1.

BARANDA v GUSTILO
FACTS:
This case is a petition certiorari, prohibition and mandamus with preliminary injunction to compel the
respondent judge to reinstate his order dated February l2, 1987 directing the Acting Register of Deeds to
CANCEL the NOTICE of LIS PENDENS annotated in the new certificates of titles issued in the name of
the petitioners.

Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No. 64432 and the private
respondents in G.R. No. 62042 regarding a Lot No. 4517 of the Cadastral Survey of Sta. Barbara, Iloilo,
which is under the petitioners name in TCT No. 106098. The said prior Supreme Court cases were all
ruled with finality in favor of petitioners, directing the respondent Gustilo to:
cancel another TCT in the name of other parties,
carry out a writ of possession in favor of the petitioners in this case,
execute the writ of demolition against the other parties.

In a series of filings, the private respondents and other parties caused the delay of the execution of the
said rulings which became final in May 20, 1984. The last and the latest of the said filing was Civil Case
No. 15871, which was the basis of the notice of lis pendens and the cause of the respondent judges
order to vacate its prior order to cancel the notice of lis pendens.

ISSUE:
W/N the pendency of the appeal in Civil Case No. 15871 with the Court of Appeals prevents the court
from cancelling the notice of lis pendens in the certificates of titles of the petitioners which were earlier
declared valid and subsisting by this Court in G.R. No. 62042 and G.R. No. 64432.

Corollary issue: nature of the duty of a Register of Deeds to annotate or annul a notice of lis
pendens in a torrens certificate of title.

RULING:
No. The respondent judge should never have allowed himself to become part of dilatory tactics, giving as
excuse the wrong impression that Civil Case No. 15871 filed by the private respondents involves another
set of parties claiming Lot No. 4517 under their own Torrens Certificate of Title.

RATIO: The purpose of a notice of lis pendens is defined in the following manner:

Lis pendens has been conceived to protect the real rights of the party causing the registration
thereof With the lis pendens duly recorded, he could rest secure that he would not lose the
property or any part of it. For, notice of lis pendens serves as a warning to a prospective
purchaser or incumbrancer that the particular property is in litigation; and that he should keep his
hands off the same, unless of course he intends to gamble on the results of the litigation. (Section
24, Rule 14, RuIes of Court; Jamora v. Duran, et al., 69 Phil. 3, 11; I Martin, Rules of Court, p.
415, footnote 3, citing cases.) (Natanov. Esteban, 18 SCRA 481, 485-486)

In the cases of Victoriano v. Rovila (55 Phil. 1000), Municipal Council of Paranaque v. Court of First
Instance of Rizal (70 Phil., 363) and Sarmiento v. Ortiz (10 SCRA 158), to the effect that:

We have once held that while ordinarily a notice of pendency which has been filed in a proper
case, cannot be cancelled while the action is pending and undetermined, the proper court has the
discretionary power to cancel it under peculiar circumstances, as for instance, where the
evidence so far presented by the plaintiff does not bear out the main allegations of his complaint,
and where the continuances of the trial, for which the plaintiff is responsible, are unnecessarily
delaying the determination of the case to the prejudice of the defendant. (Victoriano v. Rovira,
supra; The Municipal Council of Paranaque v. Court of First Instance of Rizal, supra)

First paragraph of Section 77 of Presidential Decree No. 1529, provides that:

 Cancellation of lis pendens. Before final judgment, a notice of lis pendens may be cancelled
upon Order of the Court after proper showing that the notice is for the purpose of molesting the
adverse party, or that it is not necessary to protect the rights of the party who caused it to be
registered. It may also be cancelled by the Register of Deeds upon verified petition of the party
who caused the registration thereof.

NATURE OF THE DUTY OF THE REGISTER OF DEEDS TO ANNOTATE AND/OR CANCEL THE
NOTICE OF LIS PENDENS IN A TORRENS CERTIFICATE OF TITLE

Section 10, Presidential Decree No. 1529 states that "It shall be the duty of the Register of Deeds to
immediately register an instrument presented for registration dealing with real or personal property which
complies with all the requisites for registration. ... . If the instrument is not registrable, he shall forthwith
deny registration thereof and inform the presentor of such denial in writing, stating the ground or reasons
therefore, and advising him of his right to appeal by consulta in accordance with Section 117 of this
Decree."

Section 117 provides that "When the Register of Deeds is in doubt with regard to the proper step to be
taken or memoranda to be made in pursuance of any deed, mortgage or other instrument presented to
him for registration or where any party in interest does not agree with the action taken by the Register of
Deeds with reference to any such instrument, the question shall be submitted to the Commission of Land
Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds. ... ."

The elementary rule in statutory construction is that when the words and phrases of the statute are clear
and unequivocal, their meaning must be determined from the language employed and the statute must be
taken to mean exactly what it says. (Aparri v. Court of Appeals, 127 SCRA 231; Insular Bank of Asia and
America Employees' Union [IBAAEU] v. Inciong, 132 SCRA 663) The statute concerning the function
of the Register of Deeds to register instruments in a torrens certificate of title is clear and leaves
no room for construction. According to Webster's Third International Dictionary of the English Language
the word shall means "ought to, must, ...obligation used to express a command or exhortation, used in
laws, regulations or directives to express what is mandatory." Hence, the function of a Register of Deeds
with reference to the registration of deeds encumbrances, instruments and the like is ministerial in nature.
The respondent Acting Register of Deeds did not have any legal standing to file a motion for
reconsideration of the respondent Judge's Order directing him to cancel the notice of lis pendens
annotated in the certificates of titles of the petitioners over the subject parcel of land. In case of doubt as
to the proper step to be taken in pursuance of any deed ... or other instrument presented to him, he
should have asked the opinion of the Commissioner of Land Registration now, the Administrator of the
National Land Title and Deeds Registration Administration in accordance with Section 117 of Presidential
Decree No. 1529

2. Register of Deeds for Nueva Ecija vs Juliana Pengson (71 Phil 109)

Facts:
Lot 862 referred to in this case, with original certificate of title No. 5446, one half belongs to
Inocencio Ligon proindiviso, and the other half to Ester Ligon and Loreto Ligon, in equal parts.

In the civil case No. 28581 of the Court of First Instance of Manila, filed by Sabina Geraldo and
Carlos Davis against Inocencio Ligon, in order to collect from him the amount of P2,780, a judgment was
delivered in favor of the Geraldo and Davis.

For the execution of this judgment, the sheriff of the City of Manila sold the part of Inocencio
Ligon in Lot 862. Mamerto G. Ligon, being the highest bidder in the action, was awarded all right, interest
and part of the defendant on the lot. However, after expiration of the legal term of withdrawal, without
making use of it, the sheriff issued the definitive document of this sale for all the land represented in lot
862 described in its original title No. 5446. Mamerto Ligon requested and later obtained the cancellation
of original title No. 5446 and another transfer certificate be issued under his name for the whole lot. He
then sold the lot to Juliana Pengson who, requested before the Registrar of Nueva Ecija issuance of
another title certificate by virtue of a deed of sale. Petitioner, however, discovered upon examination of
the antecedents of the land that the whole lot 862 does not solely belong to Incencio Ligon, but only half
of it.

Issue:
Whether or not another transfer certificate can be issued under Juliana Pengson.

Ruling:
The Registrar admits that Lot 862 is registered in the name of Juliana Pengson, Ester and
Loreto Ligon will be illegally deprived of half of this lot. It goes without saying that the Registrar can not
cooperate to consummate this injustice. It is said that his duty is ministerial. Although admittedly so, it is
not, however, to the extent of compelling him to consciously punish such injustice. It should be borne in
mind that, as a result of the above facts, Mamerto Ligon presumably has knowledge that Innocent Ligon
was not owner of the whole lot.

We do not believe that the decision cited by the appellant in the cause of the Cross against
Fabie (35 Jur. Fil., 146) is applicable, since that decision was made in consideration of the negligence of
the owner, a circumstance that does not occur in the present case. In addition, the purpose of this case
was to cancel and cancel a transfer certificate already issued, which is not the case here, in which it is
only a matter of registering and issuing a transfer certificate that has not yet been made.

For these reasons, the decision appealed, with the costs to the appellant, is upheld.

3. Southwestern University v Laurente

FACTS:

The transfer certificate of title (TCT No. 7567) in question covered a parcel of land situated in
Camansi, Danao, Cebu. The same was issued in 1928 by the Register of Deeds of Cebu in favor
of H. M. H. Nemazee, the proprietor of the original applicant, Danao Coal Mining Syndicate, Ltd.
There is annotation of incumbrances on the transfer certificate of title covering a parcel of land

In a quitclaim deed, dated 14 January 1960, the heirs of Nemazee transferred and quitclaimed in
favor of Southwestern University their rights, title, interest and participation in, including their
mining and leasehold rights over, said land.

Subsequently, Southwestern University petitioned the lower court to order the cancellation of the
aforequoted annotation of incumbrances on the ground that the condition and agreement
constituting the same were cancelled and rendered inoperative by the outbreak of World War II as
well as by the death of all the listed beneficiaries
On 12 September 1960, one Cenon Laurente moved the lower court to reconsider its order of
cancellation, specifically of the second portion of the annotation of incumbrances in question. He
alleged that Southwestern University had filed an ejectment suit 4 before another branch of the
same court against him and several other occupants of the land covered by TCT No. 7567, over
which land, he claimed, he might possibly have an interest as a purchaser of a certain parcel of
land
The motion for reconsideration was denied, the court maintans that inasmuch as the law
specifically provides notice to parties in interest, such notice if any, should be limited to the parties
listed or annotated on the certificate of title. Hence, if such parties are already dead, as had been
alleged and substantiated by petitioner Southwestern University, then notice to said parties would
be superfluous or notice would not be necessary.
The Court acting within its limited jurisdiction as a Court of Land Registration, can only act on
what appears on the face of the certificate of title, and cannot go beyond what appears therein as
 movant Cenon Laurente would now want this Court to believe. Notice by Publication is not
necessary in connection with the this petition which has been duly filed in accordance with
Section 112 of Act 496.

ISSUE:

Whether or not Laurente is a party interest entitled to notice

RULING:

Cancellation of registered interests that have terminated and ceased may be ordered by the land
registration court under, and in conformity with, section 112 of Act No. 496, otherwise known as
the Land Registration Act. The new owner, Southwestern University, of the land herein involved
took the right step by petitioning the court under said section to have the registered interests
the deceased persons' rights of use and occupancy of the surface of said land ordered
cancelled on the ground that the same had terminated and ceased. Notice was no longer
necessary for the court to acquire jurisdiction over the petition insofar as the second portion of the
annotation of incumbrances was concerned. With the death of all the registered adverse
claimants thereof, there were no more parties in interest to be notified.
Appelant Laurente was not and can not now be considered a party in interest entitled to notice.
He was, as he is now, a stranger representing no adverse claim as to render the petition for
cancellation controversial and, thereby, divest the lower court of its jurisdiction.
Before a claimant can be considered as possessing a genuine adverse interest that would
deprive the Registration Court of jurisdiction to proceed under section 112 of Act 496 in the
absence of notice to him, there must be a showing of the prima facie truth and validity of such
adverse interest. Laurente has failed to make such a showing.
A mere verbal agreement will not do here; there must be a public instrument in order to affect a
stranger (such as the holder of the certificate of title or his successors in interest).

For Article 1280, No. 1, of the Civil Code of 1889 (in force in 1920 when Laurente claims to have
acquired title) prescribes:

The following must be reduced to writing in a public instrument:

1. Acts or contracts whose object is the creation, transmission, modification or extinction of rights
which affect immovable property. (Emphasis supplied)

What is worse is that Laurente allowed more than 20 years to elapse without asserting the
alleged conveyance in his favor, when a period of 10 years sufficed under Act 190 (then in force)
to bar any claim to or over real property. Nor has Laurente adequately explained such laches on
his part..

