PNB

v CA Petition for review, affirming CFI decision declaring null and void TCT1439 in the name of Felisa Boyao, ordered its cancellation and the reinstatement of TCT 1412 of Chu Kim Kit Facts: - - - - Chu Kim Kit is the absolute owner of a parcel of land in Tacloban, Leyte He went to mainland China and left his mother here in the Philippines, Felisa Boyano. ChuKim Kit entrusted his TCT to his mother and allowed her to administer the property and to enjoy its fruits in his absence. This caused Felisa Boyano to cause the cancellation of TCT1412 and to obtain TCT 1439 in her name o Her acts of administration have created the impression in the mind of 3rd persons that she was the owner of the property and could dispose of it o By the acts of confidence of ChuKimKit, he is partly to blame for the commission of the fraud against himself by his mother She mortgaged the property to the PNB to secure a loan of Php25,000

- Issue: -

W/N the CFI and CA erred in declaring null and void the mortgages

Ruling: - - - - YES, the CFI and CA erred. PNB is an innocent mortgagee in for value At the time of the mortgage, the property was covered by TCT1439 in the name of FelisaBoyano. Petitioner PNB had the right to rely on what appeared on the certificate of title, and in the absence of anything to excite suspicion (the titled carried no annotation, defect or flaw), it was under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of the certificate. A fraudulent or forged document of sale may become the root of a valid title if the certificate of titles has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger. Sec55 of LRA: an original owner of a registered land may seek the annulment of a transfer thereof on the ground of fraud, such remedy, however, is without prejudice to the rights of any innocent holder for value of the certificate of title Remedy of ChuKimKit: action for damages against those who caused the fraud (Boyano). If insolvent, action against the Treasurer of the Philippines against the Assurance Fund. Mortgage valid and enforceable; ChuKimKit has right to exercise mortgagers right of redemption and to claim reimbursement from mom.

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