Tomas vs. Tomas

Tomas vs. Tomas

G.R. No. L-36897 | June 25, 1980

DE CASTRO, J.

Parties:

Plaintiffs-appellees: SPOUSES FLORENTINO S. TOMAS and FRANCISCA CARINO

Defendant-appellant: EUSEBIA TOMAS (defendant) PHILIPPINE NATIONAL BANK, SANTIAGO, ISABELA BRANCH (defendant-appellant)

Nature: PETITION for certiorari to review the decision of the then Intermediate Appellate Court.

Keyword: Mortgaged property through fraudalent means, good faith

Summary: The parcel of land owned by Florentino Tomas which was obtain through a homestead patent was fraudulently transferred to Eusebia Tomas, claiming that she was the heir of the former. She successfully cancelled the OCT of Florentino Tomas and had a TCT issued under her name through an extra-judicial settlement. She then took a loan from PNB mortgaging the questioned property. Upon the discovery of the original owner of the said fraudulent act, he filed an action against Eusebia Tomas alleging that the mortgage be declared null and void, since the mortgagor (Eusebia) is not the true owner of the property.

Facts: Plaintiff spouses, Florentino S. Tomas and Francisca Cariño, are the owners of a parcel of land located in Malasian, Santiago, Isabela (now Saguday, Nueva Vizcaya) since 1929, which they obtained through a homestead patent with Original Certificate of Title. Through fraud and misrepresentation, one Eusebia Tomas succeeded in having the said OCT cancelled, and obtained another in her name, now TCT-360 Nueva Vizcaya, with which she obtained a loan from the Philippine National Bank branch in Santiago, Isabela, as a security, mortgaging the land with the bank for the loan of P2,500.00. Florentino Tomas discovered the fraudulent acts of Eusebia Tomas when he himself applied for a loan from the Philippine National Bank, and offered as a collateral the same land already mortgaged by Eusebia Tomas to the bank.

In the action plaintiffs filed on April 14, 1964 to declare TCT-350, Nueva Vizcaya, null and void, against Eusebia Tomas, it was found by the court (Court of First Instance of Nueva Vizcaya) that Eusebia Tomas succeeded in having plaintiffs’ OCT No. I-4620 (Isabela)¹ cancelled and having TCT No. 8779 (Isabela)² issued in her name, by executing a deed of extra-judicial settlement³ in which she made it appear that she is the lone heir of the registered owner, Florentino Tomas, to whom she was not even known before, and who was at the time very much alive. She then petitioned for the issuance of another owner’s duplicate of OCT No. I-4620, alleging loss of said owner’s duplicate. On Order of the court (Court of First Instance of Isabela) where the petition was filed, a new owner’s duplicate was issued to Eusebia Tomas as the petitioner. Upon the registration of the deed of extra-judicial settlement (Exhibit “J”), OCT No. I-4620 was cancelled, and TCT No. 8779, now TCT-350 Nueva Vizcaya was issued in the name of Eusebia Tomas on March 14, 1957.

In the same action, the Philippine National Bank was made a co-defendant as the mortgagee of the land, the plaintiffs alleging that the mortgage is null and void, the mortgagor not being the owner of the property mortgaged. After trial in which Eusebia Tomas never appeared to present any evidence, the court a quo rendered judgment declaring the CTC of Eusebia Tomas null and void as well as declaring the mortgage in favor of the Philippine National Bank without force and effect against the plaintiffs

Issue:

a. Whether the mortgage of the land in favor of the appellant bank is valid or not as against appellees

b. Whether the appellant is a mortgagee in good faith and for value, for if it is, and without anything to excite suspension as it claims, it is protected in the same way as a purchaser in good faith and for value is protected under Section 39 of Act 496, otherwise known as the Land Registration Act.

