SOME DOCTRINES IN LAND TITLES AND DEEDS.doc

8/14/2019 SOME DOCTRINES IN LAND TITLES AND DEEDS.doc

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SOME DOCTRINES IN LAND TITLES AND DEEDS

a. Forged document can be a source of a valid title

A forged or fraudulent document may become the root of a valid

title if the property has already been transferred from the name of theowner to that of the forger. This doctrine serves to emphasize that a person

who deals with registered property in good faith will acquire good title from a

forger and be absolutely protected by a Torrens title.(Sps. Villamil vs. Velasco,

G.. !o. "##"$#, %&&'

b. )irror doctrine

General ule*

". +onsistently, this +ourt has ruled that every person dealing with

registered land may safely rely on the correctness of the

certificate of title issued therefor and the law will in no way

oblige him to go beyond the certificate to determine the condition

of the property. here there is nothing in the certificate of title to

indicate any cloud or vice in the ownership of the property, or any

encumbrance thereon, the purchaser is not required to e-plore further

than what the Torrens Title upon its face indicates in quest for any hidden

defects or inchoate right that may subsequently defeat his right

thereto.(+hua vs. Soriano, G.R. NO. 15!!" #$%

%. Time and again, this +ourt has ruled that a person dealing with the

owner of registered land is not bound to go beyond the certificate of title

as he is charged with notice of burdens on the property which are noted

on the face of the register or on the certificate of title. (San orenzo /evt

+orp vs. +0, G.. !o. "%1%1%, %&&2

3-ception4s*

". 5owever, when a person who deals with registered land through

someone who is not the registered owner" he is e&pected to loo'

behind the certificate of title and e&amine all the factual

circumstances" in order to determine if the vendor has the capacity to

transfer any interest in the land. 5e has the duty to ascertain the identity

of the person with whom he is dealing and the latter6s legal authority to convey.

The law 7requires a higher degree of prudence from one who buys from a

person who is not the registered owner, although the land ob8ect of the
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transaction is registered. hile one who buys from the registered owner does

not need to loo9 behind the certificate of title, one who buys from one who is not

the registered owner is e-pected to e-amine not only the certificate of title but

all factual circumstances necessary for him to determine if there are any flaws

in the title of the transferor, or in his capacity to transfer the land.: Thestrength of buyer6s inquiry on the seller6s capacity or legal authority to sell

depends on the proof of capacity of the seller. ;f the proof of capacity consists

of a special power of attorney duly notarized, mere inspection of the face of

such public document already constitutes sufficient inquiry. ;f no such special

power of attorney is provided or there is one but there appear flaws in its

notarial ac9nowledgment, mere inspection of the document will not do< the

buyer must show that his investigation went beyond the document and into the

circumstances of its e-ecution. (+hua vs. Soriano, G.R. NO. 15!!" #$%

#. (his principle does not apply when the party has actual

'nowledge of facts and circumstances that would impel a reasonably

cautious man to ma'e such in)uiry or when the purchaser has

'nowledge of a defect or the lac' of title in his vendor or of sufficient

facts to induce a reasonably prudent man to in)uire into the status of

the title of the property in litigation. =ne who falls within the e-ception

can neither be denominated an innocent purchaser for value nor a purchaser in

good faith.(Sps. Villamil vs. Velasco, G.. !o. "##"$#, %&&'

>. ;n case of ban9ing institutions?..

hile the cases cited by petitioner held that the mortgagee is not under

obligation to loo9 beyond the certificate of title when on its face, it was free

from lien or encumbrances, the mortgagees therein were considered in good

faith as they were totally innocent and free from negligence or wrongdoing in

the transaction. ;n this case, petitioner 9new that the loan it was e-tending to

Garcia4Trans0merican was for the purpose of the development of the eight@unit

townhouses. Aetitioner6s insistence that prior to the approval of the loan, it

undertoo9 a thorough chec9 on the property and found the titles free from liens

and encumbrances would not suffice. *t was incumbent upon petitioner toin)uire into the status of the lots which includes verification on

whether Garcia had secured the authority from the +,-R to mortgage

the sub/ect lots. 0etitioner failed to do so. e li9ewise find petitioner

negligent in failing to even ascertain from Garcia if there are buyers of the lots

who turned out to be private respondents. Aetitioner6s want of 9nowledge due

to its negligence ta9es the place of registration, thus it is presumed to 9now the
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rights of respondents over the lot. The conversion of the status of petitioner

from mortgagee to buyer@owner will not lessen the importance of such

9nowledge. !either will the conversion set aside the consequence of its

negligence as a mortgagee.

