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VI.

CERTIFICATE OF TITLE (Sections 39-50)


a. Salient Features of the Torrens System
i.

Decree binds the land

A land registration proceeding being in rem, the decree of registration


issued pursuant to the decision binds the land and quiets title thereto,
and is conclusive upon and against all persons, including the government
and all the branches thereof, whether mentioned by name in the
application, notice or citation, or included in the general inscription To
whom it may concern.
Del Prado vs Caballero
FACTS:
In a judgment rendered in a Cadastral Case, Judge Reyes of RTC adjudicated in favor
of Spouses Antonio L. Caballero and Leonarda B. Caballero several parcels of land.
Antonio Caballero moved for the issuance of the final decree of registration for their
lots. Consequently, the same court ordered the National Land Titles and Deeds
Registration Administration to issue the decree of registration and the
corresponding titles of the lots in favor of the Caballeros.
Respondents sold to petitioner, Carmen del Prado, Lot No. 11909 on the basis of the
tax declaration covering the property. The pertinent portion of the deed of sale
reads as follows:
"A parcel of land known as Cad. Lot No. 11909, bounded as follows
containing an area of 4,000 square meters, more or less
Original Certificate of Title (OCT) No. 1305, covering Lot No. 11909, was issued only
on November 15, 1990, and entered in the "Registration Book" of the City of Cebu
on December 19, 1990. Therein, the technical description of Lot No. 11909 states
that said lot measures about 14,457 square meters, more or less.
Petitioner filed in the same cadastral proceedings a "Petition for Registration of
Document Under Presidential Decree (P.D.) 1529" in order that a certificate of title
be issued in her name, covering the whole Lot No. 11909. In the petition, petitioner
alleged that the tenor of the instrument of sale indicated that the sale was for a
lump sum or cuerpo cierto, in which case, the vendor was bound to deliver all that
was included within said boundaries even when it exceeded the area specified in
the contract. Respondents opposed, on the main ground that only 4,000 sq m of Lot
No. 11909 was sold to petitioner. They claimed that the sale was not for a cuerpo
cierto. They moved for the outright dismissal of the petition on grounds of
prescription and lack of jurisdiction.
ISSUE:

WON the sale of the land was for a lump sum or not
RULING:
In sales involving real estate, the parties may choose between two types of
pricing agreement: a unit price contract wherein the purchase price is
determined by way of reference to a stated rate per unit area (e.g., P1,000
per square meter), or a lump sum contract which states a full purchase
price for an immovable the area of which may be declared based on the
estimate or where both the area and boundaries are stated (e.g., P1 million
for 1,000 square meters, etc.).
In the case where the area of an immovable is stated in the contract based
on an estimate, the actual area delivered may not measure up exactly with
the area stated in the contract. According to Article 1542 of the Civil Code, in
the sale of real estate, made for a lump sum and not at the rate of a certain
sum for a unit of measure or number, there shall be no increase or decrease
of the price, although there be a greater or less areas or number than that
stated in the contract. . .
However, the rule laid down in Article 1542 is not hard and fast and admits of
an exception. A caveat is in order, however. The use of "more or less" or
similar words in designating quantity covers only a reasonable excess or
deficiency. A vendee of land sold in gross or with the description "more or
less" with reference to its area does not thereby ipso facto take all risk of
quantity in the land.
In the instant case, the deed of sale is not one of a unit price contract. The parties
agreed on the purchase price of P40,000.00 for a predetermined area of 4,000 sq m,
more or less, bounded on the North by Lot No. 11903, on the East by Lot No. 11908,
on the South by Lot Nos. 11858 & 11912, and on the West by Lot No. 11910. In a
contract of sale of land in a mass, the specific boundaries stated in the contract
must control over any other statement, with respect to the area contained within its
boundaries.
More importantly, we find no reversible error in the decision of the CA.
Petitioner's recourse, by filing the petition for registration in the same
cadastral case, was improper.
IT IS A FUNDAMENTAL PRINCIPLE IN LAND REGISTRATION THAT A
CERTIFICATE OF TITLE SERVES AS EVIDENCE OF AN INDEFEASIBLE AND
INCONTROVERTIBLE TITLE TO THE PROPERTY IN FAVOR OF THE PERSON
WHOSE NAME APPEARS THEREIN. SUCH INDEFEASIBILITY COMMENCES
AFTER ONE YEAR FROM THE DATE OF ENTRY OF THE DECREE OF
REGISTRATION. INASMUCH AS THE PETITION FOR REGISTRATION OF
DOCUMENT DID NOT INTERRUPT THE RUNNING OF THE PERIOD TO FILE
THE APPROPRIATE PETITION FOR REVIEW AND CONSIDERING THAT THE
PRESCRIBED ONE-YEAR PERIOD HAD LONG SINCE EXPIRED, THE DECREE OF

REGISTRATION, AS WELL AS THE CERTIFICATE OF TITLE ISSUED IN FAVOR


OF RESPONDENTS, HAD BECOME INCONTROVERTIBLE.

ii.

Certificate of Title (Section 39-40)

Section 39. Preparation of decree and Certificate of Title. After the judgment
directing the registration of title to land has become final, the court shall, within
fifteen days from entry of judgment, issue an order directing the Commissioner to
issue the corresponding decree of registration and certificate of title. The clerk of
court shall send, within fifteen days from entry of judgment, certified copies of the
judgment and of the order of the court directing the Commissioner to issue the
corresponding decree of registration and certificate of title, and a certificate stating
that the decision has not been amended, reconsidered, nor appealed, and has
become final. Thereupon, the Commissioner shall cause to be prepared the decree
of registration as well as the original and duplicate of the corresponding original
certificate of title. The original certificate of title shall be a true copy of the decree
of registration. The decree of registration shall be signed by the Commissioner,
entered and filed in the Land Registration Commission. The original of the original
certificate of title shall also be signed by the Commissioner and shall be sent,
together with the owner's duplicate certificate, to the Register of Deeds of the city
or province where the property is situated for entry in his registration book.
Section 40. Entry of Original Certificate of Title. Upon receipt by the Register of
Deeds of the original and duplicate copies of the original certificate of title the same
shall be entered in his record book and shall be numbered, dated, signed and
sealed by the Register of Deeds with the seal of his office. Said certificate of title
shall take effect upon the date of entry thereof. The Register of Deeds shall
forthwith send notice by mail to the registered owner that his owner's duplicate is
ready for delivery to him upon payment of legal fees.
Under the Torrens system, a certificate of title may be an original
certificate of title, which constitutes a true copy of the decree of
registration, or a transfer certificate of title, issued subsequent to the
original registration. The original certificate of title is the transcript of the
decree of registration made by the Registration of Deeds in the registry. It
accumulates in one document a precise and correct statement of the exact
status of the fee simple title which an owner possess. The certificate, once
issued, is the evidence of the title which the owner has. What appears on
the face of the title is controlling on questions of ownership since the
certificate of title is an absolute and indefeasible evidence of ownership of
the property in favor of the person whose name appears therein.
A CERTIFICATE OF TITLE SERVES AS EVIDENCE OF AN INDEFEASIBLE AND
INCONTROVERTIBLE TO THE PROPERTY IN FAVOR OF THE PERSON WHOSE
NAME APPEARS THEREIN. Such indefeasibility commences after the lapse
or expiration of one year from the date of entry of the decree of
registration when all persons are considered to have constructive notice

of the title to property. After the lapse of one year, title to the property
can no longer be contested.
A person dealing with registered property need not go beyond, but only
has to rely on, the title of his predecessor-in-interest. Since the act of
registration is the operative act to convey or affect the land insofar as
third persons are concerned, it follows that where there is nothing in the
certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the

GUARANTEED HOMES, INC. vs VALDEZ


It is basic that a person dealing with registered property need not go
beyond, but only has to rely on, the title of his predecessor-in-interest.
Since "the act of registration is the operative act to convey or affect the
land insofar as third persons are concerned, it follows that where there is
nothing in the certificate of title to indicate any cloud or vice in the
ownership of the property, or any encumbrance thereon, the purchaser is
not required to explore farther than what the Torrens title upon its face
indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto. If the rule were otherwise, the
efficacy

and

conclusiveness

of

the

certificate

of

title

which

the Torrens system seeks to insure would entirely be futile and nugatory.
The public shall then be denied of its foremost motivation for respecting
and observing the Torrens system of registration. In the end, the business
community stands to be inconvenienced and prejudiced immeasurably.
Contrary to the assertion of respondents, OCT No. 404 was expressly cancelled by
TCT No. T-8241. The alleged non-signature by the Register of Deeds Soliman
Achacoso, does not affect the validity of TCT No. T-8241 since he signed TCT No. T8242 and issued both titles on the same day. There is a presumption of
regularity in the performance of official duty. The presumption is further
bolstered by the fact that TCT No. T-8241 was certified to be on file with
the Registry of Deeds and registered in the name of Cipriano. It is enough
that petitioner had examined the latest certificate of title which in this
case was issued in the name of the immediate transferor, the spouses
Rodolfo. THE PURCHASER IS NOT BOUND BY THE ORIGINAL CERTIFICATE
BUT ONLY BY THE CERTIFICATE OF TITLE OF THE PERSON FROM WHOM HE
HAD PURCHASED THE PROPERTY.
Secondly,

while

the

Extrajudicial

Settlement

of

Sole

Heir

and

Confirmation of Sales executed by Cipriano alone despite the existence of


the other heirs of Pablo, is not binding on such other heirs, nevertheless,
it has operative effect under Section 44 of the Property Registration
Decree, which provides that:

