Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-4340

May 28, 1952

REBECCA LEVIN, plaintiff-appellee,

vs.
JOAQUIN V. BASS, ET AL., defendants.
EUGENIO MINTU, defendant-appellant.
x---------------------------------------------------------x
G.R. No. L-4341

May 28, 1952

JOAQUIN V. BASS, plaintiff-appellee,

vs.
JOSE C. ROBLES, ET AL., defendants.
REBECCA LEVIN, ET EL., intervenors.
EUGENIO MINTU, intervenor-appellant.
x---------------------------------------------------------x
G.R. No. L-4342

May 1952

JOAQUIN V. BASS, plaintiff-appellee,

vs.
EUGENIO MINTU, defendant-appellant.
x---------------------------------------------------------x
G.R. No. L-4343

May 28, 1952

REBECCA LEVIN, plaintiff-appellee,

vs.
JOAQUIN V. BASS, defendant-appellant.
x---------------------------------------------------------x
G.R. No. L-4344

May 28, 1952

JOAQUIN V. BASS, plaintiff-appellant,

vs.
REBECCA LEVIN, defendant-appellee.
x---------------------------------------------------------x
G.R. No. L-4345

May 28, 1952

JOAQUIN V. BASS, plaintiff-appellant,

vs.
JOSE C. ROBLES and AMINTA T. DE ROBLES, defendants-appellees.
x---------------------------------------------------------x
G.R. No. L-4346

May 28, 1952

JOAQUIN V. BASS, plaintiff-appellant,

vs.
AMINTA T. DE ROBLES, defendant-appellee.
Josefina A. Calupitan for defendant-appellant Eugenio Mintu.
Jose S. Sarte for defendant-appellant Joaquin V. Bass.
Leodegario Alba for petitioner Pastor L. Manlapaz.
Mateo M. Nonato for petitioner and appellant Joaquin V. Bass.
PADILLA, J.:
G. R. No. L-4340 is an action (case No. 70054 of the Court of First Instance of Manila) for
annulment of sales of, and mortgage on, a lot and two houses erected thereon and damages
brought by Rebecca Levin against Joaquin V. Bass, Emiliano R. Eustaquio, Co Chin Leng and
Eugenio Mintu where the last named defendant is the appellant; G. R. No. L-4343 is the same
case where Joaquin V. Bass is the appellant; G.R. No. L-4341 is an action (case No. 71549 of the
same court) for detainer brought by Joaquin V. Bass against Jose C. Robles and Aminta T. de
Robles, in which Rebecca Levin and Eugenio Mintu intervened, and where the last named
intervenor is the appellant; G.R. No. L-4345 is the same case for detainer where Joaquin V. Bass
is the appellant; G. R. No. L-4342 is an action (case No. 516 of the same court) for annulment of
sale brought by Joaquin V. Bass against Eugenio Mintu where the latter is the appellant; G. R.
No. L-4344 is an action (case No. 71159 of the same court) for detainer of a building located at
No. 328 San Rafael street brought by Joaquin V. Bass against Rebecca Levin where the former is
the appellant; and G. R. No. L-4346 is an action (case No. 2371 of the same court) for detainer
brought by Joaquin V. Bass against Aminta T. de Robles where the former is the appellant. The
two main cases (G. R. No. L-4340 and No. L-4342) around which others revolve all under the
appellate jurisdiction of this court.
After a joint hearing the trial court rendered judgment annulling Exhibit A dated 5 January 1944,
where it appears that, for and in consideration of P30,000, Rebecca Levin and conveyed to

Emiliano Eustaquio a lot containing an area of 317.70 square meters and the house erected
thereon bearing No. 326 San Rafael street Manila; Exhibit B dated 30 March 1944, where it
appears that, for and in consideration of P38,000, Emiliano R. Eustaquio sold and conveyed to
Joaquin V. Bass the same lot and house; and Exhibit C dated 18 February 1944, where it appears
that, for and consideration of P65,000, Rebecca Levin sold and conveyed to Joaquin V. Bass a lot
containing an area of 1,006.80 square meters and the house erected thereon bearing No 328 San
Rafael Street Manila; to cancel transfer of certificates of title Nos. 73450 and 73451 issued in the
name of Joaquin V. Bass and in lieu thereof to issue new Torrens certificates of title in the names
of Rebecca Levin, widow, of legal age and resident of the City of Manila at No. 328 San Rafael
Street, said new certificates to bear a memorandum of mortgage in favor of Co Chin Leng, entry
No. 1616, as said mortgage appears on both transfer certificate of titles Nos. 73450 and 73451 to
be cancelled, and the certificate of title to be issued in the name of Rebecca Levin, in lieu of
transfer certificate of title No. 73450, to bear a memorandum of a notice of lis pendens noted on
said transfer certificate of title in connection with civil case No. 2562 of the Court of First
Instance of Manila entitled "Isabelo Martinez vs. Joaquin V. Bass," entry No. 20955; holding that
Rebecca Levin is entitled to recover from Joaquin V. Bass," damages for losses which she may
suffer by reason of said mortgage annotation and notice of lis pendens; dismissing the complaint
of Joaquin V. Bassin civil case No. 516, holding that the deed of sale under certain conditions
executed by Joaquin V. Bass in favor of Eugenio Munti is without force and effect as against
Rebecca Levin and ordering Joaquin V. Bass to pay Eugenio Mintu the sum of P4,173.16,
together with lawful interests thereon from 23 October 1946, the date of the filing of the said
answer in said civil case, until paid; dismissing the complaint of Joaquin V. Bass in civil cases
Nos. 71159, 71549 and 2371 and declaring Rebecca Levin to be entitled to the payment of
rentals by Jose C. Robles and/or Aminta T. de Robles for the use and occupation of the premises
at No. 326 San Rafael street, Manila, from 11 March 1945 until the tenants move out of the
premises and to receive from the clerk of court the sums of money deposited by Aminta T. de
Robles and/or Jose C. Robles by way of rentals for the said property at No. 326 San Rafael
street, still remaining in his possession, the said amounts to be applied to the rentals to be granted
upon by and between them or those which may be declared by final judgment to be the
reasonable compensation for the use of occupation of the premises; and ordering Joaquin V. Bass
to render an accounting of the sums of money he had received from the court, or otherwise, as
rentals of the house at No. 326 San Rafael street from and after 11 March 1945, and to pay to
Rebecca Levin the balance that may result from said accounting. Costs are taxed against Joaquin
V. Bass.
In 1943 Rebecca Levin was a widow, 65 years old and the registered owner of a lot on which two
houses stoodone bearing No. 326 and the other No. 328 San Rafael Street, Manilaas
evidenced by transfer certificate of title No. 62680. She was illiterate and knew only how to sign
her name. At about the end of December 1943 Joaquin V. Bass called on Rebecca Levin at her
house on No. 328 San Rafael street, Manila, and representing himself to be a real estate broker
asked her whether she would sell her lot and house at No. 326 adjoining her residence. At that
time there lived in the house of Rebecca Levin some Japanese civilians, officers or employees of
the Pacific Mining Co., occupying or renting two rooms, Angelita Martinez a brother, and
Meliton Villasenor, a houseboy. In addition to P50 collected by her as monthly rental for the
house at No 326, the Japanese renting the two rooms paid her P200 monthly and supplied her
with rice and other foodstuffs without charge. Rebecca Levin told Joaquin V. Bass that she was

not selling her house at No. 326 San Rafael street. On subsequent calls Joaquin V. Bass told
Rebecca Levin that it would be to her advantage and benefit to sell the lot and house at No. 326
San Rafael street and with the proceeds of the sale to purchase another house. He told her that if
she would not sell the lot and house the Japanese who had been looking for houses to occupy
might deprive her thereof without getting anything in exchange therefor. He told her further that
by selling her house, which she rented for P50 a month only, and buying for P26,000 one on
Antonio Rivera street she would gain because the monthly rental of the latter was P140. She
consented to see the house at Antonio Rivera street and went there accompanied by Joaquin V.
Bass and Meliton Villasenor, her houseboy. Joaquin V. Bass pointed to a building (Exhibit G) of
for apartments (accessorias) not far from the Tutuban railroad station. They were not able to see
the second story of the building because, according to Joaquin V. Bass, the owner had gone to
Pampanga. For the second time, they went to see the building on Antonio Rivera street but they
again failed to see the second story of the building for the same reason given by Joaquin V. Bass
when they went to see it the first time. Relying upon the representations made by Joaquin V.
Bass, Rebecca Levin finally consented to sell her house. One of the last days of December 1943
or of the first days of January 1944, while Rebecca Levin was engaged in conversation with Dr.
Pastor L. Manlapaz and Angelita Martinez, Joaquin V. Bass called on her bringing along with
him certain papers. Upon Joaquin V. Bass" suggestion Rebecca Levin followed by him entered a
room adjoining that where she, Dr. Manlapaz and Angelita Martinez were conversing, and upon
repeated representations and assurances made by Joaquin V. Bass that the papers he brought were
just an authority to sell the house at No. 326 San Rafael street, Rebecca Levin signed five
documents and Bass took from her bag which she placed on a small table in the room her
residence certificate and the receipt showing payment of realty tax on her property. None of the
documents Rebecca Levin signed was left to her. The following day (6 January 1944), Joaquin V.
Bass called on Rebecca Levin at her house and handed to her P10,000 saying that it was a partial
payment of the purchase price of the lot and house at No. 326 San Rafael street which he
represented had been sold to a Japanese and asked her to give him the Torrens title of the house
and lot. Upon being informed by her that the Torrens title of the houses and lot was in the
possession of the Agricultural and Industrial Bank, to which they were mortgage for P2,000,
Joaquin V. Bass took from her P2,000 and requested her to go with him to the Agricultural and
Industrial Bank where they paid the mortgage debt of Isidore Reich (presumably the predecessor
of the late husband of Rebecca [Exhibit M]) and received a mortgage release and the Torrens
certificate of title No. 62680 (Exhibit K and K-1); and on February 1944, she signed a receipt for
P2,000 (Exhibits L and L-1). Joaquin V. Bass not only took P2,000 to pay the mortgage debt to
the Agricultural and Industrial Bank (Exhibit M) but also the balance of P8,000 telling her that
he would pay it to the owner of the building on Antonio Rivera street; that the balance of the
repurchase price of her house At No. 326 San Rafael street would be paid to her as soon as the
lot and house sold be segragated or separated from the larger lot on which her house at No 328
San Rafael street stood; and that it was necessary to make such subdivision to be approved by the
court in order that the sale of her house and lot not to arose any suspicion on her part Joaquin V.
Bass gave her a receipt from that partial amount paid for the building on Antonio Rivera street
signed by one Mariano Irurin y Reyes but the amount written therein was just P6,000. The signer
of the receipt promised to deliver the deed of sale of the building of Antonio Rivera street within
5 days from the date of payment of P20,000, the balance of the purchase price (Exhibit H). Being
illiterate Rebecca Levin did not notice that the amount appearing in the receipt was P6,000
instead of P8,000 which was the sum taken from her by Joaquin V. Bass. To make her believe

