1.

In re Consulta of Vicente Francisco on behalf of Cabantog 67 Phil 222

Facts: On January 21, 1936, the spouses Francisco Vicua and Maxima Caballes made an absolute sale of three parcels of land, covered by transfer certificates of title Nos. 13395, 13396, and 13397, in favor of Domingo Cabantog for the sum of P2,500. The deed of sale was presented for registration, and the senior clerk in the office of the register of deeds of Laguna, in the absence of the latter official, made a notation thereon to the effect that the same was presented at 12.15 o'clock on January 25, 1936, as per entry number 18624, vol. II of the day book. On his return to duty on January 27, 1936, the register of deeds had the aforesaid notation cancelled and substituted by the following: 18624. The inscription of the proceeding deed of sale is hereby suspended until after the resolution to be rendered by the Supreme Court on the appeal intended to be presented by Maxima Caballes against the decision of the Court of First Instance of Laguna in Civil Case No. 6600 instituted by Apolonia Coronado et al. vs. Maxima Caballes et al., in which the latter has been condemned to pay to the plaintiff the amount of P1,000,000 (should be P100,000). The undersigned is of the opinion that it is the duty of the register of deeds to aid the courts, avoiding that their decisions may be effective due to transfers of properties made by the party losing in a case after same have been handled down; and also to protect the interest of the winning party by preventing the multiplicity of litigations. Pending the appeal of Maxima Caballes to this court from the decision in civil case No. 6600 sentencing her to pay Apolonia Coronado the sum of P100,000, the latter secured an attachment of the three parcels of land sold by Maxima Caballes to Domingo Cabantog, which attachment was entered in the day book of the register of deeds of Laguna on January 27, 1936. Against the refusal of the register of deeds to register the deed of sale in favor of Domingo Cabantog, his counsel elevated a consulta to the judge of the Fourth Branch of the Court of First Instance of Manila, through the Chief of the General Land Registration Office, requesting answer to the following: 1. Is it not the ministerial duty of the register of deeds of Laguna, upon presentation to him of the absolute deed of sale in favor of Domingo Cabantog of the three (3) parcels of land in question, with the corresponding owners' duplicate certificates of title, to register said deed of sale, cancel said outstanding certificates in the name of the vendors, and prepare and issue the proper transfer certificates of title in the name of the vendee, the proper registration fees having been tendered and accepted and there being no judicial order suspending such action? 2. Does the register of deeds of Laguna have the authority to deny issuance of the proper transfer certificates of title in favor of the vendee on the ground alleged by him that, "it is the duty of the register of deeds to aid the courts, avoiding that their decision may be effective (or ineffective) due to transfers of properties made by the party losing in case after same have been handed down; and also to protect the interest of the winning party by preventing the multiplicity of litigations', or should the register of deeds leave this question to the determination of the proper court in case the same is submitted to it for determination by any interested party? A copy of the consulta having been served on the register of deeds, the latter filed his answer thereto. The case came up to the oral hearing. After hearing, Judge Montemayor entered a resolution: In view of the foregoing, this court rules that the register of deeds of the Province of Laguna should have registered the deed executed by Maxima Caballes and Francisco Vicuna in favor of Domingo Cabantog. It should be understood, however, that this ruling is without prejudice to any action that may be taken be Apolonia Coronado in the proper court to guide or control the action of the register of deeds with respect to the deed in question. Furthermore, this ruling does not in any manner touch upon the nature, propriety or validity of the transfer of the three parcels of land to Cabantog. Apolonia Coronado moved for reconsideration but was unsuccessful.

Issue: Whether the nature of the function of a register of deeds with reference to the registration of a deed of sale of a registered land is ministerial or discretional Held: According to this provision of the law, upon presentation of a deed of conveyance of a registered land, together with the grantor's duplicate certificate, the register of deeds shall (1) make out in the registration book new certificate of title; (2) prepare and deliver to the grantee an owner's duplicate certificate of title; (3) note upon the original and duplicate certificates the date of transfer, the volume and page of the registration book where the new certificate is registered, and a reference by number to the last prior certificate; (4) require the surrender of the grantor's duplicate certificate for purposes of cancellation; (5) cancel likewise the original certificate and (6) file and endorse in the manner required the deed of conveyance presented for registration. The duties enjoined upon the register of deed by the aforecited section of the Land Registration Act are clearly ministerial and mandatory in character not only as is indicated by the auxiliary "shall" but by the nature of such functions required to be performed by him. Upon the other hand, section 193 of the Administrative Code, in referring to the "general functions of register of deeds" provides that "it is the duty of a register of deeds to record in proper form all instruments relative to such lands, the recording whereof shall be required or allowed by law." We have not overlooked reference to the case of Debrunner vs. Jaramillo (12 Phil., 316), in which it was said that the duties of a registrar of property when he is acting under the Mortgage Law, are to a large extent judicial, as indicated in articles 18, 100 and 101 et seq. of that law, and to the case of Betco vs. La Flor de Intal (43 Phil., 517), where it was said that "registers of deeds perform both functions of an administrative character and functions which are at least of a quasi-judicial nature." Notwithstanding divergence of facts between these cases and the present case, we have given weight to what seem are logical inferences of counsel for the appellant in the application of general principles, but we find that as plausible an argument to the contrary may be found in Standard Oil Co. of New York vs. Jaramillo (44 Phil., 630); and Garcia Sanchez vs. Rosauro (40 Phil., 231); and Williams vs. Suer (49 Phil., 534) with the same divergence of facts and the laws involved. Limiting ourselves to the facts of the present case, we are of the opinion that it is the duty of the register of deeds of Laguna under the law to register the deed executed by Maxima Caballes and Francisco Vicuna in favor of Domingo Cabantog. 2. Gurba Singh Pabla & Co. vs Reyes and Tantoco 92 Phil 177