SEC. 44. Statutory Liens Affecting Title. Every


registered owner receiving a certificate of title in pursuance of
a decree of registration, and every subsequent purchaser of
registered land taking a certificate of title for value and in
good faith, shall hold the same free from all encumbrances
except those noted on said certificate and any of the following
encumbrances which may be subsisting, namely:
x x x x
Even assuming arguendo that the extrajudicial settlement was a forgery,
the Court still has to uphold the title of petitioner. THE CASE LAW IS THAT
ALTHOUGH GENERALLY A FORGED OR FRAUDULENT DEED IS A NULLITY AND
CONVEYS NO TITLE, THERE ARE INSTANCES WHEN SUCH A FRAUDULENT
DOCUMENT MAY BECOME THE ROOT OF A VALID TITLE. AND ONE SUCH
INSTANCE

IS

WHERE

THE

CERTIFICATE

OF

TITLE

WAS

ALREADY

TRANSFERRED FROM THE NAME OF THE TRUE OWNER TO THE FORGER,


AND WHILE IT REMAINED THAT WAY, THE LAND WAS SUBSEQUENTLY SOLD
TO AN INNOCENT PURCHASER. FOR THEN, THE VENDEE HAD THE RIGHT TO
RELY UPON WHAT APPEARED IN THE CERTIFICATE.
Registration in the public registry is notice to the whole world. Every
conveyance, mortgage, lease, lien, attachment, order, judgment,
instrument or entry affecting registered land shall be, if registered, filed
or entered in the Office of the Register of Deeds of the province or city
where the land to which it relates lies, be constructive notice to all
persons from the time of such registering, filing or entering.

REYES vs RAVAL-REYES
While we agree with the court a quo that the disputed lots are subjects in litigation
in 'Civil Case No. 3659, it appearing that respondent, as defendant therein, had
presented a counterclaim for partition of the lots covered by the titles, we see no
valid and plausible reason to justify, on this ground, the withholding from the
registered owners, such as the petitioners-appellants herein, the custody and
possession of the owners' duplicates of certificates of title.
In a decided case, this Court has already held that: THE OWNER OF THE LAND IN
WHOSE FAVOR AND IN WHOSE NAME SAID LAND IS REGISTERED AND
INSCRIBED IN THE CERTIFICATE OF TITLE HAS A MORE PREFERENTIAL
RIGHT TO THE POSSESSION OF THE OWNER'S DUPLICATE THAN ONE
WHOSE NAME DOES NOT APPEAR IN THE CERTIFICATE AND HAS YET TO
ESTABLISH HIS RIGHT TO THE POSSESSION THEREOF.

It being undisputed that respondent had already availed of an


independent civil action to recover his alleged co-owner's share in the
disputed lots by filing a counterclaim for partition in said Civil Case No.
3659, his rights appear to be amply protected, and considering that he
may also avail of, to better protect his rights thereto, the provision on
notice of lis pendens under Section 24, Rule 14, of the Revised Rules of
Court, for the purpose of recording the fact that the lots covered by the
titles in question are litigated in said Civil Case No. 3659, we again see no
justifiable reason for respondent to retain the custody of the owners'
duplicates of certificates of title.

LITAM vs ESPIRITU
FURTHER STRONG PROOFS THAT THE PROPERTIES IN QUESTION ARE THE
PARAPHERNAL PROPERTIES OF MARCOSA RIVERA, ARE THE VERY
TORRENS TITLES COVERING SAID PROPERTIES. ALL THE SAID PROPERTIES
ARE REGISTERED IN THE NAME OF 'MARCOSA RIVERA, MARRIED TO
RAFAEL LITAM.' THIS CIRCUMSTANCE INDICATES THAT THE PROPERTIES IN
QUESTION BELONG TO THE REGISTERED OWNER, MARCOSA RIVERA, AS
HER PARAPHERNAL PROPERTIES, FOR IF THEY WERE CONJUGAL, THE
TITLES COVERING THE SAME SHOULD HAVE BEEN ISSUED IN THE NAMES
OF RAFAEL LITAM AND MARCOSA RIVERA. THE WORDS 'MARRIED TO
RAFAEL LITAM' WRITTEN AFTER THE NAME OF MARCOSA RIVERA, IN EACH
OF THE ABOVE MENTIONED TITLES ARE MERELY DESCRIPTIVE OF THE
CIVIL STATUS OF MARCOSA RIVERA, THE REGISTERED OWNER OF THE
PROPERTIES COVERED BY SAID TITLES.

PHILIPPINE NATIONAL BANK vs COURT OF APPEALS


Does the presumption of conjugality of properties acquired by the spouses
during coverture provided for in Article 160 of the Civil Code apply to
property covered by a Torrens certificate of title in the name of the
widow?
Article 160 of the Civil Code provides as follows:
"ART. 160. ALL PROPERTY OF THE MARRIAGE IS PRESUMED TO
BELONG TO THE CONJUGAL PARTNERSHIP, UNLESS IT BE
PROVED THAT IT PERTAINS EXCLUSIVELY TO THE HUSBAND OR
TO THE WIFE."
THE PRESUMPTION APPLIES TO PROPERTY
LIFETIME OF THE HUSBAND AND WIFE.

ACQUIRED

DURING

THE

IN THIS CASE, IT APPEARS ON THE FACE OF THE TITLE THAT THE


PROPERTIES WERE ACQUIRED BY DONATA MONTEMAYOR WHEN SHE WAS
ALREADY A WIDOW. WHEN THE PROPERTY IS REGISTERED IN THE NAME OF
A SPOUSE ONLY AND THERE IS NO SHOWING AS TO WHEN THE PROPERTY
WAS ACQUIRED BY SAID SPOUSE, THIS IS AN INDICATION THAT THE

PROPERTY BELONGS EXCLUSIVELY TO SAID SPOUSE. AND THIS


PRESUMPTION UNDER ARTICLE 160 OF THE CIVIL CODE CANNOT PREVAIL
WHEN THE TITLE IS IN THE NAME OF ONLY ONE SPOUSE AND THE RIGHTS
OF INNOCENT THIRD PARTIES ARE INVOLVED.
The PNB had a reason to rely on what appears on the certificates of title of
the properties mortgaged. For all legal purposes, the PNB is a mortgagee
in good faith for at the time the mortgages covering said properties were
constituted the PNB was not aware to any flaw of the title of the
mortgagor.
AT ANY RATE, ALTHOUGH ACTIONS FOR RECOVERY OF REAL PROPERTY AND
FOR PARTITION ARE REAL ACTIONS, HOWEVER, THEY ARE ACTIONS IN
PERSONAM THAT BIND ONLY THE PARTICULAR INDIVIDUALS WHO ARE
PARTIES THERETO. THE PNB NOT BEING A PARTY IN SAID CASES IS NOT
BOUND BY THE SAID DECISIONS.
NOR DOES IT APPEAR THAT THE PNB WAS AWARE OF THE SAID DECISIONS
WHEN IT EXTENDED THE ABOVE DESCRIBED MORTGAGE LOANS. INDEED, IF
THE PNB KNEW OF THE CONJUGAL NATURE OF SAID PROPERTIES IT WOULD
NOT HAVE APPROVED THE MORTGAGE APPLICATIONS COVERING SAID
PROPERTIES OF DONATA MONTEMAYOR WITHOUT REQUIRING THE
CONSENT OF ALL THE OTHER HEIRS OR CO-OWNERS THEREOF. MOREOVER,
WHEN SAID PROPERTIES WERE SOLD AT PUBLIC AUCTION, THE PNB WAS A
PURCHASER FOR VALUE IN GOOD FAITH SO ITS RIGHT THERETO IS BEYOND
QUESTION.

REPUBLIC vs MENDOZA
A DECREE OF REGISTRATION IS CONCLUSIVE UPON ALL PERSONS, INCLUDING THE
GOVERNMENT OF THE REPUBLIC AND ALL ITS BRANCHES, WHETHER OR NOT
MENTIONED BY NAME IN THE APPLICATION FOR REGISTRATION OR ITS NOTICE.
INDEED, TITLE TO THE LAND, ONCE REGISTERED, IS IMPRESCRIPTIBLE. NO ONE
MAY ACQUIRE IT FROM THE REGISTERED OWNER BY ADVERSE, OPEN, AND
NOTORIOUS POSSESSION.
THUS, TO A REGISTERED OWNER UNDER THE TORRENS SYSTEM, THE RIGHT TO
RECOVER POSSESSION OF THE REGISTERED PROPERTY IS EQUALLY
IMPRESCRIPTIBLE SINCE POSSESSION IS A MERE CONSEQUENCE OF OWNERSHIP.
Here, the existence and genuineness of the Mendozas' title over the property has not been disputed.
While the consolidation and subdivision plan of Lots 1923 and 1925 shows that a 1,149 square
meter lot had been designated to the City Government, the Republic itself admits that no new title
was issued to it or to any of its subdivisions for the portion that PPS had been occupying since 1957.
THAT THE CITY GOVERNMENT OF LIPA TAX-DECLARED THE PROPERTY AND ITS
IMPROVEMENTS IN ITS NAME CANNOT DEFEAT THE MENDOZAS' TITLE. This Court has

allowed tax declarations to stand as proof of ownership only in the absence of a certificate of title.
Otherwise, they have little evidentiary weight as proof of ownership.