that she was the owner of the building on Antonio Rivera street, Joaquin V. Bass turned over to
her the monthly rentals of the building for five months which he claimed he had collected from
the tenants of the building. Not long after the signing by Rebecca Levin of the documents giving
Joaquin V. Bass authority to sell the house at No. 326 San Rafael street and the pretended
purchase by her through him of the building on Antonio Rivera street, the latter called on the
former at her house. He found her sick. He told her that he had tested medicine or drug for
ailments such as the one she was suffering from and that if she would take it she would feel
immediately and completely relieved. He went down. Immediately after his return to the house
he called and told the houseboy Meliton Villasenor to bring a glass of water where he diluted the
drug and asked Rebecca Levin to take it. The latter did not hesitate to take it as until then she did
not have the least suspicion of him who succeeded in winning and enjoyed her trust and
confidence. After taking the medicine she become to vomit and suffer stomach pains and her face
and lips became swollen. She went for Dr. Pastor L. Manlapaz who found that she was poisoned.
After application of antidotes she recovered from the poisoning. This incident coupled with the
failure of Joaquin V. Bass to return to her the documents she had been asking made Rebecca
Levin suspicious of him and consulted with Dr. Pastor L. Manlapaz and Filemon Poblador, the
latter when working in the office of the President of the Republic. As Poblador was not a lawyer
he talked to attorney Esteban Nedruda who being also an employee in the office of the President
of the Republic at Malacaang refused to handle the case but promised to investigate it. After
investigation Nedruda found that the lots were transferred and registered in the name of Joaquin
V. Bass and mortgaged him. Finally, the services of attorney Cesar de Larrazabal on the property
of Rebecca Levin which were registered in the office of Register of Deeds of Manila. It was
found out that the papers signed by her on 5 January 1944 were a deed of sale of her house and
lot at No. 326 San Rafael street for P30,000 in favor of Emiliano R. Eustaquio acknowledge on
the same day before notary public Eliezar A. Manikan (Exhibit A) and another deed of sale of her
house and a lot No. 328 San Rafael street for P65,000 in favor of Joaquin V. Bass dated 18
February 1944 and acknowledge on that date before the same notary public Elizer A. Manikan
(Exhibit C); and that on 30 March 1944, for and in consideration of P38,000, Emiliano R.
Eustaquio sold to Joaquin V. Bass the lot and the house at No. 326 San Rafael street (Exhibit B.).
Prior to the registration of these three deeds of sale, or on 24 February 1944, a petition was filed
by attorney Eliezer A. Manikan in the name of Rebecca Levin praying for the subdivision of
parcels of land into two lots-the certificate of title to lot No. 1 containing an area of 317.7 square
meters to be issued in the name of Emiliano R. Eustaquio and the certificate of title to lot No. 2
containing an area of 1,006.80 square meters to be issued in the name of Rebecca Levin (Exhibit
I). On February 1944, the petition was granted by the Court of First Instance of Manila, Fourth
Branch, presided over by Judge Gervasio Diaz, (Exhibit J.) Transfer certificate of title No. 62680
in the name of Rebecca Levin describing a parcel of land located on San Rafael street containing
an area of 1,3228.40 square meters entered on September 1941, together with a memorandum of
mortgage executed in favor of the Agricultural and Industrial Bank entered on 26 September
1939-a memorandum noted on the previous certificate of title No. 9220-was cancelled, and in
lieu thereof Transfer certificate of title No. 71907 in the name of Emiliano R. Eustaquio for a
parcel of land containing an area of 317.70 square meters more or less, and the house erected
thereon, and transfer certificate of title No. 71908 in the name of Rebecca Levin for the
remaining area of 1,006.80 square meters and the house erected thereon, were issued by the
Registrar of Deeds of Manila on 27 February 1944, pursuant to the order of the court dated 22
February referred to (Exhibit J). On 11 May 1944, transfer certificate of title No. 71908 in the

name of Rebecca Levin was cancelled and in the lieu thereof transfer certificate of title No.
73451 was issued in the name of Joaquin V. Bass by the Registrar of Deeds of Manila; and on 10
April 1944, transfer of certificate of title No. 71907 in the name of Emiliano R. Eustaquio was
cancelled and in lieu thereof transfer certificate of title No. 73450 was issued in the name of
Joaquin V. Bass by the Registrar of Deeds. On 8 April 1944, to secure the payment of P70,000,
together with interests thereon at 5 per cent per annum, payable in five years, Joaquin V. Bass
mortgaged to Co Chin Leng the two lots and house selected thereon and the instrument of
mortgage was registered on 10 April 1944 on both certificates of title Nos. 73450 and 73451. On
6 July 1944, a notice of lis pendens was noted in the back of transfer certificate of title No.
73450 in connection with civil case No. 2562 of the Court of First Instance of Manila entitled
"Isabelo Martinez vs. Joaquin V. Bass." On October 1944, for and in consideration of P200,000
"presenting circulating currency," Joaquin V. Bass sold to Eugenio Mintu the lot and house at No.
328 San Rafael street desrcibed in transfer certificate of title No. 73450, P90,000 of which was
paid on the date of the execution of the deed of sale; P10,000, to be retained by the vendee
(Eugenio Mintu) and to be paid to the vendor (Joaquin V. Bass) after the notice of lis pendens in
connection with civil case No. 2652 of the Court First Instance of Manila entitled "Isabelo
Martinez vs. Joaquin V. Bass" shall have been removed or cancelled; and P100,00, the balance,
to be deposited by the vendee (Eugenio Mintu) upon instructions of the vendor (Joaquin V. Bass)
with the clerk of court of Manila after return of the former from a trip to Ilocos Norte, the deposit
to be made within 30 days from the date of the deed of sale and for the purpose of securing there
release of the mortgage in favor of Co Chin Leng, the vendor (Joaquin V. Bass) undertaking to
obtain the release of the mortgage on the property sold and to deliver it (the mortgage release) to
the vendee (Eugenio Mintu) and the cancellation of the notice of lis pendens on or before 8 April
1945 (Exhibit 3-Mintu). To secure the fulfillment of the undertaking-the mortgage release and
cancellation of the notice of lis pendens-the vendor (Joaquin V. Bass) assigned, transferred and
conveyed by way of liquidated damages to the vendee (Eugenio Mintu) his title, rights, interest,
participation or share in and to lot No. 2, the larger lot on which house No. 328 San Rafael street
is errected, and both parties agreed that if the condition provided for in paragraph (d) of the deed
of sale be fulfilled, the condition in paragraph (e) thereof relative to the assignment, transfer and
conveyance of lot No. 2 to the vendee would be null and void without legal effect, otherwise it
would remain in full force and effect. The following clause was inserted with initials of both
parties: "force majeure and fortuitous events exempts the vendor from compliance thereto"
(Exhibit 3-Mintu.) On 1 November 1944, Eugenio Mintu and Jose C. Robles entered into a lease
contract on the house and lot No. 326 San Rafael street, Manila (Exhibit 1-Mintu). From
November 1944 to January 1945 Jose C. Robles paid to Eugenio Mintu the rental of P45 a month
as agreed upon (Exhibit 2-Mintu), but beginning February the rental of the house were not paid
to Mintu because there was a dispute as to who was the owner of the house. On 3 November
1944, Eugenio Mintu deposited with the sheriff of Manila for the account of Joaquin V. Bass the
sum of P100,416.67 as full payment of the purchase price of the property sold to him on 14
October 1944. The sum of P100,000 is the total of Bass" indebtedness to Co Chin Leng-P70,000
secured by mortgaged and P30,000 unsecured, the sum of P416,67 represents the interest on the
amount owned to Co Chin Leng up to the time of the deposit (Exhibit 4-Mintu) and the sum of
P158.92 represents the sheriff's fees on the amount deposited (Exhibit 5-Mintu). On November
1944, Eugenio Mintu presented and filed with the office of Registrar of Deeds of Manila the
original of the deed of sale (Exhibit E) duly notarized and paid the sum of P224.50: P.50 for
entry in the day book; P220 for registration fees; and P4 for the issuance of two titles (Exhibit 6-

