Beruflich Dokumente
Kultur Dokumente
FIRST DIVISION Baguio City a notice of lis pendens over the disputed property. Said notice was entered
in the Day Book, as well as in the Capays certificate of title.
Subsequently, the injunction issued by the trial court was lifted thus allowing the
[G.R. No. 114299. September 24, 1999] foreclosure sale to proceed. Foreclosure proceedings were initiated and on October 17,
1968, the property was sold to TRB which was the highest bidder at the auction sale. A
sheriff certificate of sale was issued in its name on the same day. On February 25,
1970, the property was consolidated in the name of TRB, the sole bidder in the
TRADERS ROYAL BANK, petitioner, vs. HON. COURT OF APPEALS, sale. TCT No. T-6595 in the name of the Capay spouses was then cancelled and a new
PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA one, TCT No. T-16272,[2] was entered in the banks name. The notice of lis pendens,
JOY, all surnamed CAPAY and RAMON A. GONZALES, respondents. however, was not carried over in the certificate of title issued in the name of TRB.
Thereafter, the Capays filed with the CFI a supplemental complaint praying for
the recovery of the property with damages and attorneys fees. Trial in Civil Case No.
Q-10453 proceeded and, on October 3, 1977, the CFI rendered its decision declaring
[G.R. No. 118862. September 24, 1999] the mortgage void for want of consideration. The CFI ordered, among other things, the
cancellation of TCT No. T-16272 in the name of TRB and the issuance of new
certificates of title in the name of the Capay spouses.
PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all TRB appealed to the Court of Appeals. While the case was pending in the Court
surnamed CAPAY, and RAMON A. GONZALES, petitioners, vs. SPS. of Appeals, TRB on March 17, 1982 sold the land to Emelita Santiago in whose name
HONORATO D. SANTOS and MARIA CRISTINA S. SANTOS, SPS. a new certificate of title, TCT No. 33774,[3] was issued, also, without any notice of lis
CECILIO L. PE and JOSEFINA L. PE, FLORA LARON WESCOMBE, pendens annotated thereon. Santiago in turn divided the land into six (6) lots and sold
SPS. TELESFORO P. ALFELOR II and LIZA R. ALFELOR, SPS. these to Marcial Alcantara, Armando Cruz and Artemio Sanchez, who became co-
DEAN RODERICK FERNANDO and LAARNI MAGDAMO owners thereof.[4] Alcantara and his co-owners developed the property and thereafter
FERNANDO, REMEDIOS OCA, DEVELOPMENT BANK OF THE sold the six (6) lots to separate buyers who were issued separate titles, again, bearing
PHILIPPINES and TRADERS ROYAL BANK, respondents. no notice of lis pendens.[5]
On July 30, 1982, the Court of Appeals rendered its decision modifying the
DECISION decision of the trial court as to the award of damages but affirming the same in all
other respects.
KAPUNAN, J.:
For having been filed out of time and for lack of merit, the petition
The present controversy has its roots in a mortgage executed by the spouses for certiorari filed by TRB before this Court[6] was denied in a Resolution dated
Maximo and Patria Capay in favor of Traders Royal Bank (TRB) pursuant to a loan September 12,1983. TRBs motion for reconsideration was similarly denied in a
extended by the latter to the former. The mortgage covered several properties, Resolution dated October 12, 1983. The Courts September 12, 1983 Resolution having
including a parcel of land, the subject of the present dispute. [1] The loan became due become final and executory on November 9, 1983, the trial court issued a writ of
on January 8, 1964 and the same having remained unpaid, TRB instituted extra- execution directing the Register of Deeds of Baguio City to cancel TCT No. T-16272
judicial foreclosure proceedings upon the mortgaged property. in the name of TRB, and to issue a new one in the name of the Capay spouses.