DBT MAR-BAY vs CARAAN


A Complaint for "Quieting of Title with Cancellation of TCT No. 200519 and
all Titles derived thereat
A.
THE RTC FAILED TO CONSIDER THAT THE ACTION FILED BEFORE IT WAS
NOT SIMPLY FOR RECONVEYANCE BUT AN ACTION FOR QUIETING OF TITLE
WHICH IS IMPRESCRIPTIBLE.
VERILY, AN ACTION FOR RECONVEYANCE CAN BE BARRED BY
PRESCRIPTION. When an action for reconveyance is based on fraud, it
must be filed within four (4) years from discovery of the fraud, and such
discovery is deemed to have taken place from the issuance of the original
certificate of title. On the other hand, an action for reconveyance based on
an implied or constructive trust prescribes in ten (10) years from the date
of the issuance of the original certificate of title or transfer certificate of
title.
The rule is that the registration of an instrument in the Office of the RD
constitutes constructive notice to the whole world and therefore the
discovery of the fraud is deemed to have taken place at the time of
registration.
HOWEVER, THE PRESCRIPTIVE PERIOD APPLIES ONLY IF THERE IS AN
ACTUAL NEED TO RECONVEY THE PROPERTY AS WHEN THE PLAINTIFF IS
NOT IN POSSESSION OF THE PROPERTY. IF THE PLAINTIFF, AS THE REAL
OWNER OF THE PROPERTY ALSO REMAINS IN POSSESSION OF THE
PROPERTY, THE PRESCRIPTIVE PERIOD TO RECOVER TITLE AND
POSSESSION OF THE PROPERTY DOES NOT RUN AGAINST HIM. IN SUCH A
CASE, AN ACTION FOR RECONVEYANCE, IF NONETHELESS FILED, WOULD BE
IN THE NATURE OF A SUIT FOR QUIETING OF TITLE, AN ACTION THAT IS
IMPRESCRIPTIBLE.
THE REASON FOR THIS IS THAT ONE WHO IS IN ACTUAL POSSESSION OF A
PIECE OF LAND CLAIMING TO BE THE OWNER THEREOF MAY WAIT UNTIL
HIS POSSESSION IS DISTURBED OR HIS TITLE IS ATTACKED BEFORE TAKING
STEPS TO VINDICATE HIS RIGHT, THE REASON FOR THE RULE BEING, THAT
HIS UNDISTURBED POSSESSION GIVES HIM A CONTINUING RIGHT TO SEEK
THE AID OF A COURT OF EQUITY TO ASCERTAIN AND DETERMINE THE
NATURE OF THE ADVERSE CLAIM OF A THIRD PARTY AND ITS EFFECT ON
HIS OWN TITLE, WHICH RIGHT CAN BE CLAIMED ONLY BY ONE WHO IS IN
POSSESSION.

B.
IT IS A WELL-ENTRENCHED RULE IN THIS JURISDICTION THAT NO TITLE TO
REGISTERED LAND IN DEROGATION OF THE RIGHTS OF THE REGISTERED
OWNER SHALL BE ACQUIRED BY PRESCRIPTION OR ADVERSE POSSESSION.
PRESCRIPTION IS UNAVAILING NOT ONLY AGAINST THE REGISTERED
OWNER BUT ALSO AGAINST HIS HEREDITARY SUCCESSORS. POSSESSION IS
A MERE CONSEQUENCE OF OWNERSHIP WHERE LAND HAS BEEN
REGISTERED UNDER THE TORRENS SYSTEM, THE EFFICACY AND INTEGRITY
OF WHICH MUST BE PROTECTED. PRESCRIPTION IS RIGHTLY REGARDED AS
A STATUTE OF REPOSE WHOSE OBJECTIVE IS TO SUPPRESS FRAUDULENT
AND STALE CLAIMS FROM SPRINGING UP AT GREAT DISTANCES OF TIME
AND SURPRISING THE PARTIES OR THEIR REPRESENTATIVES WHEN THE
FACTS HAVE BECOME OBSCURE FROM THE LAPSE OF TIME OR THE
DEFECTIVE MEMORY OR DEATH OR REMOVAL OF WITNESSES.

CARAAN vs CA
Answer with Counterclaim
A CERTIFICATE OF TITLE SERVES AS EVIDENCE OF AN INDEFEASIBLE TITLE
TO THE PROPERTY IN FAVOR OF THE PERSON WHOSE NAME APPEARS
THEREIN."
PRIVATE RESPONDENTS having presented TCT No. RT-71061, which is the
reconstituted title of TCT No. 214949, they HAVE THUS PROVEN THEIR
ALLEGATION OF OWNERSHIP OVER THE SUBJECT PROPERTY. THE BURDEN
OF PROOF THEN SHIFTED TO PETITIONERS WHO MUST ESTABLISH BY
PREPONDERANCE OF EVIDENCE THEIR ALLEGATION THAT THEY HAVE A
BETTER RIGHT OVER THE SUBJECT PROPERTY.
IT SHOULD BE BORNE IN MIND, HOWEVER, THAT SECTION 48,
PRESIDENTIAL DECREE NO. 1529 (P.D. NO. 1529), PROVIDES THAT "A
CERTIFICATE OF TITLE SHALL NOT BE SUBJECT TO COLLATERAL ATTACK. IT
CANNOT BE ALTERED, MODIFIED, OR CANCELLED EXCEPT IN A DIRECT
PROCEEDING IN ACCORDANCE WITH LAW."
Petitioners' defense takes the form of a collateral attack on private
respondents' certificate of title.
When is an action an attack on a title?
It is when the object of the action or proceeding is to nullify the title,
and thus challenge the judgment pursuant to which the title was
decreed. The attack is direct when the object of an action or
proceeding is to annul or set aside such judgment, or enjoin its

enforcement. On the other hand, THE ATTACK IS INDIRECT OR


COLLATERAL WHEN, IN AN ACTION TO OBTAIN A DIFFERENT RELIEF,
AN ATTACK ON THE JUDGMENT IS NEVERTHELESS MADE AS AN
INCIDENT THEREOF.
In the present case, the attack on the title is definitely merely collateral
as the relief being sought by private respondents in their action was
recovery of possession. The attack on the validity of private respondents'
certificate of title was merely raised as a defense in petitioners' Answer
filed with the trial court.

LEYSON vs BONTUYAN
NEMO DAT QUOD NON HABET
COUNTERCLAIM
A.
WHILE SECTION 47 OF ACT NO. 496 PROVIDES THAT A CERTIFICATE OF
TITLE SHALL NOT BE SUBJECT TO COLLATERAL ATTACK.
THE RULE IS THAT AN ACTION IS AN ATTACK ON A TITLE IF ITS OBJECT IS
TO NULLIFY THE SAME, AND THUS CHALLENGE THE PROCEEDING
PURSUANT TO WHICH THE TITLE WAS DECREED.
THE ATTACK IS CONSIDERED DIRECT WHEN THE OBJECT OF AN ACTION IS
TO ANNUL OR SET ASIDE SUCH PROCEEDING, OR ENJOIN ITS
ENFORCEMENT.
ON THE OTHER HAND, AN ATTACK IS INDIRECT OR COLLATERAL WHEN, IN
AN ACTION TO OBTAIN A DIFFERENT RELIEF, AN ATTACK ON THE
PROCEEDING IS NEVERTHELESS MADE AS AN INCIDENT THEREOF. SUCH
ACTION TO ATTACK A CERTIFICATE OF TITLE MAY BE AN ORIGINAL ACTION
OR A COUNTERCLAIM IN WHICH A CERTIFICATE OF TITLE IS ASSAILED AS
VOID.
A COUNTERCLAIM IS CONSIDERED A NEW SUIT IN WHICH THE DEFENDANT
IS THE PLAINTIFF AND THE PLAINTIFF IN THE COMPLAINT BECOMES THE
DEFENDANT. IT STANDS ON THE SAME FOOTING AND IS TO BE TESTED BY
THE SAME RULES AS IF IT WERE AN INDEPENDENT ACTION. FURTHERMORE,
SINCE ALL THE ESSENTIAL FACTS OF THE CASE FOR THE DETERMINATION
OF THE TITLE'S VALIDITY ARE NOW BEFORE THE COURT, TO REQUIRE THE
PARTY
TO
INSTITUTE
CANCELLATION
PROCEEDINGS
WOULD
BE
POINTLESSLY CIRCUITOUS AND AGAINST THE BEST INTEREST OF JUSTICE.
B.

