the surety6 and $)%
notice and summary hearing on the same action. @nite! 4),p an! 4aper Co. vs.
Acropo,is Centra, %)arant*$ ..( SCRA .2
7rit of Possession
The purchaser can demand possession of the property even during the redemption
period for as long as he files an ex parte motion under oath and post a bond in accordance
with Section < of Act. 3o. +/+#, as amended. .pon filing of the motion and the approval
of the bond, the law also directs the court in express terms to issue the order of a writ of
possession. 7hen the redemption period has expired and title over the property has been
consolidated in the purchaser8s name, a writ of possession can be demanded as a matter
of right. 4#Com v. :e)n-$ %.R. No. 1+&.&1$ Decemer ($ 2013.
The implementation of a writ of possession issued pursuant to Act 3o. +/+# at the
instance of the purchaser at the foreclosure sale of the mortgaged property in whose name
the title has been meanwhile consolidated cannot be prevented by the in-unctive writ.
@C4# v. Spo)ses 0)mo$ %.R. No. 1.2+2+$ Decemer 11$ 2013.
According to Baciran v. IAC, the Court held that the obligation of a court to issue
a writ of possession that is in favor of the purchaser involved in an extra-udicial
foreclosure sale ceases to be ministerial once there is a third party who is in possession of
the property and is claiming a right, which is adverse to that of the debtorCmortgagor.
Ro*a, Savin-s #an5 v. Asia$ et. a,$ %.R. No. 1'3.2'$ Apri, 10$ 2013.
0AND TIT0ES (2011-2013 Doctrines)
Action for reconveyance6 free patent
The established legal principle in actions for annulment or reconveyance of title is
that a party see1ing it should establish not merely by a preponderance of evidence but by
clear and convincing evidence that the land sought to be reconveyed is his. "n an action to
recover, the property must be identified, and the plaintiff must rely on the strength of his
title and not on the wea1ness of the defendant8s claim. >SD Rea,t* vs. @ni=i!e Sa,es$
Inc$ +02 SCRA 2&+$ 6@0: 31$ 2013
A private individual may bring an action for reconveyance of a parcel of land even if the
title thereof was issued through a free patent since such action does not aim or purport to
re5open the registration proceeding and set aside the decree of registration, but only to
show that the person who secured the registration of the 'uestioned property is not the
real owner thereof. 0or;ano vs. Taa*a-$ ..2 SCRA 3'
Certificate of Dand Transfer
The tenant5landholder of a Certificate of Dand Transfer merely possesses an
inchoate right that is sub-ect to compliance with certain legal preconditions for perfecting
title and ac'uiring full ownership. ?eirs o9 #)ens)ceso vs. 4ere;$ .&2 SCRA (&1$
3ARC? .$ 2013
Certificate of title
As against an array of proofs consisting of tax declarations andCor tax receipts
which are not conclusive evidence of ownership nor proof of the area covered therein, an
original certificate of title, which indicates true and legal ownership by the registered
owners over the disputed premises, must prevail. ?eirs o9 De,9in vs. Raa!on$ +02
SCRA 2'+$ 6@0: 31$ 2013
A certificate of title serves as evidence of an indefeasible title to the property in
favor of the person whose name appears therein6 The certificate of title is indefeasible
and imprescriptible and all claims to the parcel of land are 'uieted upon issuance of the
certificate. Deca,en- vs. #is8op o9 3issionar* District o9 4.I. o9 4rotestant C8)rc8 o9
t8e @SA$ .+2 SCRA 1(2
As provided in Section //) of Act 3o. &;> and Southwestern Universit vs.
!aurente, notice is re'uired to be given to parties whose annotations appear on the bac1
of the certificate of title in an action for cancellation of annotations on the certificate of
title. Criso,o-o vs. Ome,io$ .'2 SCRA 12(
A person who is not the owner of the property is allowed to file the petition for a
new duplicate certificate, provided that the person has interest in the property, such as a
person who had what appeared to be a validly notari9ed !eed of Absolute Sale over the
sub-ect property in his favor. ReC Comp,aint o9 Concerne! 3emers o9 C8inese
%rocers Association a-ainst 6)stice Intin- o9 t8e CA
The certificate of title, by itself, does not vest ownership6 it is merely an evidence
of title over a particular property. Espino vs. #),)t$ .(& SCRA (23
"t has long been ingrained in our -urisprudence that a void title may become the
root of a valid title if the derivative title was obtained in good faith and for value. 3)no;
vs. :a)t$ 6r.$ .20 SCRA '+
7hile certificates of title are indefeasible, unassailable and binding against the
whole world, including the government itself, they do not create or vest title. They merely
confirm or record title already existing and vested. Sta. 0)cia Rea,t* vs. Cit* o9 4asi-$
.22 SCRA ((
An original certificate of title issued by the egister of !eeds under an
administrative proceeding is as indefeasible as a certificate of title issued under -udicial
proceedings. Sampaco vs. 0ant)!$ .2( SCRA 3.