All the foregoing circumstances cast a dense pall of doubt over the genuineness and validity of
Laurente's adverse claim, and fully justify its rejection by the lower court.

4. Egao v CA, 174 SCRA 484 G.R. No. 79787, 29 June 1989

Facts:

The respondents filed a motion for quieting the title and recovery of possession and ownership
against the petitioners. Apparently, they claim they are the owners of the parcel of land by virtue of the
deed of sale they entered into with Roberto Marfori to whom the petitioners allegedly sold their land to.
The Egaos acquired their land title by virtue of a free patent and transferred their ownership in favor of
Marfori by virtue of a deed of sale. However, the Certificate of Title was not transferred in Marforis favor.
Upon purchase of the land from Marfori, the respondents introduced improvements thereon and paid
taxes for the property. However, the petitioners illegally occupied portions of the land. Petitioner answers
that they are the true owner of the land by virtue of the Certificate of Title issued by the Register of Deeds
pursuant to their Free Patent. The lower court ruled in favor of Egao.

Upon appeal, the CA reversed the decision of the lower court on grounds that the main issue
should be whether Egao can validly sell the land to Marfori who subsequently transferred the ownership
to the respondents. The CA holds both Egao and Marfori to be in pari delicto for violating the 5-year
restriction provided by Commonwealth 141 against encumbrance and alienation of public lands acquired
thru free patent or homestead patent. They cannot therefore obtain affirmative relief. It also declares the
respondents as innocent purchasers for value who the obtained the duplicate of the OCT still in the name
of the Egaos from Marfori and ownership was transferred to them by physical possession of the property.
It thus promulgated judgment holding the respondents the absolute owners of the land in dispute, to
cancel the OCT of the petitioner and its transfer thereof to the respondents and to surrender peaceful
possession of the land to the respondents.

Issue: Whether or not the petitioners validly transferred their ownership to Marfori to resolve the rights of
the respondents over the land in dispute?

Ruling:

The SC holds that based on the adduced evidence, the Egaos sold the lot to Marfori within the 5-
year restriction period provided by law on Free Patent based on the Deed of Sale entered into by the
parties. Although the petitioners denied the validity of the Deed of Sale the court held that it was notarized
and a notarial document has in its favor the presumption of regularity. When the land was sold to the
respondents, they know that the OCT is still registered under the name of the petitioners. Thus, they are
not considered to be innocent purchaser as contrary to the ruling of the CA. Where a purchaser neglects
to make the necessary inquiries and closes his eyes to facts which should put a reasonable man on his
guard as to the possibility of the existence of a defect in his vendor's title, and relying on the belief that
there was no defect in the title of the vendor, purchases the property without making any further
investigation, he cannot claim that he is a purchaser in good faith for value. A private individual cannot
bring an action for reversion or any action which would have an effect of canceling a free patent and the
certificate of title issued on the basis thereof since the land covered will form part again of the public
domain. Sec. 124 of the Public Land Act provides that deeds of sale of patented lands, perfected within
the prohibited five (5) year period are null and void thus the Egaos have no title to pass to Marfori and
nobody can dispose that which does not belong to him. The respondents are not innocent purchasers for
value with no standing to question the rights of the petitioners over the land and to file an action to quiet
the title. The petitioners remained to be the registered owners and entitled to remain in physical
possession of the disputed property. Respondents are ordered to deliver the OCT to the petitioners
without prejudice to an action for reversion of the land to be instituted by the Solicitor General for the
State.

5. Garcia vs CA GR L-48971 & 49011 (January 22, 1980)

Facts:

This case is about the issuance of two or more transfer certificates of title to different persons for the
same lots, or subdivisions thereof, due to the fact that the original title was allegedly not cancelled when
the first transfer certificates of title were issued to replace the original title.

On August 9, 1918, a deed of sale for two parcels of land, E and G of the Hacienda Maysilo, located in
Malabon, Rizal and covered by Original Certificate of Title No. 983, was executed in favor of Ismael
Lapus, a bona fide occupant thereof. The deed was executed pursuant to an order of the Court of First
Instance of Rizal in a partition proceeding involving the said hacienda. The deed of sale was presented
for registration at two-twenty-five in the afternoon of January 15, 1920 and was recorded as Primary Entry
No. 7710. That deed of sale itself contains the following entries showing that it was annotated on the back
of OCT No. 983.
However, it seemed that, contrary to the foregoing entry and the official routine or standard operating
procedure, the deed of sale was not annotated on OCT No. 983 and that, consequently, that title was
apparently not cancelled. As a result of the registration of that deed of sale, Transfer Certificate of Title
No. 4910 was issued to Lapus for the two parcels of land, E and G, and Transfer Certificate Title No. 4911
was issued for the remaining five lots covered by OCT No. TCT Nos. 4910 and 4911 contain the following
entries: "Transfer from No. 983. Originally registered on the 29th day of January, in the year 1917 in Book
No. A-9, page 215, of the said Province of Rizal, pursuant to decree entered in Case No. 3850."

Lapus on different occasions mortgaged the two parcels of land to secure his obligations to the Philippine
National Bank, the Government and the Philippine Trust Company. He died in 1951. The two parcels of
land were inherited by his daughter, Carolina Lapuz-Gozon. She became the registered owner of the two
lots. She subdivided them into fifty-five lots. She sold some of the subdivision lots to her co-respondents-
appellees herein. Lapus and his successors-in-interest have been in possession of the two parcels even
before 1910 or for more than seventy years.

Meanwhile, in 1962, certain, alleged heirs (collectively known as the Riveras) of the late Maria de la
Concepcion Vidal filed a motion in Land Registration Cases Nos. 4429 and 4496 of the CFI of Rizal,
alleging that they were deprived of their participation in the Hacienda Maysilo covered by OCT No. 983
and for other titles and that, since only OCT No. 983 was supposedly unencumbered, all the land covered
by that title should be adjudicated to them. The court granted the motion. In 1963, OCT No. 983 was
definitely cancelled and in lieu thereof Transfer Certificate of Title No. 112235 was issued to the Riveras.
Later, Lots 5 and 7 of the said title (corresponding to parcels E and G which were sold to Ismael Lapus in
1918 as stated earlier) were assigned by Bartolome Rivera to Sergio Cruz and Pacifico Garcia and TCT
Nos. 112743 and 112742 were issued to Cruz and Garcia, respectively. Thus, two sets of transfer
certificates of title for Lots E and G or 5 and 7, originally covered by OCT No. 983, were issued, one to the
heir of Ismael Lapus and another set to the successors-in-interest of the Riveras.

On 1964, Garcia subdivided Lot 7 (G) into Lots A and B. Garcia retained Lot A and obtained TCT for it. He
assigned Lot B to Antonio Muoz in 1964. As a consequence of the assignment, TCT No. 134957 was
issued to Muoz. In 1965, he mortgaged Lot B to the Associated Banking Corporation to secure a loan of
P200,000.

On the other hand, on July 17, 1964 Cruz sold to Santiago Go Lot 5 (E) covered by TCT No. 112743. TCT
No. 131329 was issued to Go on August 25, 1964. On December 23, 1964, Go mortgaged Lot 5 to the
Philippine National Bank (PNB) to secure a loan. Muoz and Go did not pay their mortgage debts. The
two banks foreclosed the mortgages. PNB bought the mortgaged lot at the auction sale held on May 4,
1967. The sheriff issued to it a certificate of sale dated May 19, 1967 but at that time there was already a
notice of lis pendens annotated on the title of the mortgaged lot. TCT Nos. 212153 and 236881 for the
mortgaged lots were issued to the Associated Banking Corporation and the Philippine National Bank,
respectively.

Mrs. Gozon later learned that the Riveras and their successors-in-interest had acquired the land covered
by OCT No. 983. She was informed that parcels E and G were identical to Lots 5 and 7. She registered
adverse claims on the titles covering Lots 5 and 7 and filed with CFI of Rizal against the Riveras, Cruz,
Muoz, Garcia, Associated Banking Corporation, PNB and others an action to quiet title and for damages.

The trial court declared TCT Nos. 141802 to 141855 and 143512 issued to Mrs. Gozon and her co-
plaintiffs valid and voided TCT No. 112235 issued to the Riveras and all titles and transactions emanating
therefrom insofar as those titles covered the lots embraced in plaintiffs titles. The trial Court also ordered
Muoz and Santiago Go to pay the Associated Banking Corporation and PNB respectively, in the event
that the bank would be evicted from the lot covered by TCT No. 212153. The Court of Appeals affirmed
the decision. Hence, this petition.

Issue:
Whether or not the 1920 title issued to Lapus and the titles derived therefrom should prevail over the 1963
title issued to the Riveras and the subsequent titles derived from it.

Whether or not Lapus title prevails even if it was not annotated by the register of deeds on the anterior or
parent title which was not cancelled before 1963?

Ruling:

The two appeals have no merit. The title of Lapus and the titles derived therefrom should be given effect.
The title of the Riveras and the titles springing from it are void. There can be no doubt that Lapus was an
innocent purchaser for value. He validly transmitted to his successors-in-interest his indefeasible title or
ownership over the disputed lots or parcels of land. That title could not be nullified or defeated by the
issuance forty-three years later to other persons of another title over the same lots due to the failure of the
register of deeds to cancel the title preceding the title issued to Lapus. This must be so considering that
Lapus and his successors-in-interest remained in possession of the disputed lots and the rival claimants
never possessed the same.

"The general rule is that in the case of two certificates of title, purporting to include the same land, the
earlier in date prevails, whether the land comprised in the latter certificate be wholly, or only in part,
comprised in the earlier certificate" (Hogg, Australian Torrens System 823, citing cases and cited in
Legarda and Prieto v. Saleeby, 31 Phil. 590, 595).

"Where two certificates (of title) purport to include the same land, the earlier in date prevails. . . . In
successive registrations, where more than once certificate is issued in respect particular estate or interest
in land, the person claiming under the prior certificate is entitled to the estate or interest; and that person
is deemed to hold under the prior certificate who is the holder of, or whose claim is derived directly or
indirectly from the person who was the holder of the earliest certificate issued in respect thereof" (Niblack,
Analysis of the Torrens System, page 237, cited in Legarda and Prieto v. Saleeby, supra, pages 595-6). It
is settled that is this jurisdiction the maxim prior est in tempore, potior est in jure (he who is first in time is
preferred in right) is followed in land registration matters (La Urbana v. Bernardo, 62 Phil. 790, 806).

The deed of sale in favor of Lapus, which was judicially authorized, was entered in the entry book and a
new title was issued to him. As already stated, and this point should be underscored, the deed of sale in
favor of Lapus contains the notation that it was annotated on the back of OCT No. 983. Moreover, the title
issued to Lapus contains the usual notation that it was a transfer from a previous title which in this case
was OCT No. 983.The deed of sale in favor of Lapus and the titles issued to him and his successors-in-
interest, together with his mortgage in 1929 of the disputed lots to the PNB itself, are all a matter of public
record in the registry of deeds. As stressed in Legarda and Prieto v. Saleeby, 31 Phil. 590, 600, "the
record is notice to all the world. All persons are charged with the knowledge of what it contains. All
persons dealing with the land so recorded, or any portion of it, must be charged with notice of whatever it
contains. The purchaser is charged with notice of every fact shown by the record and is presumed to
know every fact which the record discloses."