Facts: Case is an appeal against an order of the CFI of Manila compelling Reyes and Tantoco to surrender TCTs of two parcels of land, so that the contract of lease between Gurbax and the owner of the land, John Tan Chin Eng, can be annotated thereon. On July 23, 1948, Chin Eng entered into a contract with Gurbax, wherein Gurbax was to construct thereon a three-story building valued at from P80,000 to P90,000. The contract also provided that the building shall become the exclusive property of Chin Eng, but that Gurbax were to occupy, hold, or possess it as lessees for a period of 3 years and 6 months from its completion, without paying rent, the sum spent in the construction being considered as the rentals; that after the said period Gurbax was to continue occupying the said building for another 2 years at a monthly rental of P2,000. This contract of lease was filed and registered in the office of the Register of Deeds of Manila on August 10, 1948. At the time that the contract was entered into there was an existing mortgage over the land in favor of Jose Calvo and Carlos Calvo for the sum of P110,000. This mortgage in favor of the Calvos was cancelled, and a new mortgage was executed by the owner in favor of Reyes and his spouse Tantoco, dated March 8, 1949, which was registered on the same date in the office of the Register of Deeds of Manila. On May 14, 1949, the original contract of lease with Gurbax was amended, by virtue of which the period under which the lessees were to hold and occupy the property without rentals was extended to 7 years and 4 months, and the rental for the additional two years thereafter reduced to P1,148. This amended contract of lease was also registered in the office of the Register of Deeds of Manila on May 20, 1949. On May 25, 1949, counsel for Gurbax wrote R&T requesting them to allow him to take the certificates of title to the office of the Register of Deeds of Manila for the annotation of the contracts of lease entered into by the owner with them, and on May 27, 1949, the son of R&T acknowledged receipt of the said letter but informed counsel for Gurbax that the request could not be granted without the written consent of the owner of the certificates of title. On June 16, 1949, R&Ts son wrote Chin Eng, demanding the payment of the overdue interest on the

mortgage. On June 3, 1949, Gurbax filed a motion in the CFI of Manila praying that an order issue to Chin Eng for the delivery of the owner's duplicates of TCTs to the petitioners in order that the Register of Deeds of Manila may be able to make the annotation thereon of the contract of lease and its amendment. Against this petition R&T filed an opposition, alleging that they had no knowledge whatsoever of the contract of lease in favor of Gurbax, or of its amendments, and that the execution of the amendment violated the express provision of the mortgage, to the effect that the owner could not sell, assign, or encumber the mortgaged premises without the written consent of the mortgagees. It is to be noted that with respect to the original contract of lease in favor of Gurbax, no allegation is made in the opposition of the R&T that they were not aware of the existence of the contract, their only allegation being that the only annotation on the certificates of title at the time they entered into the contract of mortgage was the mortgage in favor of the Calvos. It is also to be noted that R&T do not deny an express allegation of the amended petition to the effect that notice was given to the public by a big sign board placed on the premises while the building was under construction that Gurbax is the owner of the building. The amended petition further states, without denial on the part of the R&T, that as early as October 9, 1948, the Register of Deeds of Manila had demanded in writing from Chin Eng the submission of his Owners Duplicate TCTs in order that the lease executed by him in favor of Gurbax may be given due course. The CFI issued an Order directing R&T to surrender the TCTs so that the lease in favor of Gurbax may be noted thereon. It expressly found that R&T had knowledge of the lease contract, but that their mortgage of March 8, 1949, has priority over Gurbax amended contract of lease. As regards the (supposed) prohibition contained in the contract of mortgage, the court held that the prohibition gives a right of foreclosure; in other words, that in spite of the prohibition the amended contract of lease may not be considered as null and void. Issue: WON Gurbax has a right to have the said deeds registered despite the opposition of Reyes and Tantoco Ruling: YES, Gurbax may register the instrument of lease. The purpose of registering an instrument is to give notice thereof to all persons (section 51, Act No. 496); it is not intended by the proceedings for registration to seek to destroy or otherwise affect already registered rights over the land, subsisting or existing at the time of the registration. The rights of these parties, who have registered their rights, are not put in issue when an instrument is subsequently presented for registration; nor are its effects on other instruments previously registered put in issue by the procedure of registration. Thus, the objections raised by respondents-appellants that they had no knowledge of the contract of lease before the property was mortgaged to them, or that the same violates their contract of mortgage with the owner of the land these are not passed upon by the order for the registration of petitioners-appellees' contract of lease. The objections, as well as the relative rights of all parties who have registered their deeds, shall be decided in the proper suit or proceeding when the opportune occasion arises; but they are not now in issue, nor may they be adjudicated upon, simply because petitioners-appellees have applied for the registration of their contract of lease. The foregoing, however, must not be understood as an absolute and invariable rule of procedure, for parties may, by mutual consent, submit issues for determination at the time of the proceeding to register a document. But the court should only proceed therewith (determination of the issues) upon giving all the parties concerned sufficient opportunity to present their respective sides and the evidence in support thereof, and that if this can not be done, the determination of the issues should be reserved in a subsequent proceeding and the registration of the document ordered. Wherefore, the opposition to the motion for the surrender of the certificates of title to the Register of Deeds of Manila is overruled, and the order appealed from, in so far as it orders the surrender of the certificates of title for the registration of the contracts of lease, is hereby affirmed, but the other rulings are reversed, and the other issues raised by respondents-appellants reserved for determination in a proper proceeding. With costs against the respondents-appellants.