Mintu). On the same date, together with the original deed of sale (Exhibit E) the owner's
duplicates of transfer of certificate of title Nos. 73450 and 73451 were presented and filed with
the office of Registrar of Deeds of Manila but said documents were not among those salvaged
and were presumed to have been lost or burned according to the certification of the Registrar of
Deeds in and for the City of Manila (Exhibit 8-Mintu). On 19 January 1945, Eugenio Mintu paid
to Joaquin V. Bass the sum of P10,000 in full settlement of the purchase price of the property
acquired by him on 14 October 1944 (Exhibit 7-Mintu). On 29 October 1945, a notice of lis
pendens was noted at the back of transfer certificate of title No. 70054 of the Court of First
Instance of Manila entitled "Rebecca Levin vs. Joaquin V. Bass".
Joaquin V. Bass testifies that he acquired the lot and house at No. 328 San Rafael street from
Emiliano R. Eustaquio for P38,000 and the lot and house at No. 328 San Rafael street from
Rebecca Levin for P65,000, the first on 30 March 1944 and the second on 18 February 1944; that
Rebecca Levin paid him the monthly rental of P150 for the lot and house at No. 328 San Rafael
street from March 1944 to January 1945, as shown by the stubs of the receipts issued to her
(Exhibits 20-Bass to 20-K-Bass); that Rebecca Levin refused to pay the rental for February
unless it was reduced to P100; that on 19 May 1945 he brought against her an action for detainer
which on appeal to the Court of First Instance of Manila bears No. 71159; that after he acquired
the property at No. 326 San Rafael street from Emiliano R. Eustaquio the latter brought him to
the tenant, Rosario Vda. de Altonaga, who left the premises to go to the Cagayan to look for her
daughter; that Vicente Tagle rented the premises signing a contract for one year but after 2 or 4
months he left the premises and his daughter Aminta T. de Robles married to Jose C. Robles
became the tenant; that in February 1945 Jose C. Robles left the premise after a quarrel he had
with his wife Aminta T. de Robles; that in April 1945 he brought against Jose C. Robles and
Aminta T. de Robles an action for detainer on which on appeal to the Court of First Instance of
Manila bears No. 71549; that on May 1946 Aminta T. de Robles and he signed a lease contract
(Exhibit 1-Bass); that he did not make Rebecca Levin sign documents authorizing him to sell her
house at No. 326 San Rafael street as testified to by Dr. Manlapaz; that he did not show to
Rebecca Levin any house on Calle Antonio Rivera to be exchanged with or for her property at
No. 326 San Rafael street, as testified to by Dr. Manlapaz, Meliton Villaseor and Angelita
Martinez; that it is not true that Rebecca Levin did not receive the consideration for the sale of
her house at No. 328 San Rafael street; that on October 1944 he sold for P200,000 the house and
lot at No. 326 San Rafael street to Eugenio Mintu, who handed to him P65,000 and a check for
P25,000 which the bank refused to cash, but later on Mintu told him that he had deposited funds
in the bank and so the check was honored and cashed at the bank of the Philippine Islands; that
all in all he was paid P90,000 and P10,000 for 16 gantas of rice given him to Mintu; that the
balance of P100,000 was never and has not been paid to him; that he has not given possession of
the property to Eugenio Mintu the transaction not having been consummated because of force
majeure; and that he was bound to return to Eugenio Mintu the P100,000 received by him.
Eliezer A. Manikan, the notary public before whom the deeds of sale sought to be annulled were
acknowledged, testifies that Rebecca Levin appeared before him and acknowledged the
execution of the documents in favor of Emiliano R. Eustaquio on 5 January 1944 and in favor of
Joaquin V. Bass on 18 February 1944.

The testimony of Rebecca Levin as to how she consented to sell her house and lot No. 326 San
Rafael street and the manner she was induced by Joaquin V. Bass to sign papers which he
represented were mere authorization to sell is corroborated by Dr. Pastor L. Manlapuz, Angelita
Martinez and Meliton Villasenor.
These witnesses had no interest to pervert the truth. Rebecca Levin was not in need of money of
fact she led quite a comfortable life. Only because of the misrepresentation that she would gain
by selling her house at No. 326 San Rafael street and of the threat made by Joaquin V. Bass that
she might lose it did she finally consent to sell it.
On the other hand, Joaquin V. Bass has a criminal record was convicted of estafa (Exhibit O)
and was involved ina shady deal (Exhibit R) and found to have presented a promisory note for
P5,000 and a chattel mortgage which he claimed Rebecca Levin had signed and upon which he
brought an action against her for foreclosure (civil case No. 71481, the Court of First Instance of
Manila), when in truth and in fact, as pronounced by the trial court, they were not signed and
acknowledged by her before a notary public (Exhibit P). He succeeded in winning the trust and
confidence of Rebecca Levin, a widow, 65 years old, a foreigner in this country and without
relatives. Joaquin V. Bass claims he was employed at that time by the Manila Electric Co. as
mechanical engineer but on cross examination he had to admit that he did not have any degree
nor was he licensed by the Government of the Philippines to practice the profession of
mechanical engineer. When he was pressed to answer the question whether he was actually
employed by the Manila Electric Co. he evaded it by saying that he was employed by White and
Co. which owned 60 per cent of the shares of the Manila Electric Co. During the occupation of
the country by the enemy he was engaged in the buy and sell business and had no known
income. It is unbelieavable that he could acquire the house and lot of Rebecca Levin at No. 328
San Rafael street for P65,000 and the one allegedly sold to Emiliano R. Eustaquio at No. 326,
same street, through his machinations, for P38,000. He claims he deposited his money in the
Bank of Taiwan but in the same way that he presented his pass book (Exhibit 7) showing his
deposits in the Bank of the Philippine Islands, he could have presented the pass book of
certificate of deposit of money he had in the Bank of Taiwan, Ltd. In fact, during the occupation
of the country by the enemy and before he mortgaged the two houses and lots to Co Chin Leng
Joaquin V. Bass had no money. According to Exhibit 7, on 10 April 1944 only he made the first
or initial deposit of P50,000 with the Bank of the Philippine Islands. That money must be of the
P70,000 loaned to him by Co Chin Leng on April 8 1944 secured by mortgage on the houses and
lots he had acquired fraudulently from Rebecca Levin.
Eliezer A. Manikan perverted the truth when he testified that P10,000 was paid to or received by
Rebecca Levin in his office, whereas Joaquin V. Bass testified that she received it in her house;
when he testified that on the date of the excecution of the deed of sale (Exhibit A) by Rebecca
Levin, or on 5 January 1944, the Torrens title to the property was brought by her to his office,
when in truth and in fact the title was on that date kept by the Agricultural and Industrial Bank
and taken from it the following day when the motrgage debt was paid. Eliezer A. Manikan did
not tell the truth when he testified that on the date of the execution of the deed of sale by
Rebecca Levin the sum of P35,000 in Japanese war notes, consisting of six packages of P10,000
each P10 bills and the rest of P5 bills, was counted by her, because, according to Joaquin V. Bass,
Rebecca Levin mortgaged her house to him for P35,000 and later converted it into an absolute

sale for P65,000 (Exhibits S and S-1). Eliezer A. Manikan did not tell the truth when he testified
that the deed of sale marked Exhibit C was executed two or three weeks after the order of the
court-referring to the order approving the subdivisions of the parcels of land of Rebecca Levin
into two lots presented for registration on 24 February 1944-because the deed of sale (Exhibit C)
dated February 1944 was executed and acknowledged on that date, whereas the court order
approving the subdivision and six days before its presentation for registration. On the cross
examination Joaquin V. Bass testified that the consideration for the sale of the house and lot on
No. 328 San Rafael street consisted of payment in cash of P35,000 and the transfer to or
assumption by him of Rebecca Levin's debt for P30,000 to one Concepcion de la Rama. On
further cross-examination he testified that the purchase price agreed upon between him and
Rebecca Levin was P60,000 plus P2,800 which was not included in the price.
There is overwhelming evidence to support the conclusion of the trial court that Rebecca Levin
did not execute the deeds of sale Exhibit A and Exhibit C. What she was made to believe she
signed was an authorization to sell the house at No. 326 San Rafael street.
As to the mortgage in favor of Co Chin Leng we hold that the court below that there is no
evidence to show that the mortgage was made in bad faith and without consideration. He must,
therefore, be deemed to be a mortgaged in good faith and for value. As to the sum consigned by
Eugenio Mintu for Joaquin V. Bass' account there is no evidence as to the outcome of the
complaint for consignation filed 3 November 1944 by Joaquin V. Bass against Co Chin Leng in
the Court of First Instance of Manila (case No. 2984).
As regards Eugenio Mintu, the evidence shows that he paid P200,000 to Joaquin V. Bass in the
manner and form above stated; that the orignal deed of sale (Exhibit E), together with the
owner's duplicate certificate of title Nos. 73450 and 73451, was presented for registration on 8
November 1944 in the office of Registrar of Deeds of Manila and entered in the day book-entry
No. 27161, but that, according to the certification of the registrar, the original deed of sale and
the owner's duplicate certificate of titles have not been found, were not among the salvaged
records and were, therefore, presumed to have been lost or burned (Exhibit 8-Mintu). It also
appears that the registration free consisting of P.50, the fee for the entry in the day book; P220,
the registration fees for a sale of P200,000; and P4, the fee for the issuance of two certificates of
title were paid by Eugenio Mintu (Exhibit 6-Mintu). On the other hand, on October 1945, a
notice of lis pendens was filed in the office of Registrar of Deeds of Manila and noted on the
backof transfer certificate of title Nos. 73450 and 73451 in connection with civil case No. 70054
of Court of First Instance of Manila entitled "Rebecca Levin vs. Joaquin V. Bass et al."
The claim of Joaquin V. Bass that the sale between him and Mintu was conditional is devoid of
merit, because the conditional part of the deed of sale concerns the guarantee undertaken by him
as vendor to obtain the release of the mortgage of Co Chin Leng and the cancellation of the
notice of lis pendens in connection with civil case No. 2562 entitled "Isabelo
Martinez vs. Joaquin V. Bass," which release and cancellation he promised and would secure on
or before 8 April 1945. It is not a condition which, if not fulfilled, would avoid the sale made of
the lot and house at No. 328 San Rafael street, but one which, if not performed, would cause the
vesting in the vendee (Eugenio Mintu) of the title to the lot and house at No. 328, same street,
which was given as security for the fulfillment of the undertaking.