Since the applicable rule in the instant case is that the earlier certificate of title should be recognized as
superior and controlling, there is no justification for relying on the doctrine laid down by Justice Holmes in
Eliason v. Wilborn, 281 U.S. 457, that "as between two innocent persons, one of whom must suffer the
consequence of a breach of trust, the one who made it possible by his act of confidence must bear the
loss." There was no breach of trust in this case. What is noteworthy in this case is that after it was recited
in the registered deed of sale that sale was annotated at the back of the title covering the lots sold, it
turned out that the title did not contain such an annotation and that the title was not cancelled. For that
anomaly, the purchaser, Ismael Lapus, the holder of the earlier title, was not culpable or blameworthy.

WHEREFORE, the judgment of the Court of Appeals, affirming the decision of the trial court, should
stand.

6. PEOPLE vs. REYES

FACTS: Spouses Julio Rizare and Patricia Pampo owned a parcel of land in Lipa City registered in their
names under a TCT. Both are now deceased and were survived by the following children: the accused
Mizpah R. Reyes and the complainants. In 1983, the complainants discovered from the Register of Deeds
(RD) that the subject property had already been transferred in the name of Mizpah Reyes, single, under a
TCT. They alleged that the conveyance was through a deed of sale executed and signed by their
parents. Upon examination in the RD of the document, they found that the signature of their parents was
falsified and that accused also made an untruthful statement that she was single although she was
married. The N.B.I. found that the signature of Julio Rizare was genuine but that of Patricia Pampo was
forged. The complainants filed 2 informations against Reyes for falsification and for allegedly making an
untruthful statement of fact in the deed of sale. The trial court granted the motion of Reyes to quash the
informations stating that the lapse of more than twenty (20) years before the two information were filed,
the crimes for which the accused, Mizpah Reyes, are charged have already prescribed. The People now
filed an appeal in the CA who affirmed the decision of the RTC. The CA ruled that the prescriptive period
started when the deed of sale was registered in the RD and not when the falsification was discovered.
Hence, this petition for review on Certiorari.

ISSUE: W/N the petitioners action against Reyes has already prescribed.

HELD: Yes, the action has already prescribed. The rule is well-established that registration in a public
registry is a notice to the whole world. The record is constructive notice of its contents as well as all
interests, legal and equitable, included therein. Under the rule of notice, it is presumed that the purchaser
has examined every instrument of record affecting the title. Such presumption is irrebutable. This
presumption cannot be overcome by proof of innocence or good faith. The notarized deed of sale was
registered on May 26, 1961. The criminal information for falsification of a public document having been
filed only on October 18, 1984, or more than ten (10) years from May 26, 1961, the crime for which the
accused was charged has prescribed. The Court of Appeals, therefore, committed no reversible error in
affirming the trial court's order quashing the two information on the ground of prescription.

7. ANDREA BUDLONG vs. JUAN PONDOC ET. AL

FACTS:

On October 27, 1934 the sisters Isabela Pondoc and Crispina Pondoc donated to Andrea Budlong in a
notarial instrument their two-thirds share in the Lot 5447 in consideration of the donee's personal services
to the donors. Andrea accepted the donation in the same instrument.

Two years after the execution of the donation, or on October 27,1936, Original Certificate of Title No.
4718 was issued for the said lot. The title shows that the lot is owned by the following co-owners: Crispina
Pondoc 113; Isabela Pondoc 1/3; Francisco Garrote 1/6, and Isabela Garrote-Pondoc 1/6 the donee,
Andrea Budlong did not intervene in the cadastral proceeding.

Petitioner was not substituted for the donors in that proceeding. Isabela Pondoc and Crispina Pondoc
died without any descendants in 1935 and 1937. Francisco Garrote left Bohol thirty years before 1966
and had never returned to that province. Isabel Garrote-Pondoc died and was survived by her five
children named Juan, Fabio, Apolinaria, Benedicta and Felicidad all surnamed Pondoc y Garrote.
Andrea Budlong has been in possession of the lot. She declared it for tax purposes in her name. She
planted the lot to coconuts, bamboos,bananas and a mango tree.

Early in 1965 Andrea wanted to register the deed of donation. The register of deeds in a letter dated April
1, 1965 asked Juan Pondoc to surrender the owner's duplicate of OCT No. 4718 but failed to comply the
request.

Andrea Budlong filed in the Court of First instance of Bohol an action for the partition of the said lot. She
was allowed to sue as a pauper. The trial court dismissed the complaint on the grounds that Andrea
Budlong was guilty of laches and that the registration of the lot extinguished her rights under the deed of
donation.

ISSUE: Whether or not the donee ceased to be a co-owner because her name does not appear in the
certificate of title.

RULING:

The court held that the donation in 1934 should be given effect. The donation of the land was confirmed
by the plaintiff-appellants, her improvements, enjoyment of fruits, and payment of the realty taxes dues
for the years 1936 to 1966.

In the deed it is expressly stipulated that the ownership over the two-thirds proindiviso share of the donors
in Lot No. 5447 was transferred to the donee. That notarial deed amounted to a transfer of the ownership
and the execution of a public instrument of conveyance is one of the recognized ways by which delivery
of lands may be made.

Article 403 of the old Civil Code, now article 497, provides that the assignees of the co-owners may take
part in the partition of the property. Article 400 of the old Code, now article 494, provides that each co-
owner may demand at any time the partition of the common property, a provision which implies that the
action to demand partition is imprescriptible or cannot be barred by laches. (Art. 1965, old Civil Code).

The deed of donation made in favor of Andrea Budlong as co-owner of Lot No. 5447 became her the
successor-in-interest of the donors, Isabela Pondoc and Crispina Pondoc. The fact that in OCT No. 4718,
which was issued subsequent to the donation, the donors appear to be the co-owners and as such,
Andrea Budlong being a donee has all the rights of being a co-owner even if her name was not appear in
the certificate of title.

8. Roxas vs. Dinglasan

Facts: Felisa Kalaw was the registered owner with Certificate of Title of a lot at Lipa City. On June 11,
1959, she sold to Francisca Mojica by means of a public instrument an undivided portion of the lot for the
price of P938.50. In the same month and year, she sold to Victoria Dinglasan by means of a private
instrument the remaining portion for the price of P5,851.40. Long before and at the time of the sales,
Francisca Mojica and Victoria Dinglasan were in possession of the Lot. The vendor's Certificate of Title
was not delivered to the vendees because it was in the possession of another person to whom the lot had
been mortgaged by Felisa Kalaw.

Prior to December 29, 1961, Pedro Dinglasan, by falsifying a public document of conveyance, succeeded
in having Certificate of Title the name of Felisa Kalaw canceled and a new transfer Certificate of Title
issued in his name. The record does not show when and how he had obtained possession of the owner's
duplicate certificate of title. On December 29, 1961, Pedro Dinglasan mortgaged the lot to Leonora T.
Roxas as security for a loan. The mortgagor's title having been delivered to the mortgagee, she caused
the instrument to be registered on the back of the said transfer certificate of title. On April 3, 1962, the
mortgagee, Leonora T. Roxas, instituted the instant foreclosure suit against the mortgagor, Pedro
Dinglasan, the latter having failed or refused to pay the obligation on its due date. Said defendant was
declared in default. On April 18, 1962, Francisca Mojica and Victoria Dinglasan moved to intervene and
that their complaint in intervention annexed to the motion be admitted. The complaint alleged that they
were the owners of the lot, having purchased the same from Felisa Kalaw, in June 1959; the title to said
land was fraudulently transferred by Pedro Dinglasan in his name; that Pedro Dinglasan mortgaged the
land in favor of plaintiff Leonora T. Roxas; that said mortgagor has been convicted of "Falsification of
Public Document by a Private Individual," and the document used by him in transferring title in his name
was the subject of the said felony. The intervenors prayed that they be declared the true and absolute
owners of the parcel of land covered by Transfer Certificate of Title; that whatever document executed by
Pedro Dinglasan in transferring the ownership of the land in his name be declared null and void; and that
Transfer Certificate of Title be ordered canceled and another title issued in the intervenors' names.

Lower court rendered its decision finding that the mortgage was validly constituted and its foreclosure was
in order, that "this is not the time and place for them (intervenors) to raise their claim of ownership over
the property," and that the intervenors were not entitled to any relief. Judgment was rendered ordering
foreclosure of the mortgage. From this judgment the intervenors appealed to the Court of Appeals. Said
court, however, certified the appeal of this Court on the ground that it involves only questions of law
Issue:
1. Whether or not the intervenors acquired ownership of the land
2. Whether or not the mortgage was valid
Held:
1. The complaint in intervention was to vindicate ownership of the land in the intervenors. The deeds of
sale involving the parcel of land covered by Certificate of Title in the name of the vendor, Felisa Kalaw, not
having been registered, the said intervenors did not acquire ownership of the land. It is well settled that in
case of sale of a piece of land titled under the Torrens System, it is the act of registration, and not
tradition, that transfers the ownership of the land sold. The vendees-intervenors not having acquired the
ownership of the land, their action to vindicate ownership must fail because such action can prosper only
upon proof by plaintiff that he is the owner. As pointed out, the intervenors did not acquire ownership of
the land because their deeds of sale were not registered.
2. Article 2085 of the New Civil Code requires that the mortgagor be the owner of the property mortgaged.
Although Pedro Dinglasan was not the owner of the property mortgaged because he had secured title
thereto thru fraud or falsification of a public document, the mortgage was valid because Leonora T. Roxas
was an innocent mortgagee for value, having relied upon the mortgagor's transfer certificate of title which
according to the Register of Deeds was genuine and free from any objection.
Where the certificate of title was already in the name of the forger when the land was sold to an innocent
purchaser, the vendee had the right to rely on what appeared in the certificate and, in the absence of
anything to excite suspicion, was under no obligation to look beyond the certificate and investigate the
title of the vendor appearing on the face of said certificate. The principle is applicable to a mortgagee in
good faith and for value.
Moreover, the intervenors were negligent. As the vendor did not deliver to them her duplicate certificate of
title, they should have consulted a good lawyer who could have advised them to protect their rights by
filing with the Office of the Register of Deeds an adverse claim. Had they filed an adverse claim, Pedro
Dinglasan would not have been able to obtain cancellation of Felisa Kalaw's certificate of title and the
issuance of a new transfer certificate of title in his name. They were, thus, negligent, and their negligence
was the proximate cause of their loss.
PREMISES CONSIDERED, the judgment appealed from is affirmed without prejudice to allowing the
intervenors-appellants to make the deposit mentioned in the appealed judgment within ninety (90) days
from date of finality of the judgment of this Court, and without prejudice to the vendees, Francisca Mojica
and Victoria Dinglasan, bringing an action against the vendor, Felisa Kalaw, for the enforcement of said
vendor's warranty against eviction. No special pronouncement as to costs.

9. Aznar Bros. Realty Co. v CA

FACTS:
The disputed property is Lot No. 4399 with an area of 34,325 square meters located at Dapdap, Lapu-
Lapu City. risanta Maloloy-on petitioned for the issuance of a cadastral decree in her favor over said
parcel of land. After her death in 1930, the Cadastral Court issued a Decision directing the issuance of a
decree in the name of Crisanta Maloloy-ons eight children, namely: Juan, Celedonio, Emiliano,
Francisco, Simeon, Bernabe, Roberta and Fausta, all surnamed Aying. The certificate of title was,
however, lost during the war.
Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial Partition of Real Estate with
Deed of Absolute Sale dated March 3, 1964, conveying the subject parcel of land to herein petitioner
Aznar Brothers Realty Company. Said deed was registered with the Register of Deeds of Lapu-Lapu City
on March 6, 1964 under Act No. 3344.
In 1988, herein petitioner filed a Petition for Reconstitution of the Original Title as the original title over
the subject property had been lost during the war. On April 12, 1988, the court granted said petition,
thereby directing the Register of Deeds of Lapu-Lapu City to issue a reconstituted title in the name of
the abovementioned Aying siblings.
In 1991, petitioner, claiming to be the rightful owner of the subject property, sent out notices to vacate,
addressed to persons occupying the property. Unheeded, petitioner then filed a complaint for
ejectment against the occupants before the Metropolitan Trial Court (MTC), Lapu-Lapu City.