Classification of land6 official proclamation
The classification of land is descriptive of its legal nature or status and does not
have to be descriptive of what the land actually loo1s li1e6 .nless and until the land
classified as forest land is released in an official proclamation to that effect so that it may
form part of the disposable agricultural lands of the public domain, the rules on
confirmation of imperfect title do not apply. :) C8an- vs. Rep),ic$ .(( SCRA 110
Collateral attac1
7hat cannot be collaterally attac1ed is the certificate of title and not the title
itself6 Title as a concept of ownership should not be confused with the certificate of title
as evidence of such ownership although both are interchangeably used. 0aca*an vs.
Samo*$ .(2 SCRA .++
(xtrinsic ,raud
The fraud must consist in an intentional omission of facts re'uired by law
to be stated in the application or a willful statement of a claim against the truth.
"t must show some specific acts intended to deceive and deprive another of his
right. The fraud must be actual and extrinsic, not merely constructive or intrinsic6
the evidence thereof must be clear, convincing and more than merely preponderant.
Rep),ic vs. #e,,ate$ %.R. No. 1+2.'2$ A@%@ST +$ 2013
Dand registration
Applicants must overcome the presumption that the land they are applying for is part
of the public domain and that they have an interest therein sufficient to warrant
registration in their names arising from an imperfect title. :) C8an- vs. Rep),ic$ .((
SCRA 110
Petitioners8 possession of the sub-ect forest land prior to the date when it was
classified as alienable and disposable is inconse'uential and should be excluded from the
computation of the period of possession6 The adverse possession which can be the basis
of a grant of title in confirmation of imperfect title cases cannot commence until after
forest land has been declared and alienable. :) C8an- vs. Rep),ic$ .(( SCRA 110
Tax declarations are good indicia of possession in the concept of an owner, for no one
in his right mind would be paying taxes for a property that is not in his actual or
constructive possession6 7hat is categorically re'uired by law is open, continuous,
exclusive, and notorious possession and occupation under a "ona fideclaim of ownership
since =une /), /;&# or earlier. Rep),ic vs. Ri;a,vo$ 6r.$ .(( SCRA 21.
"t is -urisprudentially clear that the thirty $+0%5year period of prescription for purposes
of ac'uiring ownership and registration of public land under Section /& $)% of P.!. 3o.
/#); only begins from the moment the State expressly declares that the public dominion
property is no longer intended for public service or the development of the national
wealth or that the property has been converted into patrimonial. Rep),ic vs. Ri;a,vo$
6r.$ .(( SCRA 21.
An applicant in a land registration case cannot -ust harp on mere conclusions of law
to embellish the application but must impress thereto the facts and circumstances
evidencing the alleged ownership and possession of the land55 general statements that are
mere conclusions of law and not factual proof of possession are unavailing and cannot
suffice. Rep),ic vs. 3animtim$ .(2 SCRA 220
The applicant for registration must present a copy of the original classification
approved by the !(3 Secretary and certified as a true copy by the legal custodian of
the official recordsmere notation by a geodetic engineer on the survey plans that
properties are alienable and disposable does not suffice to prove these lands8
classification. @nion 0ea9 Toacco Corp. vs. Rep),ic$ .(2 SCRA .(2
The State prohibits the sale or encumbrance of the homestead $Section //>% within
five years after the grant of the patent. After that five5year period the law impliedly
permits alienation of the homestead6 xxx such alienation or conveyance $Section //<%
shall be sub-ect to the right of repurchase by the homesteader, his widow or heirs within
five years. 3or,a vs. #e,monte$ ..1 SCRA +1+
Dand registration case is a proceeding in rem
There is no need to personally notify the owners or claimants of the land sought to
be registered if it is involved in a land registration case since it is a proceeding in rem.
This gives automatic power and authority to the court over the res. %)i!o-EnriD)e; v.
>ictorino$ et a,.$ %.R. No. 1'0(2+$ Septemer 30$ 2013
Dis pendens
All findings of fraud should begin the exposition with the presumption of good
faith6 The erroneous annotation of a notice of lis pendens does not negate good faith. The
over9ealousness of a party in protecting pendent lite his perceived interest, inchoate or
otherwise, in the corporation8s properties from depletion or dissipation, should not be
lightly e'uated to bad faith. 0) vs. 0) :m$ Sr.$ .(3 SCRA 23
Ence a notice of lis pendens has been duly registered, any cancellation or issuance
of the title of the land involved as well as any subse'uent transaction affecting the same,
would have to be sub-ect to the outcome of the litigation. De,a 3erce! vs. %SIS$ ..1
SCRA '3
Prescription
Properties of public dominion are not susceptible to prescription and that only
properties of the State that are no longer earmar1ed for public use, otherwise 1nown as
patrimonial, may be ac'uired by prescription. Rep),ic vs. 3etro In!e/ Rea,t* an!