3.

Director of Lands vs Addison 49 Phil 19

4.

Blondeau vs Nano 61 Phil 625

Facts: Nano and Vallejo (defendants) were joint owners of a parcel of land situated on Calle Georgia, Manila. Nano obtained a loan from Blondeau (plaintiff) in the amount of P12,000.00 secured by a mortgage of the said parcel of land. The mortgage was executed by Nano by virtue of an alleged Special Power of Attorney by Vallejo. The mortgage appears to be regular and to have been duly executed and accepted by Vallejo on November 5, 1931. When the loan was not paid, Blondeau and her husband Dela Cantera filed an action for foreclosure of the property the Court of First Instance of Manila. Vallejo contended that the mortgage is invalid his signature was forged. Judgment was rendered against Nano but not against Vallejo. From this judgment, plaintiffs filed an appeal. Issue: WON the foreclosure of the parcel of land is valid on the ground that the signature of Vallejo was forged. Held: Yes, the foreclosure is valid. A forger cannot effectuate his forgery in the case of registered land by executing a transfer which can be registered, unless the owner has allowed him, in some way, to get possession of the owner's certificate. Therefore, if the owner has voluntarily or carelessly allowed the forger to come into possession of his owner's certificate he is to be judged according to the maxim, that when one of two innocent persons must suffer by the wrongful act of a third person the loss fall on him who put it into the power of that third person to perpetrate the wrong. This is a case of a mortgagee relying upon a Torrens title, and loaning money in all good faith on the basis of the title standing in the name of the mortgagors only thereafter to discover one defendant to be an alleged forger and the other defendant, if not a party to the conspiracy, at least having by his negligence or acquiescence made it possible for the fraud to transpire. Giving to the facts the most favorable interpretation for Vallejo, yet, as announced by the United States Supreme Court, the maxim is, as between two innocent persons, in this case Angela Blondeau and Jose Vallejo, one of whom must suffer the consequence of a breach of trust, the one who made it possible by his act of confidence must bear the loss, in this case Jose Vallejo.

5.

Fidelity and Surety Co. vs Conegero 41 Phil 396

Facts: Prior to June 26, 1913, Pastora Conegero was the holder of Torrens certificate of title, No. 147, covering a parcel of land in the city of Iloilo. A cadastral survey covering this and other land in the city of Iloilo was undertaken by the Government; and in the course of the cadastral proceedings the court found it convenient or desirable to order that the certificate of title No. 147 be cancelled and that a new certificate of title should be issued to Conegero. She surrendered certificate No. 147, and two new certificates were issued: one to herself (No. 194), and another to her children (No. 195). The cancellation of certificate No. 147 was effected under the authority of an order of the Court of Fist Instance of Iloilo, dated July 26, 1913; and the mandate of the Chief of the General Land Registration Office, directed to the register of deeds in Iloilo, directing the change, is dated October 1, 1914. While she was yet the holder of certificate No. 147, she mortgaged the land covered by it to El Hogar Filipino to secure a debt, and the encumbrance thereby created was noted on her duplicate certificate of title. On March 30, 1916, Pastora Conegero entered into an agreement with one Samuel Thomas whereby, in consideration of the sum of P1,637.49, she bargained and sold the property described in title No. 147. At the time this sale was made the Torrens certificate covering the land was not produced or delivered to the purchaser in the city of Manila where the contract was made; and in fact at that time certificate No. 147, referred to in the description of the land in said contract, was non-existent, having been cancelled as already stated. Soon after the contract of sale had been executed by Pastora Conegero in favor of Samuel Thomas, the latter's attorney sent the document to Francisco Enage, register of deeds in Iloilo, in order that the transfer might be registered and that a new certificate might in due course be issued to Samuel Thomas. To this communication, Mr. Enage replied, returning the document and informing the writer