To prevent the propertys sale by public auction, the Capays, on September 22, Said writ, however, could not be implemented because of the successive
1966, filed a petition for prohibition with preliminary injunction (Civil Case No. Q- subsequent transfers of the subdivided property to buyers who obtained separate titles
10453) before the Court of First Instance (CFI) of Rizal, alleging that the mortgage thereto. Thus, a complaint for recovery of possession/ownership dated 8 June 1985
was void since they did not receive the proceeds of the loan. The trial court initially was filed before the Quezon City Regional Trial Court against TRB and the subsequent
granted the Capays' prayer for preliminary injunction. transferees of the property, the respondents in G.R. No. 118862 (hereinafter, the non-
bank respondents). Plaintiffs in said case were Patria Capay, her children by
Maximo[7] who succeeded him upon his death on August 25, 1976, and Ramon
Gonzales, counsel of the spouses in Civil Case No. Q-10453 who became co-owner of
the property to the extent of 35% thereof as his attorneys fees (collectively, the On April 26, 1994, TRB filed with this Court a petition for review to set aside
Capays). On March 27, 1991, the trial court rendered its decision, the dispositive the CA decision, docketed herein as G.R. No. 114299, invoking the following grounds:
portion of which states:
I.
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs against the
defendants and ordering the Register of Deeds for Baguio to cancel TCT No. T- THE RESPONDENT HONORABLE COURT OF APPEALS COMMITTED
36177, Books 198, Page 177 in the names of defendants Spouses Honorato D. Santos GRAVE AND SERIOUS ERROR OF LAW IN PROMULGATING THE
and Maria Cristina Santos; to cancel TCT No. 36707, Book 201, Page 107 in the DISPUTED DECISION AND THEREBY DECIDED A QUESTION OF
names of defendant Spouses Cecilio Pe and Josefina L. Pe; to cancel TCT No. T- SUBSTANCE WHOLLY CONTRARY TO SETTLED JURISPRUDENCE AND
36051, Book 198, Page 51 in the name of Flora Laron Wescombe, married to Kevin TOTALLY NOT IN ACCORD WITH APPLICABLE DECISION OF THIS
Lind Wescombe (now deceased); to cancel TCT No. T-36147, Book 198, page 147 HONORABLE SUPREME COURT.
in the names of Spouses Telesforo P. Alfelor II and Liza R. Alfelor; to cancel TCT
No. T-36730, Book 201, Page 130 in the names of Spouses Dean Roderick Fernando II.
and Laarni Magdamo Fernando; to cancel TCT No. 37437, Book 205, Page 37 in the
name of Remedios Oca, and issue new ones free from all liens and encumbrances, THE RESPONDENT HONORABLE COURT OF APPEALS HAS COMMITTED
together with all the improvements therein in the names of plaintiffs sharing pro SO GRAVE AND SERIOUS ERRORS OF LAW IN SANCTIONING A
indiviso as follows: 35% to Ramon A. Gonzales, married to Lilia Y. Gonzales, of DEPARTURE FROM THE USUAL AND ACCEPTED COURSE OF JUDICIAL
legal age, with postal address at 23 Sunrise Hill, New Manila, Quezon City; 37.92% PROCEEDING AS TO CALL FOR THE EXERCISE OF THE POWER OF
to Patria B. Capay, of legal age, widow, Filipino; 5.41% each to Ruby Ann Capay, of REVIEW BY THIS HONORABLE SUPREME COURT.
legal age, Filipino, married to Pokka Vainio, Finnish citizen; Chona Margarita
Capay, of legal age, Filipino, married to Waldo Flores; Rosario Capay, of legal age, a) The public respondent has plainly and manifestly acted whimsically, arbitrarily,
Filipino, married to Jose Cuaycong, Jr.; Cynthia Capay, of legal age, Filipino, capriciously, with grave abuse of discretion, in excess of jurisdiction tantamount to
married to Raul Flores; Linda Joy Capay, of legal age, Filipino, married to Pedro lack of jurisdiction.