On February 1, 1994, the MTC ordered the occupants to vacate the property. The case eventually
reached this Supreme Court, a Decision was promulgated in favor of herein petitioner, declaring it as the
rightful possessor of the parcel of land in question.

Meanwhile, herein respondents, along with other persons claiming to be descendants of the eight Aying
siblings, all in all numbering around 220 persons, had filed a complaint for cancellation of the Extra-
Judicial Partition with Absolute Sale, recovery of ownership, injunction and damages with the RTC of
Lapu-Lapu City. The complaint was dismissed twice without prejudice. Said complaint was re-filed on
August 19, 1993, docketed as Civil Case No. 2930-L.

In the Answer to the Amended Complaint, petitioner then raised the affirmative defenses of failure to
state cause of action and prescription, as it took respondents 27 years, 10 months and 27 days to file the
action to recover subject property, when an action to recover property based on an implied trust should
be instituted within 4 years from discovery of the fraud.

After trial, the RTC rendered a Decision dated July 4, 1997, ruling that respondents evidence failed to
prove that the extra-judicial partition with deed of absolute sale was a totally simulated or fictitious
contract and concluded that said document is valid, thus, effectively conveying to petitioner the
Property in question.

In modifying the RTC judgment, the CA ratiocinated that an action for recovery of possession of
registered land never prescribes in view of the provision of Section 44, Act No. 496 (now Sec. 47, PD
1520), to the effect that no title to registered land in derogation to that of a registered owner shall be
acquired by prescription. The CA further ruled that even if the action is deemed to be based on implied
trust, prescription did not begin to run since there is no evidence that positive acts of repudiation were
made known to the heirs who did not participate in the execution of the Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale. Thus, striking down the RTCs ruling that the respondents complaint
is dismissible on the ground of prescription, the CA held instead that herein respondents action had not
prescribed but upheld the validity of the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale, except as to the shares of the heirs of Emiliano, Simeon and Roberta, who did not participate in the
execution of said document.

ISSUE:
Whether or not there is sufficient proof for the principle of laches to apply.

HELD:
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered
under Act No. 3344 and not under Act No. 496, said document is deemed not registered. Accordingly,
the ten-year prescriptive period cannot be reckoned from March 6, 1964, the date of registration of the
subject document under Act No. 3344. The prescriptive period only began to run from the time
respondents had actual notice of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale.
The only evidence on record as to when such prescriptive period commenced as to each of the
respondents are Wenceslao Sumalinogs (heir of Roberta Aying) testimony that about three years after
1964, they already learned of the existence of the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale; and Laurencio Ayings (heir of Emiliano Aying) admission that he found out about the sale
of the land in dispute a long time ago and can only estimate that it must be after martial law. Paulino
Aying (heir of Simeon Aying) gave no testimony whatsoever as to when the children of Simeon Aying
actually learned of the existence of the document of sale. On the other hand, petitioner did not present
any other evidence to prove the date when respondents were notified of the execution of the subject
document.

In view of the lack of unambiguous evidence of when the heirs of Emiliano Aying and Simeon Aying
discovered the existence of the document of sale, it must be determined which party had the burden of
proof to establish such fact.

The test for determining where the burden of proof lies is to ask which party to an action or suit will fail
if he offers no evidence competent to show the facts averred as the basis for the relief he seeks to
obtain. Moreover, one alleging a fact that is denied has the burden of proving it and unless the party
asserting the affirmative of an issue sustains the burden of proof of that issue by a preponderance of the
evidence, his cause will not succeed. Thus, the defendant bears the burden of proof as to all affirmative
defenses which he sets up in answer to the plaintiffs claim or cause of action; he being the party who
asserts the truth of the matter he has alleged, the burden is upon him to establish the facts on which
that matter is predicated and if he fails to do so, the plaintiff is entitled to a verdict or decision in his favor.
In the case at bar, it was petitioner, as the defendant before the RTC, which set up in its Answer the
affirmative defense of prescription. It was, therefore, incumbent upon petitioner to prove the date
from which the prescriptive period began to run. Evidence as to the date when the ten-year prescriptive
period began exists only as to the heirs of Roberta Aying, as Wenceslao Sumalinog admitted that they
learned of the existence of the document of sale in the year 1967. As to the heirs of Emiliano Aying and
Simeon Aying, there is no clear evidence of the date when they discovered the document conveying the
subject land to petitioner. Petitioner miserably failed to adduce proof of when the heirs of Emiliano
Aying and Simeon Aying were notified of the subject document. Hence, with regard to said heirs, the
Court may consider the admission in the amended complaint that they learned of the conveyance of the
disputed land only in 1991 when petitioner sent notices to vacate to the occupants of the subject land,
as the date from which the ten-year prescriptive period should be reckoned.

Respondents filed their Amended Complaint on December 6, 1993. Thus, with regard to respondent
heirs of Roberta Aying who had knowledge of the conveyance as far back as 1967, their cause of action
is already barred by prescription when said amended complaint was filed as they only had until 1977
within which to bring action. As to the respondent heirs of Emiliano and Simeon Aying, they were able
to initiate their action for reconveyance of property based on implied or constructive trust well within
the ten-year prescriptive period reckoned from 1991 when they were sent by petitioner a notice to
vacate the subject property.

Evidently, laches cannot be applied against respondent heirs of Emiliano and Simeon Aying, as they took
action to protect their interest well within the period accorded them by law.

10. FIDELITY and SURETY COMPANY v CONEGERO February 18, 1921 G.R. No. L-15466

FACTS:

Prior to June 26, 1913, Pastora Conegero was the holder of Torrens certificate of title, No. 147,
covering a parcel of land in the city of Iloilo. After the Torrens title aforesaid had been issued, a cadastral
survey covering this and other land in the city of Iloilo was undertaken by the Government; and in the
course of the cadastral proceedings the court found it convenient or desirable to order that the certificate
of title No. 147 be cancelled and that a new certificate of title should be issued to Pastora Conegero in its
stead. The explanation of this order, though unimportant for the purposes of this decision, is said to be
that the court had discovered that certificate No. 147 included, in addition to the land of which Pastora
Conegero was the true owner, two strips of land which belonged to her children.
 At any rate, Pastora Conegero surrendered certificate No. 147, and two new certificates were
issued: one to herself (No. 194), and another to her children (No. 195). The land included in certificate No.
194 may be assumed, as stated in the agreed facts, to be the same as that which had been included in
the old certificate No. 147, though it is possible that the lots covered by the two certificates are not exactly
the same. With certificate No. 195 we are not here concerned.

While Pastora Conegero was yet the holder of certificate No. 147, she mortgaged the land
covered by it to El Hogar Filipino to secure a debt, and the encumbrance thereby created was noted on
her duplicate certificate of title. On March 30, 1916, Pastora Conegero entered into an agreement with
one Samuel Thomas whereby, in consideration of the sum of P1,637.49, she bargained and sold to the
said Thomas the property described in title No. 147.

. At the time this sale was made the Torrens certificate covering the land was not produced or
delivered to the purchaser in the city of Manila where the contract was made; and in fact at that time
certificate No. 147, referred to in the description of the land in said contract, was non-existent, having
been cancelled as already stated. Of this fact, however, the purchaser was presumably ignorant; and
although he (or his attorney) was aware that the owner's certificate, No. 147, had been sent to Iloilo for
use in the cadastral proceedings, the irregularity of making the contract without having the certificate in
hand was considered unimportant.

On October 18, 1916, Pastora Conegero mortgaged the property described in certificate No. 194
to the Fidelity and Surety Company of the Philippine Islands to secure a credit of P2,000 guaranteed by
the surety company. This mortgage was registered and noted on the original certificate of title, No. 194,
by the register of deeds at Iloilo on March 29, 1917.

On March 22, 1918, the Fidelity and Surety Company of the Philippine Islands brought this action
to foreclose its mortgage, naming Samuel Thomas and Southworth and Goyena as codefendants with
Pastora Conegero.

ISSUE(s):
1.) Did the entering of this memorandum in said book operate as an effective registration of the title, or
transfer of title, and thereby held that it had this effect?

2.) Whether or not the deed of March 30, 1916, to Samuel Thomas is superior to the mortgage of October
18, 1916, executed in favor of the Fidelity and Surety Company.

RULING(s):
1.) No. Section 56 of Act No. 496 provides in part as follows:
Each register of deeds shall keep an entry book in which he shall enter in the order of their reception all
deeds and other voluntary instruments, and all copies of writs or other process filed with him relating to
registered land. He shall note in such book the year, month, day, hour, and minute of reception of all
instruments, in the order in which they are received. They shall be regarded as registered from the time
so noted, and the memorandum of each instrument when made on the certificate of title to which it refers
shall bear the same date.

What is here really meant, we suppose, is that wherever registration is actually effected, and a
new certificate issued, the registration is retroactive and takes effect by relation as of the date when the
annotation in the entry book was made.

In the light of this interpretation it is quite evident that the mere annotation of a contract relating
to land covered by a Torrens title, which is not followed by registration and the emission of a new
certificate, is without significance as regards its effect upon such title.
2.) It must be held that the title acquired by the Fidelity and Surety Company is superior to that acquired
by Samuel Thomas, since the memorandum in said book did not operate as an effective registration of
the title.

11. TENIO-OBSEQUIO v CA

Facts: The subject matter of the present petition is a parcel of land registered in the name of herein
respondent Eufronio Alimpoos and which he acquired through a homestead application. The said land is
now registered in the name of herein petitioner, Consorcia Tenio-Obsequio.

On September 10, 1986, private respondents filed a complaint in the court a quo against Tenio and her
husband for recovery of possession and ownership, alleging that sometime in 1964, they mortgaged the
land to Eduardo Deguro for P10,000.00and used the land as guaranty. On June 25, 1965, Eduardo
Deguro and his wife, without the knowledge of private respondents, prepared a document of sale and
after the death of Eduardo Deguro, his heirs sold the land to Consorcia Tenio-Obsequio. It was allegedly
only in 1982, when Eufronio Alimpoos received a Certificate of Agricultural Leasehold of his land from the
Department of Agrarian Reform (DAR), that he learned that the land was already titled in the name of
another.

Consorcia Tenio-Obsequio maintains that she purchased the land in question from the heirs of Deguro in
good faith, for valuable consideration and without knowledge of any flaw or defect whatsoever.

Issue: WON Obsequitos contention has merit.

Held: The petition is meritorious. Reconveyance of the land in question to the original owner is not in
order.

Herein respondent Alimpoos, as the original owner of the said land, is assailing the title of petitioner on
the ground that their original certificate of title over the said land was cancelled by virtue of a forged deed
of absolute sale.

Under Section 55 the Land Registration Act, as amended by Section 53 of Presidential Decree No. 1529,
an original owner, of registered land may seek the annulment of a transfer thereof on the ground of fraud.
However, such a remedy is without prejudice to the rights of any innocent holder for value with a
certificate of title.

A purchaser in good faith and for value is one who buys the property of another, without notice that some
other person has a right to or interest in such property, and pays a full and fair price for the same at the
time of such purchase or before he has notice of the claim or interest of some other person in the
property. In consonance with this accepted legal definition, petitioner Consorcia Tenio-Obsequio is a
purchaser in good faith. There is no showing whatsoever nor even an allegation that herein petitioner had
any participation, voluntarily or otherwise, in the alleged forgery.

12. JOAQUIN V. BASS, plaintiff-appellant, vs. ESTEBAN DE LA RAMA and HIJOS DE I. DE LA

RAMA, defendants-appellees.