We now take up the question between Eugenio Mintu and Rebecca Levin. Under the Torrens
system the act of registration is the operative act to convey and affect the land.1 Do the entry in
the day book of a deed of sale which was presented and filed together with the owner's duplicate
certificate of title with the office of Register of Deeds and full payment of registration fees
constituted a complete act of registration which operates to convey and affect the land? In
voluntary registration such as sale, mortgage, lease and the like, if the owner's duplicate
certificate be not surrendered and presented or if no payment of registration fees be made within
15 days, entry in the day book of the deed of sale does not operate to convey and affect the land
sold.2 In voluntary registration, such as an attachment, levy upon, execution, lis pendens and the
like entry thereof in the day book is a sufficient notice to all persons of such adversed
claim.3 Eugenio Mintu fulfilled or took the steps he was expected to take in order to have the
Registrar of Deeds in and for the City of Manila issue to him the corresponding transfer
certificate of title on the lot and house at No. 328 San Rafael Street sold to him by Joaquin V.
Bass. The evidence shows that Eugenio Mintu is an innocent purchaser for value. Nevertheless,
the court below held that the sale made by Bass to Mintu is as against Rebecca Levin without
force and effect because of the express provision of law which in part says:
. . . Provided, however, That in all cases of registration procured by fraud the owner may
pursue all his legal and equitable remedies against the parties to such fraud, without
prejudice, however, to the rights of any innocent holder for value of certificate of title;
(Section 55, Act 496, as amended by Act 3322).
In other words, the sale made by Joaquin V. Bass to Eugenio Mintu is valid as between them but
not as against Rebecca Levin who could avail herself of all her legal and equitable remedies
against Joaquin V. Bass and reach the property acquired fraudulently by the latter and
subsequently sold to Eugenio Mintu who admittedly is an innocent purchaser for value, for the
reason that the later though an innocent purchaser for value is not a holder of a certificate of title.
The pronouncement of the court below is to the effect that an innocent purchaser for value has no
right to the property because he is not a holder of a certificate of title to such property acquired
by him for value in good faith. It amounts to holding that for failure of the Registrar of Deeds to
amply and perform his duty an innocent purchaser for value loses that characterhe is not an
"innocent holder for value of a certificate of title." The court below has strictly and literally
construed the provision of law applicable to the case. If the strict and literal construction of the
law made by the court below be the true and correct meaning and intent of the lawmaking body,
the act of registrationthe operative act to convey and effect registered propertywould be left
to the Registrar of Deeds. True, there is a remedy available to the registrant to compel the
Registrar of Deeds to issue him the certificate of title but the step would entail expense and cause
unpleasantness. Neither violence to, nor stretching of the meaning of, the law would be done, if
we should hold that an innocent purchaser for value of registered land becomes the registered
owner and in the contemplation of law the holders of a certificate thereof the moment he presents
and files a duly notarized and lawfull deed of sale and the same is entered on the day book and at
the same he surrenders or presents the owner's duplicate certificate of title to the property sold
and pays the full amount of registration fees, because what remains to be done lies within his
power to perform. The Registrar of Deeds is in duty bound to perform it. We believe that is a
reasonable and practical interpretation of the law under considerationa construction which
would lead to no inconsistency and injustice.

Taking into consideration all the circumstances of the case and bearing in mind that the only
objective courts must strive to attain is to do justice, we believe that our interpretation of the law
applicable to the case at bar subserves the interests of justice. True, Rebecca Levin loses he
house and lot No. 326 San Rafael street, but "as between not innocent persons, 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."4
We hold, therefore, that Eugenio Mintu is the rightful owner of the lot and house at No. 326 San
Rafael street since 8 November 1944 and entitled to collect the rentals due and unpaid from that
date until possession of the premises shall have been restored to him and the balance by Joaquin
V. Bass of rentals and moneys received by him imputable to such rentals as ordered by the trial
court, subject to the registered mortgage in favor of Co Chin Leng. What has been awarded to
Rebecca Levin in the judgment appealed from, in so far as the lot and house at No. 326 San
Rafael street are concerned, is deemed awarded to Eugenio Mintu.
The rest of the judgment appealed from not inconsistent herewith, is affirmed, with costs against
Joaquin V. Bass.
Let a copy of this decision be furnished the City Fiscal of Manila who is directed an
investigation of Joaquin V. Bass and attorney and notary public Eliezer A. Manikan in
connection with the execution and acknowledgment of the documents, involved and the
testimony given by them in these cases and to take such action as the result of the investigation
may warrant.
Paras, C.J., Feria, Pablo, Bengzon, Montemayor, Reyes, and Bautista Angelo JJ., concur.

Separate Opinions
TUASON, J., concurring:
Crime and fraud can not serviced as the root of a valid title notwithstanding the good faith of the
purchase for value. This rule is qualified by the condition that the rightfull owner was not guilty
for any negligence contributing to or facilitating the commission of the crime or fraud. Subject to
this qualification, the doctrine that, as between two innocent parties, the one who made the crime
or fraud possible must bear the loss, should be applied. From the facts of this case, it appears that
Rebecca Levin was not free from blame for the issuance of a certificate of title in the names of
Bass. With these circumstances in mind, I concur in the foregoing decision.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. Nos. L-48971 & 49011 January 22, 1980

PACIFICO GARCIA, petitioner-appellant,
vs.
BENJAMIN M. GOZON, TECLA GUTIERREZ, ROSARIO FELIX, PAULINO D.
BUENAVENTURA, RAYMUNDO DIONISIO, VIRGILIO AUSTRIA and MARCEON
VICENCIO, respondents-appellees;
PHILIPPINE NATIONAL BANK, petitioner-appellant,
vs.
COURT OF APPEALS (Third Division), CAROLINA LAPUZ- GOZON, assisted by her
husband BENJAMIN M. GOZON, TECLA GUTIERREZ, ROSARIO FELIX, PAULINO
D. BUENAVENTURA, RAYMUNDO DIONISIO, VIRGILIO AUSTRIA and MARCEON
VICENCIO, respondents-appellees.
Agapito Mendoza & Antonio G. Ibarra for appellant Pacifico Garcia
Laurel Law Office and Flores Ocampo, Dizon & Domingo for private appellees.

AQUINO, J.:
This case is about the issuance of two or more transfer certificates of title to different persons
for the same lots, or subdivisions thereof, due to the fact that the original title was allegedly not
cancelled when the first transfer certificates of title were issued to replace the original title. The
factual background is as follows:
1. On August 9, 1918, a deed of sale for two parcels of land, E and G (with a total area of more
than seven hectares) of the Hacienda Maysilo, located in Malabon, Rizal and covered by Original
Certificate of Title No. 983, was executed in favor of Ismael Lapus a bona fide occupant thereof.
The deed was executed pursuant to an order of the Court of First Instance of Rizal in Civil Case
No. 391, Negao vs. Vidal, a partition proceeding involving the said hacienda (See Bustamante vs.
Tuason, 47 Phil. 433, 434).
2. The deed of sale was presented for registration at two-twenty five in the afternoon of January
15, 1920 and was recorded as Primary Entry No. 7710. That deed of sale itself contains the
following entries showing that it was annotated on the back of OCT NO. 983:
Presentado en este Registro a las 2:25 de la tarde del dia de hoy segun el Asiento
No. 7710 de tomo 10 del Libro Diario, Pasig, Rizal, Enero 15, 1920.
Register of Deeds (Exh. B-12)

Inscrito el documento que precede al dorso del certificado de Titulo Original No.
983 del Tomo A-9, de inscritor en las paginas 113 y 114 ambos del libro T-25 de
registro como certificados de titulo Nos. 4910 y 4911, archivado en el legajo T#4910. Pasig, Rizal, Enero 15, 1920.:
Register of Deeds (Exh. B-1).
However, it seemed that, contrary to the foregoing entry and the official routine or standard
operating procedure, the deed of sale was not annotated on OCT No. 983 and that, consequently,
that title was apparently not cancelled. Why that annotation did not appear in OCT No. 983 and
why there was no notation of the cancellation of that title, as it appeared in 1962, is a mystifying
circumstance in this case.
3. As a result of the registration of that deed of sale, Transfer Certificate of 'Title No. 4910 was
issued to Lapus for the two parcels of land, E and G, and I Transfer Certificate of Title No. 4911
was issued for the remaining five lots covered by OCT No. 983 (which embrace an area of more
than two hundred fifty-eight hectares registered in the names of more than twenty-six-coowners). TCT Nos. 4910 and 4911 contain the following entries: "Transfer from No. 983.
Originally registered on the 29th day of January, in the year 1917 in Book No. A-9, page 215, of
the said Province of Rizal, pursuant to a decree entered in Case No. 3850."
4. Lapus on different occasions mortgaged the two parcels of land to secure his obligations to the
Philippine National Bank, the Government and the Philippine Trust Company. He died in 1951.
The two parcels of land were inherited by his daughter, Carolina Lapuz-Gozon. She became the
registered owner of the two lots. She subdivided them into fifty-five lots. She sold some of the
subdivision lots to her co-respondents-appellees herein. Lapus and his successors-in-interest
have been in possession of the two parcels even before 1910 or for more than seventy years.
5. Meanwhile, in 1962, certain. alleged heirs (collectively known as the Riveras) of the late
Maria de la Concepcion Vidal filed a motion in Land Registration Cases Nos. 4429 and 4496 of
the Court of First Instance of Rizal, alleging that they were deprived of their participation in the
Hacienda Maysilo covered by OCT No. 983 and for other titles and that, since only OCT No.
983 was supposedly unencumbered, all the land covered by that title should be adjudicated to
them. The court granted the motion. It should be stressed that OCT No. 983 appears to have
remained uncancelled notwithstanding the sale to Lapus of two parcels covered by it and the fact
that it had been replaced by TCT Nos. 4910 and 4911.
6. On June 7, 1963, OCT No. 983 was definitely cancelled and in lieu thereof Transfer
Certificate of Title No. 112236 was issued to the Riveras. Later, Lots 5 and 7 of the said title
(corresponding to parcels E and G which were sold to Ismael Lapus in 1918 as stated earlier)
were assigned by Bartolome Rivera to Sergio Cruz and Pacifico Garcia and TCT Nos. 112743
and 112742 were issued to Cruz and Garcia, respectively. Thus, two sets of transfer certificates