that the registration thereof could not be effected for the reason that certificate No. 147 had been cancelled and has been supplanted by certificate No. 194 in the name of Pastora Conegero. The register of deeds, however, noted in his entry book the fact that such a deed had been presented to him at 10 a.m., on April 18, 1916, and placed a memorandum to the same effect on the document itself. In 1916 Pastora Conegero mortgaged the property described in certificate No. 194 to the Fidelity and Surety Company of the Philippine Islands to secure a credit of P2,000 guaranteed by the surety company. This mortgage was registered and noted on the original certificate of title, No. 194, by the register of deeds at Iloilo on March 29, 1917. Samuel Thomas commenced an action in the Court of First Instance of Iloilo to compel Pastora Conegero to produce certificate No. 194 for cancellation, and to secure the issuance of a new certificate of title in his name. Notice of lis pendens was filed on November 5, 1917. On November 9, 1917, Pastora Conegero executed a third mortgage, to Southworth and Goyena, to secure a note for P500.On March 22, 1918, the Fidelity and Surety Company of the Philippine Islands brought this action to foreclose its mortgage, naming Samuel Thomas and Southworth and Goyena as codefendants with Pastora Conegero. Issue: Whether or not the entering of this memorandum in said book operate as an effective registration of the title, or transfer of title, and thereby held that it had this effect. Ruling: No. At the time the absolute deed of sale in favor of Thomas was presented to the register of deeds in Iloilo in the case before us the Torrens title upon which that deed was supposed to operate was nonexistent, having been judicially canceled with the consent of the owner. There can be no constructive registration in a situation of this kind. Under section 50 of Act No. 496, "no deed, mortgage, lease, or other voluntary instrument, except a will, purporting to convey or affect registered land, shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of authority to the clerk or register of deeds to make registration. The act of registration shall be the operative act to convey and affect the land." The steps by which registration is accomplished are fully set out in section 57 of the same Act; and by reference thereto, it will be seen that registration of the transfer of registered land depends upon several vital conditions, among which is the requirement that the grantor's duplicate certificate, upon which the title is founded, shall be produced before the register of deeds for cancellation; and that he shall also have before him the original certificate, likewise to be cancelled. This prerequisite condition was not complied with when the deed to Thomas was presented for registration. On the other hand, the conveyance of the land covered by certificate No. 194, by way of mortgage to the Fidelity and Surety Company, was effected in compliance with all legal requirements. As a consequence it must be held that the title acquired by the Fidelity and Surety Company is superior to that acquired by Samuel Thomas. **The Supreme Court ruled that when the land which is the subject of a sale is registered in the name of the purchaser, registration takes effect retroactively as of the date the deed was noted in the entry book by the Registrar of Deeds, and not when final registration was accomplished. 6. Sanchez v Director of Lands 63 Phil 378

7. FACTS:

Sta. Ana vs Hernandez 18 SCRA 973

Spouses Jose Santa Ana, Jr. and Lourdes Sto. Domingo, owned a 115,850-square meter parcel of land situated in barrio Balasing, Sta. Maria, Bulaca. On 28 May 1954, they sold two (2) separate portions of the land for P11,000.00 to the herein respondent Rosa Hernandez

The Contract of sale stated two basis for the object of the sale, namely: (1)12,500 sq. m. and 26,000 sq. m. at the rate of P.29 per square meter; and (2) the recital of areas included with the mentioned of boundary properties. After the sale the spouses caused the preparation of a subdivision plan, Psd-43187, was approved on 13 January 1955 by the Director of Lands. Rosa Hernandez, however, did not conform to the plan and refused to execute an agreement of subdivision and partition for registration with the Register of Deeds of Bulacan; and she, likewise, refused to vacate the areas that she had occupied. Instead, she caused the preparation of a different subdivision plan, which was approved by the Director of Lands on 24 February 1955. This plan, Psd-42844, tallied with the areas that the defendant, Rosa Hernandez, had actually occupied. On 28 February 1955, herein petitioners-spouses filed suit against respondent Rosa Hernandez in CFIBulacan, claiming that said defendant was occupying an excess of 17,000 square meters in area of what she had bought from them. Defendant Rosa Hernandez, on the other hand, claimed that the alleged excess, was part of the areas that she bought. Argument of ROSA HERNANDEZ: plaintiffs had sold two portions without clear boundaries but with exact areas (12,500 sq. m. and 26,000 sq. m.) at the rate of P.29 per square meter or, as defendant Rosa Hernandez claimed, two portions, the areas of which were not definite but which were well defined on the land and with definite boundaries and sold for the lump sum of P11,000.00. Argument of STA. ANA SPOUSES: Despite the incontestable fact that the deed of sale in favor of Rosa Hernandez recites a price in a lump sum (P11,000.00) for both lots (Annex "C", Complaint, Rec. on App., p. 21), appellants insist that the recited area, i.e. 12,500 sq. m. and 26,000 sq. m. at the rate of P.29 per square meter, where the boundary properties was mentioned should be taken as controlling. Trial Court Decision: Finding for the plaintiffs, the said court ordered the defendant, among other things, to vacate "the excess portions actually occupied by her and to confine her occupation only to Lots 4-a and 4-b as shown in the plan, Exhibit E, of the plaintiffs . . .," referring to Psd-43187. CA Decision: The Court of Appeals dismissed the complaint and declared Rosa Hernandez the owner of lots 4-a and 4-b in her plan, Psd-42844 citing Art. 1542 of the Civil Code as the basis ISSUE: Whether or not the recital of the land areas boundary properties is controlling in a contract of sale of lump sum real property.

HELD: The answer is in the affirmative. Applying to the case Article 1542 of the new Civil Code: In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be greater or less area or number than that stated in the contract.

The same rule shall be applied when two or more immovables are sold for a single price; but if, besides mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall be bound to deliver all that is included within said boundaries, even when it exceeds the area or number specified in the contract; and, should he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number, unless the contract is rescinded because the vendee does not accede to the failure to deliver what has been stipulated. And this is particularly true where, as in the case now before this Court, the area given is qualified to be approximate only To hold the buyer to no more than the area recited on the deed, it must be made clear therein that the sale was made by unit of measure at a definite price for each unit. If the defendant intended to buy by the meter be should have so stated in the contract (Goyena vs. Tambunting, supra). The ruling of the Supreme Court of Spain, in construing Article 1471 of the Spanish Civil Code (copied verbatim in our Article 1542) is highly persuasive that as between the absence of a recital of a given price per unit of measurement, and the specification of the total area sold, the former must prevail and determines the applicability of the norms concerning sales for a lump sum. The Civil Code's rule as to sales "a cuerpo cierto" was not modified by Act 496, section 58, prohibiting the issuance of a certificate of title to a grantee of part of a registered tract until a subdivision plan and technical description are duly approved by the Director of Lands, and authorizing only the entry of a memorandum on the grantor's certificate of title in default of such plan. The latter provision is purely a procedural directive to Registers of Deeds that does not attempt to govern the rights of vendor and vendee inter se, that remain controlled by the Civil Code of the Philippines. It does not even bar the registration of the contract itself to bind the land.