FACTS:

On December 18, 1923, the provincial sheriff of Occidental Negros, at the instance of the herein plaintiff
Joaquin V. Bass, levied execution on the one-fourth interest of Pedro Ferrer in the said land by virtue of a
writ of execution issued by the Court of First Instance of Manila in civil case No. 19816, entitled "Joaquin
V. Bass vs.. Pedro Ferrer." Notice of the levy was presented to the office of the register of deeds and
entered in the day book on December 18, 1923, but was not annotated on the certificate of title. Pursuant
to that levy, the provincial sheriff advertised and sold at public auction the said one-fourth interest of
Pedro Ferrer in the land above mentioned, adjudicating it to the judgment creditor Joaquin V. Bass for the
sum of P4,811,35, which was the amount of the judgment plus interest, costs, and expenses of the sale.
The certificate of sale was presented to the office of the register of deeds and entered in the day book on
April 9, 1924; but, like the notice of levy, it was not annotated on the corresponding certificate of title. It
does not appear that the sheriff ever issued a final deed of sale in favor of Joaquin V. Bass after the lapse
of one year. Neither does it appear whether or not the execution debtor Pedro Ferrer exercised the right
of redemption within said statutory period.

On or before 1924 Juliana Fuentebella Vda. de Ferrer, Pedro Ferrer, and Francisco Ferrer instituted civil
case No. 2911 in the Court of First Instance of Occidental Negros against the Negros Coal Co., Ltd.,
Esteban de la Rama, and Hijos de I. de la Rama; and by way of cross-complaint filed in said case on July
30, 1924, the defendant Hijos de I. de la Rama foreclosed the mortgage executed by Pedro Ferrer as well
as those executed separately by his co-owners Juliana Fuentebella and Francisco Ferrer on the land
described in transfer certificate of title No. 2112. By virtue of the judgment obtained in said case by Hijos
de I. de la Rama against Pedro Ferrer and his co-owners, the provincial sheriff advertised and sold at
public auction on January 5, 1929, the land described in transfer certificate of title No. 2112, adjudicating
it to the judgment creditor Hijos de I. de la Rama for the sum of P50,000. Upon presentation of the
certificate of sale to the register of deeds of Occidental Negros, the latter, on January 7, 1929, cancelled
transfer certificate of title No. 2112 in the name of Juliana Fuentebella, Francisco Ferrer, and Pedro Ferrer
and issued transfer certificate of title No. 11411 in the name of Hijos de I. de la Rama. Subsequently the
sheriff's sale was confirmed by the court in an order dated July 27, 1929.

On the last-mentioned certificate of title are noted the following are subsisting encumbrances on the land
in question: (1) A mortgage of P400,000 in favor of the Philippine National Bank, recorded October 24,
1935; (2) another mortgage in favor of the Philippine National Bank to secure credit of P1,000,000 to
P2,000,000, recorded February 25, 1938; and (3) notice of lis pendens by the plaintiff in this case,
recorded April 21, 1939.

The present action was instituted in or about April, 1939, by Joaquin V. Bass against Esteban de la Rama
and Hijos de I. de la Rama to obtain judgment ordering the defendants "to deliver the land in question to
the plaintiff and to pay to the latter damages in the sum of P1,220,700" claimed to be the value of the
sugar realized from the produce of one-fourth of the said land during the time it has been in the
possession of the defendants. That amount has been reduced in the prayer of appellant's brief to
P353,365.98.

The theory of the plaintiff, as may be gathered from his complaint, is that by virtue of the certificate of sale
issued in his favor by the sheriff on February 15, 1924, which was entered in the day book of the register
of deeds on April 9 of the same year, he became the absolute owner of one-fourth of the land described in
transfer certificate of title No. 2112, equivalent to 127.9271 hectares. The trial court dismissed plaintiff's
complaint on the ground that whatever right he might have acquired by virtue of the sheriff's sale have
been lost thru his failure to redeem Pedro Ferrer's mortgage in favor of Hijos de I. de la Rama before it
was foreclosed. Plaintiff appealed.

ISSUE: Whether or not the mere entry in the day book affecting registered land but was not annotated on
the certificate of title already constitute ownership by the plaintiff.

RULING:

No. It will be noted that section 51 declares the effect of registration, while section 52 specifies the
manner of registration. The two sections are complementary to each other and should be interpreted
together. To hold that the mere entry of a document in the day or entry book, without noting it on the
certificate of title, is sufficient, would render section 52 nugatory and destroy of the principal features of
the Torrens System of registration, namely, that all encumbrances on the land or special estates therein
shall be shown or at least intimated upon the certificate of title so that a person dealing with the owner of
the land need not go behind the certificate and inquire into transactions the existence of which is not there
intimated.
If the mere entry of a document in the entry book were sufficient, no one would or should take the trouble
of causing it to be annotated on the certificate of title and paying additional fees. But that is unavoidable
because section 56 provides "that no registration, annotation, or memorandum on a certificate of title shall
be made unless the fees prescribed therefor by this Act are paid within fifteen days' time after the date of
the registration of the deed, instrument order, or document in the entry book or day book, and in case said
fee is not paid within the time above mentioned, such entry shall be null and void." It seems clear,
therefore, that the mere entry in the day book is not sufficient.

In the instant case the notice of levy on execution and the sheriff's sale in favor of appellant of Pedro
Ferrer's participation in the land in question were never annotated on the certificate of title. Hence they
were not binding against the mortgage Hijos de I. de la Rama and it was not necessary for the latter to
implead appellant as junior encumbrancer in the foreclosure of its mortgage. As a result, the equity or
right acquired by appellant in Pedro Ferrer's participation in the land in question was wiped out by the
foreclosure of the pre-existing mortgage thereon.

Aside from the foregoing considerations, it also appears from paragraph V of plaintiff's complaint that the
defendant Hijos de I. de la Rama, which appears now to be the registered owner of the land in question,
has been in the adverse and exclusive possession of said land since January 5, 1929. Nevertheless
plaintiff's commenced this action and filed notice of lis pendens only in April, 1939, that is to say, more
than ten years after plaintiff's cause of action had accrued. Since, as we have shown, plaintiff's interest in
said land has not been registered, he cannot invoke section 46 of the Land Registration Act in his favor. It
is clear, therefore, that this action is barred by the statute of limitations.

13. DBP v Acting Register of Deeds of Nueva Ecija

FACTS:
This case, rather cut-and-dried as far as factual background is concerned, turns upon a
determination of the true meaning and intendment of Section 56 of Presidential Decree No.
1529, 1 which in part reads:
Sec. 56. Primary Entry Book; fees, certified copies. Each Register of Deeds shall
keep a primary entry book in which, upon payment of the entry fee, he shall enter, in
the order of their reception, all instruments including copies of writs and processes
filed with him relating to registered land. He shall, as a preliminary process in
registration, note in such book the date, hour and minute of reception of all
instruments, in the order in which they were received. They shall be regarded as
registered from the time so noted, and the memorandum of each instrument, when
made on the certificate of title to which it refers, shall bear the same date: Provided,
that the national government as well as the provincial and city governments shall be
exempt from the payment of such fees in advance in order to be entitled to entry and
registration.
xxx xxx xxx
The facts are few and undisputed. On June 13, 1980, the Development Bank of the Philippines
(hereafter, DBP) presented for registration to the Register of Deeds of Nueva Ecija, Cabanatuan
City, a sheriff's certificate of sale in its favor of two parcels of land covered by Transfer Certificates of
Title Nos. NT-149033 and NT-149034, both in the names of the spouses Andres Bautista and
Marcelina Calison, which said institution had acquired as the highest bidder at an extrajudicial
foreclosure sale. The transaction was entered as Entry No. 8191 in the Registry's Primary Entry
Book and DBP paid the requisite registration fees on the same day. Annotation of the sale on the
covering certificates of title could not, however be effected because the originals of those certificates
were found to be missing from the files of the Registry, where they were supposed to be kept, and
could not be located. 2 On the advice of the Register of Deeds, DBP instituted proceedings in the Court
of First Instance of Nueva Ecija to reconstitute said certificates, and reconstitution was ordered by that
court in a decision rendered on June 15, 1982. 3 For reasons not apparent on the record, the certificates
of title were reconstituted only on June 19,1984. 4
On June 25, 1984, DBP sought annotation on the reconstituted titles of the certificate of sale subject
of Entry No. 8191 on the basis of that same four-year-old entry. The Acting Register of Deeds, being
in doubt of the proper action to take on the solicitation, took the matter to the Commissioner of Land
Registration by consulta raising two questions: (a) whether the certificate of sale could be registered
using the old Entry No. 8191 made in 1980 notwithstanding the fact that the original copies of the
reconstituted certificates of title were issued only on June 19, 1984; and (b) if the first query was
answered affirmatively, whether he could sign the proposed annotation, having assumed his duties
only in July 1982. 5
The resolution on the consulta held that Entry No. 8191 had been rendered "... ineffective due to the
impossibility of accomplishing registration at the time the document was entered because of the non-
availability of the certificate (sic) of title involved. For said certificate of sale to be admitted for
registration, there is a need for it to be re-entered now that the titles have been reconstituted upon
payment of new entry fees," and by-passed the second query as having been rendered moot and
academic by the answer to the first. 6
Unwilling to accept that result, the DBP appealed the resolution to the Court of Appeals (then the
Intermediate Appellate Court) 7 which, after reviewing the record, certified the appeal to this Court as
involving a question purely of law
ISSUE: WHETHER OR NOT THE ABSENCE OF A CORRESPONDING ANNOTATION ON THE
CERTIFICATE OF TITLE RENDERS A PRIMARY ENTRY WITHOUT EFFECT?
RULING: NO.
Current doctrine thus seems to be that entry alone produces the effect of registration, whether the
transaction entered is a voluntary or an involuntary one, so long as the registrant has complied with
all that is required of him for purposes of entry and annotation, and nothing more remains to be done
but a duty incumbent solely on the register of deeds.
Therefore, without necessarily holding that annotation of a primary entry on the original of the
certificate of title may be deferred indefinitely without prejudice to the legal effect of said entry, the
Court rules that in the particular situation here obtaining, annotation of the disputed entry on the
reconstituted originals of the certificates of title to which it refers is entirely proper and justified. To
hold said entry "ineffective," as does the appealed resolution, amounts to declaring that it did not,
and does not, protect the registrant (DBP) from claims arising, or transactions made, thereafter
which are adverse to or in derogation of the rights created or conveyed by the transaction thus
entered. That, surely, is a result that is neither just nor can, by any reasonable interpretation of
Section 56 of PD 1529, be asserted as warranted by its terms.
The qualms implicit in the query of the respondent (and present appellee) register of deeds about
making annotation of an entry effected before he assumed that office are more imagined than real.
He would only be making a memorandum of an instrument and of its entry based on or reciting
details which are already of indubitable record and, pursuant to the express command of the law,
giving said memorandum the same date as the entry. No part of that function is exclusive to the
incumbent of the office at the time entry was made or is forbidden to any of his successors.
14. GONZALES v IAC

FACTS:

The spouses Asuncion Sustiguer and Dioscoro Buensuceso were the original owners of Lot No.
2161 of the Cadastral Survey of Barotac Nuevo, the property subject of this controversy. For delinquency
in the payment of the real estate taxes due thereon, the land was sold at public auction to the Province of
Iloilo in 1955. Hortencia Buensuceso, daughter of said spouses, discovered in the office of the Register of
Deeds of Iloilo that the Certificate of Title of subject land, OCT No. 3351, was still in the name of her
parents. Hortencia paid the back taxes on the land in behalf of her mother (who by that time was already
separated in fact from her father) in whose favor the Provincial Treasurer executed a deed of repurchase
on April 10, 1969. On April 17, 1969, the spouses Gaudioso Panzo and Hortencia Buensuceso bought the
land from the latter's mother for P1,000.00.