Duran, all with postal address at 37 Sampaguita St., Capitolville Subd., Bacolod
City, ordering said defendants to vacate the premises in question and restoring
xxx
plaintiffs thereto and for defendant Traders Royal Bank to pay each of the plaintiffs
moral damages in the amount of P100,000.00, P40,000.00 in exemplary damages
and P40,000.00 as attorneys fees, all with legal interest from the filing of the b) The public respondent erred in not finding that it was not the fault of petitioner
complaint, with costs against defendants. when the notice of lis pendens was not carried over to its new title.
SO ORDERED.[8] xxx
TRB and the non-bank respondents appealed to the Court of Appeals. In a c) The public respondent erred in not finding that PD No. 1271 had legally caused
Decision promulgated on February 24, 1994 in CA-G.R. CV No. 33920, the appellate the invalidation of the Capays property and the subsequent validation of TRBs title
court affirmed the decision of the trial court in toto.[9] It ruled that the non-bank over the same property was effective even as against the Capays.[13]
respondents cannot be considered as purchasers for value and in good faith, having
purchased the property subsequent to the action in Civil Case No. Q-10453 and that Meanwhile, the non-bank respondents moved for a reconsideration of the Court
while the notice of lis pendens was not carried over to TRBs certificate of title, as well of Appeals decision. Convinced of the movants arguments, the Court of Appeals in a
as to the subsequent transferees titles, it was entered in the Day Book which is Resolution promulgated on August 10, 1994 granted the motion for reconsideration
sufficient to constitute registration and notice to all persons of such adverse claim, and dismissed the complaint as against them. The dispositive portion of the resolution
citing the cases of Villasor vs. Camon,[10] Levin vs. Bass[11] and Director of Lands vs. states:
Reyes.[12]
ACCORDINGLY, in view of the foregoing disquisitions and finding merit in the
As regard TRB, the Court of Appeals said that the bank was in bad faith when it
motion for reconsideration, the same is hereby GRANTED. Consequently, the
sold the property knowing that it was under litigation and without informing the buyer
decision of this Court, promulgated on February 24, 1994, is hereby
of that fact.
RECONSIDERED. The complaint filed against defendants-appellants with the
court a quo is hereby ordered DISMISSED, and the certificate of titles originally RESPONSIBLE CITIZENS AND WELL-RESPECTED RESIDENTS IN THE
issued to them in their individual names are hereby ordered restored and duly COMMUNITY, ARE EXEMPTED FROM THE EFFECTS OF THE
respected. We make no pronouncement as to costs. CONSTRUCTIVE NOTICE ARISING FROM REGISTRATION.
SO ORDERED.[14] VII
The Capays thus filed with this Court a petition for review, docketed as G.R. No. THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF WITH
118862, to set aside the resolution of the Court of Appeals raising the following errors: REGARDS TO TRADERS ROYAL BANK, AFTER THE LATTER HAS
PERFECTED ITS APPEAL TO THE SUPREME COURT.
I
VIII
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY
NOW HOLDING THAT TUAZON VS. REYES, 48 PHIL. 814 AND RIVERA VS.
MORAN, 48 PHIL. 836 ARE NOT APPLICABLE HEREOF, WHILE PINO VS. THE COURT OF APPEALS PALPABLY ERRED IN NOT RULING ON THE
COURT OF APPEALS, 198 SCRA 436, IS APPLICABLE. COUNTER-ASSIGNMENT OF ERROR THAT:
Q How did you come to know of this property at Asin Road where you now reside? A Well, the first step I did was to go to the Land Registration Office.
A My sister, Ruth Ann Valdez, sir. Q Are you referring to the City Hall of Baguio?
Q When this particular property was bought by you, when was that? A Yes, the City Hall of Baguio.
Q And what did you do in the Registry of Deeds? A We found the title of this property and there was reassurance that it was a clean
title and we saw the mother title under the Hilario family.
A We looked for the title, the original title, sir.
Q Mrs. Meeks, when you say Banaue, what particular place is this Banaue?
Q When you say we, who was your companion?
A It is in Banaue Street in Quezon City, sir.
A Mr. Alcantara and my present husband, sir.
Q And when you saw the title to this property and the mother title, what was the
Q The three (3) of you? result of your investigation, the investigation that you made?
