TOLEDO BANAGA VS CA

FACTS:
Banaga filed an action for redemption, but the trial court declared that she had lost her right to redeem. So, the property was foreclosed
and sold at public auction.
Banaga caused the annotation of a notice of lis pendens. She, then, appealed and the CA reversed the trial court judgment and granted
Banaga a certain period to redeem.
The lower court ordered the cancellation of private respondents certificates of title and issue new ones in the name of Banaga.
Private respondent filed a petition for certiorari with the CA and caused the annotation of a 2
nd
notice of lis pendens.
Petitioner Banaga sold the subject property to petitioner Tan with the deed of absolute sale mentioning private respondent's certificate
of title which was not yet cancelled. Notwithstanding the notice of lis pendens, petitioner Tan subdivided the property in question under
a subdivision plan, which she made not in her name but in the name of private respondent.
Tan asked the Register of Deeds to issue new titles in her name, which was granted but still carried the two notices of lis pendens.
The CA rendered decision declaring private respondent as owner of the property and ordered the RD to reinstate the titles in private
respondents name.
The RD refused stating that the certificate of titles of Tan must first be surrendered. Private respondent sought to cite the RD in
contempt, but the trial court denied such ruling that his remedy is by consulta to the Commissioner on Land Registration. On appeal, the
CA ruled in favour of private respondents.

ISSUE:
Whether not Tan is a buyer in good faith
Whether or not the refusal of the RD on the reason that the certificates of title of Tan must first be surrendered is justified

HELD:
The Court is not convinced of the arguments proffered by petitioners.
Such issue had already been clearly and categorically ruled upon by the CA and affirmed by this Court, wherein private respondent was adjudged
the rightful and absolute owner thereof. The decision in that case bars a further repeated consideration of the very same issue that has already
been settled with finality. Under the principle of res judicata, the Court and the parties, are bound by such final decision, otherwise, there will be
no end to litigation.
They argue that the winning party must wait execution until the losing party has complied with the formality of surrender of the duplicate title.
Such preposterous contention borders on the absurd and has no place in our legal system.
The surrender of the duplicate is implied from the executory decision since petitioners themselves were parties thereto. Besides, as part of the
execution process, it is a ministerial function of the Register of Deeds to comply with the decision of the court to issue a title and register a
property in the name of a certain person, especially when the decision had attained finality, as in this case.
At the time of the sale, the person from whom petitioner Tan bought the property is neither the registered owner nor was the former authorized
by the latter to sell the same. She knew she was not dealing with the registered owner or a representative of the latter. One who buys property
with full knowledge of the flaws and defects in the title of his vendor is enough proof of his bad faith
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and cannot claim that he acquired title in
good faith as against the owner or of an interest therein. Being a buyer in bad faith, petitioner Tan cannot acquire a better rights than her
predecessor in interest,
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for she merely stepped into the shoes of the latter.

NOTE:
In almost all cases involving issuance of title in favour of someone else, there is that requirement of surrender of owners duplicate copy of title,
but this rule admits of certain exceptions. In Padilla, it was levy on execution (property was made to answer for an obligation or judgment debt, the
property or title itself was not subject matter of case but was made only to answer for a judgment debt). In Toledo-Banaga, title itself is subject
matter of litigation (this case one of the exception where it is not necessary for the surrender of owners duplicate copy of title).
Instances where surrender of owners duplicate copy of title not necessary (Toledo-Banaga case):
1. Final and executory decision
2. Subject matter of litigation is the property itself
3. One of the parties to the case is the registered owner