Thereafter, the spouses Panzo filed a petition in the Court of First Instance of Iloilo for the
reconstitution of the original certificate of title. On February 26,1971, a reconstituted original certificate of
title was issued in the name of Asuncion Sustiguer alone. And by virtue of the sale of said property by
Sustiguer to the spouses Panzo, her title was cancelled and in lieu thereof TCT No. T-64807 was issued
by the Register of Deeds of Iloilo in the spouses' name on March 3, 1971. The said spouses then
mortgaged the property to respondent Rural Bank of Pavia for P5,000.00. Upon their failure to pay the
account, respondent bank foreclosed the mortgage on August 11, 1973 and the bank was the highest
bidder. A certificate of sale was executed by the Provincial Sheriff in its favor.

On April 18, 1974, petitioner as judicial co-administratrix of the Intestate Estate of the late Matias
Yusay brought an action, against the spouses Panzo and the respondent Rural Bank seeking the
annulment and cancellation of the title in the name of the Panzos and the issuance of a new title in favor
of Yusay. In her complaint, petitioner alleged among other things: that the subject property was first
mortgaged to Yusay on April 30, 1929 by the spouses Sustiguer and Buensuceso; that sometime
November, 1934, said property was verbally sold to Yusay by the same spouses; that since Yusay bought
the property in 1948, he and his administrator and later plaintiff administratrix, have been in possession of
the property thru their tenant Elias Daguino until April 15, 1971, when defendants spouses Panzo wrested
possession from their tenant; that on May 12, 1971, plaintiff administratrix filed an action, for forcible entry
against them before the Municipal Court of Barotac Nuevo, Iloilo docketed as Civil Case No. 577; that the
trial court having ruled in favor of plaintiffs on November 4, 1972, defendants spouses appealed the said
decision to the Court of First Instance of Iloilo, where the said appeal still pends; that defendant Rural
Bank was not a mortgagee in good faith for not having taken the necessary precaution before accepting
the subject property as collateral for the loan granted the defendants-spouses.

In its answer of May 14,1984 defendant Rural Bank set up the defense of good faith alleging that
the certificate of title in the names of the spouses Panzo was free from any lien and that the rigid
requirements for loan applications had been duly deserved by the Bank. It further claimed that on August
11, 1973, the mortgage executed by the spouses was foreclosed and defendant bank being the highest
bidder was issued a certificate of sale by the Provincial Sheriff of Iloilo.

Upon receipt of the answer of defendant Bank, plaintiff on July 15, 1974 moved to dismiss the
case as regards defendants spouses Panzo on the ground that the subject property having already been
sold to defendant Rural Bank, the said spouses ceased to have any interest in the property. The lower
court acting on this motion ordered the dismissal of the case on July 26, 1974 against the said defendant-
spouses only.

After trial and submission of the respective memoranda of the parties, the court a quo addressing
itself to the only issue of whether or not defendant Rural Bank was a mortgagee and subsequent buyer
for value and in good faith ruled in favor of said defendant.

From the decision of the court a quo, petitioner appealed to the Intermediate Appellate Court
which rendered its decision, subject of this petition, agreement in toto the decision of the court a quo.

ISSUE: Whether or not the respondent bank was an innocent mortgagee and subsequent buyer for value
in good faith of the property.

RULING: YES.

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 wits then duly
registered with the Register of Deeds.

The credit investigation and approval were undertaken by responsible officers of the respondent
Bank. For the bank to consult a lawyer would not have made much difference in its findings.

The well-known rule in this jurisdiction is that a person dealing with a registered land has a light to
rely upon the face of the torrens certificate of title and to dispense with the need of inquiring her except
when the party concerned has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make inquiry. It has also been held that a bank is not required, before
accepting a mortgage, to make an investigation of the title of the property being given as security.

It is well-settled that a Torrens Title cannot be collaterally attacked. The issue on the validity of the
title can only be raised in an action expressly instituted for that
purpose.

A Torrens Title can be attacked only for fraud within one year after the date of the issuance of the
decree of registration. Such attack must be direct and not by collateral proceeding. The title represented
by the certificate cannot be changed, altered, modified, enlarged or diminished in a collateral proceeding.

WHEREFORE, the decision of respondent Intermediate Appellate Court of November 15, 1983
agreement in toto with costs the decision of the Court of First Instance of Iloilo dated July 16, 1975 is
hereby AFFIRMED without pronouncement as to costs.
15. Pineda v CA

This petition for review on certiorari[1] seeks to reverse the Decision[2] of the Court of Appeals
dated 26 August 1993 in CA-G.R. SP No. 28651 as well as the Resolution dated 4 March 1994
denying the motion for reconsideration. In its assailed decision, the Court of Appeals declared
void the orders[3] of the Regional Trial Court[4] of Cavite City dated 10 January 1992, 5 February
1992 and 30 April 1992, and made the preliminary injunction permanent. In the first order, the trial
court declared that Teresita A. Gonzales, despite notice, failed to appear at the hearing of the
motion to surrender Transfer Certificate of Title No. T-16084 and to file opposition to the motion.
In the second order, the trial court declared void the original and owners duplicate of Transfer
Certificate of Title No. T-16084 and ordered the reinstatement of Transfer Certificate of Title No. T-
8361. In the third order, the trial court denied the motions to lift the first order and to reconsider
the second order.

On 4 January 1982, the Spouses Virgilio and Adorita Benitez (Spouses Benitez) mortgaged a
house and lot (Property) covered by Transfer Certificate of Title No. T-8361 (TCT 8361) in favor of
Juanita P. Pineda (Pineda) and Leila P. Sayoc (Sayoc). The real estate mortgage secured the
Spouses Benitezs loan of P243,000 with a one-year maturity period.[5] Pineda and Sayoc did not
register the mortgage with the Register of Deeds. The Spouses Benitez delivered the owners
duplicate of TCT 8361 to Pineda.

After trial, the trial court rendered a Decision dated 15 June 1987, the dispositive portion of which
reads: WHEREFORE, in view of the foregoing, the Court hereby renders judgment declaring the
second owners duplicate of TCT No. T-8361 of the land records of Cavite as null and void and the
Register of Deeds of Cavite City is hereby ordered upon payment of the corresponding legal fees
the annotation of this pronouncement in its record and the revival of the first owners duplicate
with the same faith and credit before its alleged loss. The counterclaim of defendants Benitezes is
hereby dismissed. No pronouncement as to costs.

On 9 November 1983, with the consent of Pineda, the Spouses Benitez sold the house,[6] which
was part of the Property, to Olivia G. Mojica (Mojica). On the same date, Mojica filed a petition for
the issuance of a second owners duplicate of TCT 8361 alleging that she purchased a parcel of
land[7] and the owners duplicate copy of TCT No. T-8361 was lost.[8] On 7 December 1983, the
trial court granted the petition. The Register of Deeds of Cavite City issued the second owners
duplicate of TCT 8361 in the name of the Spouses Benitez.

On 7 December 1987, Mojica defaulted in paying her obligation to Gonzales. Hence, Gonzales
extrajudicially foreclosed the mortgage. On 27 January 1988, Gonzales purchased at public
auction the Property for P423,244.88. For failure of Mojica to redeem the Property, Gonzales
consolidated the title to the Property. On 29 March 1989, Gonzales executed the corresponding
Affidavit of Consolidation.

The Issues

Petitioners raise the following issues for resolution:

1. Whether a notice of lis pendens binds a subsequent purchaser of the property to the outcome
of the pending case.

2. Whether TCT 13138 and TCT 16084, being derived from the void second owners duplicate of
TCT 8361, are also void.

3. Whether a separate action should be filed to cancel TCT 16084.

4. Whether Gonzales was an innocent purchaser for value.

5. Whether Gonzales was denied due process of law.

RULING:

We deny the petition.

Validity of TCT 13138 and TCT 16084

Mojica filed a petition for reconstitution[17] of the owners duplicate of TCT 8361 claiming that this
owners duplicate was lost. However, contrary to Mojicas claims, the owners duplicate of TCT
8361 was not lost but in Pinedas possession. Since the owners duplicate of TCT 8361 was in fact
not lost or destroyed, there was obviously nothing to reconstitute or replace. Therefore, the trial
court correctly ruled that the reconstitution proceedings and the second owners duplicate of TCT
8361 are void.[18] As the Court held in New Durawood Co., Inc. v. Court of Appeals:[19]

In the instant case, the owners duplicate certificates of title were in the possession of Dy Quim
Pong, the petitioners chairman of the board and whose family controls the petitioner-corporation.
Since said certificates were not in fact lost or destroyed, there was no necessity for the petition
filed in the trial court for the Issuance of New Owners Duplicate Certificates of Title . . . In fact, the
said court never acquired jurisdiction to order the issuance of new certificates. Hence, the newly
issued duplicates are themselves null and void. (Emphasis supplied)

Mojica registered with the Register of Deeds the deed of sale executed by the Spouses Benitez
conveying the Property to her. Mojica also presented to the Register of Deeds the second owners
duplicate of TCT 8361. The Register of Deeds cancelled TCT 8361 and issued on 14 December
1983 TCT 13138 in the name of Mojica. However, since TCT 13138 is derived from the void
second owners duplicate of TCT 8361, TCT 13138 is also void. No valid transfer certificate of title
can issue from a void transfer certificate of title, unless an innocent purchaser for value has
intervened.[20]

Mojica was not a purchaser in good faith. Mojica alleged that the Spouses Benitez gave her the
owners duplicate of TCT 8361 on 9 November 1983, the day the Spouses Benitez sold to her the
house. However, in her petition for reconstitution, which she also filed on the same day, 9
November 1983, Mojica claimed that the owners duplicate of TCT 8361 was lost. In effect, Mojica
claimed that she received the owners duplicate of TCT 8361 from the Spouses Benitez, lost the
same, and filed the petition for reconstitution, all on the same day, 9 November 1983.

In her petition for reconstitution, Mojica also claimed that she purchased a parcel of land when in
fact she only purchased on 9 November 1983 the house, and not the lot covered by TCT 8361.
Obviously, Mojica procured the reconstitution of the second owners duplicate of TCT 8361
through misrepresentation. Hence, Mojica was not a purchaser in good faith when she later
purchased on 12 December 1983 the lot since she knew of the irregularity in the reconstitution of
the second owners duplicate of TCT 8361.

Therefore, TCT 13138 issued in the name of Mojica is void. However, what is void is the transfer
certificate of title and not the title over the Property. The title refers to the ownership of the
Property covered by the transfer certificate of title while the transfer certificate of title merely
evidences that ownership. A certificate of title is not equivalent to title as the Court explained in
Lee Tek Sheng v. Court of Appeals:[21]

xxx The certificate referred to is that document issued by the Register of Deeds known as the
Transfer Certificate of Title (TCT). By title, the law refers to ownership which is represented by
that document. Petitioner apparently confuses certificate with title. Placing a parcel of land under
the mantle of the Torrens system does not mean that ownership thereof can no longer be
disputed. Ownership is different from a certificate of title. The TCT is only the best proof of
ownership of a piece of land. Besides, the certificate cannot always be considered as conclusive
evidence of ownership. Mere issuance of the certificate of title in the name of any person does
not foreclose the possibility that the real property may be under co-ownership with persons not
named in the certificate or that the registrant may only be a trustee or that other parties may have
acquired interest subsequent to the issuance of the certificate of title. To repeat, registration is not
the equivalent of title, but is only the best evidence thereof. Title as a concept of ownership
should not be confused with the certificate of title as evidence of such ownership although both
are interchangeable. xxx (Emphasis supplied)

Mojicas Title

The prior mortgage of the Property by the Spouses Benitez to Pineda and Sayoc did not prevent
the Spouses Benitez, as owners of the Property, from selling the Property to Mojica. A mortgage
is merely an encumbrance on the property and does not extinguish the title of the debtor who
does not lose his principal attribute as owner to dispose of the property.[22] The law even
considers void a stipulation forbidding the owner of the property from alienating the mortgaged
immovable.[23]

Since the Spouses Benitez were the undisputed owners of the Property, they could validly sell
and deliver the Property to Mojica. The execution of the notarized deed of sale between the
Spouses Benitez and Mojica had the legal effect of actual or physical delivery. Ownership of the
Property passed from the Spouses Benitez to Mojica.[24] The nullity of the second owners
duplicate of TCT 8361 did not affect the validity of the sale as between the Spouses Benitez and
Mojica.