Case law has it that an action for reconveyance prescribes in ten years,
the point of reference being the date of registration of the deed or the
date of issuance of the certificate of title over the property. In an action
for reconveyance, the decree of registration is highly regarded as
incontrovertible. What is sought instead is the transfer of the property or
its title, which has been wrongfully or erroneously registered in another
person's name, to its rightful or legal owner, or to one who has a better
right.
HOWEVER, IN A SERIES OF CASES, THIS COURT DECLARED THAT AN ACTION
FOR RECONVEYANCE BASED ON FRAUD IS IMPRESCRIPTIBLE WHERE THE
PLAINTIFF IS IN POSSESSION OF THE PROPERTY SUBJECT OF THE ACTS.
THE PARAMOUNT REASON FOR THIS EXCEPTION IS BASED ON THE THEORY
THAT REGISTRATION PROCEEDINGS COULD NOT BE USED AS A SHIELD FOR
FRAUD. MOREOVER, TO HOLD OTHERWISE WOULD BE TO PUT PREMIUM ON
LAND-GRABBING AND TRANSGRESSING THE BROADER PRINCIPLE IN
HUMAN RELATIONS THAT NO PERSON SHALL UNJUSTLY ENRICH HIMSELF AT
THE EXPENSE OF ANOTHER.

OO vs LIM
IS AN ACTION FOR QUIETING OF TITLE CONSTITUTE A COLLATERAL ATTACK
IN VIOLATION OF SECTION 48 OF PD 1529
An action or proceeding is deemed an attack on a title when its objective
is to nullify the title, thereby challenging the judgment pursuant to which
the title was decreed. The attack is direct when the objective is to annul
or set aside such judgment, or enjoin its enforcement. On the other hand,
the attack is indirect or collateral when, in an action to obtain a different
relief, an attack on the judgment is nevertheless made as an incident
thereof.
Quieting of title is a common law remedy for the removal of any cloud,
doubt, or uncertainty affecting title to real property. Whenever there is a
cloud on title to real property or any interest in real property by reason of
any instrument, record, claim, encumbrance, or proceeding that is
apparently valid or effective, but is, in truth and in fact, invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said
title, an action may be brought to remove such cloud or to quiet the title.
In such action, the competent court is tasked to determine the respective
rights of the complainant and the other claimants, not only to place things
in their proper places, and to make 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 the improvements he may desire, as well as use, and even


abuse the property as he deems fit.
THE AVERMENTS READILY SHOW THAT THE ACTION WAS NEITHER A DIRECT
NOR A COLLATERAL ATTACK ON OCT NO. RO-9969-(O-20449), FOR LIM WAS
ASSERTING ONLY THAT THE EXISTING TITLE REGISTERED IN THE NAME OF
THE PETITIONERS' PREDECESSORS HAD BECOME INOPERATIVE DUE TO THE
CONVEYANCE IN FAVOR OF LIM'S MOTHER, AND RESULTANTLY SHOULD BE
CANCELLED.
LIM DID NOT THEREBY ASSAIL THE VALIDITY OF OCT NO. RO-9969-(O20449), OR CHALLENGE THE JUDGMENT BY WHICH THE TITLE OF THE LOT
INVOLVED HAD BEEN DECREED. IN OTHER WORDS, THE ACTION SOUGHT
THE REMOVAL OF A CLOUD FROM LIM'S TITLE, AND THE CONFIRMATION OF
LIM'S OWNERSHIP OVER THE DISPUTED PROPERTY AS THE SUCCESSOR-ININTEREST OF LUISA.

FERNANDEZ vs COURT OF APPEALS


Section 50 of Act No. 496 (now Sec. 51 of P.D. 1529), provides that the registration of the
deed is the operative act to bind or affect the land insofar as third persons are concerned.
But WHERE THE PARTY HAS KNOWLEDGE OF A PRIOR EXISTING INTEREST
WHICH IS UNREGISTERED AT THE TIME HE ACQUIRED A RIGHT TO THE SAME
LAND, HIS KNOWLEDGE OF THAT PRIOR UNREGISTERED INTEREST HAS THE
EFFECT OF REGISTRATION AS TO HIM. The torrens system cannot be used as a shield
for the commission of fraud.
As far as private respondent Zenaida Angeles and her husband Justiniano are concerned,
the non-registration of the affidavit admitting their sale of a portion of 110 square meters of
the subject land to petitioners cannot be invoked as a defense because (K)NOWLEDGE OF
AN UNREGISTERED SALE IS EQUIVALENT TO REGISTRATION.
In fact the Spouses Fernandez executed an affidavit of acknowledgment.

ABRIGO vs DE VEYRA
BETWEEN TWO BUYERS OF THE SAME IMMOVABLE PROPERTY REGISTERED UNDER
THE TORRENS SYSTEM, THE LAW GIVES OWNERSHIP PRIORITY TO (1) THE FIRST
REGISTRANT IN GOOD FAITH; (2) THEN, THE FIRST POSSESSOR IN GOOD FAITH;
AND (3) FINALLY, THE BUYER WHO IN GOOD FAITH PRESENTS THE OLDEST TITLE.
THIS PROVISION, HOWEVER, DOES NOT APPLY IF THE PROPERTY IS NOT
REGISTERED UNDER THE TORRENS SYSTEM.
Otherwise stated, the law provides that a double sale of immovables transfers
ownership to (1) the first registrant in good faith; (2) then, the first possessor in
good faith; and (3) finally, the buyer who in good faith presents the oldest title.
This principle is in full accord with Section 51 of PD 1529 which provides that no
deed, mortgage, lease or other voluntary instrument -- except a will -- purporting
to convey or affect registered land shall take effect as a conveyance or bind the
land until its registration.
THUS, IF THE SALE IS NOT REGISTERED, IT IS BINDING ONLY BETWEEN THE SELLER
AND THE BUYER BUT IT DOES NOT AFFECT INNOCENT THIRD PERSONS.
In the instant case, both Petitioners Abrigo and respondent registered the sale of
the property. Since neither petitioners nor their predecessors (Tigno-Salazar and
Cave-Go) knew that the property was covered by the Torrens system, they
registered their respective sales under Act 3344.
For her part, respondent registered the transaction under the Torrens system
because, during the sale, Villafania had presented the transfer certificate of title
(TCT) covering the property.

It is undisputed that Villafania had been issued a free patent registered as


Original Certificate of Title (OCT) No. P-30522. The OCT was later cancelled by
Transfer Certificate of Title (TCT) No. 212598, also in Villafanias name. As a
consequence of the sale, TCT No. 212598 was subsequently cancelled and TCT No.
22515 thereafter issued to respondent.
Soriano v. Heirs of Magali held that REGISTRATION MUST BE DONE IN THE PROPER
REGISTRY IN ORDER TO BIND THE LAND. SINCE THE PROPERTY IN DISPUTE IN THE
PRESENT CASE WAS ALREADY REGISTERED UNDER THE TORRENS SYSTEM,
PETITIONERS REGISTRATION OF THE SALE UNDER ACT 3344 WAS NOT EFFECTIVE
FOR PURPOSES OF ARTICLE 1544 OF THE CIVIL CODE.
PETITIONERS CANNOT VALIDLY ARGUE THAT THEY WERE FRAUDULENTLY MISLED
INTO BELIEVING THAT THE PROPERTY WAS UNREGISTERED. A TORRENS TITLE,
ONCE REGISTERED, SERVES AS A NOTICE TO THE WHOLE WORLD. ALL PERSONS
MUST TAKE NOTICE, AND NO ONE CAN PLEAD IGNORANCE OF THE REGISTRATION.
Under the foregoing, the prior registration of the disputed property by the second
buyer does not by itself confer ownership or a better right over the property.
Article 1544 requires that such registration must be coupled with good faith.
Knowledge gained by the first buyer of the second sale cannot defeat the first
buyers rights except where the second buyer registers in good faith the second
sale ahead of the first, as provided by the Civil Code. Such knowledge of the first
buyer does not bar her from availing of her rights under the law, among them, to
register first her purchase as against the second buyer. But in converso,
knowledge gained by the second buyer of the first sale defeats his rights even if
he is first to register the second sale, since such knowledge taints his prior
registration with bad faith. This is the price exacted by Article 1544 of the Civil
Code for the second buyer being able to displace the first buyer; that before the
second buyer can obtain priority over the first, he must show that he acted in
good faith throughout (i.e. in ignorance of the first sale and of the first buyers
rights) ---- from the time of acquisition until the title is transferred to him by
registration, or failing registration, by delivery of possession. (Italics supplied)
Equally important, under Section 44 of PD 1529, every registered owner receiving
a certificate of title pursuant to a decree of registration, and every subsequent
purchaser of registered land taking such certificate for value and in good faith
shall hold the same free from all encumbrances, except those noted and
enumerated in the certificate. Thus, a person dealing with registered land is not
required to go behind the registry to determine the condition of the property,
since such condition is noted on the face of the register or certificate of title.
Following this principle, this Court has consistently held as regards registered land that a
purchaser in good faith acquires a good title as against all the transferees thereof
whose rights are not recorded in the Registry of Deeds at the time of the sale.
THE REGISTRATION CONTEMPLATED UNDER ART. 1544 HAS BEEN HELD TO REFER
TO REGISTRATION UNDER ACT 496 LAND REGISTRATION ACT (NOW PD 1529)
WHICH CONSIDERS THE ACT OF REGISTRATION AS THE OPERATIVE ACT THAT
BINDS THE LAND. ON LANDS COVERED BY THE TORRENS SYSTEM, THE PURCHASER
ACQUIRES SUCH RIGHTS AND INTEREST AS THEY APPEAR IN THE CERTIFICATE OF
TITLE, UNAFFECTED BY ANY PRIOR LIEN OR ENCUMBRANCE NOT NOTED THEREIN.