Budicial notice can be ta9en of the uniform practice of ban9s toinvestigate, e-amine and assess the real estate offered as security for the

application of a loan. e cannot overemphasize the fact that the Can9 cannot

barefacedly argue that simply because the title or titles offered as security were

clean of any encumbrances or lien, that it was thereby relieved of ta9ing any

other step to verify the over@reaching implications should the subdivision be

auctioned on foreclosure. (5omeban9ers Saving D Trust +o. vs. +0, G.. !o.

"%$>21, %&&2

1. ;n case of financing institutions? ;n the case at bar, GS;S is admittedly a financing institution. ;n its

answer to the complaint filed with the trial court, GS;S admitted 9nowledge that

the spouses Bose +. Eulueta and Soledad C. amos owned the 0ntonio

Subdivision when they mortgaged the same with GS;S. ;n Sunshine Finance and

Investment Corp. v. Intermediate Appellate Court, we held that when the

purchaser or mortgagee is a financing institution" the general rule that

a purchaser or mortgagee of land is not re)uired to loo' further than

what appears on the face of the title does not apply. Further*

!evertheless, we have to deviate from the general rule because of the

failure of petitioner in this case to ta9e the necessary precautions to ascertain if

there was any flaw in the title of the !olascos and to e-amine the condition of

the property they sought to mortgage. (he petitioner is an investment and

financing corporation. e presume it is e&perienced in its business.

Ascertainment of the status and condition of properties offered to it as

security for the loans it e&tends must be a standard and indispensable

part of its operations. Surely it cannot simply rely on an e-amination of

a Torrens certificate to determine what the sub8ect property loo9s li9e as its

condition is not apparent in the document. The land might be in a depressed

area. There might be squatters on it. ;t might be easily inundated. ;t might bean interior lot without convenient access. These and other similar factors

determine the value of the property and so should be of practical concern to the

petitioner.(GS;S vs. dela )erced, G.. !o. "1&>'$, %&&"

2. ;n the case of /omingo ealty vs. +0 (%&,the S+ had the

occasion to give a precaution to prospective buyers of titled lands, to wit*
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5opefully this case will serve as a precaution to prospective parties to a contract

involving titled lands for them to e-ercise the diligence of a reasonably prudent

person by underta9ing measures to ensure the legality of the title and the

accurate metes and bounds of the lot embraced in the title. ;t is advisable that

such parties21% verify the origin" history" authenticity" and validity of thetitle with the Office of the Register of 3eeds and the ,and Registration

Authority4 2#% engage the services of a competent and reliable geodetic

engineer to verify the boundary" metes" and bounds of the lot sub/ect

of said title based on the technical description in the said title and the

approved survey plan in the ,and anagement ureau4 26% conduct an

actual ocular inspection of the lot4 27% in)uire from the owners and

possessors of ad/oining lots with respect to the true and legal

ownership of the lot in )uestion4 25% put up signs that said lot is being

purchased" leased" or encumbered4 and 2!% underta'e such other

measures to ma'e the general public aware that said lot will be sub/ect

to alienation" lease" or encumbrance by the parties.

c. ules applicable in /ouble Sale*

+ivil +ode, 0rt. "211. ;f the same thing should have been sold to different

vendees, the ownership shall be transferred to the person who may have first

ta9en possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person

acquiring it who in good faith first recorded it in the egistry of Aroperty.

Should there be no inscription, the ownership shall pertain to the person who in

good faith was first in the possession< and, in the absence thereof, to the person

who presents the oldest title, provided there is good faith.

". The principle ofprimus tempore, potior jure(first in time, stronger

in right gains greater significance in case of double sale of immovable

property. hen the thing sold twice is an immovable" the one who

ac)uires it and first records it in the Registry of 0roperty" both

made in good faith" shall be deemed the owner. 8erily" the act of

registration must be coupled with good faith9 that is" theregistrant must have no 'nowledge of the defect or lac' of title of

his vendor or must not have been aware of facts which should

have put him upon such in)uiry and investigation as might be

necessary to ac)uaint him with the defects in the title of his

vendor.(San orenzo /evt +orp vs. +0, G.. !o. "%1%1%, %&&2

d. 0urchaser in good faith


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". 0 purchaser in good faith is one who buys property without notice

that some other person has a right to or interest in such property and

pays its fair price before he has notice of the adverse claims and interest

of another person in the same property.(+hua vs. Soriano, G.R. NO.

15!!" #$%%. Thus, the reliance by the +huas on the notarial ac9nowledgment

found in the duly notarized SA0 presented by +elestino is sufficient

evidence of good faith. The +huas need not prove anything more for it is

already the function of the notarial ac9nowledgment to establish the

appearance of the parties to the document, its due e-ecution and

authenticity. (+hua vs. Soriano, G.R. NO. 15!!" #$%

SOME DOCTRINES IN LAND TITLES AND DEEDS.doc

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