Javier v Concepcion

Facts:

Lim Chua, Tan Tian On and Tan Sick Tan filed for the reconveyance of a parcel of land (Lot 12) against Urbano Javier and Leonila Albiela. Lot 12 is allegedly a portion of a big parcel of land (Lot 6) located in Quezon. It was alleged that Lot 12 was ordered excluded from Lot 6 by Chua et. al. They said that Lot 12 can never be a part of Lot 6 because the Guhit River serves as a natural boundary between the Lot 12 (which was located in Dolores, Quezon) and Lot 6 (located in Candelaria, Quezon).

As a defense, Javier alleged that they acquired Lot 12 by part-purchase and part-inheritance; that they have a Spanish title to the lot; that the lot was adjudicated to their predecessors-in-interest in Land Registration Cases, that they have declared the land for tax purposes; that they planted the land with numerous fruits w/o interference from Chua et. al; and that Chua et. al, were never owners of Lot 12 as they have acquired their title through fraud and deceit.

The court a quo rendered judgment in favor of Chua et. al. It held that Lot 12 was part of Lot 6 as evidenced by the records of the Chief Surveyor of the Land Registration Office. Javier knew of this fact. His contention that the Commissioner’s report and the plotted area should not be admitted has no merit because of the manifestation of the Chief Surveyor.

The CA affirmed the decision thus the certiorari.

Issue:

1.      Whether or not there was fraud in the registration of Lot 12.

2.      Whether or not Chua et. al’s. cause of action has not been barred by prescription/laches.

Held:

1.      No. Fraud as a legal basis for review of a decree means actual/positive fraud as distinguished from constructive/legal fraud.  Actual fraud is a question of fact. Lot 12 was found to be part of Lot 6 under TCT 16817 issued in the name of    Chua. Furthermore, the decree of registration has long become final. Under sec 38 of Land Registration Act:  the person allegedly deprived of the land by a decree of registration under fraud should file in the CFI a petition for review w/in 1 yr. after the entry of the decree, provided no innocent purchaser for value has acquired an interest. Granting that there was no actual/ positive fraud in securing the title, Javier is barred from questioning it.

2.      Without merit. The rule is one cannot acquire title to a registered land by prescription or adverse possession. There are no intervening rights of 3^rd persons w/c may be affected by a decision directing the return of Lot 12 to Chua et. al. The defense of laches will not apply in this case.

*SC affirms CA.

Bornales v IAC

Facts:

Sixto Dumolong, married to Isabel Marquez, was originally awarded a parcel of land in Capiz in 1927. But Sixto and Isabel had lived separately since 1920. They had no child. Subsequently, Sixto cohabited with Placida Dumolong, with whom he had a son (Renito Dumolong).

In November 1977,  Placida filed for reconstitution of title over the lot. This was granted by the CFI, Capiz. In March 1978, a Deed of Extrajudicial Adjudication and Sale of Real Property was sold to spouses Carlito Patanao and Minda Dumolong; and spouses Bernardo Decrepito and Loreta Dumolong. This was executed by Renito and by Isabel whose supposed thumbmark appeared in the document. The deed was registered in November 1978. 3 months later, they sold the lot to the Bornales spouses through a Deed of Absolute sale.

Isabel filed an Action for Reconveyance against all the spouses. Only the Bornales spouses answered and the other spouses were declared in default. The RTC held in favor of Isabel on the grounds that all the defendants were purchasers in bad faith, that the land was conjugal property of Isabel and Sixto, and that the Deed was a forgery through the machinations of the defendants.

CA affirmed the RTC.

Issue:

Whether or not the spouses Bornales are purchasers in good faith?

Held:

No.  The Bornales spouses have been tenants/lessees of the land during Sixto’s lifetime. Having been cultivators of the land, it is unimaginable that they were unaware of the transactions affecting the land.  It appears that they were aware that Isabel was the legal wife of Sixto and was a rightful heir to the properties of the latter.

The fact alone that the petitioners knew that they purchased the property with full knowledge of the flaws and defect in the title of the vendors is proof of their bad faith.  Having bought the land registered under the Torrens system from their vendors who procured title by means of fraud, petitioners cannot invoke the indefeasibility of a certificate of title against Isabel to the extent of her interest. The Torrens system should not be used as a means to perpetuate fraud against the rightful owner. Registration, to be effective, must be made in good faith.

*CA affirmed

Doctrine: The Torrens system should not be used as a means to perpetuate fraud against the rightful owner. Registration, to be effective, must be made in good faith.