of title for Lots E and G or 5 and 7, originally covered by OCT No. 983, were issued, one to the
heir of Ismael Lapus and another set to the successors-in-interest of the Riveras.
7. On October 22, 1964, Garcia subdivided Lot 7 (G) into Lots A and B. Garcia retained Lot A
and obtained TCT No. 134958 for it. He assigned Lot B to Antonio Muoz on November 5,
1964. As a consequence of the assignment, TCT No. 112742 was cancelled and TCT No. 134957
was issued to Muoz. In 1965, he mortgaged Lot B to the Associated Banking Corporation to
secure a loan of P200,000.
8. On the other hand, on July 17, 1964 Cruz sold to Santiago Go Lot 5 (E) covered by TCT No.
112743. TCT No. 131329 was issued to Go on August 25,1964. On December 23, 1964, Go
mortgaged Lot 6 to the Philippine National Bank (PNB) to secure a loan of P50,000 which was
later increased to P60,000.
9. Muoz and Go did not pay their mortgage debts. The two banks foreclosed the mortgages. The
PNB bought the mortgaged lot at the auction sale held on May 4. 1967. The sheriff issued to it a
certificate of sale dated May 19, 1967 but at that time there was already a notice of lis
pendens annotated on the title of the mortgaged lot. TCT Nos. 212163 and 236881 for the
mortgaged lots were issued to the Associated Banking Corporation and the Philippine National
Bank, respectively.
10. The Riveras and their successors-in-interest have never set foot on the disputed lots.
11. Mrs. Gozon later learned that the Riveras and their successors-in-interest had acquired the
land (more than two hundred fifty-eight hectares) covered by OCT No. 983. Her lawyer and a
surveyor informed her that parcels E and G, which she inherited from her father, were identical
to Lots 5 and 7 which were conveyed to Cruz and Garcia. She registered adverse claims on the
titles covering Lots 5 and 7. On December 27, 1965 she and the persons to whom she had
transferred portions of parcels E and G filed with the Court of First Instance of Rizal at Caloocan
City against the Riveras, Cruz, Muoz, Garcia, Associated Banking Corporation, PNB and others
an action to quiet title and for damages.
12. A notice of lis pendens was annotated on January 25, 1966 on the titles of Garcia, Muoz and
Go. The notice of lis pendens was annotated on the title of the PNB when the sale in its favor
was registered on December 13, 1969.
13. The trial court in its decision of July 30, 1975 declared valid TCT Nos. 141802 to 141855
and 143512 issued to Mrs. Gozon and her co-plaintiffs. It voided TCT No. 112235 issued to the
Riveras and all titles and transactions emanating therefrom insofar as those titles covered the lots
embraced in plaintiffs' titles. The Riveras were ordered to pay the plaintiffs twenty thousand
pesos as attorney's fees.
14. The trial court also ordered Muoz to pay the Associated Banking Corporation, in the event
that the bank would be evicted from the lot covered by TCT No. 212153, two hundred sixty-five

thousand seventy-two pesos and fifteen centavos with twelve percent interest per annum from
the date of the eviction plus ten thousand pesos as attorney's fees.
15. Santiago Go was ordered to pay the PNB, should it be evicted from the lot covered by TCT
No. 236881, the sum of sixty thousand pesos plus nine percent interest per annum from the date
of the eviction and six thousand pesos as attorney's fees.
16. That judgment of the trial court was affirmed by the Court of Appeals in its decision of May
25, 1978. Garcia and the PNB appealed from that decision. The Associated Banking Corporation,
now the Associated Citizens Bank, tried to appeal but it was not able to file its petition for review
(L-49010).
Garcia contends that the Court of Appeals erred in not holding that his title is valid and that the
titles of Ismael Lapus and his successors-in-interest lost their right to the disputed lots due to
their negligence or inaction.
The issue is whether the 1920 title issued to Lapus and the titles derived therefrom should prevail
over the 1963 title issued to the Riveras and the subsequent titles derived from it. Should Lapus'
title prevail even if it was not annotated by the register of deeds on the anterior or parent title
which was not cancelled before 1963? It was that noncancellation which led to the issuance of
the duplicative title to the Riveras and eventually to the execution of the controversial mortgages
and foreclosure sales to the two banks.
We hold that the two appeals have no merit. The title of Lapus and the titles derived therefrom
should be given effect. The title of the Riveras and the titles springing from it are void.
There can be no doubt that Lapus was an innocent purchaser for value. He validly transmitted to
his successors-in-interest his indefeasible title or ownership over the disputed lots or parcels of
land. That title could not be nullified or defeated by the issuance forty-three Years later to other
persons of another title over the same lots due to the failure of the register of deeds to cancel the
title preceding the title issued to Lapuz. This must be so considering that Lapus and his interest
remained in possession of the disputed successors in lots and the rival claimants never possessed
the same.
"The general rule is that in the case of two certificates of title, purporting to include the same
land, the earlier in date prevail, whether the land comprised in the latter certificate be wholly, or
only in part, comprised in the earlier certificate" (Hogg, Australian Torrens System 823, citing
cases and cited in Legarda and Prieto vs. Saleeby, 31 Phil. 590, 595).
"Where two certificates (of title) purport to include the same land, the earlier in date prevails. ...
In successive registrations, where more than once certificate is issued in respect of a party estate
or interest in land, the Person claiming under the prior certificate is entitled to the estate or
interest; and that person is deemed to hold under the prior certificate who is the holder of, or
whose claim is derived directly or indirectly from the person who was the holder of the earliest

certificate issued in respect thereof " (Niblack, Analysis of the Torrens System page 237, cited in
Legarda and Prieto vs. Saleeby, supra, pages 595-6).
And the rule that in case of double registration the owner of the earlier certificate is the owner of
the land applies to the successive vendees of the owners of such certificates. "The vendee of the
earlier certificate would be the owner as against the vendee of the owner of the later certificate"
(Legarda and Prieto vs. Saleeby, supra, pages 597-9).
It is settled that is this jurisdiction the maxim prior est in tempore, potior est in jure (he who is
first in time is preferred in right) is followed in land registration matters (La Urbana vs.
Bernardo, 62 Phil. 790, 806).
Appellant Garcia invokes the ruling that the mere entry of a document in the day or entry book
without noting it on the certificate of title is not a sufficient registration (Bass vs. De la Rama, 73
Phil. 682, 685).
That ruling was superseded by the holding in the later six cases of Levin vs. Bass, 91 Phil. 420,
where a distinction was made between voluntary and involuntary registration, such as the
registration of an attachment, levy upon execution, notice of his pendens, and the like. In cases
of involuntary registration, an entry thereof in the day book is a sufficient notice to all persons
even if the owner's duplicate certificate of title is not presented to the register of deeds.
On the other hand, according to the said cases of Levin vs. Bass, in case of voluntary registration
of documents an innocent purchaser for value of registered land becomes the registered owner,
and, in contemplation of law the holder of a certificate of title, the moment he presents and files a
duly notarized and valid deed of sale and the same is entered in the day book and at the same
time he surrenders or presents the owner's duplicate certificate of title covering the land sold and
pays the registration fees, because what remains to be done lies not within his power to perform.
The register of deeds is duty bound to perform it. (See Potenciano vs. Dineros, 97 Phil. 196.)
The instant case is not Identical to the Bass cases. Here the deed of sale in favor of Lapus, which
was judicially authorized, was entered in the entry book and a new title was issued to him. As
already stated, and this point should be underscored, the deed of sale in favor of Lapus contains
the notation that it was annotated on the back of OCT No. 983 (presumably, the original and
owner's duplicate thereof).
But why in 1962 it appeared that no such annotation was found on the back of OCT No. 983,
contrary to what was stated in the 1918 deed of sale, is a mystery that the trill court and the
plaintiffs failed to unravel during the trial. Moreover, the title issued to Lapus contains the usual
notation that it was a transfer from a previous title which in this case was OCT No. 983.
It should be further observed that the deed of sale in favor of Lapus and the titles issued to him
and his successors interest together with his mortgage in 1929 of the disputed lots to the PNB
itself, are all a matter of public record in the registry of deeds.

As stressed in Legarda and Prieto vs. Saleeby, 31 Phil. 590, 600, "the record is notice to all the
world. All persons are charged with the knowledge of what it contains. All persons dealing with
the land so recorded, or any portion of it, must be charged with notice of whatever it contains.
The purchaser is charged with notice of every fact shown by the record and is presumed to know
every fact which the record discloses.
"When a conveyance has been properly recorded, such record is constructive notice of its
contents and all interests, legal and equitable, included therein." "Under the rule of notice, it is
presumed that the purchaser has examined every instrument of record affecting the title. Such
presumption is irrefutable. He is charged with notice of every fact shown by the record and is
presumed to know every fact which an examination of the record would have disclosed"
(Legarda and Prieto vs. Saleeby, supra, page 600).
As Justice Johnson says, "this presumption cannot be overcome by proof of innocence or good
faith. Otherwise, the very purpose and object of the law requiring a record would be destroyed.
Such presumption cannot be defeated by proof of want of knowledge of what the record contains
any more than one may be permitted to show that he was ignorant of the provisions of the law.
The rule that all persons must take notice of the facts which the public record contains is a rule of
law. The rule must be absolute. Any variation would lead to endless confusion and useless
litigation" (Legarda and Prieto vs. Saleeby, supra, pp. 600-601).
As to the PNB's claim that it was a mortgagee and purchaser in good faith and for value, the
Appellate Court held that the bank should have made an on-the-spot investigation of the lot
mortgaged by Go to ascertain whether he was in possession of it or it was claimed by other
persons. Its failure to do so precludes the bank from being considered as a mortgagee in good
faith and for value (Gatioan vs. Gaffud, L-21953, March 28, 1969, 27 SCRA 706).
On the other hand, the trial court held that the PNB was not a buyer in good faith when it bought
Go's lot at the auction sale because there was already a notice of his pendens annotated on his
title.
In the Gatioan case, it appears that in 1935 Rufina Permison secured a Torrens title for a parcel
of land on the basis of a free patent. The land was sold to Encarnacion Gatioan and Transfer
Certificate of Title No. T-1212 was issued to her. She mortgaged the land three times to the PNB
In 1956, the spouses Sixto Gaffud and Villamora Logan were able to secure a Torrens title for
the same lot also on the basis of a free patent. They mortgaged the land also to the PNB. The
Secretary of Agriculture and Natural Resources, on discovering that two Torrens titles were
issued for the same land, recommended the cancellation of the later title issued to the Gaffud
spouses. As the PNB refused to cancel the mortgaged executed by Gatioan, in spite of the fact
that she had made full payment of the mortgage debt, she filed against the Gaffud spouses and
the PNB an action to quiet title.

