Casimiro Development Corporation v.

Renato Mateo
G.R. No. 175485, July 27, 2011, BERSAMIN, J.

FACTS:

By the agreement of the entire Lara-Mateo family, after the death of the Isaias Lara,
a deed of sale of the his property located at Barrio Pulang Lupa, Las Pinas City was
executed in favor of Laura Mateo (Laura). Then, Laura registered the land under her sole
name and obtained Original Certificate of Title (OCT) No. 6386.

Laura used the land as collateral to secure a loan from Bacoor Rural Bank. To repay
the loan, Laura borrowed funds thru transfer of the title of the land for the meantime in
the name Parmenas Perez until the repayment of the funds. Laura recovered the property
by repaying with the proceeds of another loan obtained from Rodolfo Pe (Pe). Then,
Laura later executed a deed of sale in favor of Pe.

Pe constituted a mortgage on the property in favor of China Banking Corporation

(China Bank) as security for a loan. After Pe failed to redeem, China Bank foreclosed the
mortgaged land. Then, Casimiro Development Corporation (CDC) purchased the land.

CDC brought an action for unlawful detainer in the MeTC in Las Piñas City
against the Renato Mateo’s (respondent) sibling and other occupants of the land.

Defendants maintained that the MeTC did not have jurisdiction because the land
was classified as agricultural; that DARAB has juridiction. MeTC ruled in favor of CDC
stating, among others, that Certificates of Title under the Torrens System is indefeasible
and imprescriptible.As between two persons claiming possession, one having a Torrens
title and the other has none, the former has a better right. RTC ruled against CDC for lack
of jurisdiction, CA ruled in favor of CDC and declared that MeTC has juridiction and
reinstated the decision of the MeTC. On appeal, SC affirmed the ruling of CA.

Respondent, in his capacity as one of the co-owners, brought an action for

quieting of title, reconveyance of four-fifths of the land, and damages against CDC
and Laura in the RTC, Las Piñas City, the action was denied. On appeal, CA ruled against
CDC declaring that the latter as not a buyer in good faith due to its being charged with
notice of the defects and flaws of the title at the time it acquired the property

ISSUE:

1) WON the title in the name of Laura is indefeasible and incontrovertible.

2) WON CDC was an innocent purchaser.

RULING:

1) YES, The property has already been placed under the Torrens system of land
registration before CDC became the registered owner by purchase from China Bank; OCT
has already been issued to attest to the fact that the person named in the certificate is the
owner of the property described. Neither the respondent nor his siblings opposed the
transactions causing various transfers, and even acknowledged the registration of the
land under the name of Laura.

Registration of land under the Torrens System, aside from perfecting the title and
rendering it indefeasible after the lapse of the period allowed by law, also renders the
title immune from collateral attack.
2) CDC was an innocent purchaser for value. Considering that China Bank’s TCT
was clean title, free from any lien or encumbrance. CDC, when it purchased the property,
had the right to rely solely upon the face of the certificate of title in the name of China
Bank.
HELD: WHEREFORE, we grant the petition for review on certiorari; set aside the decision
of the Court of Appeals in CA-GR. CV No. 71696; dismiss the complaint in Civil Case No.
94-2045; and declare Transfer Certificate of Title No. T- 34640 in the name of Casimiro
Development Corporation valid and subsisting.