Land Titles: Remedies

De Guzman v. National Treasurer

36 [Who may recover from the Assurance Fund]
G.R. No. 143281 August 3, 2000 J. Kapunan Fejj
Petitioners: Respondents:
Spouses Francisco and Amparo De Guzman, Jr. The National Treasurer of the Republic of the
Philippines and The Register of Deeds of Marikina
City
Recit Ready Summary

Spouses Urlan and Asuncion Milambiling purchased a parcel of land situated in Antipolo Rizal from Sta.
Lucia Realty and Development, Inc. After their church wedding, they left for Europe for their honeymoon.
Thereafter, they proceeded to Saudi where they were working. But before leaving, they entrusted the
Deed of Sale and the Certificate of Title, which was still in the name of Sta. Lucia Realty, to their long-
time friend, Marilyn Belgica. Belgica volunteered to register the sale and transfer the title in the names of
Spouses Milambiling.

Urlan Milambiling found out that the Certificate of Title covering the land was indeed transferred in their
(spouses Milambiling) names but was subsequently cancelled and transferred to Spouses De Guzman. It
appears that while the spouses were in Suadi, a couple identifying themselves as Spouses Milambiling
requested a real estate broker to find a buyer for a lot located in Vermont Subdivision, Antipolo, Rizal.
The broker introduced the impostor-couple to the De Guzmans and the former was able to convince the
latter to buy the property. A Deed of Absolute Sale was executed in favor of Spouses De Guzman. The
sale was registered with the Register of Deeds of Marikina who cancelled the Certificate of Title in the
name of the Milambilings and issued a TCT in the names of the De Guzmans.

Spouses Milambiling filed an action for declaration of nullity of sale and title with damages. The RTC
granted. The CA and SC both affirmed. Spouses De Guzman then filed an action for damages against
the Assurance Fund before the RTC, impleading the National Treasurer and the Register of Deeds of
Marikina City.

Issue here is whether the Assurance Fund is liable for the losses sustained by Spouses De
Guzman. [NO].

The assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a
certificate is conclusive evidence of an indefeasible title to land. Spouses De Guzman did not suffer any
prejudice because of the operation of this doctrine. On the contrary, the De Guzmans sought to avail of
the benefits of the Torrens System by registering the property in their name. That they eventually lost the
property to the original owners does not entitle them to compensation under the Assurance Fund.

Spouses De Guzman’s circumstances do not fall under the two cases provided by law for recovery from
the Assurance Fund. First, they have not alleged that the loss or damage they sustained was through any
omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other
employees of the Registry in the performance of their respective duties. Also, Spouses De Guzmans
were negligent in not ascertaining whether the impostors who executed the deed of sale in their favor
were really the owners of the property. Second, Spouses De Guzman were not deprived of their land as a
consequence of the bringing of the land or interest therein under the provisions of the Property
Registration Decree. Neither was the deprivation due to the registration by any other person as owner of
such land, or by mistake, omission or misdescription in any certificate or owner’s duplicate, or in any entry
or memorandum in the register or other official book or by any cancellation.
Facts

1. July 1, 1985: Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in
Antipolo, Rizal from Sta. Lucia Realty and Development, Inc.
2. Although they were already civilly married, Asuncion used her maiden name in the Deed od Sale
because she did not want to use her married name until she was married in church.