8.

Manila Electric Co. vs CA, GR No. L-33794; 114 SCRA 173 Bianca

Facts: Respondent Pedro J. Velasco (VELASCO, for short) purchased three (3) lots from the People's Homesite and Housing Corporation (PHHC, for short), located at the corner of the then South D and South 6 Streets of Quezon City. The Deed of Sale, among others, provided that: (b) The properties herein sold and any other construction that shall be made thereon shall be used exclusively for residential purposes and no business, industry or factory of whatever kind or nature shall be allowed or permitted within the premises. xxx xxx xxx (c) The vendor ... shall have the right to enter the premises ... for the purpose of ... installing electric ... lines or any other utility for the community. xxx xxx xxx II. This sale is made under the following terms and conditions the violation of any of which shall entitle the Vendor to rescind this contract and seek the cancellation of the title issued as a result hereof and to repossess the property and dispose of the same as if there had been no previous sale thereof, and said terms and conditions shall likewise be annotated on the certificate or title concerned and considered a burden to the property. xxx xxx xxx The foregoing conditions were substantially, but not word for word, annotated on the title issued to VELASCO. VELASCO sold two of the aforesaid three lots (the PROPERTY, for short) to petitioner Manila Electric Company (MERALCO, for short), which is the public service company furnishing electric current to the Manila area, including Quezon City. Thereafter, MERALCO established a substation within the PROPERTY, the construction of which "was started in September, 1953 and was finished the following November". Subsequently on November 29, 1954, VELASCO wrote a letter to MERALCO stating therein that the severe noise, plus the electrification of the ground, made life of the whole family unbearable, in a residential district, which was illegally converted into dangerous factory-like site. Consequently VELASCO filed a complaint in Civil Case No. Q-1355 of the Court of First Instance of Rizal (the NUISANCE CASE, for short) praying that MERALCO be ordered "to remove and abate the nuisances herein complained against," with damages. The trial Court dismissed the complaint but, on appeal to this Court, the dismissal was set aside. MERALCO was "ordered to either transfer its sub-station at South D and South 6 Streets, Diliman, Quezon City, or take appropriate measures to reduce its noise at the property line between the defendant company's compound and that of the plaintiff-appellant to an average of forty (40) to fifty 50 decibels within 90 days from finality of this decision. Meanwhile, VELASCO had instituted a complaint in Civil Case No Q-2716 of the Court of First Instance of Rizal (the CANCELLATION CASE, for short) for the rescission of the sale of the PROPERTY to MERALCO and to collect rentals for the use and occupation of the PROPERTY while in the latter's possession. The complaint was dismissed by the trial Court on the ground that the NUISANCE CASE and the CANCELLATION CASE had split VELASCO'S cause of action such that the CANCELLATION CASE was precluded from being instituted. On appeal to the Court of Appeals, the judgment of the trial Court was reversed on the finding that no cause of action was split, considering that abatement of nuisance was distinct and separate from rescission of the contract of sale in favor of ME RALCO. Hence the petition. ISSUE:

Whether or not the complaint will be dismissed on the ground that the Nuisance case and the cancellation case had spilt Velascos cause of action such that the cancellation case was precluded from being instituted. RULING: Yes. The court resolved to set aside the decision of the Appellate Tribunal, and to dismiss the complaint in the CANCELLATION CASE. THE RIGHT OF ACTION.- The contract of sale between PHHC and VELASCO provided that only constructions exclusively for "residential purposes" shall be built on the PROPERTY. That requirement, naturally, was binding on VELASCO himself, as it is also binding on MERALCO as his assignee. Be that as it may, that contract implies that it is PHHC itself, which has the right of action against any assignee of VELASCO. Cancellation of the title to the PROPERTY would be by virtue of the condition imposed in the PHHC- VELASCO contract, and not by virtue of the contract between VELASCO and MERALCO. The exact relevant wording of the contract between PHHC and VELASCO was as follows: ... the violation of any of which (inclusive of the "residential purposes" restriction) shall entitle the vendor (PHHC) to rescind this contract and seek the cancellation of the title issued as a result hereof and to repossess the property. It will be seen that if the PROPERTY were used by VELASCO himself not for "residential purposes", PHHC can rescind "this contract", which is the contract between PHHC and VELASCO, and PHHC can "seek the cancellation of the title" issued as a result "of this contract". The PROPERTY' having been transferred to MERALCO, PHHC cannot rescind the contract between VELASCO and MERALCO because PHHC was not a party to that VELASCO-MERALCO contract. PHHC's redress would be to directly "seek cancellation of the title" of MERALCO, and to repossess the PROPERTY. Considering that redress for the use of the PROPERTY for non-residential purposes is the cancellation of the title and repossession by PHHC, it should be clear that the right of action based on violation of the restriction has to be with PHHC and not with VELASCO. If title to the PROPERTY is cancelled, and PHHC repossesses, no damage will be suffered by VELASCO who had already sold and had received the value thereof. The damage will be borne solely by MERALCO. Hence, it cannot be that VELASCO can have a right of action against MERALCO for violation of the restriction.