It was held that Gatioan's title should prevail over that of the Gaffud spouses and that the
mortgage executed by them in favor of the PNB was void. The Gaffud spouse were ordered to
pay damages to Gatioan.
Since the applicable rule in the instant case is that the earlier certificate of title should be
recognized as superior and controlling there is no justification for relying on the doctrine laid
down by Justice Holmes in Eliason vs. Wilborn 281 U.S. 457, that "as between two innocent
persons, 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."
There was no breach of trust in this case. What is note. worthy in this case is that after it was
recited in the registered deed of sale that sale was annotated at the back of the title covering the
lots sold, it turned out that the title did not contain such an annotation and that the title was not
cancelled. For that anomaly, the purchaser, Ismael Lapus, the how" of the earlier title, was not
culpable or blameworthy.
WHEREFORE, the judgment of the Court of Appeals, affirming the decision of the trial court,
should stand. Costs against the appellants.
SO ORDERED.
Barredo (Chairman), Antonio, Concepcion, Jr. and Santos, JJ., concur.
Abad Santos, J., took no part.

FIRST DIVISION
NATIONAL
AUTHORITY,
Petitioner,

HOUSING

G.R. No. 149121

Present:

- versus -

AUGUSTO BASA, JR., LUZ BASA

PUNO, C.J.,
Chairperson,
CARPIO,*
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.

and EDUARDO S. BASA,

Respondents.

Promulgated:

April 20, 2010

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
LEONARDO-DE CASTRO, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set
aside the Amended Decision[1] of the Court of Appeals dated November 27, 2000and its
Resolution dated July 19, 2001 denying the motion for reconsideration of the National Housing
Authority (NHA).
On April 19, 1983, spouses Augusto and Luz Basa loaned from NHA the amount of P556,827.10
secured by a real estate mortgage over their properties covered by Transfer Certificates of Title
(TCTs) Nos. 287008 and 285413, located at No. 30 San Antonio St., San Francisco del
Monte, Quezon City.[2] Spouses Basa did not pay the loan despite repeated demands. To collect
its credit, the NHA, on August 9, 1990, filed a verified petition for extrajudicial foreclosure of
mortgage before the Sheriffs Office in Quezon City, pursuant to Act No. 3135, as amended.[3]
After notice and publication, the properties were sold at public auction where NHA emerged as
the highest bidder.[4] On April 16, 1991, the sheriffs certificate of sale was registered and
annotated only on the owners duplicate copies of the titles in the hands of the respondents, since
the titles in the custody of the Register of Deeds were among those burned down when a fire
gutted the City Hall of Quezon City on June 11, 1988.[5]
On April 16, 1992, the redemption period expired,[6] without respondents having redeemed the
properties. Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of
Ownership[7] over the foreclosed properties, and the same was inscribed by the Register of Deeds
on the certificates of title in the hand of NHA under Entry No. 6572/T-287008-PR-29207.[8]
On June 18, 1992, NHA filed a petition for the issuance of a Writ of Possession. The said petition
was granted by the Regional Trial Court (RTC) in an Order[9] dated August 4, 1992.

A Writ of Possession[10] was issued on March 9, 1993 by the RTC, ordering spouses Augusto and
Luz Basa to vacate the subject lots. The writ, however, remained unserved.This compelled NHA
to move for the issuance of an alias writ of possession on April 28, 1993.

Before the RTC could resolve the motion for the issuance of an alias writ of possession,
respondents spouses Basa and Eduardo Basa, on June 2, 1993, filed a Motion for Leave to
Intervene and Petition in Intervention (with Prayer for Temporary Restraining Order and/or
Writ of Preliminary Injunction).[11] Respondents anchored said petition for intervention on
Section 8[12] of Act No. 3135, as amended, which gives the debtor/mortgagor the remedy to
petition that the sale be set aside and the writ of possession be cancelled. In the said petition for
intervention, respondents averred that the extrajudicial foreclosure of the subject properties was a
nullity since notices were not posted and published, written notices of foreclosure were not given
to them, and notices of sale were not tendered to the occupants of the sold properties, thereby
denying them the opportunity to ventilate their rights.[13] Respondents likewise insisted that even
assuming arguendo that the foreclosure sale were valid, they were still entitled to redeem the
same since the one-year redemption period from the registration of the sheriffs certificate of
foreclosure sale had not yet prescribed. [14] Citing Bernardez v. Reyes[15] and Bass v. De la Rama,
[16]
respondents theorized that the instrument is deemed registered only upon actual inscription on
the certificate of title in the custody of the civil registrar.[17]Since the sheriffs certificate was only
inscribed on the owners duplicate certificate of title, and not on the certificate of title in the
possession of the Register of Deeds, then there was no effective registration and the one-year
redemption period had not even begun to run. Thus, respondents asked the RTC, among others,
to declare the foreclosure sale null and void, to allow the respondents to redeem the mortgaged
properties in the amount of P21,160.00, and to cancel the Writ of Possession dated March 9,
1993.
NHA opposed respondents petition for intervention. [18] It countered that the extrajudicial
foreclosure sale was conducted validly and made in accordance with Act No. 3135 as evidenced
by the publication of the Notice of Sheriffs Sale in the Manila Times in its issues dated July 14,
21 and 28, 1990.[19] NHA also said that respondents had been furnished with a copy of the Notice
of Sheriffs Sale as shown at the bottom portion of said notice. [20] NHA maintained that
respondents right of redemption had long expired on April 15, 1992 since the certificate of sale
was inscribed on their TCT Nos. 285413 and 287008 a year earlier, or on April 16, 1991. It
pointed out that the RTC, via its Order dated August 4, 1992, had already ruled that respondents

right of redemption was already gone without them exercising said right. Since said order had
already attained finality, the ruling therein could no longer be disturbed.
On January 2, 1995, the RTC issued the first assailed Order [21] with the following directives: 1)
granting the issuance of the alias writ of possession which allowed NHA to take possession of
the subject properties; 2) admitting the Petition in Intervention and treating the same as the
petition to set aside sale mentioned in [Sec. 8] of Act No. 3155; and 3) granting the issuance of a
Writ of Preliminary Injunction in favor of respondents that ordered NHA to refrain from selling
or disposing of the contested properties. The pertinent portion of the order reads:
After examining the record and following precedents x x x this Court hereby
orders:
1. The issuance of an alias writ of possession;
2. Admission of the Petition in Intervention, treating the same as the
petition to set aside sale, etc., mentioned in [Sec. 8] of Act No. 3155;
3. The issuance of a writ of preliminary injunction, after a BOND in the
amount of P20,000.00 had been duly filed by intervenors, ordering movant
National Housing Authority, its agents and/or any other person acting under its
command, to desist and refrain from selling or in any manner from disposing of
the subject properties covered by TCT Nos. 287008 and 285413 and located at
No. 30, San Antonio Street, San Francisco del Monte, Quezon City, pending the
termination of this proceeding and/or unless a contrary order is issued by this
Court;
4. Setting the hearing of the petition in intervention (to set aside) on March
17, 1995, at 8:30 a.m.[22]

NHA filed a motion for reconsideration [23] assailing the RTCs Order insofar as it admitted
respondents motion for intervention and issued a writ of preliminary injunction. NHA argued that
respondents should have assailed the foreclosure sale during the hearing in the petition for the
issuance of a Writ of Possession, and not during the hearing in the petition for the issuance of an
alias writ of possession since the petition referred to in Section 8 of Act No. 3135 pertains to the
original petition for the issuance of the Writ of Possession and not the Motion for the Issuance of
an Alias Writ of Possession. NHA stressed that another reason why the petition for intervention
should be denied was the finality of the Order dated August 4, 1992 declaring respondents right
of redemption barred by prescription. Lastly, NHA asserted that the writ of possession was issued

as a matter of course upon filing of the proper motion and thereby, the court was bereft of
discretion.
In the second assailed Order[24] dated September 4, 1995, the RTC denied NHAs motion for
reconsideration reasoning that the admission of the intervention was sanctioned by Section 8 of
Act No. 3135. As to the grant of preliminary injunction, the RTC made the justification that if the
NHA was not restrained, the judgment which may be favorable to respondents would be
ineffectual. The order partly provides:
The motion is without merit. The admission of the intervention is sanctioned by
Sec. 8 of Act No. 3135. And, because, otherwise or if no preliminary injunction is
issued, the movant NHA may, before final judgment, do or continue the doing of
the act with the intervenor asks the court to restrain, and thus make ineffectual the
final judgment rendered afterwards which may grant the relief sought by the
intervenor.
ACCORDINGLY, the motion for reconsideration is DENIED. [25]

Undaunted, NHA filed on November 24, 1995, a special civil action for certiorari and
prohibition before the Court of Appeals.
The Court of Appeals rendered a Decision [26] dated February 24, 2000, in favor of the NHA. It
declared null and void the assailed orders of the RTC dated January 2, 1995 and September 4,
1995, to the extent that the said orders admitted the petition in intervention and granted the
issuance of the preliminary injunction; but it upheld the grant of the alias writ of possession,
thus:
WHEREFORE, the petition is GRANTED, and the assailed order
of January 2, 1995 is declared NULL AND VOID except for the portion directing
the issuance of an alias writ of possession. Likewise declared NULL AND VOID
is the second assailed order of September 4, 1995 denying the petitioners motion
for reconsideration. Let an alias writ of possession be issued and
executed/implemented by the public respondent without further delay.[27]

The Court of Appeals defended its affirmation of the RTCs grant of the alias writ of possession in
NHAs favor by saying that it was a necessary consequence after the earlier writ was left
unserved to the party. It further explained that NHA was entitled to the writ of possession as a
matter of course after the lapse of the redemption period.