The purchaser is not required to explore farther than what the Torrens title, upon
its face, indicates. The only exception is where the purchaser has actual
knowledge of a flaw or defect in the title of the seller or of such liens or
encumbrances which, as to him, is equivalent to registration.

SAN LORENZO DEVELOPMENT CORPORATION


THE LAW SPEAKS NOT ONLY OF ONE CRITERION. THE FIRST CRITERION IS PRIORITY
OF ENTRY IN THE REGISTRY OF PROPERTY; THERE BEING NO PRIORITY OF SUCH
ENTRY, THE SECOND IS PRIORITY OF POSSESSION; AND, IN THE ABSENCE OF THE
TWO PRIORITIES, THE THIRD PRIORITY IS OF THE DATE OF TITLE, WITH GOOD
FAITH AS THE COMMON CRITICAL ELEMENT. SINCE SLDC ACQUIRED POSSESSION
OF THE PROPERTY IN GOOD FAITH IN CONTRAST TO BABASANTA, WHO NEITHER
REGISTERED NOR POSSESSED THE PROPERTY AT ANY TIME, SLDCS RIGHT IS
DEFINITELY SUPERIOR TO THAT OF BABASANTAS.
BABASANTA ONLY CAUSED THE ANNOTATION OF NOTICE OF LIS PENDENDS

CALALANG vs REGISTER OF DEEDS


CRUZ vs CABANA
Said respondents spouses were likewise the first to register the sale with right of
repurchase in their favor on May 13, 1965 under Primary Entry No. 210113 of the
Register of Deeds. They could not register the absolute deed of sale in their favor
and obtain the corresponding transfer certificate of title because at that time the
seller's duplicate certificate was still with the bank. But there is no question, and the
lower courts so found conclusively as a matter of fact, that when petitioner Cruz
succeeded in registering the later sale in his favor, he knew and he was
informed of the prior sale in favor of respondents-spouses.
Respondent appellate court correctly held that such "KNOWLEDGE OF A PRIOR
TRANSFER OF A REGISTERED PROPERTY BY A SUBSEQUENT PURCHASER
MAKES HIM A PURCHASER IN BAD FAITH AND HIS KNOWLEDGE OF SUCH
TRANSFER VITIATES HIS TITLE ACQUIRED BY VIRTUE OF THE LATTER
INSTRUMENT OF CONVEYANCE WHICH CREATES NO RIGHT AS AGAINST THE
FIRST PURCHASER."

JOAQUIN vs MADRID
WHEN THE INSTRUMENT PRESENTED IS FORGED, EVEN IF ACCOMPANIED
BY THE OWNER'S DUPLICATE CERTIFICATE OF TITLE, THE REGISTERED
OWNER DOES NOT THEREBY LOSE HIS TITLE, AND NEITHER DOES THE
ASSIGNEE IN THE FORGED DEED ACQUIRE ANY RIGHT OR TITLE TO THE
PROPERTY.
THE INNOCENT PURCHASER FOR VALUE PROTECTED BY LAW IS ONE WHO
PURCHASES A TITLED LAND BY VIRTUE OF A DEED EXECUTED BY THE

REGISTERED OWNER HIMSELF, NOT BY A FORGED DEED, AS THE LAW


EXPRESSLY STATES.

MONUZ vs YABUT
IT HAS LONG BEEN INGRAINED IN OUR JURISPRUDENCE THAT A VOID TITLE
MAY BECOME THE ROOT OF A VALID TITLE IF THE DERIVATIVE TITLE WAS
OBTAINED IN GOOD FAITH AND FOR VALUE. FOLLOWING THE PRINCIPLE OF
INDEFEASIBILITY OF A TITLE, EVERY PERSON DEALING WITH REGISTERED
LANDS MAY SAFELY RELY ON THE CORRECTNESS OF THE CERTIFICATE OF
TITLE OF THE VENDOR/TRANSFEROR, AND HE IS NOT REQUIRED TO GO
BEYOND THE CERTIFICATE AND INQUIRE INTO THE CIRCUMSTANCES
CULMINATING IN THE VENDORS ACQUISITION OF THE PROPERTY. THE
RIGHTS OF INNOCENT THIRD PERSONS WHO RELIED ON THE CORRECTNESS
OF THE CERTIFICATE OF TITLE AND ACQUIRED RIGHTS OVER THE PROPERTY
COVERED THEREBY CANNOT BE DISREGARDED AND THE COURTS CANNOT
ORDER THE CANCELLATION OF SUCH CERTIFICATE FOR THAT WOULD
IMPAIR OR ERODE PUBLIC CONFIDENCE IN THE SYSTEM OF LAND
REGISTRATION.

DURAN vs IAC
While it is true that under Art. 2085 of the Civil Code, it is essential that
the mortgagor be the absolute owner of the property mortgaged, and
while as between the daughter and the mother, it was the daughter who
still owned the lots, STILL insofar as innocent third persons are concerned
the owner was already the mother (Fe S. Duran) inasmuch as she had
already become the registered owner (Transfer Certificates of Title Nos.
2418 and 2419).
The mortgagee had the right to rely upon what appeared in the certificate
of title, and did not have to inquire further. If the rule were otherwise, the
efficacy and conclusiveness of Torrens Certificate of Titles would be futile
and nugatory. Thus the rule is simple: the fraudulent and forged document
of sale may become the root of a valid title if the certificate has already
been transferred from the name of the true owner to the name indicated
by the forger (See De la Cruz v. Fable, 35 Phil. 144; Blondeau et al. v. Nano et al.,
61 Phil. 625; Fule et al. v. Legare et al., 7 SCRA 351; see also Sec. 55 of Act No.
496, the Land Registration Act).
The fact that at the time of the foreclosure sale proceedings (1970-72) the
mortgagees may have already known of the plaintiffs' claim is immaterial.
What is important is that at the time the mortgage was executed, the
mortgagees in good faith actually believed Fe S. Duran to be the owner, as
evidenced by the registration of the property in the name of said Fe S.
Duran.
THE DOCTRINE TO FOLLOW IS SIMPLE ENOUGH: A FRAUDULENT OR

FORGED DOCUMENT OF SALE MAY BECOME THE ROOT OF A VALID TITLE IF


THE CERTIFICATE OF TITLE HAS ALREADY BEEN TRANSFERRED FROM THE
NAME OF THE TRUE OWNER TO THE NAME OF THE FORGER OR THE NAME
INDICATED BY THE FORGER."

LAGROSA vs PANGILINAN
Petitioner Lagrosa's right to possess the subject property is clearly
inferior to or inexistent in relation to Evelyn Arizapa Banua.
As correctly held by the lower courts, the "Deed of Real Estate Mortgage"
executed by Julio Arizapa is null and void, the property mortgaged by Julio
Arizapa being then owned by the City of Manila under Transfer Certificate
of Title No. 91120.
For a person to validly constitute a valid mortgage on real estate, he must
be the absolute owner thereof as required by Article 2085 of the Civil Code
of the Philippines.

RURAL BANK of STA. IGNACIA vs DIMATULAC


In the present case, petitioner herein derived its title from the Valentin
and Razon spouses, after an extrajudicial foreclosure sale. Under the law
which permits a successor- in-interest to redeem the property sold on
execution, the term "successor-in-interest" includes one to whom the
debtor has transferred his statutory right of redemption; one to whom the
debtor has conveyed his interest in the property for the purpose of
redemption; or one who succeeds to the interest of the debtor by
operation of law.
Petitioner acquired its title while CA-G.R. CV No. 14909 was pending
before the Court of Appeals. To acquire title, the successor-in-interest
must do so subsequent to the commencement of the action, and not
before such commencement. Having derived little from the Spouses
Valentin and Razon, whose title was nullified by the final and executory
decision of the Court of Appeals in CA-G.R. CV No. 14909, the petitioner
cannot escape the effect of the appellate court's judgment in said case.
The rural bank as purchaser at an auction sale does not have a better
right to said property than their predecessors-in-interest, namely the
Valentin and Razon couple.
THE RULE THAT PERSONS DEALING WITH REGISTERED LANDS CAN RELY
SOLELY ON THE CERTIFICATE OF TITLE DOES NOT APPLY TO BANKS. THE
DEGREE OF DILIGENCE REQUIRED OF BANKS IS MORE THAN THAT OF A
GOOD FATHER OF A FAMILY; IN KEEPING WITH THEIR RESPONSIBILITY TO
EXERCISE THE NECESSARY CARE AND PRUDENCE IN DEALING EVEN WITH A
REGISTERED OR TITLED PROPERTY.

THE BUSINESS OF A BANK IS AFFECTED WITH PUBLIC INTEREST, holding in


trust the money of the depositors, which the bank should guard against
loss due to negligence or bad faith. For this reason, the bank is not
allowed to rely merely on the protective mantle of the land registration
law, which is normally accorded only to purchasers or mortgagees for
value and in good faith.

GONZALES vs IAC
The mortgage was duly constituted and registered with the Register of
Deeds on May 28, 1971. The ejectment case which was filed by petitioner
against the said spouses which petitioner claims should have put the
respondent bank on its guard was annotated at the back of the subject
title only on March 29, 1973. There was therefore nothing on the face of
the title of the Panzos which would arouse the suspicion of the respondent
bank. The certificate of title was in the name of the mortgagors when the
land was mortgaged by them to respondent bank.
We agree with the trial court that the respondent Bank was not negligent
in failing to consult a lawyer. The loan application of the Panzos was
subjected to the rigid requirements of the bank. There was a physical
inspection of the property. The loan application passed thru the scrutiny
of the Credit Committee, the members of which are also the Directors of
the Bank. The mortgage was then duly registered with the Register of
Deeds.