Held:

a. The SC find no error in the holding of the court a quo that the mortgage executed by Eusebia Tomas, appellant’s co-defendant in favor of said appellant bank over the land in question which the former never owned, I [sic] without effect as against appellees herein

b. The SC find more weight and vigor in a doctrine which recognizes a better right for the innocent original registered owner who obtained his certificate of title through perfectly legal and regular proceedings, than one who obtains his certificate from a totally void one, as to prevail over judicial pronouncements to the effect that one dealing with a registered land, such as a purchaser, is under no obligation to look beyond the certificate of title of the vendor, for in the latter case, good faith has yet to be established by the vendee or transferee, being the most essential condition, coupled with valuable consideration, to entitle him to respect for his newly acquired title even as against the holder of an earlier and perfectly valid title. There might be circumstances apparent on the face of the certificate of title which could excite suspicion as to prompt inquiry, such as when the transfer is not by virtue of a voluntary act of the original registered owner, as in the instant case, where it was by means of a self-executed deed of extra-judicial settlement, a fact which should be noted on the face of Eusebia Tomas’ certificate of title. Failing to make such inquiry would hardly be consistent with any pretense of good faith, which the appellant bank invokes to claim the right to be protected as a mortgagee, and for the reversal of the judgment rendered against it by the lower court.

Ratio: In claiming good faith as a mortgagee, and for value, appellant bank claims that no proof to the contrary was presented by appellees in the trial court.⁷ It is a fact, however, that incontrovertible proofs have seen adduced showing that Eusebia Tomas, the mortgagor, was not the owner of the property mortgaged. This is all that appellees had to prove that would place appellant bank on obligation to show good faith, as in fact, it was the bank that alleged good faith as its defense.⁸ It would be more legally correct, therefore, to say that it was incumbent on appellant to prove its affirmative allegation of good faith rather than appellee to show the contrary.

Ruling: WHEREFORE, the judgment appealed from is hereby affirmed, without pronouncement as to costs. SO ORDERED.

Notes: The owner of the building is equitably entitled to reimbursement of the cost of improvements made on public land lot granted to another. (Manila Pencil Company, Inc. vs. Trazo, 77 SCRA 181).

A petition for quieting of title on the ground of fraud although essentially an action for reconveyance should not be dismissed on the ground of prescription where the petition contains an averment that “the malicious and illegal acts committed by the defendants were known to the plaintiffs only during this year 1977.” (Heirs of Segundo Uberas vs. Court of First Instance of Negros Occidental, 86 SCRA 145).

If the vendor failed to redeem the property mortgaged equitably within the period agreed upon, the vendee’s title becomes irrevocable by the mere registration of an affidavit of consolidation. (Labasan vs. Lacuesta, 86 SCRA 16).

The remedy of a realty owner whose property was erroneously registered in another’s name is to recover from the Assurance Fund the losses as damages he had sustained. (Frias vs. Esquivel, 67 SCRA 487).

Where the petitioner and the respondent agreed “to give and to do” certain rights and obligations respecting the land and mortgage debts of the petitioner, but partaking the nature of antichresis, the agreement entered into is an innominate contract. (Dizon vs. Gaborro, 83 SCRA 688).

A mortgage on the land includes the improvements found thereon. (Manahan vs. Cruz, 61 SCRA 137).

Same Same: Land Registration; Between the mortgagee in good faith who extended a mortgage loan to a person who claimed to be the registered owner of the collateral as per the submitted Transfer Certificate of Title and the innocent original registered owner, the latter deserves better protection.—We, indeed, find more weight and vigor in a doctrine which recognizes a better right for the innocent original registered owner who obtained his certificate of title through perfectly legal and regular proceedings, than one who obtains his certificate from a totally void one, as to prevail over judicial pronouncements to the effect that one dealing with a registered land, such as a purchaser, is under no obligation to look beyond the certificate of title of the vendor, for in the latter case, good faith has yet to be established by the vendee or transferee, being the most essential condition, coupled with valuable consideration, to entitle him to respect for his newly acquired title even as against the holder of an earlier and perfectly valid title. There might be circumstances apparent on the face of the certificate of title which could could excite suspicion as to prompt inquiry, such as when the transfer is not by virtue of a voluntary act of the original registered owner, as in the instant case, where it was by means of a self-executed deed of extra-judicial settlement, a fact which should be noted on the face of Eusebia Tomas’ certificate of title. Failing to make such inquiry would hardly be consistent with any pretense of good faith, which the appellant bank invokes to claim the right to be protected as a mortgagee, and for the reversal of the judgment rendered against it by the lower court.

De Guzman, Jr. vs. National Treasurer of the Republic of the Phils

De Guzman, Jr. vs. National Treasurer of the Republic of the Phils

G.R. No. 143281 | August 3, 2000

KAPUNAN, J.

Parties:

Petitioners: SPOUSES FRANCISCO and AMPARO DE GUZMAN, JR.