As to the RTCs admission of respondents petition for intervention, the appellate court opined that
it was improperly and erroneously made. The Court of Appeals believed that the only recourse
available to a mortgagor, in this case the respondents, in a foreclosure sale is to question the
validity of the sale through a petition to set aside the sale and to cancel the writ of possession, a
summary procedure provided for under Section 112 of the Land Registration Act. It also
observed that the grant of the preliminary injunction by the RTC was uncalled for as it would
effectively defeat the right of NHA to possession, the latter having been entitled by virtue of the
grant of the alias writ of possession.
Respondents filed a motion for reconsideration.[28] They alleged that since they raised the issue
that their right of redemption had not prescribed, said fact should have changed the whole
scenario such that the issuance of a writ of possession ceased to be summary in nature and was
no longer ministerial. Respondents then concluded that their right to redeem the properties
against NHAs right to the writ of possession must be threshed out in a hearing of the case on its
merits.
With regard to the RTC Order dated August 4, 1992 granting the writ of possession which,
according to the NHA, became final and executory, respondents argued that said order did not
constitute res judicata so as to bar the filing of the petition for intervention since the said order
was not a judgment on the merits that could attain finality.
Also, respondents would like the Court of Appeals to treat the petition for intervention not only
as an opposition to the issuance of the alias writ of possession, but also as a proper remedy under
Section 8 of Act No. 3135, as amended, in view of the various issues raised.
On November 27, 2000, the Court of Appeals, in its Amended Decision, reconsidered its earlier
stance. It declared that the period of redemption had not expired as the certificate of sale had not
been registered or annotated in the original copies of the titles supposedly kept with the Register
of Deeds since said titles were earlier razed by fire. Taking its cue from Bass v. De la
Rama where the Court purportedly made a ruling that entry of a document, such as sale of real
property, in the entry book is insufficient to treat such document as registered, unless the same
had been annotated on the certificate of title; the Court of Appeals went on to say that the entry
of the certificate of sale in the owners duplicate of the titles could not have been sufficient to
register the same since anyone who would wish to check with the Register of Deeds would not
see any annotation. Thus, entry made on the owners duplicate of the titles cannot be considered
notice that would bind the whole world. Having been deprived of their right of redemption, the

Court of Appeals deemed it proper to allow respondents to intervene. The dispositive part of the
amended decision decrees:
WHEREFORE, the motion for reconsideration is GRANTED.
Our decision dated February 24, 2000, is RECONSIDERED and SET ASIDE and
the petition DISMISSED.[29]

Unfazed, NHA filed a motion for reconsideration, which the Court of Appeals denied in its July
19, 2001 Resolution, to wit:
ACCORDINGLY, the Motion for Reconsideration dated February 24, 2000 is
DENIED for lack of merit.[30]

Hence, the instant petition.

In its memorandum, NHA tendered the following issues:
1. WHETHER OR NOT THE ANNOTATION OF THE SHERIFFS
CERTIFICATE OF SALE IN THE PRIMARY ENTRY BOOK OF THE
REGISTER OF DEEDS AND ON THE OWNERS DUPLICATE TITLE
IS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT
OF LAW ON REGISTRATION.
2. WHETHER OR NOT THE CASE OF BASS VS. DE LA RAMA HAS BEEN
SUPERSEDED.[31]

Respondents, on the other hand, offered the following as issues:

I
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT
THE LOWER COURT DID NOT ACT WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ADMITTING
THE RESPONDENTS INTERVENTION AND GRANTING THE EQUITABLE
WRIT OF INJUNCTION THEREBY DISMISSING THE PETITION FOR
CERTIORARI AND PROHIBITION.
II

WHETHER OR NOT THE INSTANT PETITION COMPLIES WITH THE

REQUIREMENTS OF RULE 45 OF THE RULES OF COURT.[32]

On the procedural aspect, respondents question NHAs alleged failure to include in its petition
copies of material portions of the record such as pleadings filed in the RTC and the Court of
Appeals as required under Section 4, Rule 45 of the Rules of Court. Respondents also pointed
out the purported defective verification of NHA in view of the fact that it merely stated that the
one verifying had read the allegations of the petition and that the same were true and correct to
the best of his knowledge. According to respondents, such declarations were not in accordance
with the rules which require that a verified pleading must state that the affiant had read the
pleading and that the allegations therein were true and correct based on his personal
knowledge and not only to the best of his knowledge.
As to the merits, NHA stresses that the annotation and entry in the owners duplicate
certificate of titles of the sheriffs certificate of sale are sufficient compliance with the
requirement of law on registration. To support this, NHA refers to Land Registration
Administration Circular No. 3 dated December 6, 1988, entitled Entry and Provisional
Registration of Instruments Pending Reconstitution of Title which allegedly authorized all
Registers of Deeds to accept for entry and provisional registration instruments affecting lost or
destroyed certificates of title pending reconstitution of the original. The legality and validity of
the disputed registration on its duplicate copies of the sheriffs certificate of sale, NHA insists, are
backed by this Courts ruling in Development Bank of the Philippines v. Acting Register of Deeds
of Nueva Ecija,[33] where purportedly, this Court made a favorable interpretation of Section 56 of
Presidential Decree No. 1529. NHA says that the inscription of the sheriffs certificate of sale
only to the owners duplicate copies, but not to those in the custody of the register of deeds is
justified as the latter were burned down. Thus, it could not be blamed for the non-registration of
the sale in the original copies.
NHA faults the Court of Appeals reliance on Bass v. De la Rama since the ruling therein stating
that entry and annotation of a sale instrument on the owners duplicate copy only as insufficient
registration, was already abandoned in Development Bank of the Philippines v. Acting Register of
Deeds of Nueva Ecija, where it was allegedly ruled that the primary entry alone of the
transaction produces the effect of registration so long as the registrant has complied with all that
is required of him for purposes of entry and annotation.
In contrast, respondents submit that annotation of the sheriffs certificate of sale on the owners
copy is inadequate to propel the running of the redemption period. They firmly believe that for

the sale instrument to be considered as registered, the inscription must be made on the
reconstituted titles.
Respondents disagree with NHAs opinion that Bass v. De la Rama was superceded
by Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija. They are of
the persuasion that the ruling in DBP pertains exclusively to the unique factual milieu and the
issues attendant therein, but not to the instant case where Bass purportedly applies. Respondents
also assail NHAs citation of Sta. Ignacia Rural Bank, Inc. v. Court of Appeals.[34] According to
them, said case finds no application to the instant controversy because the issue involved in the
former was whether the redemption period should be reckoned from the date of the auction sale
or the registration of the certificate of sale, which ostensibly is not the bone of contention in this
case.
Ascribing NHAs inaction to have the burned titles reconstituted, respondents assert that such
neglect should not be used as a justification for the non-inscription in the original titles of the
certificate of sale. Additionally, respondents insist that the question of whether the redemption
period should be reckoned from the inscription on the owners duplicate copies is a factual and
legal issue that is appropriately adjudicated in a hearing on the merits of their petition in
intervention, and not in the instant special civil action for certiorari and prohibition which is
limited in scope, namely, whether the RTC committed grave abuse of discretion amounting to
lack of jurisdiction in admitting their petition in intervention.
Respondents reiterate that the issuance of the writ of possession prayed for by NHA before the
RTC is no longer ministerial since it raised the issue of whether their period of redemption has
already expired. They cite Barican v. Intermediate Appellate Court[35] as the authority to this
argument.
We dwell first with the procedural issues before the main controversy. Respondents contend that
the instant petition is dismissible on the ground that NHA failed to attach pleadings filed in the
RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of Court which
partly provides:
SEC. 4. Contents of petition. The petition shall be filed in eighteen (18)
copies, with the original copy intended for the court being indicated as such by
the petitioner, and shall x x x (d) be accompanied by a clearly legible duplicate
original, or a certified true copy of the judgment or final order or resolution
certified by the clerk of court of the court a quo and the requisite number of plain

copies thereof, and such material portions of the record as would support the
petition; x x x.

In its petition, NHA attached the February 24, 2000 Decision, the November 27,
2000 Amended Decision, and the July 19, 2001 Resolution all of the Court of Appeals; copies of
the transfer certificates of title of the disputed properties; and the June 13, 1994 Order of the
Quezon City RTC ordering the reconstitution of the said titles. This Court finds that NHA
substantially complied with the requirements under Section 4 of Rule 45. The same conclusion
was arrived at by this Court in Development Bank of the Philippines v. Family Foods
Manufacturing Co., Ltd.[36] when it was faced with the same procedural objection, thus:
As held by this Court in Air Philippines Corporation v. Zamora:
[E]ven if a document is relevant and pertinent to the
petition, it need not be appended if it is shown that the contents
thereof can also [be] found in another document already attached
to the petition. Thus, if the material allegations in a position paper
are summarized in a questioned judgment, it will suffice that only a
certified true copy of the judgment is attached.
Third, a petition lacking an essential pleading or part of the
case record may still be given due course or reinstated (if earlier
dismissed) upon showing that petitioner later submitted the
documents required, or that it will serve the higher interest of
justice that the case be decided on the merits.
Nevertheless, even if the pleadings and other supporting documents were
not attached to the petition, the dismissal is unwarranted because the CA records
containing the promissory notes and the real estate and chattel mortgages were
elevated to this Court. Without a doubt, we have sufficient basis to actually and
completely dispose of the case.
We must stress that cases should be determined on the merits, after all
parties have been given full opportunity to ventilate their causes and defenses,
rather than on technicalities or procedural imperfections. In that way, the ends of
justice would be served better. Rules of procedure are mere tools designed to
expedite the decision or resolution of cases and other matters pending in court. A
strict and rigid application of rules, resulting in technicalities that tend to frustrate
rather than promote substantial justice, must be avoided. In fact, Section 6 of Rule
1 states that the Rules shall be liberally construed in order to promote their
objective of ensuring the just, speedy and inexpensive disposition of every action
and proceeding.