RURAL BANK OF OROQUIETA


GUIDELINES
After the execution of a real estate mortgage, the mortgagor has an equity of
redemption exercisable within the period stipulated in the mortgage deed.
In case of judicial foreclosure, that EQUITY OF REDEMPTION SUBSISTS
AFTER THE SALE AND BEFORE IT IS CONFIRMED BY THE COURT.
However, in case of a judicial foreclosure of a mortgage in favor of a banking
institution, section 78 of the General Banking law grants the mortgagor a right of
redemption which may be exercised within one year from the sale.
Under section 3, Rule 68 of the Rules of Court, IT IS THE CONFIRMATION BY
THE COURT OF THE AUCTION SALE THAT WOULD DIVEST THE
SERRANO SPOUSES OF THEIR RIGHTS TO THE MORTGAGED LOT AND

THAT WOULD VEST SUCH RIGHTS IN THE BANK AS PURCHASER AT THE


AUCTION SALE.
The clause "subject to such rights of redemption as may be allowed by law", found
in the last part of section 3, has not application to this case because the mortgagor
did not exercise his right of redemption under section 78 of the General Banking
Law.
What applies to this case is the settled rule that "a foreclosure sale is not complete
until it is confirmed, and before said confirmation, the court retains control of the
proceedings by exercising a sound discretion in regard to it, either granting or
withholding confirmation as the rights and interests of the parties and the ends of
justice may require." (Salazar vs. Torres, 108 Phil. 209, 214-5).
"In order that a foreclosure sale may be validly confirmed by the court, it is
necessary that a hearing be given the interested parties, at which they may have an
opportunity to show cause why the sale should not be confirmed." (Raymundo vs.
Sunico, 25 Phil. 365).
"The acceptance of a bid at the foreclosure sale confers no title on the purchaser. Until the
sale has been validly confirmed by the court, he is nothing more than a preferred bidder.
Title vests only when the sale has been validly confirmed by the court." (Raymundo vs.
Sunico, 25 Phil. 365).
The confirmation retroacts to the date of the sale (Villar vs. Javier de Paderanga, 97 Phil.
604, citing Binalbagan Estate, Inc. vs. Gatuslao, 74 Phil. 128).
A hearing should be held for the confirmation of the sale. The mortgagor should be
notified of the hearing. Lack of notice vitiates the confirmation of the sale. The
mortgagor may still redeem the mortgaged lot after the rendition of the order confirming
the sale which is void for lack of hearing and notice to the mortgagor. (Grimalt vs.
Velasquez and Sy Quio, 36 Phil. 936; Raymundo vs. Sunico, 25 Phil. 365).
Notice and hearing of a motion for confirmation of sale are essential to the validity of the
order of confirmation, not only to enable the interested parties to resist the motion but
also to inform them of the time when their right of redemption is cut off (Tinglao vs.
Botones, 90 Phil. 275, 279).
An order of confirmation, void for lack of notice and hearing, may be set aside anytime
(Tinglao vs. Botones, supra).
It is equally settled that after the foreclosure but before its confirmation, the court may
grant the judgment debtor or mortgagor an opportunity to pay the proceeds of the sale

and thus refrain from confirming it (Anderson and De Mesa vs. Reyes and Gutierrez
Saenz, 54 Phil. 944, citing Grimalt vs. Velasquez and Sy Quio, 36 Phil. 936 and La
Urbana vs. Belando, 54 Phil. 930).
LexLib

If after the foreclosure sale and before the confirmation thereof, the mortgagee, as
purchaser at the auction sale, sold the mortgaged property to another person, that
subsequent sale does not render the foreclosure sale more effective. That subsequent
sale does not prevent the trial court from granting the mortgagor a period within which
to redeem the mortgaged lot by paying the judgment debt and the expenses of the sale
and costs (Anderson and De Mesa vs. Reyes and Gutierrez Saenz, 54 Phil. 944).
"Whatever may have been the old rule by all of the modern authorities, it is the policy of
the courts to assist rather than to defeat the right of redemption" (De Castro vs. Olondriz
and Escudero, 50 Phil. 725, 732).
After the confirmation of the sale, made after hearing and with due notice to the
mortgagor, the latter cannot redeem anymore the mortgaged lot (unless the
mortgagee is a banking institution) (Piano vs. Cayanong, 117 Phil. 415).
It is after the confirmation of the sale that the mortgagor loses all interest in the
mortgaged property (Clemente vs. H. E. Heacock Co., 106 Phil. 1163; Clemente vs.
Court of Appeals, 109 Phil. 798; Clemente vs. H.E. Heacock Co., L-23212, May 18,
1967, 20 SCRA 115).
In the instant case, where the foreclosure sale has not yet been confirmed but the
statutory one-year period for redemption expired and the mortgaged lot was sold by
the mortgagee (as the only bidder at the auction sale) to a third person, the trial
court should give the purchaser a chance to be heard before requiring the
mortgagee-bank to accept the redemption price tendered by the mortgagors.

SPS. BORROMEO vs CA
IN THIS CASE, PETITIONERS' RIGHTS TO THEIR PROPERTY IS RESTRICTED
BY THE REM THEY EXECUTED OVER IT. UPON THEIR DEFAULT ON THE
MORTGAGE DEBT, THE RIGHT TO FORECLOSE THE PROPERTY WOULD BE
VESTED UPON THE CREDITOR-MORTGAGEE. NEVERTHELESS, THE RIGHT OF
FORECLOSURE CANNOT BE EXERCISED AGAINST THE PETITIONERS BY ANY
PERSON OTHER THAN THE CREDITOR-MORTGAGEE OR ITS ASSIGNS.
AN EXTRAJUDICIAL FORECLOSURE INSTITUTED BY A THIRD PARTY TO THE
LOAN AGREEMENT AND THE REM WOULD, THEREFORE, BE A VIOLATION
OF PETITIONERS' RIGHTS OVER THEIR PROPERTY.

It is clear that under Article 1311 of the Civil Code, contracts take effect
only between the parties who execute them. Where there is no privity of
contract, there is likewise no obligation or liability to speak about.

LANDRITO vs COURT OF APPEALS


In a long line of cases, this Court has consistently ruled that the one-year
redemption period should be counted not from the date of foreclosure
sale, but from the time the certificate of sale is registered with the
Register of Deeds. Here, it is not disputed that the sheriff's certificate of
sale was registered on 29 October 1993.
And under Article 13 of the New Civil Code, a year is understood to have
three hundred sixty-five (365) days each. Thus, excluding the first day and
counting from 30 October 1993 (under paragraph 3 of Article 13 of the
New Civil Code), and bearing in mind that 1994 was a leap year,
petitioners had only until 29 October 1994, the 365th day after
registration of the sheriff's certificate of sale on 29 October 1993, within
which to redeem the foreclosed property in accordance with law. And
since 29 October 1994 fell on a Saturday, petitioners had until the
following working day, 31 October 1994, within which to exercise their
right of redemption.
From the foregoing, it is clear as day that even the complaint filed by the
petitioners with the trial court on 09 November 1994 was instituted
beyond the 1-year redemption period. In fact, petitioners no less
acknowledged that their complaint for annulment of extrajudicial
foreclosure and auction sale was filed about eleven (11) days after the
redemption period had already expired on 29 October 1994. They merely
harp on the alleged increase in the redemption price of the mortgaged
property as the reason for their failure to redeem the same. However, and
as already pointed out herein, they chose not, despite notice, to appear
during the foreclosure proceedings.
Of course, petitioners presently insist that they requested for and were
granted an extension of time within which to redeem their property,
relying on a handwritten note allegedly written by Mrs. San Diego's
husband on petitioners' statement of account, indicating therein the date
11 November 1994 as the last day to pay their outstanding account in full.
Even assuming, in gratia argumenti, that they were indeed granted such
an extension, the hard reality, however, is that at no time at all did
petitioners make a valid offer to redeem coupled with a tender of the
redemption price.