Respondents: THE NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES and THE REGISTER OF DEEDS OF MARIKINA CITY

Nature: PETITION for review on certiorari of a decision of the Court of Appeals.

Keyword: Original duplicate of title; impostors selling property; Assurance Fund

Summary: Spouses Milambiling purchased a parcel of land in Antipolo. Due to their work as accountant and nurse in Saudi Arabia, they entrusted the deed of sale of the parcel of land they bought from Sta. Lucia Realty & the corresponding certificate of title to Belgica, a long-time friend. After some time, Belgica informed the spouses that the certificate of title of the said land had been transferred in their name. After an agreement by the couple and Belgica that she will bring the title in Saudi, she informed them that she forgot the title in their house in the Philippines. Angered by the circumstance, Urlan Malimbing asked his relatives to check with the office of the registrar what had happened to their title and was informed that the CTC had been indeed transferred to their names but was subsequently cancelled and title transferred to the spouses de Guzman. Delving in deeper, it turned out that an imposter-couple who had a copy of the owner’s duplicate copy of Malimbiling’s property in Antipolo convinced and sold the property to the spouses de Guzman. Learning upon the circumstance, Urlan Malimbiling went back to the Philippines and filed a case of declaration of nullity of sale and title with damages against spouses de Guzman and the former won. Spouses de Guzman appealed to the CA and the SC but they still lost. Subsequently, the Spouses De Guzman filed an action for damages against the Assurance Fund before the RTC impleading the National Treasuer and the Register of Deeds of Marikina.

RTC: rendered decision in favor of the spouses de Guzman

CA: Reversed the decision of the RTC stating that they do not fall under the circumstance stated in PD 1529 and thus not entitled to damages.

SC: Affirmed the decision of the CA.

Facts: On 01 July 1985, Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in Antipolo, Rizal from Sta. Lucia Realty and Development, Inc. Although they were already civilly married, Asuncion used her maiden name in the Deed of Sale because, being conservative, she did not want to use her married name until she was married in church.

After their church wedding on 05 July 1985, Urlan and Asuncion Milambiling left for Europe on their honeymoon and from there, they proceeded to Saudi Arabia where they were working as accountant and nurse, respectively.

Before leaving for abroad, the spouses Milambiling entrusted the Deed of Sale of the parcel of land they bought from Sta. Lucia Realty and the corresponding Certificate of Title still in the name of Sta. Lucia Realty to a long-time friend and one of their principal wedding sponsors, Marilyn Belgica, who volunteered to register the sale and transfer the title in their names.

Later, the spouses Milambiling learned from Belgica through an overseas telephone call that a transfer certificate of title of the said parcel of land had already been issued in their names. Belgica committed to the Milambiling spouses that she will personally deliver the title to them in Saudi Arabia. Sometime in May 1986, Belgica arrived in Saudi Arabia but the title was not with her. Belgica said that she left it in their house in the Philippines and forgot to bring it with her.

Urlan Milambiling was angry and immediately called up his relatives in the Philippines and asked them to find out from the Office of the Register of Deeds of Rizal what happened to their title. He was informed that the Certificate of Title covering the said parcel of land had indeed been transferred in their names but was subsequently cancelled and title transferred in the names of x x x the spouses De Guzman.

Milambiling was also told about the circumstances that led to the cancellation of their title. It appears that while the spouses Milambiling were in Saudi Arabia, a couple identifying themselves as the spouses Urlan and Asuncion Milambiling went to the house of a certain Natividad Javiniar, a real estate broker, inquiring if the latter could find a buyer for their lot located in Vermont Subdivision, Antipolo, Rizal. Javiniar accompanied the said couple to the house of [the] spouses De Guzman. Having somehow obtained possession of the owner’s duplicate copy of the certificate of title in the name of the spouses Milambiling, the impostor-couple were able to convince the de Guzmans to buy the property. On 20 November 1985, the impostor-couple, posing as the spouses Milambiling, executed a Deed of Absolute Sale in favor of [the] spouses de Guzman who paid the stipulated purchase price of P99,200.00. On 30 April 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 TCT No. N-117249 in the names of [the] De Guzman[s].