Gonzales Title

After the sale of the Property to her, Mojica obtained a loan from Gonzales secured by a real
estate mortgage over the Property. Gonzales registered this mortgage on 22 February 1985 with
the Register of Deeds who annotated the mortgage on the void TCT 13138 in Mojicas name. The
nullity of TCT 13138 did not automatically carry with it the nullity of the annotation of Gonzales
mortgage. The rule is that a mortgage annotated on a void title is valid if the mortgagee registered
the mortgage in good faith.[25] In Blanco v. Esquierdo,[26] the Court held:

That the certificate of title issued in the name of Fructuosa Esquierdo is a nullity, the same having
been secured thru fraud, is not here in question. The only question for determination is whether
the defendant bank is entitled to the protection accorded to innocent purchasers for value, which
phrase, according to sec. 38 of the Land Registration Law, includes an innocent mortgagee for
value. The question, in our opinion, must be answered in the affirmative.

The trial court, in the decision complained of, made no finding that the defendant mortgagee bank
was a party to the fraudulent transfer of the land to Fructuosa Esquierdo. Indeed, there is nothing
alleged in the complaint which may implicate said defendant mortgagee in the fraud, or justify a
finding that it acted in bad faith. On the other hand, the certificate of title was in the name of the
mortgagor Fructuosa Esquierdo when the land was mortgaged by her to the defendant bank.
Such being the case, the said defendant bank, as mortgagee, had the right to rely on what
appeared in the certificate and, in the absence of anything to excite suspicion, was under no
obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the
face of said certificate. (De Lara, et al. vs. Ayroso, 95 Phil., 185; 50 Off. Gaz., [10] 4838, Joaquin
vs. Madrid, et al., 106 Phil., 1060). Being thus an innocent mortgagee for value, its right or lien
upon the land mortgaged must be respected and protected, even if the mortgagor obtained her
title thereto thru fraud. The remedy of the persons prejudiced is to bring an action for damages
against those causing the fraud, xxx. (Emphasis supplied)

Thus, the annotation of Gonzales mortgage on TCT 13138 was valid and operated to bind the
Property and the world, despite the invalidity of TCT 13138.
Gonzales registered her mortgage in good faith. Gonzales had no actual notice of the prior
unregistered mortgage in favor of Pineda and Sayoc. To bind third parties to an unregistered
encumbrance, the law requires actual notice.[27] The fact that Mojica, who sold the Property to
Gonzales, had actual notice of the unregistered mortgage did not constitute actual notice to
Gonzales, absent proof that Gonzales herself had actual notice of the prior mortgage. Thus,
Gonzales acquired her rights as a mortgagee in good faith.

When Mojica defaulted in paying her debt, Gonzales caused the extrajudicial foreclosure of the
mortgaged Property. Gonzales purchased the mortgaged Property as the sole bidder at the public
auction sale. For Mojicas failure to redeem the foreclosed Property within the prescribed period,
Gonzales consolidated her title to the Property. Absent any evidence to the contrary, the sale at
public auction of the Property to Gonzales was valid. Thus, the title or ownership of the Property
passed from Mojica to Gonzales. At this point, therefore, Gonzales became the owner of the
Property.

When Gonzales purchased the Property at the auction sale, Pineda and Sayoc had already
annotated the lis pendens on the original of TCT 8361, which remained valid. However, the
mortgage of Gonzales was validly registered prior to the notation of the lis pendens. The
subsequent annotation of the lis pendens could not defeat the rights of the mortgagee or the
purchaser at the auction sale who derived their rights under a prior mortgage validly registered.
The settled rule is that the auction sale retroacts to the date of the registration of the mortgage,
[28] putting the auction sale beyond the reach of any intervening lis pendens, sale or attachment.
As the Court explained in Caviles, Jr. v. Bautista:[29]

We have also consistently ruled that an auction or execution sale retroacts to the date of levy of
the lien of attachment. When the subject property was sold on execution to the petitioners, this
sale retroacted to the date of inscription of petitioners notice of attachment on October 6, 1982.
The earlier registration of the petitioners levy on preliminary attachment gave them superiority
and preference in rights over the attached property as against respondents.

Accordingly, we rule that the execution sale in favor of the petitioner Caviles spouses was anterior
and superior to the sale of the same property to the respondent Bautista spouses on October 18,
1982. The right of petitioners to the surrender of the owners duplicate copy of TCT No. 57006
covering the subject property for inscription of the certificate of sale, and for the cancellation of
said certificate of title and the issuance of a new title in favor of petitioners cannot be gainsaid.

A contrary rule would make a prior registration of a mortgage or any lien meaningless.[30] The
prior registered mortgage of Gonzales prevails over the subsequent notice of lis pendens, even if
the auction sale took place after the notation of the lis pendens. Consequently, TCT 16084,
issued to Gonzales after she presented the sheriffs certificate of sale and her affidavit of
consolidation, is valid.

What remained with Pineda and Sayoc after the foreclosure was the mortgagors residual rights
over the foreclosed Property, which rights are the equity of redemption[31] and a share in the
surplus fund, if any.[32] Since Mojica was not a purchaser in good faith, the residual rights of
Mojica were subject to the claim of Pineda and Sayoc. Of course, Pineda and Sayoc may still file
an action to recover the outstanding debt of the Spouses Benitez, and even go after Mojica for
her assumption of obligation under the Acknowledgment of Indebtedness.

The Equities Favor Gonzales over Pineda and Sayoc

Pineda and Sayoc were negligent in not registering their mortgage, which ultimately led to this
controversy. Had Pineda and Sayoc registered their mortgage, their rights as prior mortgagees
would have prevailed over that of Gonzales. Pineda and Sayoc were also negligent in not
foreclosing their mortgage ahead of Gonzales, when they could have done so as early as 4
 January 1983 after the Spouses Benitez defaulted on their loan.[33] In contrast, the loan of
Mojica fell due only on 7 December 1987.

Since Gonzales vigilantly exercised her right to foreclose the mortgaged Property ahead of
Pineda and Sayoc, Gonzales mortgage would still prevail over the mortgage of Pineda and Sayoc
even if Gonzales mortgage was not validly registered. The unregistered mortgage of Pineda and
Sayoc was extinguished upon foreclosure of Gonzales mortgage even assuming for the sake of
argument that the latter mortgage was unregistered. Between two unregistered mortgagees, both
being in good faith, the first to foreclose his mortgage prevails over the other.

Even assuming that Gonzales mortgage was not validly registered, the notice of lis pendens
could still not defeat Gonzales right under the foreclosure sale. The effect of the notice of lis
pendens was to subject Gonzales, as the subsequent purchaser of the Property, to the outcome
of the case. The outcome of the case is the cancellation of the second owners duplicate of TCT
8361. The complaint of Pineda and Sayoc simply prayed for the cancellation of the second
owners duplicate of TCT 8361 and the award of damages.[34]

The notice of lis pendens would only bind Gonzales to the declaration of nullity of the second
owners duplicate of TCT 8361. Gonzales could not use TCT 13138, as a void issue of the void
second owners duplicate of TCT 8361, to secure a new TCT in her name. This is the legal
consequence of the notice of lis pendens, which would have bound Gonzales had the registration
of her mortgage been void. However, the declaration of nullity of TCT 13138 would still not make
the mortgage of Pineda and Sayoc preferred over that of Gonzales. Since Gonzales foreclosed
her mortgage ahead of Pineda and Sayoc, she would still have a better right than Pineda and
Sayoc who slept on their rights as mortgagees.

Conclusion

The nullity of TCT 13138 did not affect the validity of the title or ownership of Mojica or Gonzales
as subsequent transferees of the Property. What is void is the transfer certificate of title, not the
title or ownership itself of Mojica or Gonzales. The notice of lis pendens could not defeat
Gonzales rights over the Property for two reasons. First, Gonzales registered in good faith her
mortgage before the notation of the lis pendens, making the registration of her mortgage valid
despite the invalidity of TCT 13138. Second, since Gonzales mortgage was valid, the auction sale
retroacted to the date of registration of her mortgage, making the auction sale prior in time to the
notice of lis pendens. Thus, TCT 16084, issued to Gonzales as a result of the foreclosure sale, is
valid.

WHEREFORE, the petition is DENIED. The Decision dated 26 August 1993 and the Resolution
dated 4 March 1994 of the Court of Appeals in CAG.R. SP No. 28651 are AFFIRMED. Petitioners
Juanita P. Pineda and Lilia Sayoc are directed to surrender the owners duplicate of Transfer
Certificate of Title No. 8361 to the Register of Deeds of Cavite City for cancellation. Transfer
Certificate of Title No. 16084 in the name of Teresita A. Gonzales is declared valid. This is without
prejudice to any action petitioners Juanita P. Pineda and Lilia Sayoc may file against the Spouses
Virgilio and Adorita Benitez as well as Olivia G. Mojica. No pronouncement as to costs.

16. PELAYO V PEREZ (GR 141323)

FACTS:

David Pelayo (Pelayo),by a Deed of Absolute Sale executed on January 11, 1988, conveyed to
Melki Perez (Perez) two parcels of agricultural land (the lots) situated in Panabo, Davao which are
portions of Lot 4192, Cad. 276 covered by OCT P-16873.
Loreza Pelayo (Loreza), wife of Pelayo, and another one whose signature is illegible witnessed
the execution of the deed. Loreza, however, signed only on the third page in the space provided for
witnesses on account of which Perez application for registration of the deed with the Office of the Register
of Deeds in Tagum, Davao was denied.
Perez thereupon asked Loreza to sign on the first and second pages of the deed but she refused,
hence, he instituted on August 8, 1991 the instant complaint for specific performance against her and her
husband Pelayo (defendants).
The defendants moved to dismiss the complaint on the ground that it stated no cause of action,
citing Section 6 of RA 6656 otherwise known as the Comprehensive Agrarian Reform Law which took
effect on June 10, 1988 and which provides that contracts executed prior thereto shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act.
The questioned deed having been executed on January 10, 1988, the defendants claimed that
Perez had at least up to September 10, 1988 within which to register the same, but as they failed to, it is
not valid and, therefore, unenforceable. The trial court thus dismissed the complaint. On appeal to this
Court, the dismissal was set aside and the case was remanded to the lower court for further proceedings.
In their Answer, the defendants claimed that as the lots were occupied illegally by some persons
against whom they filed an ejectment case, they and Perez who is their friend and known at the time as
an activist/leftist, hence feared by many, just made it appear in the deed that the lots were sold to him in
order to frighten said illegal occupants, with the intentional omission of Lorezas signature so that the deed
could not be registered; and that the deed being simulated and bereft of consideration is void/inexistent.
Perez countered that the lots were given to him by defendant Pelayo in consideration of his services as
his attorney-in-fact to make the necessary representation and negotiation with the illegal occupants-
defendants in the ejectment suit; and that after his relationship with defendant Pelayo became sour, the
latter sent a letter to the Register of Deeds of Tagum requesting him not to entertain any transaction
concerning the lots title to which was entrusted to Perez who misplaced and could [not] locate it.