9.
Facts:

Doromal vs CA L-36083 June

Lot No. 3504 of the cadastral survey situated in poblacion of La Paz, Iloilo, with an area of a little more than 2- hectares was co-owned by the late Justice Horilleno and his siblings, Luis, Soledad, Fe, Rosita, Carlos and Esperanza, all surnamed Horilleno. Since Esperanza had already died, she was succeeded by her only daughter and heir herein plaintiff, Filomena Javellana, in the proportion of 1/7 undivided ownership. The co-owners led by Carlos, and as to deceased Justice Antonio Horilleno, his daughter Mary, in early 1967, decided to sell the property to the father and son, named Ramon Doromal, Sr. and Jr. In the preparation of the execution of sale, since the brothers and sisters Horilleno were scattered in various parts of the country, they all executed various powers of attorney in favor of their niece, Mary H. Jimenez. A power of attorney with identical tenor for signature of Filomena Avellana together with a a letter from Carlos informing Filomena that the price was P 4.00 per square meter were sent to her. Filomena, not being agreeable, did not sign the power of attorney, and the rest of the co-owners went ahead with their sale of

their 6/7 shares. A new title in the name of the co-owners was issued and a deed of sale to the Doromals was likewise executed. In a letter dated 18 January 1968, it was mentioned that the price per square meter was P 4.00 whereas an earlier letter dated 5 November 1967, the price was P 5.00 per square meter. Likewise, documents showed that the Doromals actually paid a total of P 115, 250.00 (two checks in the amount of P 97,000.00 and P 18, 250.00 were issued). However, the price stated in the deed of sale was only P 30,000.00 On 10 June 1968, the plaintiff lawyer, Atty. Villanueva brought a letter to the residence of the Doromals informing the latter that the plaintiff Filomena Javellana is making a formal offer to repurchase or redeem from them the 6/7 undivided share in Lot No. 3504, which they bought from her erstwhile co-owners., the Horillenos, for the sum of P 30,000.00. Likewise, the said lawyer manifested to the Doromals that he had the P 30,000.00 with him in cash, and tendered it to them, for the exercise of the legal redemption, the Doromals were aghast and refused, and on the next day, 11 June 1968, plantiff Javellana filed this case. Issues: (1) Whether or not the right of redemption of the property sold by Filomenas co-owners to Doromals has already expired on the time she made her offer of redemption? (2) Whether or not the redemption price to be paid by Filomena Javellana should be that stated in the deed of sale which is P 30,000.00 instead of P 115,250? Held: (1) No. It was held that although respondent Filomena Javellana was informed of her co-owners' proposal to sell the land in question to petitioners she was, however, "never notified ... least of all, in writing", of the actual execution and registration of the corresponding deed of sale, hence, said respondent's right to redeem had not yet expired at the time she made her offer for that purpose thru her letter of June 10, 1968 delivered to petitioners on even date. (2) It was held that the redemption price to be paid by respondent should be that stated in the deed of sale which is P30,000 notwithstanding that the preponderance of the evidence proves that the actual price paid by petitioners was P115,250. 10. Blas v Dela Cruz 37 Phil 1 - Gen Facts: Sometime prior to the commencement of the present action, an action was commenced in the Court of Land Registration by the defendant Vicente de la Cruz for the registration under the torrens system of several pieces or parcels of land. To the registration of said parcel of land, the plaintiff, Simeon Blas, presented his opposition, alleging that he was the owner of a portion of the lands A hearing was had in the Court of Land registration

That portion of the land claimed by Simeon Blas was excluded from the lands included in the petition of Vicente de la Cruz From that decision Vicente de la Cruz appealed to the Supreme Court where, after due hearing and consideration, the decision of the lower court was modified and that portion which was claimed by Simeon Blas was ordered to be registered in the name of Vicente de la Cruz

Issue: Whether or not the decree ordering the registration of land under the Torrens system includes the buildings and improvements thereon when they have not been expressly excluded in said decree Held: Without attempting at this time to define the character of the "liens, claims, or rights arising or existing under the laws of the Philippine Islands which the statutes of the Philippine Islands cannot require to appear of record in the registry Islands cannot require to appear of record in the registry," we are of the opinion that buildings and improvements upon land are not included in that exception, and that, unless the objector, during the pendency of the litigation for the registration of land makes claims to improvements of the character of those in the present action, and does have them excluded from the decree of registration, they will be included as a part and parcel and appurtenances to the land; and that the objector will not be permitted, in a separate action subsequently brought, to question the right of such improvements. If he may, then the certificate of registration does not guarantee to the owner of the land the quiet and peaceable enjoyment of his title which the Torrens system was adopted to secure. For the foregoing reasons, we are of the opinion and so hold that, inasmuch as the plaintiff herein did not, during the pendency of the litigation for the registration of the lands in question, have excluded therefrom and have noted upon the certificate of title his alleged rights and interests in the improvements mentioned herein and noted upon the certificate of title issued, he thereby lost his right to such improvements; and therefore, the judgment of the lower court is hereby affirmed. And it is hereby ordered and decreed that a judgment in accordance herein be entered and that the cause be remanded to the lower court, with instruction to enter a final judgment in accordance with this decree, unless the plaintiff within a period of five days from the receipt of the notice of the same amend his original petition. It is so ordered with costs.