A Yes, sir. A We were reassured that we were purchasing a valid title, we had a genuine title.
Q What title did you see there? Q When you were able to determine that you had a valid, authentic or genuine title,
A We saw the title that was made up in favor of Amado Cruz, sir. what did you do?
Q And what was the result of your looking up for this title in the name of Amado A That is when I finally thought of purchasing the property. [17]
Cruz? Telesforo Alfelor II, the purchaser of Lot 4, narrated going through a similar
A We had to be reassured that it was a genuine one, so we asked Atty. Diomampo routine:
who heads the office. We showed him a copy of that title and we were also Q How did you come to know of this place as Asin Road where you are presently
reassured by him that anything that was signed by him was as good as it is. residing?
Q Did this Atty. Diomampo reassure you that the title was good? A It was actually through Mrs. Flory Recto who is presently the Branch Manager
A He did. of CocoBank. She informed my wife that there is a property for sale at Asin
road, and she was the one who introduced to us Mr. Alcantara, sir.
Q After your conversation with the Register of Deeds, what did you do?
Q When you were informed by Mrs. Recto and when you met with Mr. Alcantara,
A The second step we did was to confer with our lawyer, a friend from RCBC did you see the property that was being offered for sale?
Binondo, Manila, this is Atty. Nelson Waje.
A Yes, sir.
Q What is your purpose in going to this lawyer?
Q When did you specifically see the property, if you can recall?
A We wanted an assurance that we were getting a valid title just in case we think
of buying the property. A I would say it is around the third quarter of 1983, sir.
Q What was the result of your conference with this lawyer? Q When you went to see the place, could you please describe what you saw at that
time?
A He was absolutely certain that that was a valid title.
A When we went there the area is still being developed by Mr. Alcantara. As a
Q Mrs. Meeks, after looking at the place, going to the Register of Deeds, looking matter of fact the road leading to the property is still not passable considering
at the title and seeing your lawyer friend, what decision did you finally make that during that time it was rainy season and it was muddy, we fell on our
regarding the property? way going to the property and walked to have an ocular inspection and
physical check on the area, sir.
A We wanted more reassurances, so we proceeded to Banaue, as advised by that
same lawyer, there is another office of the Bureau of Lands. I cannot recall xxx
the office but it has something to do with registration of the old.
Q What was the improvement, if any, that was in that parcel which you are going
Q What is your purpose in going to this Office in Banaue? to purchase?
A I wanted more reassurances that I was getting a valid title. A During that time, the riprap of the property is already there, the one-half of the
riprap sir.
Q What was the result of your visit to the Banaue Office?
Q Do you know who was making this improvement at the time that you went there?
A I would understand that it was Marcial Alcantara, sir. Q Specifically, Mr. Alcantara, will you please inform the Court in what place in
Baguio have you acquired and subdivided and sold lots?
Q After you saw the place and you saw the riprap and you were in the course of
deciding to purchase this property, what else did you do? A Dominican Hill, Leonila Hill, Crystal Cave and Asin Road, sir.
A First, I have to consider that the property is clean. Q You mentioned Asin Road, what particular place in Asin Road are you referring?
Q How did you go about determining whether the title of the property is clean? A That property I bought from Emelita Santiago, sir.
A Considering that Marcial Alcantara is a real estate broker, I went to his office Q When you say you bought it from Emelita Santiago, how did you come to know
and checked the documents he has regarding the property. that Emelita Santiago is disposing of the property?
Q And what was the result of your checking as to whether the title of the property A Because of the father, he is the one who offered me the property, sir, Armando
is clean? Gabriel.
A He showed me the copy of the title and it was clean, sir. Q Is he also a resident of Baguio?
Q Aside from going to Mr. Alcantara to check up the title of the property, what A He is from Buyagan, La Trinidad, sir.
else did you do?
Q How did you come to know of this Armando Gabriel wanting to sell a property
A Well, the next thing is I requested his wife to accompany me to the Bureau of in Asin?
