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.