11. Macadangdang vs Martinez GR No. 158682

Facts: The present controversy involves a house and lot in Parkhomes Subdivision, Tunasan, Muntinlupa, Metro Manila, covered by TCT No. 146553 in the name of Emma A. Omalin. On December 20, 1986, the Macadangdang spouses offered to buy the subject property from Omalin for P380,000 on installment basis. On the same date, the Macadangdang spouses made a downpayment of P5,000 through the broker, Sto. Nino Realty Services, Inc. On January 3, 1987, they paid another P175,000. Thereafter, Omalin executed a deed of sale with mortgage dated January 5, 1987. The deed provided for the payment of the balance of P200,000 in three installments. The Macadangdang spouses took possession of the house and lot on January 18, 1987. On April 22, 1987, they paid P60,000 and on October 1, 1987, another P30,000. After the Macadangdangs had paid a total of P270,000, the parties agreed that the balance of P110,000 was to be paid upon delivery of the TCT. On January 29, 1988, Omalin executed a deed of absolute sale in favor of the Macadangdang spouses. However, the latter did not pay the P110,000 balance because Omalin failed to deliver the TCT. It turned out that the property was mortgaged to private respondent spouses Ramon and Gloria Martinez (Martinez spouses). It appears that on March 5, 1987, a certain Atty. Paterno Santos, a broker, offered to mortgage the subject property to the Martinez spouses for P200,000. Atty. Santos was in possession of a "clean" TCT No. 146553 and a fire insurance policy covering said property. The spouses Martinez accepted the mortgage with interest at 36% p.a. and duly recorded it at the Registry of Deeds of Makati. The proper annotation was made at the back of the title. From September 1987 to March 9, 1988, Omalin paid the monthly interest of P6,000 but failed to pay the subsequent interest from April 1988 to October 1989 amounting to P114,000. The Macadangdang spouses filed a criminal case for estafa against Omalin and a combined action for specific performance, annulment of contract and damages against the spouses Martinez and Omalin. After trial, the Makati RTC rendered a decision in favor of the Macadangdang spouses. On appeal, however, the appellate court modified the decision of the Makati RTC, finding that Omalin remains to be the owner of the property despite the existence of a valid mortgage, she has the right

to sell it. Hence, we rule that the sale in favor of plaintiffs-appellee is likewise valid, subject to the right of defendants-appellants to foreclose the property for failure of defendant Omalin to pay her indebtedness. Issue: Who between the purchaser and the mortgagor shall have a superior right Ruling: The subject matter of the instant petition involves registered land. Unlike the case of unregistered land, in which an earlier instrument, be it sale or mortgage, prevails over a latter one, and the registration of any one of them is immaterial, with respect to registered land, the rule is different. Between two transactions concerning the same parcel of land, the registered transaction prevails over the earlier unregistered right.6 The act of registration operates to convey and affect the registered land so that a bonafide purchaser of such land acquires good title as against a prior transferee, if such prior transfer was unrecorded.Sections 51 and 52 of PD 1529, otherwise known as the Property Registration Decree, are pertinent: Sec. 51. Conveyance and other dealings by registered owner. An owner of registered land may convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds, mortgages, lease or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease or other voluntary instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to make Registration.

The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies. Sec. 52. Constructive notice upon registration. Every conveyance, mortgage, lease, lien attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering. It is clear from the foregoing that the registration of the deed is the effectual act which binds the land insofar as third persons are concerned. Prior registration of a lien creates a preference as the act of registration is the operative act that conveys and affects the land.8 Considering that the prior sale of the subject property to the Macadangdang spouses was not registered, it was the registered mortgage to the spouses Martinez that was valid and effective. For sure, it was binding on Omalin and, for that matter, even on the Macadangdang spouses, the parties to the prior sale. The rule on prior registration is subject only to one exception, that is, when a party has knowledge of a prior existing interest which is unregistered at the time he acquires a right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him. The Martinez spouses claimed they had never met the Macadangdang spouses and were unaware that Omalin had already sold the property to them. Hence, the appellate court declared the Martinez spouses as mortgagees in good faith and innocent mortgagees for value. An innocent mortgagee for value is akin to an innocent purchaser for value. The phrase "innocent purchaser for value" is deemed to include an innocent lessee, mortgagee or other (beneficiary of an) encumbrance for value. An innocent purchaser for value is one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim of another person. As a general rule, where the certificate of title is in the name of the vendor when the land is sold, the vendee for value has the right to rely on what appears on the face of the title and is not obligated to look beyond what appears on the face of the certificate of title of the vendor. As an exception, the vendee is required to make the necessary inquiries if there is anything in the certificate of title which raises any cloud or vice in the ownership of the property. Otherwise, his mere refusal to believe that such defect exists, or his willful disregard of the possibility of the

existence of a defect in his vendors title will not make him an innocent purchaser for value if it afterwards develops that the title is in fact defective, and it appears that he had such notice of the defect as would have led to its discovery had he acted with that measure of precaution which may reasonably be required of a prudent man in a like situation. Nothing on record shows that the title of Omalin, the mortgagor, was flawed when it was presented to the spouses Martinez. Their reliance on the title was therefore reasonable and correct. They were in no way obliged to go beyond the TCT to determine the legal condition of the property since there was nothing that should have aroused their suspicion about any defect or problem about the title. Where innocent third persons rely on the lack of defect of a certificate of title and acquire rights over the property, the Court cannot disregard such rights. Otherwise, public confidence in the certificate of title and ultimately, in the entire Torrens system will be impaired, for every one dealing with registered property will have to inquire at every instance whether the title has been regularly or irregularly issued.

On this note, being innocent registered mortgagees for value, the Martinez spouses acquired a superior right over the property.