Lands or rather the Registry of Deeds, sir.
A He approached me in the house, sir. He has acquired a title from the Traders
Q What registry of Deeds are you referring to? Royal Bank.
A The Registry of Deeds of Baguio City, sir. Q Can you inform the Honorable Court when you had this conversation with
Armando Gabriel on the sale of the property at Asin Road?
Q And were you able to see the Register of Deeds regarding what you would like
to know? A Later part of March, 1983, sir.
A Yes, and we were given a certification regarding this particular area that it was Q Now, when this Armando Gabriel informed you that he wants his property to be
clean, sir. sold, what did you do?
Q What Certification are you referring to? A I went to the place with the agent, sir.
A It is a Certification duly signed by the employee of the Registry of Deeds Q When you say you went to the place with the agent, what place?
Adelina Tabangin, sir.
A Kilometer 2, Asin Road, sir.
Q Do you have a copy of that Certification?
Q And when you went there to see the place, did you actually go there to see the
A Yes, I have, sir.[18] place?
The testimonies of Honorato Santos[19] and Josefina Pe[20] were to the same A By walking, I parked my car a kilometer away, sir.
effect.
Q Is it my understanding that when you went to see the property there were no
The non-bank respondents predecessor-in-interest, Marcial Alcantara, was no roads?
less thorough:
A None, sir.
Q And will you give a brief description of what you do?
xxx
A I normally acquire land, quite big tract of land and subdivide it into smaller lots
and sold it to some interested parties. Q Mr. Alcantara, when you went to see this place at Asin Road last week of March,
1983, will you please briefly describe how this place looked like at that time?
A The place was mountainous, grassy, there were cogon trees, some of the roads A Yes, I have.
were eroding already, so we cannot possibly enter the property, sir.
Q This subdivision of this property, to what office was it brought for action?
Q At the time you entered the place, was there any visible sign of claim by anyone?
A Bureau of Lands, San Fernando, La Union, sir.
A None, sir.
Q Now, Mr. Alcantara, at the time that you had this property subdivided by the
Q In terms of fence in the area? owner, could you please inform the Court if there was any claim by any other
party opposing the subdivision or claiming the property?
A There is no such, sir.
A None, sir.
xxx
Q When the Deed of Sale was executed and you said that you presented it to the
Q Aside from looking or going to the property, what else did you do to this property Register of Deeds and after the subdivision already, what action did the
prior to your purchase? Register of Deeds have regarding the matter?
A I investigated it with the Register of Deeds, sir. A They approved it and registered it already in six (6) titles, sir.
Q What is your purpose in investigating it with the Register of Deeds? Q In whose names?
A To see if the paper is clean and there are no encumbrances, sir. A One (1) title under my name, Amado Cruz and Dr. Sanchez, sir.
Q To whom did you talk? Q Initially, Mr. Alcantara, you said that you are the sole purchaser of this entire
A To Atty. Ernesto Diomampo, sir. area of One Thousand Five Hundred Ninety One (1,591) Square
Meters. Now, you are informing this Honorable Court that one Amado Cruz
Q And when you went to the Registry of Deeds to investigate and check, did you and one Dr. Sanchez were also issued two (2) titles. Could you explain how
have occasion to talk with Atty. Diomampo? these titles came into their possession?
A Yes, sir. A Actually, two (2) are our co-owners, sir.
Q And what was the result of your talk with Atty. Diomampo? Q So, is it our understanding that the Deed of Sale from Emelita Santiago is in
favor of these two (2) Atty. Cruz and Dr. Sanchez?