Llanto v Alzona

To be considered as mortgagees in good faith, jurisprudence require that they should take the necessary precaution expected of a prudent man to ascertain the status and condition of properties offered as collateral and to verify the persons they transact businesses with.

Facts:

Maria Sales was the registered owner of a parcel of land in Laguna which she acquired under a free patent. Until they died, she and her husband (Bernardo) lived on the said land in the house w/c they constructed. Maria died in August 1986.

In January 1990, a real estate mortgage contract (REM) was purportedly executed by Maria in favor of Dominador Alzona. Estela Pelongco (one of the daughters of Maria and Bernardo) signed as witness. Ernesta Alzona (brother of Dominador) admitted that his name does not appear in the REM although he was a co-mortgagee. The mortgage was foreclosed and was sold in a mortgage sale to Ernesto.  In January 1992, he executed a Consolidation of Ownership over the property and a Transfer Certificate of Title was issued in his name.

Mila Llanto (another daughter of Maria and Bernardo) and the rest of her brothers and sisters caused the inscription of an adverse claim on the title to the property. They filed for a complaint for Annulment of Mortgage and Auction Sale with Reconveyance of Title. However, the RTC and CA both ruled in favor of Alzona.

Issue:

Whether or not the Alzonas were mortgagees in good faith.

Held:

One of the essential requisites of mortgage is that the mortgagor should be the absolute owner of property to be mortgaged, otherwise the mortgage is null and void.  An exception to this is the doctrine of mortgagee in good faith - to be considered as mortgagees in good faith, jurisprudence require that they should take the necessary precaution expected of a prudent man to ascertain the status and condition of properties offered as collateral and to verify the persons they transact businesses with. This is based in the rule that all persons dealing with property covered by a Torrens title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title.

In the case, the RTC gave credence to Ernesto’s testimony that he conducted a credit investigation before he approved the loan sought and the property mortgaged. A perusal testimony proved that he exercised the necessary precautions to ascertain the status of the property to be mortgaged. Llanto never disputed Ernesto’s claim that he met the petitioners at the house built on the parcel of land. It was Estela and the persons who represented themselves as Bernardo and Maria who perpetrated the fraud. Ernesto cannot be faulted if he was led into believing that the old man and woman he met in November 1989 and January 1990 are 2 different persons.

Duran v IAC

Doctrine: The fraudulent and forged document of sale may become the root of a valid title if the certificate has already been transferred from the name of the true owner to the name indicated by the forger.

Facts:

Circe Duran owned 2 parcels of land in Caloocan City which she had purchased form the Moja Estate. She left the Philippines in June 1854.  A Deed of Sale of the 2 lots was made in favor of Circe’s mother, Fe. In December 1965, Fe mortgaged the same property to Erlinda Marcelo-Tiangco. When Circe came to know about the mortgage, she wrote to the Register of Deeds (RD) of Caloocan informing that she had not given her mother any authority to sell or mortgage any of her properties. She failed to get an answer from the RD. So she returned to the Philippines in May 1966.

Meanwhile, Fe failed to redeem the mortgaged properties and foreclosure proceedings were initiated by Marcelo- Tiangco. 

Circe claims that the sale in favor of her mother is a forgery saying that at the time of its execution in 1963, she was in the US. Fe alleges that the signatures of Circe in the Deed are genuine and the mortgage made by Fe is valid.

Issue:

1.       Whether or not the mortgage is valid

2.       Whether or not Marcelo-Tiangco was a buyer in good faith and for value

Held:

1.       Yes, the mortgage is valid with respect to the mortgagees. There is a presumption of regularity in the case of a public document. The fraudulent and forged document of sale may become the root of a valid title if the certificate has already been transferred from the name of the true owner to the name indicated by the forger. Insofar as innocent 3^rd persons are concerned, the owner was already Fe inasmuch as she had become the registered owner (caused by the sale of Circe to Fe). The mortgagee had the right to rely upon what appeared in the cert. of title and did not have to inquire further.

2.       Good faith consists of the possessor’s belief that the person from whom he received the thing was the owner of the same and could convey his title. In the case, Marcelo-Tiangco in good faith relied on the cert. of title in the name of Fe.

*Circe was also guilty of estoppels by laches. Antero (husband of Circe) was in the Philippines in 1964 to construct an apartment on the disputed lots. He could have discovered the deed of sale sought to be set aside. They could also have intervened in the foreclosure suit but they did not.