Accordingly, we find no reversible error by the appellate court in upholding the existing encumbrance over the subject property acquired by the Macadangdang spouses, in declaring the spouses Martinez as mortgagees in good faith and in recognizing their right to foreclose on the mortgage should Omalin fail to pay her obligation.

12. Laroza et. al. vs Guia L-45252

13. Heirs of Marasigan v IAC, GR No. 69303

Facts: The disputed property in this case is a residential lot (Lot No. 2-A) covered by Transfer Certificate of Title No. 100612 issued by the Register of Deeds of the City of Manila in the name of one Fe SpringaelBazar, married to Felicisimo Bazar. On April 24, 1975, Civil Case ("Maria Marron v. Felicisimo Bazar and Fe S. Bazaar") was filed before the then Court of First Instance of Manila, Branch XIII. The action sought to compel defendants Bazar to execute a registrable Deed of Absolute Sale of their lot covered by T.C.T. No. 100612 in favor of Maria Marron (private respondent in the present case). On January 27, 1976, while Civil Case No. 97479 was still pending, the Marron caused the annotation of a notice of lis pendens at the back of T.C.T. No. 100612. The CFI rendered judgment in favor of Marron

The judgment became final and executory so Maria Marron filed a motion for execution which was granted. A writ of execution was issued by the court on July 12, 1976. The spouses Bazar, however, refused to surrender their title to the property in question and to execute the required deed of sale in Marron's favor. On November 29, 1978, the lower court finally ordered the Clerk of Court to execute the deed of sale in behalf of the erring spouses. When the said deed was presented to the Register of Deeds of Manila for registration, the Deputy Clerk of Court was advised to secure a court order in order that the new title issued in the name of herein petitioner Maria Marasigan (testator/decedent) could be cancelled.

 Apparently, on December 18, 1974, a deed of absolute sale of Lot 2-A covered by T.C.T. No. 100612 was executed by Fe S. Bazar in favor of Maria Marasigan for and in consideration of the sum of Fifteen Thousand Pesos (P15,000.00). It was only on July 5, 1977 that said deed was registered with the Registry of Deeds of Manila. Consequently, T.C.T. No. 100612 was cancelled and a new title was issued in Maria Marasigan's name. When the Register of Deeds of Manila issued Transfer Certificate of Title No. 126056 naming Maria Marasigan as the new owner of Lot 2-A, the notice of lis pendens caused to be annotated by Marron on the Bazar's title was carried over on the said new title. On May 26, 1977, the Bazaars filed a petition for relief from the judgment (Marron Case. While their petition was still pending, they moved to set aside the said judgment on June 22, 1979 on the ground of lack of jurisdiction over their persons. On February 24, 1979, Marron instituted L.R.C. Case captioned "Maria Marron v. Maria Marasigan" which prayed for a court order requiring the Register of Deeds of Manila to register the deed of sale executed by the Deputy Clerk of Court in behalf of the Bazaars pursuant to the order dated November 29, 1978 of the Court of First Instance, Manila, Branch XIII. The case was tried by the Court of First Instance of Manila, Branch IV acting as a land registration court. The case was dismissed for lack of jurisdiction. On appeal, the Intermediate Appellate Court, on August 7, 1984, ruled that Marron is entitled to the property under litigation by virtue of the notice of lis pendens annotated at the back of Maria Marasigan's title. The appellate court further ruled that the decision in Civil Case No. 97479 had become final and executory because the petition for relief from judgment of the spouses Bazar was filed out of time. Issue: WON Maria Marron is entitled to the property under litigation by virtue of the notic of pendens annotated at the back of Maria Marasigans title. lis

Held: YES! There is a clear showing that although the late Maria Marasigan acquired the property in question from the Bazaars pursuant to a deed of absolute sale on December 18, 1974 or a little over four months before the filing of Civil Case No. 97479 (MARRON CASE), the transaction became effective as against third persons only on July 5, 1977 when it was registered with the Registry of Deeds of Manila. It is the act of registration which creates constructive notice to the whole world.

Moreover, there is no question that when the late Maria Marasigan was issued her transfer certificate of title to the subject property (T.C.T. No. 126056), the Registrar of Deeds of Manila then carried over to the new title the notice of lis pendens which the Marron had caused to be annotated at the back of the Bazar's title. A notice of lis pendens means that a certain property is involved in a litigation and serves as notice to the whole world that one who buys the same does it at his own risk It was also a clear notice to Maria Marasigan that there was a court case affecting her rights to the property she had purchased. As earlier stated it was only on July 5, 1977 that the sale between Maria Marasigan and the Bazaars became effective as against third persons. The registration of the deed of sale over the subject property was definitely subsequent to the annotation made on January 27, 1976. Consequently, Marasigan was bound by the outcome of the litigation against her vendors or transferors.

 The late Marasigan's transferors did not interpose any appeal from the adverse judgment on the Marron case. The 30-day period under the old rule (Rule 41, section 3 of the Revised Rules of court now amended by Batas Pambansa Bilang 129, section 39) within which the Bazaars may have taken an appeal started to run from May 12, 1976 when they were served with a copy of the said decision. On June 11, 1976, the February 24, 1976 decision in Civil Case No. 97479 became final and executory. At this point after the finality of the said decision, the Bazaars no longer had the right to alienate the property subject of the litigation. Any transaction effective during the period of litigation is subject to the risks implicit in the notice of lis pendensand to the eventual outcome of the litigation.