A The papers are clean except to the annotation at the back with the road right of
way, sir. A Yes, sir.[21]
Q After making this investigation with the Register of Deeds and talking with Atty. Third, between two innocent persons, the one who made it possible for the wrong
Diomampo, what else transpired? to be done should be the one to bear the resulting loss. [22] The Capays filed the notice
of lis pendens way back on March 17, 1967 but the same was not annotated in TRBs
A We bought the property, sir.
title. The Capays and their counsel Atty. Ramon A. Gonzales knew in 1968 of the
Q After purchasing the property from Emelita Santiago, could you please tell the extra-judicial foreclosure sale of the property to TRB and the consolidation of title in
Honorable Court what you did with that deed of sale? the banks name following the lapse of the one-year period of redemption. But in the
next fifteen (15) years or so, they did not bother to find out the status of their title or
A We registered it with the Register of Deeds for the Certificate of Title because whether the liens noted on the original certificate of title were still existing considering
at that time when we bought the property, Emelita Santiago had it subdivided that the property had already been foreclosed. In the meantime, the subject property
into six (6) lots, sir. had undergone a series of transfers to buyers in good faith and for value. It was not
Q Is it our understanding that prior to your purchase the property was subdivided until after the land was subdivided and developed with the buyers building their houses
into six (6) parcels? on the other lots when the Capays suddenly appeared and questioned the occupants
titles. At the very least, the Capays are guilty of laches. Laches has been defined as the
A Yes, sir. failure or neglect, for an unreasonable and unexplained length of time, to do that which
by exercising due diligence could nor should have been done earlier; it is negligence
Q Could you please inform the Honorable Court if you have any buyers in the
subdivision of this property prior to your purchase?
or omission to assert a right within a reasonable time, warranting presumption that the Moran,[28] Rivera acquired interest in the land before the final decree was entered in
party entitled to it either has abandoned it or declined to assert it. [23] the cadastral proceedings. Rivera, the transferee, was aware of the pending litigation
and, consequently, could not have been considered a purchaser in good
Verily, the principle on prescription of actions is designed to cover situations such as faith. Similarly, in Atun, et al. vs. Nunez, et al.[29] and Laroza vs. Guia,[30] the buyers
the case at bar, where there have been a series of transfers to innocent purchasers for of the property at the time of their acquisition knew of the existence of the notice of lis
value. To set aside these transactions only to accommodate a party who has slept on pendens. In contrast to the cited cases, the non-bank respondents in the case at bar
his rights is anathema to good order. acquired their respective portions of the land with clean title from their predecessors-
in-interest.
Independently of the principle of prescription of actions working against petitioners, II
the doctrine of laches may further be counted against them, which latter tenet finds
application even to imprescriptible actions. x x x.[24] We come now to TRBs liability towards the Capays.
The Bank unconvincingly tries to wash its hands off the present controversy, and
In De La Calzada-Cierras vs. Court of Appeals,[25] we held: attempts to shift the blame on the Capays, thus:
While it is true that under the law it is the act of registration of the deed of xxx
conveyance that serves as the operative act to convey the land registered under the
Torrens System (Davao Grains, Inc. vs. Intermediate Appellate Court, 171 SCRA 23. The petitioner Bank, during all the time that it was holding the title for over
612), the petitioners cannot invoke said dictum because their action to recover Lot fourteen (14) years that there was no legal impediment for it to sell said property,
4362 is barred by the equitable doctrine of laches. Central Bank regulations require that real properties of banks should not be held for
more than five (5) years;
The act of registering the conveyance to Rosendo was constructive notice to the
whole world of the fact of such conveyance (Heirs of Maria Marasigan vs. 24. The fault of the Register of Deeds in not carrying over the Notice of Lis
Intermediate Appellate Court, 152 SCRA 253). Pendens to the new title of the petitioner Bank should not be absorbed by the latter
considering that in all good faith, it was not aware of the existence of said annotation
But the petitioners complaint to recover the title and possession of Lot 4362 was during all the time that said title was in its possession for almost fourteen (14) years
filed only on July 21, 1981, twelve (12) years after the registration of the sale to before the property was sold to Emelita G. Santiago xxx. [31]
Rosendo. The petitioners failed and neglected for an unreasonably long time to assert
their right, if any, to the property in Rosendos possession. TRB concludes that (t)he inaction and negligence of private respondents,
allowing ownership to pass for almost 15 years constitute prescription of action and/or
Being guilty of laches, the Capays cannot invoke the ruling in Villasor vs. laches.[32]
Camon, Levin vs. Bass and Director of Lands vs. Reyes[26] to the effect that entry of Section 25 of the General Banking Act,[33] provides that no bank shall hold the
the notice of lis pendens in the day book (primary entry book) is sufficient to constitute possession of any real estate under mortgage or trust, deed, or the title and possession
registration and such entry is notice to all persons of such adverse claim. Certainly, it of any real estate purchased to secure any debt due to it, for a longer period than five
is most iniquitous for the Capays who, after sleeping on their rights for fifteen years, years. TRB, however, admits holding on to the foreclosed property for twelve (12)
to assert ownership over the property that has undergone several transfers made in years after consolidating title in its name. The bank is, therefore, estopped from
good faith and for value and already subdivided into several lots with improvements invoking banking laws and regulations to justify its belated disposition of the
introduced thereon by their owners. property. It cannot be allowed to hide behind the law which it itself violated.