YULIENCO vs COURT OF APPEALS

Petitioners assail the jurisdiction of the Quezon City RTC in taking


cognizance of the present case on the ground that there is a pending case
in the Makati RTC for injunction, reformation, and damages impugning the
validity of the promissory notes and mortgage contracts used as basis for
the foreclosure sale. They likewise lament that the grant of the writ and
the displacement of petitioners from their residence on the basis of fraud
smacks of deprivation of property without due process of law.
Petitioners' contention cannot stand judicial muster. Act 3135, otherwise
known as "An Act to Regulate the Sale of Property under Special Powers
Inserted in or Annexed to Real Estate Mortgages," mandates that
jurisdiction over a petition for a writ of possession lies in the court of the
province, city, or municipality where the property subject thereof is
situated.
Since the land subject of the controversy is located in Quezon City, the
city's RTC should rightly take cognizance of the case, to the exclusion of
other courts.
Neither can this Court consider the pendency of Special Civil Case No. 932521 before Branch 61 of the Makati RTC a procedural obstacle. Said
action for injunction, reformation, and damages does not raise an issue
that constitutes a prejudicial question in relation to the present case.
The basic issue in the former is whether the promissory note and
mortgage agreement executed between petitioners and private
respondent ACC are valid. In the latter case, the issue is whether
respondent, armed with a TCT in its name, is entitled to a writ of
possession. Clearly, the two cases can proceed separately and take their
own direction independently of each other. SDTIHA
In the present case, petitioners cannot anchor their case on the purported
interest they have, as owners, over the land and the improvements
thereon. They have been stripped of their rights over the property when,
as mortgagors, they failed to redeem it after foreclosure took place. A
mortgagor has only one year after registration of sale with the Register of
Deeds within which to redeem the foreclosed real estate. After that oneyear period, he loses all his interests over it.
WELL ESTABLISHED IS THE RULE THAT AFTER THE CONSOLIDATION OF
TITLE IN THE BUYER'S NAME, FOR FAILURE OF THE MORTGAGOR TO
REDEEM, THE WRIT OF POSSESSION BECOMES A MATTER OF RIGHT. ITS
ISSUANCE TO A PURCHASER IN AN EXTRAJUDICIAL FORECLOSURE IS
MERELY A MINISTERIAL FUNCTION. THE WRIT OF POSSESSION ISSUES AS A
MATTER OF COURSE UPON THE FILING OF THE PROPER MOTION AND THE
APPROVAL OF THE CORRESPONDING BOND. THE JUDGE ISSUING THE WRIT
FOLLOWING THESE EXPRESS PROVISIONS OF LAW NEITHER EXERCISES HIS
OFFICIAL DISCRETION NOR JUDGMENT. AS SUCH, THE COURT GRANTING

THE WRIT CANNOT BE CHARGED WITH HAVING


JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION.

ACTED

WITHOUT

If only to stress the writ's ministerial character, we have, in a case more recent than
Cometa, disallowed injunction prohibiting its issuance, just as we have held that its
issuance may not be stayed by a pending action for annulment of mortgage or the
foreclosure itself.
GUIDED BY THE FOREGOING PRINCIPLES, UNTIL THE FORECLOSURE SALE
OF THE PROPERTY IN QUESTION IS ANNULLED BY A COURT OF COMPETENT
JURISDICTION, PETITIONERS ARE BEREFT OF VALID TITLE AND RIGHT TO
PREVENT THE ISSUANCE OF A WRIT OF POSSESSION TO RESPONDENT
CORPORATION. UNTIL THEN, IT IS THE TRIAL COURT'S MINISTERIAL
FUNCTION TO GRANT THE POSSESSORY WRIT TO SAID CORPORATION.

DE VERA vs AGLORO
Section 6 of Act No. 3135 provides that the mortgagor or his successor-in-interest
may redeem the foreclosed property within one (1) year from the registration of the
sale with the Register of Deeds.
Under Section 7 of the law, if the mortgagor fails to redeem the property, the buyer
at public auction may file, with the RTC in the province or place where the property
or portion thereof is located, an ex parte motion for the issuance of a writ of
possession within one (1) year from the registration of the Sheriff's Certificate of
Sale, and the court shall grant the said motion upon the petitioner's posting a bond
in an amount equivalent to the use of the property for a period of twelve (12)
months.
ON THE STRENGTH OF THE WRIT OF POSSESSION, THE SHERIFF IS
DUTY-BOUND TO PLACE THE BUYER AT PUBLIC AUCTION IN ACTUAL
POSSESSION OF THE FORECLOSED PROPERTY. AFTER THE ONE-YEAR
PERIOD, THE MORTGAGOR LOSES ALL INTEREST OVER IT. THE
PURCHASER, WHO HAS A RIGHT TO POSSESSION THAT EXTENDS AFTER
THE EXPIRATION OF THE REDEMPTION PERIOD, BECOMES THE
ABSOLUTE OWNER OF THE PROPERTY WHEN NO REDEMPTION IS
MADE.
The purchaser can demand possession at any time following the consolidation of
ownership in his name and the issuance to him of a new transfer certificate of title.
AFTER THE CONSOLIDATION OF TITLE IN THE BUYER'S NAME FOR
FAILURE OF THE MORTGAGOR TO REDEEM THE PROPERTY, THE WRIT

OF POSSESSION BECOMES A MATTER OF RIGHT. ITS ISSUANCE TO A


PURCHASER IN AN EXTRAJUDICIAL FORECLOSURE SALE IS MERELY A
MINISTERIAL FUNCTION.
In the present case, the petitioners-mortgagors failed to redeem the property within
one (1) year from the registration of the Sheriff's Certificate of Sale with the
Register of Deeds. The respondent, being the purchaser of the property at public
auction, thus, had the right to file an ex parte motion for the issuance of a writ of
possession; and considering that it was its ministerial duty to do so, the trial court
had to grant the motion and to thereafter issue the writ of possession.

PHILIPPINE NATIONAL BANK vs IAC


It is undisputed that private respondent is a subsequent lien holder whose rights
over the mortgaged property are inferior to that of petitioner as a mortgagee. Being
a subsequent lien holder, private respondent acquires only the right of redemption
vested in the mortgagor, and his rights are strictly subordinate to the superior lien
of the anterior mortgagee. After the foreclosure sale, the remedy of the second
mortgagee is limited to the right to redeem by paying off the debt secured by the
first mortgage.
THE RULE IS THAT UPON A PROPER FORECLOSURE OF A PRIOR
MORTGAGE, ALL LIENS SUBORDINATE TO THE MORTGAGE ARE
LIKEWISE FORECLOSED, AND THE PURCHASER AT PUBLIC AUCTION
HELD PURSUANT THERETO ACQUIRES TITLE FREE FROM THE
SUBORDINATE LIENS. ORDINARILY, THEREAFTER THE REGISTER OF
DEEDS IS AUTHORIZED TO ISSUE THE NEW TITLES WITHOUT
CARRYING OVER THE ANNOTATION OF SUBORDINATE LIENS. IN A CASE
WITH SIMILAR FEATURES, WE HAD EARLIER HELD THAT THE FAILURE
OF THE SUBSEQUENT ATTACHING CREDITOR TO REDEEM, WITHIN THE
TIME ALLOWED BY SECTION 6 OF ACT 3135, THE LAND WHICH WAS
SOLD EXTRAJUDICIALLY TO SATISFY THE FIRST MORTGAGE, GIVES
THE PURCHASER A PERFECT RIGHT TO SECURE THE CANCELLATION
OF THE ANNOTATION OF SAID CREDITOR'S ATTACHMENT LIEN ON THE
CERTIFICATES OF TITLE OF SAID LAND.
There being obviously no contractual stipulation therefor, personal notice is not
necessary and what governs is the general rule in Section 3 of Act 3135, as amended,
which directs the posting of notices of the sale in at least three (3) public places of
the municipality where the property is situated, and the publication thereof in a
newspaper of general circulation in said municipality.

CAVEAT EMPTOR- The rule of caveat emptor requires the purchaser to be aware
of the supposed title of the vendor and one who buys without checking the
vendors title takes all the risks and losses consequent to such failure.

GOLDEN HAVENS vs FILINVEST


Here, Filinvest was on notice that GHM had caused to be annotated on TCT 67462
RT-1, the mother title, as early as August 4, 1989 a notice of adverse claim covering
Lot 6. This notwithstanding, Filinvest still proceeded to buy Lots 1, 2, 6, and 12 on
September 10, November 18, and December 29, 1989.
HCa

Filinvest of course contends that, although the title carried a notice of adverse claim,
that notice was only with respect to seller Yap's interest in Lot 6 and it did not affect
Lots 1, 2, 12, and the remaining interests in Lot 6. The Court disagrees.
THE ANNOTATION OF AN ADVERSE CLAIM IS INTENDED TO PROTECT
THE CLAIMANT'S INTEREST IN THE PROPERTY. THE NOTICE IS A
WARNING TO THIRD PARTIES DEALING WITH THE PROPERTY THAT
SOMEONE CLAIMS AN INTEREST IN IT OR ASSERTS A BETTER RIGHT
THAN THE REGISTERED OWNER. SUCH NOTICE CONSTITUTES, BY
OPERATION OF LAW, NOTICE TO THE WHOLE WORLD. Here, although the
notice of adverse claim pertained to only one lot and Filinvest wanted to acquire
interest in some other lots under the same title, the notice served as warning to it
that one of the owners was engaged in double selling.

PADILLA vs PHILS. PRODUCERS COOPERATIVE


Petitioner is correct in assailing as improper respondent's filing of a mere motion for
the cancellation of the old TCTs and the issuance of new ones as a result of
petitioner's refusal to surrender his owner's duplicate TCTs.
Indeed, this called for a separate cadastral action initiated via petition.
Section 107 of PD 1529, formerly Section 111 of Act 496, provides:
Sec. 107.Surrender of withheld duplicate certificates. Where it is necessary
to issue a new certificate of title pursuant to any involuntary instrument which
divests the title of the registered owner against his consent or where a voluntary

instrument cannot be registered by reason of the refusal or failure of the holder


to surrender the owner's duplicate certificate of title, the party in interest may
file a petition in court to compel the surrender of the same to the Register
of Deeds. The court, after hearing, may order the registered owner or any
person withholding the duplicate certificate to surrender the same, and
direct the entry of a new certificate or memorandum upon such surrender.
If the person withholding the duplicate certificate is not amenable to the process
of the court, or if for any reason the outstanding owner's duplicate certificate
cannot be delivered, the court may order the annulment of the same as well as
the issuance of a new certificate of title in lieu thereof. Such new certificate and
all duplicates thereof shall contain a memorandum of the annulment of the
outstanding duplicate.