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 3. After their church wedding on July 5, 1985, Urlan and Asucion Milambiling left for Europe on their
honeymoon. From there, they proceeded to Saudi Arabia where they were working as accountant
and nurse, respectively.
4. Before leaving for abroad, spouses Milambiling entrusted the Deed of Sale and the corresponding
Certificate of Title (still in the name of Sta. Lucia Realty) to Marilyn Belgica, a long-time friend.
Belgica volunteered to register the sale and transfer the title in their names.
5. Spouses Milambiling later learned from Belgica through an overseas call that a TCT had already
been issued in their names. Belgica committed that she will personally delivery the title to them in
Saudi.
6. May 1986: Belgica arrived in Saudi but she said that she left the title in the Philippines and forgot to
bring it.
7. Urlan Milambiling immediately called up his relatives in the Philippines and asked them to find out
from the Office of the Register of Deeds of Riza what happened to the title. He was then informed
that the Certificate of Title covering the land was indeed transferred in their (spouses Milambiling)
names but was subsequently cancelled and transferred to Spouses De Guzman.
(a) It appears that while the spouses were in Suadi Arabia, a couple identifying themselves as
Spouses Milambiling inquired from Natividad Javiniar, a real estate broker, if the latter could
find a buyer for a lot located in Vermont Subdivision, Antipolo, Rizal.
(b) Javiniar accompanied the impostor-couple to the house of Spouses De Guzman.
(c) The impostor-couple were able to convince the de Guzmans to buy the property.
(d) November 20, 1985: They executed a Deed of Absolute Sale in favor of Spouses de
Guzman.
(e) April 30, 1986: The De Guzmans registered the said sale with the Register of Deeds of
Marikina who cancelled the Certificate of Title in the name of the Milambilings and issued a
TCT in the names of the De Guzmans.
8. Urlan Milambiling quickly returned to the Philippines.
9. Spouses Milambiling filed an action before the RTC of Antipolo, Rizal for declaration of nullity of sale
and title with damages against Spouses De Guzman.

Procedural History

1. RTC: Spouses Milambiling filed an action for declaration of nullity of sale and title with
damages.
2. CA: Spouses de Guzman appealed the decision of the trial court; CA affirmed the RTC.
3. SC: Spouses de Guzman went to SC on a petition for review on certiorari; SC denied on the
ground that no reversible error was committed by the CA.
4. Spouses De Guzman filed an action for damages against the Assurance Fund before the RTC,
impleading the National Treasurer and the Register of Deeds of Marikina City.
5. RTC: The RTC ruled in favor of the De Guzmans and ordered the Treasurer and/or Registrar to pay
them the amount of P99,200.00.1
6. CA: The National Treasurer and Marikina Registrar of Deeds appealed; CA reversed the decision of
the RTC.
7. SC: Spouses De Guzman now seek the reversal of the decision of the CA.
Issues Ruling
1. Whether the Assurance Fund established under the Property Registration Decree 1. NO
is liable for the losses sustained by Spouses De Guzman
Rationale

1. The Assurance Fund is NOT liable for the losses sustained by Spouses De Guzman.

The persons who may recover from the Assurance Fund are:
(1) Any person who sustains loss or damage under the following conditions:
(a) That there was no negligence on his part; and

1 The amount actually paid by the De Guzmans.

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 (b) That the loss or damage sustained was through any omission, mistake or malfeasance of
the court personnel, or the Registrar of Deeds, his deputy, or other employees of the
Registry in the performance of their respective duties under the provisions of the Property
Registration Decree; or
(2) Any person who has been deprived of any land or interest therein under the following conditions:
(a) That there was no negligence on his part;
(b) That he was deprived as a consequence of the bringing of his land or interest therein under
the provisions of the Property Registration Decree; or by the registration by any other person
as owner of such land; or by mistake, omission or misdescription in any certificate of owner’s
duplicate, or in any entry or memorandum in the register or other official book or by any
cancellation; and
(c) That he is barred or in any way precluded from bringing an action for the recovery of such
land or interest therein, or claim upon the same.

- The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine
that a certificate is conclusive evidence of an indefeasible title to land. Spouses De Guzman did
not suffer any prejudice because of the operation of this doctrine.
- On the contrary, the De Guzmans sought to avail of the benefits of the Torrens System by
registering the property in their name. That they eventually lost the property to the original owners
does not entitle them to compensation under the Assurance Fund.
- Spouses De Guzman’s circumstances do not fall under the first case.
 They have not alleged that the loss or damage they sustained was through any omission,
mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or
other employees of the Registry in the performance of their respective duties.
 Also, Spouses De Guzmans were negligent in not ascertaining whether the impostors who
executed the deed of sale in their favor were really the owners of the property.
- The circumstances also do not fall under the second case.
 They were not deprived of their land as a consequence of the bringing of the land or interest
therein under the provisions of the Property Registration Decree.
 Neither was the deprivation due to the registration by any other person as owner of such
land, or by mistake, omission or misdescription in any certificate or owner’s duplicate, or in
any entry or memorandum in the register or other official book or by any cancellation.
Disposition

Petition denied. SC affirmed the decision of the CA that the Assurance Fund is not liable for the losses
sustained by the De Guzmans.