Dev1t Corp.$ .+2 SCRA (3&
Purchaser in good faith
A purchaser in good faith is one who buys the property of another, without notice
that some other person has a right to, or interest in, such property at the time of such
purchase, or before he has notice of the claim or interest of some other persons in the
property. ?acien!a 0)isita vs. 4resi!entia, A-rarian Re9orm Co)nci,$ .23 SCRA
12(E Casimiro Dev1t Corp. vs. 3ateo$ .2( SCRA .+.
Eur land registration statute extends its protection to an innocent purchaser for value, defined
as ?one who buys the property of another, without notice that some other person has a right or
interest in such property and pays the full price for the same, at the time of such purchase or
before he has notice of the claims or interest of some other person in the property. 4N# vs.
6)mamo*$ .22 SCRA 2(
,undamental is the rule in land registration law that the issue of whether the buyer of realty is
in good or bad faith is relevant only where the sub-ect of the sale is registered land and the
purchase was made from the registered owner whose title to the land is clean, in which case the
purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in
good faith and for value. Estate o9 Caac)n-an vs. 0ai-o
Fuieting of title
"n an action for 'uieting of title, the competent court is tas1ed to determine the
respective rights of the complainant and the other claimants, not only to place things in
their proper places, and ma1e the claimant, who has no rights to said immovable, respect
and not disturb the one so entitled, but also for the benefit of both, so that whoever has
the right will see every cloud of doubt over the property dissipated, and he can thereafter
fearlessly introduce any desired improvements, as well as use, and even abuse the
property. 48i,->i,,e Dev1t an! ?o)sin- Corp. vs. #oni9acio$ .21 SCRA 32+
econstitution of title
econstitution re'uires that $a% notice of the petition should be published in two
$)% successive issues of the Efficial :a9ette6 and $b% publication should be made at least
thirty $+0% days prior to the date of hearing. The thirty5day period that precedes the
scheduled hearing should be rec1oned from the time of the actual circulation or release of
the last issue of the Efficial :a9ette, and not on the date of its issue as reflected on its
front cover. Rep),ic vs. De Asis$ 6r.$ +02 SCRA 22'$ 6@0: 2($ 2013
7hen the owner8s duplicate certificate of title has not been lost, but is in fact in
the possession of another person, then the reconstituted certificate is void, because the
court that rendered the decision had no -urisdiction. econstitution can validly be made
only in case of loss of the original certificate. A,ca;ar vs. Arante$ .'+ SCRA 20+
The Supreme Court enumerated what should be shown before an order for
reconstitution can validly issue, namelyB $a% that the certificate of title had been lost or
destroyed6 $b% that the documents presented by petitioner are sufficient and proper to
warrant reconstitution of the lost or destroyed certificate of title6 $c% that the petitioner is
the registered owner of the property or had an interest therein6 $d% that the certificate of
title was in force at the time it was lost or destroyed6 and $e% that the description, area and
boundaries of the property are substantially the same and those contained in the lost or
destroyed certificate of title. Rep),ic vs. 0oren;o$ .'+ SCRA (+'
egistration of unregistered land
egistration of an instrument involving unregistered land in the egistry of !eeds
creates constructive notice and binds third person who may subse'uently deal with the
same property. ?eirs o9 De,este vs. 0an! #an5$ .21 SCRA 322
egalian !octrine
To prove that the land sub-ect of the application for registration is alienable, an
applicant must establish the existence of a positive act of the government such as a
presidential proclamation or an executive order6 an administrative action6 investigation
reports of 4ureau of Dands investigators6 and a legislative act or statute, and the applicant
may also secure a certification from the :overnment that the lands applied for are
alienable and disposable. Aran!a vs. Rep),ic$ .2. SCRA 1(0
The Public Dand Act or Commonwealth Act 3o. /&/, until this day, is the existing
general law governing the classification and disposition of lands of the public domain,
except for timber and mineral lands. G.nder the egalian doctrine embodied in our
Constitution, land that has not been ac'uired from the government, either by purchase,
grant, or any other mode recogni9ed by law, belongs to the State as part of the public
domain.G Rep),ic vs. 6ara,ve$ .'( SCRA (&2

Torrens System
A torrens certificate of title cannot be used as proof of ownership. A party may
see1 its annulment based on fraud or misrepresentation. 4ara-)*a v. Sps. Cr)ci,,o$ %.R.
No. 2002.2$ Decemer 2$ 2013.
A Torrens title cannot be used as evidence of possession or occupancy. A proper
proceeding must be done in order to prove the claims of ownership or occupancy.
%)i!o-EnriD)e; v. >ictorino$ et a,.$ %.R. No. 1'0(2+$ Septemer 30$ 2013.
Placing a parcel of land under the mantle of the Torrens System does not mean
that ownership thereof can no longer be disputedthe certificate cannot always be
considered as conclusive evidence of ownership. 0aca*an vs$ Samo*$ .(2 SCRA .++