In the same vein, the cases cited by the Capays in their first two (2) assignment TRB cannot feign ignorance of the existence of the lis pendens because when the
of errors do not help them any, as the transferees In said cases were not innocent property was foreclosed by it, the notice of lis pendens was annotated on the title. But
purchasers for value and in good faith. In Tuazon vs. Reyes and Siochi,[27] where the when TCT No. T-6595 in the name of the Capay spouses was cancelled after the
land involved therein was sold by Petronilo David to Vicente Tuazon, it was with a foreclosure, TCT No. T-16272 which was issued in place thereof in the name of TRB
deed containing the recital that the land was in dispute between the vendor and Roberto did not carry over the notice of lis pendens.
Siochi. Tuazon, who was merely subrogated to the rights of the vendor was aware of
the dispute and, furthermore, David did not warrant the title to the same. In Rivera vs.
We do not find the Capays guilty of inaction and negligence as against TRB. It
may be recalled that upon the commencement of foreclosure proceedings by TRB, the
Capays filed an action for prohibition on September 22, 1966 against the TRB before
the CFI to stop the foreclosure sale. Failing in that attempt, the Capays filed a
supplemental complaint for the recovery of the property. The case reached this
Court. Prescription or laches could not have worked against the Capays because they
had persistently pursued their suit against TRB to recover their property.
On the other hand, it is difficult to believe TRBs assertion that after holding on
to the property for more than ten (10) years, it suddenly realized that it was acting in
violation of the General Bank Act.What is apparent is that TRB took advantage of the
absence of the notice of lis pendens at the back of their certificate of title and sold the
property to an unwary purchaser. This notwithstanding the adverse decision of the trial
court and the pendency of its appeal. TRB, whose timing indeed smacks of bad faith,
thus transferred caused the property without the lis pendens annotated on its title to
put it beyond the Capays' reach. Clearly, the bank acted in a manner contrary to morals,
good customs and public policy, and should be held liable for damages. [34]
Considering, however, that the mortgage in favor of TRB had been declared null
and void for want of consideration and, consequently, the foreclosure proceedings did
not have a valid effect, the Capays would ordinarily be entitled to the recovery of their
property. Nevertheless, this remedy is not now available to the Capays inasmuch as
title to said property has passed into the hands of third parties who acquired the same
in good faith and for value. Such being the case, TRB is duty bound to pay the Capays
the fair market value of the property at the time it was sold to Emelita Santiago, the
transferee of TRB.
WHEREFORE, the decision of the Court of Appeals dated February 24, 1994
in CA-G.R. CV No. 33920, as modified by its Resolution dated August 10, 1994 is
hereby AFFIRMED. In addition, Traders Royal Bank is ordered to pay the Capays the
fair market value of the property at the time it was sold to Emelita Santiago.
This Decision is without prejudice to whatever criminal, civil or administrative
action against the Register of Deeds and/or his assistants that may be taken by the party
or parties prejudiced by the failure of the former to carry over the notice of lis
pendens to the certificate of title in the name of TRB.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.