Respondent alleges that it resorted to filing the contested motion because it could
not obtain new certificates of title, considering that petitioner refused to surrender
his owner's duplicate TCTs.
THE PROPER COURSE OF ACTION WAS TO FILE A PETITION IN COURT,
RATHER THAN MERELY MOVE, FOR THE ISSUANCE OF NEW TITLES. This
was the procedure followed in Blancaflor by Sarmiento Trading which was in more or
less the same situation as the respondent in this case:
Petitioners' reliance on prescription and laches is unavailing in this instance. It
was proper for Sarmiento Trading Corporation to file a petition with the
Court of First Instance of Iloilo, acting as a cadastral court, for the
cancellation of TCT No. 14749 in the name of Gaudencio Blancaflor and the
issuance of another in its name. This is a procedure provided for under Section
78 of Act No. 496 and Section 75 of PD No. 1529. . .

Section 78 of Act 496 reads:


Sec. 78.Upon the expiration of the time, if any allowed by law for redemption
after registered land has been sold on any execution, or taken or sold for the
enforcement of any lien of any description, the person claiming under the
execution or under any deed or other instrument made in the course of the
proceedings to levy such execution or enforce any lien, may petition the court
for the entry of a new certificate to him, and the application may be granted:
Provided, however, That every new certificate entered under this section shall
contain a memorandum of the nature of the proceeding on which it is based:
Provided, further, That at any time prior to the entry of a new certificate the
registered owner may pursue all his lawful remedies to impeach or annul
proceedings under execution or to enforce liens of any description.

Section 75 of PD 1529 provides:

Sec. 75.Application for new certificate upon expiration of redemption period.


UPON THE EXPIRATION OF THE TIME, IF ANY, ALLOWED BY LAW
FOR REDEMPTION AFTER THE REGISTERED LAND HAS BEEN
SOLD ON EXECUTION, OR TAKEN OR SOLD FOR THE
ENFORCEMENT OF A LIEN OF ANY DESCRIPTION, EXCEPT A
MORTGAGE LIEN, THE PURCHASER AT SUCH SALE OR ANYONE
CLAIMING UNDER HIM MAY PETITION THE COURT FOR THE
ENTRY OF A NEW CERTIFICATE TO HIM.
Before the entry of a new certificate of title, the registered owner may pursue all
legal and equitable remedies to impeach or annul such proceedings.

VIEWMASTER vs MAULIT
The respondent Register of Deeds of Las Pias denied the request for annotation of
the Notice of Lis Pendens on the following grounds:
1. the request for annotation and the complaint [do] not contain an
adequate description of the subject property;
2. petitioner's action only has an incidental effect on the property in
question.

The Court did not confine the availability of lis pendens to cases involving the title to
or possession or real property. Thus, it held:
"According to Section 24, Rule 14 of the Rules of Court and Section 76 of
Presidential Decree No. 1529, a notice of lis pendens in the following cases,
viz.:
a) An action to recover possession of real estate;
b) An action to quite title thereto;
c) An action to remove clouds thereon;
d) An action for partition; and
e) Any other proceedings of any kind in Court directly affecting the
title to the land or the use or occupation thereof or the buildings
thereon."

ST. MARYS vs RD of MAKATI

Considering that the dismissal of private respondent's Complaint by the RTC was appealed to the Court of
Appeals, which Complaint refers to the properties covered by TCTs No. 175209, No. 220977, and No. 220978
that bear the annotations of lis pendens, and such properties therefore are irrefragably still the subject matter
of litigation, the appellate court rightly saw the need for giving notice to the public of such a fact. The
necessity becomes even more compelling considering that petitioner SMWSI had already entered into
transactions with third parties involving the subject properties.

DE LA MERCED
A TRANSFEREE PENDENTE LITE OF REGISTERED LAND, WHOSE TITLE BEARS
A NOTICE OF A PENDING LITIGATION INVOLVING HIS TRANSFEROR'S TITLE
TO THE SAID LAND, IS BOUND BY THE OUTCOME OF THE LITIGATION,
WHETHER IT BE FOR OR AGAINST HIS TRANSFEROR.
Given this principle, the modification of the final decision against the
transferor in order to include the transferee pendente lite does not violate
the doctrine of immutability of final judgments. His inclusion does not add
to or change the judgment; it is only a legal consequence of the
established doctrine that a final judgment binds the privy of a litigating
party.
It is not disputed that petitioners caused the annotation of lis pendens on TCT No.
23554, which covers Lots 7 and 8 of Block 2, as early as September 21, 1984. 52 On
July 29, 1985 and August 24, 1998, TCT No. 23554 was cancelled with respect to
Lots 7 and 8 of Block 2 and new individual titles were issued to Victorino and
Dimaguila. Both titles had the notice of lis pendens which was carried over from TCT
No. 23554. Ineluctably, both Victorino and Dimaguila had notice of the litigation
involving GSIS's ownership over the subject properties, and were bound by the
outcome of the litigation.
WHEN A TRANSFEREE PENDENTE LITE TAKES PROPERTY WITH NOTICE OF
LIS PENDENS, SUCH TRANSFEREE UNDERTAKES TO RESPECT THE OUTCOME
OF THE LITIGATION. As held in Selph v. Vda. de Aguilar, 53 an order to cancel the
transferor's title may be enforced against his transferee, whose title is expressly
subject to the outcome of the litigation by the fact of the annotation of lis pendens.
The existence of these entries on Dimaguila's and Victorino's titles bars any defense
of good faith 54 against petitioners and effectively makes Dimaguila and Victorino
mere privies of GSIS and subject to whatever rights GSIS might have in the subject
properties, which (as it turns out) is none at all. What Dimaguila and Victorino
possess are derivative titles of the GSIS's title over Lots 7 and 8 of Block 2, which
this Court has finally adjudicated to be null and void. Given the legal maxim that a
spring cannot rise higher than its source, it follows that Dimaguila's and Victorino's
titles, or any other title over the subject properties that are derived from TCT No.
23554 of the GSIS, are likewise null and void. As explained by this Court in another
case, the title obtained by the transferee pendente lite affords him no special

protection; he cannot invoke the rights of a purchaser in good faith and cannot
acquire better rights than those of his predecessor-in-interest. 55
Admittedly, during the pendency of the case, respondents timely registered a
notice of lis pendens to warn the whole world that the property was the
subject of a pending litigation.
Lis pendens, which literally means pending suit, refers to the jurisdiction,
power or control which a court acquires over property involved in a suit,
pending the continuance of the action, and until final judgment. Founded
upon public policy and necessity, lis pendens is intended to keep the
properties in litigation within the power of the court until the litigation is
terminated, and to prevent the defeat of the judgment or decree by
subsequent alienation. . . . cAHIaE
The filing of a notice of lis pendens has a twofold effect: (1) to keep the
subject matter of the litigation within the power of the court until the entry of
the final judgment to prevent the defeat of the final judgment by successive
alienations; and (2) to bind a purchaser, bona fide or not, of the land subject
of the litigation to the judgment or decree that the court will promulgate
subsequently.
This registration, therefore, gives the court clear authority to cancel the title of the
spouses Vaca, since the sale of the subject property was made after the notice of lis
pendens
TORRES vs CA

Moreover, even if We grant Mota the status of an innocent mortgagee, the doctrine relied
upon by the appellate court that a forged instrument may become the root of a valid title,
cannot be applied where the owner still holds a valid and existing certificate of title
covering the same interest in a realty.
The doctrine would apply rather when, as in the case the forger thru insidious means
obtains the owner's duplicate certificate of title, converts it in his name, and subsequently
sells or otherwise encumbers it to an innocent holder for value, for in such a case the new
certificate is binding upon the owner.
But if the owner holds a valid and existing certificate of title, his would be indefeasible as
against the whole world, and not that of the innocent holder's. "Prior tempore potior
jure"
The doctrine is that:
"The claim of indefeasibility of the petitioner's title under the Torrens land title
system would be correct if previous valid title to the same parcel of land did not
exist. The respondent had a valid title . . . It never parted with it; it never handed

or delivered to anyone its owner's duplicate of the transfer certificate of title, it


could not be charged with negligence in the keeping of its duplicate certificate
of title or with any act which could have brought about the issuance of another
certificate upon which a purchaser in good faith and for value could rely. If the
petitioner's contention as to indefeasibility of his title should be upheld, then
registered owners without the least fault on their part could be divested of their
title and deprived of their property. Such disastrous results which would shake
and destroy the stability of land titles had not been foreseen by those who had
endowed with indefeasibility land titles issued under the Torres system.
Veronica Bareza perpetrated the fraud by making false representations in her
petition and the title issued to her being the product of fraud could not vest in
her valid and legal title to the parcel of land in litigation. As she had no title to
the parcel of land, in the same way that a thief does not own or have title to the
stolen goods, she could not transmit title which she did not have nor possess.