Defendant Pelayo claimed in any event, in his Pre-trial brief filed on March 19, 1996, that the deed was
without his wife Lorezas consent, hence, in light of Art. 166 of the Civil Code which provides:

Article 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil
interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of
the conjugal partnership without the wifes consent . . .

it is null and void.

ISSUE:
WON contracts executed prior to Comprehensive Agrarian Reform Law of 1988 which took effect on June
15, 1988 shall be valid only when registered with the Register of Deeds within a period of three (3)
months after the effectivity of the said Act.

Ruling:

No. The respondents failure to register the deed of sale within three months after effectivity of The
Comprehensive Agrarian Reform Law did not invalidate the deed of sale as the transaction over said
property is not proscribed by R.A. No. 6657. Further, the case has been resolved with finality by the CA in
its Decision dated November 24, 1994 in CA-G.R. SP No. 38700.[4] Herein petitioners no longer elevated
said CA Decision to this Court and the same became final and executory on January 7, 1995. In said
decision, the CA interpreted Section 4, in relation to Section 70 of R.A. No. 6657, to mean thus: the
proper interpretation of both sections is that under R.A. No. 6657, the sale or transfer of a private
agricultural land is allowed only when said land area constitutes or is a part of the landowner-seller
retained area and only when the total landholdings of the purchaser-transferee, including the property
sold does not exceed five (5) hectares. . As such, petitioners not having questioned the Decision of the
CA dated November 24, 1994 which then attained finality, the ruling that the deed of sale subject of this
case is not among the transactions deemed as invalid under R.A. No. 6657, is now immutable.

17. Abalos v. Macatangay, Jr.

G.R. No. 155043. September 30, 2004
Facts: Sps. Abalos are the registered owners of a land in Makati City. Arturo Abalos, the husband,
allegedly executed a Receipt and Memorandum of Agreement (RMOA) with a Special Power of Attorney
(SPA) purported to be issued by his wife, Esther, in favour of respondent, binding himself to the
respondent the property and not to offer the same to any other party within 30 days from date.

Subsequently, Esther executed a SPA, appointing sister, Bernadette Ramos, to act for and in her behalf
relative to the transfer of the property to respondent. Concerned with the spouses seeming differences,
respondent caused the annotation of his adverse claim on the title of the spouses to the property. Thus,
he wrote to the spouses infoming them of his readiness and willingness to pay the full amount of the
purchase price and demanded that the possession of the property shall be turned over to him.

On the other hand, Esther, through his attorney-in-fact, executed in favour of respondent a contract to sell
the property to the extent of her conjugal interest. She agreed to surrender possession of the property to
respondent and also obligated herself to execute and deliver to respondent a deed of absolute sale upon
full payment.

The property, however, was not delivered, prompting the respondent to cause the annotation of another
adverse claim on the certificate title. Respondent also filed a complaint for specific performance with
damages against petitioners.

Issue: Is petitioner compelled to convey the property to respondent under the terms of the RMOA and the
Contract to Sell?

Held: No.

Being essentially consensual, a contract of sale is perfected at the moment there is a meeting of the
minds upon the thing which is the object of the contract and upon the price. On the other hand, an
accepted unilateral promise which species the thing to be sold and the price to be paid, when coupled
with a valuable consideration distinct and separate from the price, is what may properly be termed a
perfected contract of option. An option merely grants a privilege to buy or sell within an agreed time and at
the determined price. It is separate and distinct from that which the parties may enter into upon the
consummation of the option.

A perfected contract of option does not result in the perfection or consummation of the sale; only when the
option is exercised may a sale be perfected. The option must, however, be supported by a consideration
distinct from the price.

The RMOA signifies a unilateral offer of Arturo to sell the property to respondent for a price certain within
a period of 30 days. The RMOA does not impose upon respondent an obligation to buy petitioners
property, as in fact it does not even bear his signature thereon. After the lapse of the 30-day period,
without respondent having exercised his option, Arturo is free to sell the property to another. Even
assuming that a bilateral contract of purchase of and sale was perfected, there has to be valid tender of
payment. In the case, the check did not constitute a legal payment because a check is not a legal tender.

As to the Contract of Sell executed by Esther, purported to refer to the earlier RMOA cannot be held valid.
The congruence of the wills of the spouses is essential for the valid disposition of conjugal property. In
this case, where the wifes putative consent to the sale of conjugal property appears in a separate
document, which does not contain the same terms and conditions as in the first document signed by the
husband, a valid transaction could not have arisen.

18. Gabriel v Register of Deeds of Rizal G.R. No. L-17956 September 30, 1963

Facts:
Elisa Gabriel filed with the Register of Deeds (RD) of Manila an adverse claim against the properties
registered in the name of her sister, the oppositor-appellant, Juanita Domingo. Petitioner alleges that the
properties have been included in the amended inventory of the estate of Antonia Reyes Vda. De Domingo
since they are actually the properties of the deceased. The registration should have been made in the
name of Antonia but due to the commission of fraud and deceit by Juanita, all the titles of the properties
were registered in her name instead. The same petition was sent to the RD of Rizal on the properties
under the name of Juanita. Petitioner alleged that the registration of the properties was done fraudulently.

For the adverse claim on the Manila properties, Juanita opposed saying that the adverse claim was for
harassment, had no legal basis, and had done and will do her irreparable loss. The RD of Manila elevated
the matter to the Land Registration Commission en Consulta. The RD of Rizal, on the other hand, denied
the registration of the Notice of the Adverse Claim saying that it was legally defective and insufficient

The petitioner appealed the decision of the RD of Rizal to the LRC who heard the cases jointly. The LRC
approved the registration of the two notices of adverse claims on the ground that the duty of the RD is
purely ministerial.

Issue: WON the two notices of adverse claim are registerable

Ruling:

Yes. The two notices of adverse claim are registerable.

Section 110 of Act No. 496 is divided into two parts. The first refers to the duty of the party who claims any
part or interest in registered land adverse to the registered owner, subsequent to the date of the original
registration; and the requirements to be complied with in order that such statement shall been titled to
registration as an adverse claim, thus showing the ministerial function of the Register of Deeds, when no
defect is found on the face of such instrument; and the second applies only when, after registration of the
adverse claim, a party files an appropriate petition with a competent court which shall grant a speedy
hearing upon the question of the validity of such adverse claim, and to enter a decree, as justice and
equity require; and in this hearing, the competent court shall resolve whether the adverse claim is
frivolous or vexatious, which shall serve as the basis in taxing the costs.

In the instant case, the first part was already acted upon by the LRC which resolved in favor of the
registrability of the two adverse claims and this part should have been considered as closed. What is left
is the determination of the validity of the adverse claims by competent court, after the filing of the
corresponding petition for hearing, which the appellant had not done.

19. ALMIROL V. REGISTER OF DEEDS OF AGUSAN. G.R. No. L-22486 March 20, 1968

FACTS

On June 28, 1961 Teodoro Almirol purchased from Arcenio Abalo a parcel of land situated in the
municipality of Esperanza, province of Agusan, and covered by original certificate of title P-1237 in the
name of "Arcenio Abalo, married to Nicolasa M. Abalo." Sometime in May, 1962 Almirol went to the office
of the Register of Deeds of Agusan in Butuan City to register the deed of sale and to secure in his name a
transfer certificate of title. Registration was refused by the Register of Deeds upon the following grounds:

1. That Original Certificate of Title No. P-1237 is registered in the name of Arcenio Abalo, married to
Nicolasa M. Abalo, and by legal presumption, is considered conjugal property;

2. That in the sale of a conjugal property acquired after the effectivity of the New Civil Code it is
necessary that both spouses sign the document; but

3. Since, as in this case, the wife has already died when the sale was made, the surviving husband
cannot dispose of the whole property without violating the existing law.
In view of such refusal, Almirol went to the Court of First Instance of Agusan on a petition for mandamus
to compel the Register of Deeds to register the deed of sale and to issue to him the corresponding
transfer certificate of title. In its resolution of October 16, 1963 the lower court, declaring that the
Mandamus does not lie because the adequate remedy is that provided by Section 4 of Rep. Act 1151
dismissed the petition, with costs against the petitioner. Hence, this present appeal.

ISSUE

Whether or not the Register of Deeds was justified in refusing to register the transaction appealed to by
the petitioner.

HELD

No. Although the reasons relied upon by the respondent show a sincere desire on his part to maintain
inviolate the law on succession and transmission of rights over real properties, these do not constitute
legal grounds for his refusal to register the deed.

Whether a document is valid or not, is not for the register of deeds to determine; this function belongs
properly to a court of competent jurisdiction.

A register of deeds is entirely precluded by section 4 of Republic Act 1151 from exercising his personal
judgment and discretion when confronted with the problem of whether to register a deed or instrument on
the ground that it is invalid. For under the said section, when he is in doubt as to the proper step to be
taken with respect to any deed or other instrument presented to him for registration all that he is
supposed to do is to submit and certify the question to the Commissioner of Land Registration who shall,
after notice and hearing, enter an order prescribing the step to be taken on the doubtful question.

20. TOLEDO BANAGA VS CA

FACTS:

Banaga filed an action for redemption, but the trial court declared that she had lost her right to redeem.
So, the property was foreclosed and sold at public auction.

Banaga caused the annotation of a notice of lis pendens. She, then, appealed and the CA reversed the
trial court judgment and granted Banaga a certain period to redeem.

The lower court ordered the cancellation of private respondents certificates of title and issue new ones in
the name of Banaga.

Private respondent filed a petition for certiorari with the CA and caused the annotation of a and notice of
lis pendens.

Petitioner Banaga sold the subject property to petitioner Tan with the deed of absolute sale mentioning
private respondent's certificate of title which was not yet cancelled. Notwithstanding the notice oflis
pendens, petitioner Tan subdivided the property in question under a subdivision plan, which she made not
in her name but in the name of private respondent.

Tan asked the Register of Deeds to issue new titles in her name, which was granted but still carried the
two notices of lis pendens.
The CA rendered decision declaring private respondent as owner of the property and ordered the RD to
reinstate the titles in private respondents name.

The RD refused stating that the certificate of titles of Tan must first be surrendered. Private respondent
sought to cite the RD in contempt, but the trial court denied such ruling that his remedy is by consulta to
the Commissioner on Land Registration. On appeal, the CA ruled in favour of private respondents.

ISSUE:

Whether not Tan is a buyer in good faith Whether or not the refusal of the RD on the reason that the
certificates of title of Tan must first be surrendered is justified

HELD:

The Court is not convinced of the arguments proffered by petitioners. Such issue had already been clearly
and categorically ruled upon by the CA and affirmed by this Court, wherein private respondent was
adjudged the rightful and absolute owner thereof. The decision in that case bars a further repeated
consideration of the very same issue that has already been settled with finality. Under the principle of res
judicata, the Court and the parties, are bound by such final decision, otherwise, there will be no end to
litigation. They argue that the winning party must wait execution until the losing party has complied with
the formality of surrender of the duplicate title. Such preposterous contention borders on the absurd and
has no place in our legal system. The surrender of the duplicate is implied from the executory decision
since petitioners themselves were parties thereto. Besides, as part of the execution process, it is a
ministerial function of the Register of Deeds to comply with the decision of the court to issue a title and
register a property in the name of a certain person, especially when the decision had attained finality, as
in this case. At the time of the sale, the person from whom petitioner Tan bought the property is neither
the registered owner nor was the former authorized by the latter to sell the same. She knew she was not
dealing with the registered owner or a representative of the latter. One who buys property with full
knowledge of the flaws and defects in the title of his vendor is enough proof of his bad faith and cannot
claim that he acquired title in good faith as against the owner or of an interest therein. Being a buyer in
bad faith, petitioner Tan cannot acquire a better right than her predecessor in interest, for she merely
stepped into the shoes of the latter