Upon learning of the above, Urlan Milambiling quickly returned to the Philippines. On 24 July 1986, the spouses Milambiling filed an action against [the spouses De Guzman] before the Regional Trial Court of Antipolo, Rizal, Branch 73, for declaration of nullity of sale and title with damages.

 [The] spouses De Guzman appealed the decision of the trial court to the Court of Appeals. On 18 July 1991, [the Court of Appeals] rendered its decision affirming the decision of the court a quo.

[The] spouses De Guzman then went to the Supreme Court on a petition for review on certiorari. On 01 July 1992, the High Tribunal issued a resolution denying the petition on the ground that no reversible error was committed by the Court of Appeals.

On 11 February 1993, [the] spouses De Guzman filed [an] action for damages against the Assurance Fund before the Regional Trial Court of Pasig, Branch 153[,] [impleading the National Treasurer of the Republic of the Philippines and the Register of Deeds of Marikina City.]¹

RTC: rendered its decision finding in favor of the De Guzman spouses adjudging the Assurance Fund liable to the amount actually paid by the plaintiffs in the amount of PHP 99,200.00, ordering the defendants treasurer and/or registrar to pay or cause the payment of the said amount to herein plaintiff.

CA: Found merit on the appeal of the National Treasurer and the Marikina Registrar of Deeds and reversed the decision of the RTC.

SC: Affirmed the decision of the CA.

Issue: Whether or not the spouses De Guzman are entitled to compensation for damages by the Assurance Fund

Held: No. They are not entitled.

Ratio: Section 95 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:

SEC. 95. Action for compensation from funds.—A person who, without negligence on his part, sustains loss or damage, or is deprived of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system or arising after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title or in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein, may bring an action in any court of competent jurisdiction for the recovery of damage to be paid out of the Assurance Fund.

The precursor of Section 95, Section 101 of the Land Registration Act (Act No. 496), similarly states:

SEC. 101. Any person who without negligence on his part sustains loss or damage through any omission, mistake or misfeasance of the clerk, or register of deeds, or of any examiner of titles, or of any deputy or clerk of the register of deeds in the performance of their respective duties under the provisions of this Act, and any person who is wrongfully deprived of any land or any interest therein, without negligence on his part, through the bringing of the same under the provisions of this Act or by the registration of any other persons as owner of such land, or by any 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, and who by the provisions of this Act 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, may bring in any court of competent jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of damages to be paid out of the Assurance Fund.

It may be discerned from the foregoing provisions that the persons who may recover from the Assurance Fund are:

1.     1)Any person who sustains loss or damage under the following conditions:

1.     a)that there was no negligence on his part; and

2.     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 Land Registration Act, now, the Property Registration Decree; or

1.     2)Any person who has been deprived of any land or interest therein under the following conditions:

1.     a)that there was no negligence on his part;

2.     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

3.     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 Court of Appeals correctly held that petitioners’ circumstances do not fall under the first case. Petitioners have not alleged that the loss or damage they sustained was “through any omission, performance of their respective duties.” Moreover, petitioners were negligent in not ascertaining whether the impostors who executed a deed of sale in their (petitioner’s) favor were really the owners of the property.

Nor does petitioners’ situation 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.”

Petitioners’ claim is not supported by the purpose for which the Assurance Fund was established. 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.⁵ Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does not entitle them to compensation under the Assurance Fund. While we commiserate with petitioners, who appear to be victims of unscrupulous scoundrels, we cannot sanction compensation that is not within the law’s contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals, the Government is not an insurer of the unwary citizen’s property against the chicanery of scoundrels. Petitioners’ recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who duped them.

Ruling: ACCORDINGLY, the petition is DENIED.

Same Same: Land Titles; Land Registration; Assurance Fund; 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.—Petitioners’ claim is not supported by the purpose for which the Assurance Fund was established. 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. Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does not entitle them to compensation under the Assurance Fund.

Same; Same; Same; The Government is not an insurer of the unwary citizen’s property against the chicanery of scoundrels.—While we commiserate with petitioners, who appear to be victims of unscrupulous scoundrels, we cannot sanction compensation that is not within the law’s contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals, the Government is not an insurer of the unwary citizen’s property against the chicanery of scoundrels. Petitioners’ recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who duped them.

Notes: The law must protect and prefer the lawful owner of registered title over the transferee of a vendor bereft of any transmissible rights. (Mathay vs. Court of Appeals, 295 SCRA 556 [1998])