Contrary to respondents assertion, NHAs verification conforms to the rule. Section 4, Rule 7 of
the Rules of Court states:
SEC. 4. Verification. Except when otherwise specifically required by law
or rule, pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that
the allegations therein are true and correct of his personal knowledge or based on
authentic records.
A pleading required to be verified which contains a verification based on
information and belief, or upon knowledge, information and belief, or lacks a
proper verification, shall be treated as an unsigned pleading.

The reason for requiring verification in the petition is to secure an assurance that the
allegations of a pleading are true and correct; are not speculative or merely imagined; and have
been made in good faith.[37] To achieve this purpose, the verification of a pleading is made
through an affidavit or sworn statement confirming that the affiant has read the pleading whose
allegations are true and correct of the affiant's personal knowledge or based on authentic records.
[38]

The General Manager of NHA verified the petition as follows:

3. I have read the allegations contained therein and that the same are true
and correct to the best of my own personal knowledge.[39]

A reading of the above verification reveals nothing objectionable about it. The affiant confirmed
that he had read the allegations in the petition which were true and correct based on his personal
knowledge. The addition of the words to the best before the phrase of my personal knowledge
did not violate the requirement under Section 4 of Rule 7, it being sufficient that the affiant
declared that the allegations in the petition are true and correct based on his personal knowledge.
Now, as to the merits of the case. The main issue before us is whether the annotation of
the sheriffs certificate of sale on the owners duplicate certificate of titles is sufficient registration
considering that the inscription on the original certificates could not be made as the same got
burned.

Jurisprudence is replete with analogous cases. Of foremost importance is Development Bank of

the Philippines v. Acting Register of Deeds of Nueva Ecija[40] where the Court listed cases where
the transaction or instrument was annotated not on the original certificate but somewhere else. In
that case, DBP, following the extrajudicial foreclosure sale where it emerged as the highest
bidder, registered with the Register of Deeds the sheriffs certificate of sale in its favor. After it
had paid the required fees, said transaction was entered in the primary entry book. However, the
annotation of the said transaction to the originals of the certificates of title could not be done
because the same titles were missing from the files of the Registry. This prompted DBP to
commence reconstitution proceedings of the lost titles. Four years had passed before the missing
certificates of title were reconstituted. When DBP sought the inscription of the four-year old sale
transaction on the reconstituted titles, the Acting Register of Deeds, being in doubt of the proper
action to take, referred the matter to the Commissioner of the Land Registration Authority
by consulta, the latter resolved against the annotation of the sale transaction and opined that said
entry was ineffective due to the impossibility of accomplishing registration at the time the
document was entered because of the non-availability of the certificate (sic) of title involved.
[41]
In other words, annotation on the primary book was deemed insufficient registration. The
Court disagreed with this posture. Considering that DBP had paid all the fees and complied with
all the requirements for purposes of both primary entry and annotation of the certificate of sale,
the Court declared that mere entry in the primary book was considered sufficient registration
since [DBP] cannot be blamed that annotation could not be made contemporaneously with the
entry because the originals of the subject certificates of title were missing and could not be
found, since it had nothing to do with their safekeeping. If anyone was responsible for failure of
annotation, it was the Register of Deeds who was chargeable with the keeping and custody of
those documents.[42] To buttress its conclusion, the Court reviewed the relevant jurisprudence
starting from 1934.The Court noted that before the Second World War, particularly
in Government of the Philippine Islands v. Aballe, [43] the prevailing doctrine was an inscription in
the book of entry even without the notation on the certificate of title was considered as
satisfactory and produced all the effects which the law gave to its registration. During the war,
however, the Court observed that there was apparent departure from said ruling since in Bass v.
De la Rama, the holding was that entry of an instrument in the primary entry book does not
confer any legal effect without a memorandum thereof inscribed on the certificate of title.[44] DBP
noted that Bass v. De la Rama, however, survived only for a little while since later cases appear
to have applied the Aballe ruling that entry in the day book, even without the corresponding
annotation on the certificate of title, is equivalent to, or produces the effect of, registration to

voluntary transactions, provided the requisite fees are paid and the owners duplicates of the
certificates of title affected are presented.[45]
These later cases are Levin v. Bass[46] and Potenciano v. Dineros,[47] both of which involve the
issue of whether entry in the day book of a deed of sale, payment of the fees, and presentation of
the owners duplicate certificate of title constitute a complete act of registration.[48]
Simply, respondents resort to Bass v. De la Rama is futile as the same was abandoned by the later
cases, i.e., Bass, Potenciano and DBP.
In the recent case of Autocorp Group v. Court of Appeals,[49] the respondent was awarded the
foreclosed parcels of land. A sheriffs certificate of sale was thereafter issued in its
favor. Thereafter, petitioners in that case filed a complaint before the RTC with a prayer for the
issuance of an ex parte TRO aimed at preventing the Register of Deeds from registering the said
certificate of sale in the name of the respondent and from taking possession of the subject
properties.[50] Before the RTC could issue a TRO, respondent presented the sheriffs certificate of
sale to the Register of Deeds who entered the same certificate in the primary book, even if the
registration fee was paid only the following day.Four days after, the RTC issued a TRO directing
the Register of Deeds to refrain from registering the said sheriffs certificate of sale. A
preliminary injunction was thereafter issued as the TRO was about to expire. The preliminary
injunction was questioned by therein respondent. One of the main issues raised there was
whether the entry of the certificate of sale in the primary book was equivalent to registration such
that the TRO and the preliminary injunction issues would not lie anymore as the act sought to be
restrained had become an accomplished act. The Court held that the TRO and the preliminary
injunction had already become moot and academic by the earlier entry of the certificate of sale in
the primary entry book which was tantamount to registration, thus:
In fine, petitioners prayer for the issuance of a writ of injunction, to
prevent the register of deeds from registering the subject certificate of sale, had
been rendered moot and academic by the valid entry of the instrument in the
primary entry book. Such entry is equivalent to registration. Injunction would
not lie anymore, as the act sought to be enjoined had already become a fait
accompli or an accomplished act.[51]

Indeed, the prevailing rule is that there is effective registration once the registrant has fulfilled all
that is needed of him for purposes of entry and annotation, so that what is left to be accomplished
lies solely on the register of deeds. The Court thus once held:

Current doctrine thus seems to be that entry alone produces the effect of
registration, whether the transaction entered is a voluntary or an involuntary one,
so long as the registrant has complied with all that is required of him for purposes
of entry and annotation, and nothing more remains to be done but a duty
incumbent solely on the register of deeds.[52]

In the case under consideration, NHA presented the sheriffs certificate of sale to the Register of
Deeds and the same was entered as Entry No. 2873 and said entry was further annotated in the
owners transfer certificate of title.[53] A year later and after the mortgagors did not redeem the
said properties, respondents filed with the Register of Deeds an Affidavit of Consolidation of
Ownership[54]after which the same instrument was presumably entered into in the day book as the
same
was
annotated
in
the
owners
duplicate
copy.[55] Just
like
in DBP, Levin, Potenciano and Autocorp, NHA followed the procedure in order to have its
sheriffs certificate of sale annotated in the transfer certificates of title. There would be, therefore,
no reason not to apply the ruling in said cases to this one. It was not NHAs fault that the
certificate of sale was not annotated on the transfer certificates of title which were supposed to be
in the custody of the Registrar, since the same were burned. Neither could NHA be blamed for
the fact that there were no reconstituted titles available during the time of inscription as it had
taken the necessary steps in having the same reconstituted as early as July 15, 1988.[56] NHA did
everything within its power to assert its right.
While it may be true that, in DBP, the Court ruled that in the particular situation here obtaining,
annotation of the disputed entry on the reconstituted originals of the certificates of title to which
it refers is entirely proper and justified, this does not mean, as respondents insist, that the ruling
therein applies exclusively to the factual milieu and the issue obtaining in said case, and not to
similar cases. There is nothing in the subject declaration that categorically states its pro hac
vice character. For in truth, what the said statement really conveys is that the current doctrine that
entry in the primary book produces the effect of registration can be applied in the situation
obtaining in that case since the registrant therein complied with all that was required of it, hence,
it was fairly reasonable that its acts be given the effect of registration, just as the Court did in the
past cases. In fact the Court there continued with this pronouncement:
To hold said entry ineffective, as does the appealed resolution, amounts to
declaring that it did not, and does not, protect the registrant (DBP) from claims
arising, or transactions made, thereafter which are adverse to or in derogation of
the rights created or conveyed by the transaction thus entered. That, surely, is a

result that is neither just nor can, by any reasonable interpretation of Section 56 of
Presidential Decree No. 1529 be asserted as warranted by its terms.[57]

What is more, in Autocorp Group v. Court of Appeals,[58] the pertinent DBP ruling was applied,
thereby demonstrating that the said ruling in DBP may be applied to other cases with similar
factual and legal issues, viz:
Petitioners contend that the aforecited case of DBP is not apropos to the case at
bar. Allegedly, in DBP, the bank not only paid the registration fees but also
presented the owners duplicate certificate of title. We find no merit in petitioners
posture x x x.
xxxx
Like in DBP v. Acting Register of Deeds of Nueva Ecija, the instrument involved
in the case at bar, is a sheriffs certificate of sale, We hold now, as we held therein,
that the registrant is under no necessity to present the owners duplicates of the
certificates of title affected, for purposes of primary entry, as the transaction
sought to be recorded is an involuntary transaction.
xxxx
x x x Such entry is equivalent to registration. Injunction would not lie
anymore, as the act sought to be enjoined had already become a fait accompli or
an accomplished act.[59]

Moreover, respondents stand on the non-applicability of the DBP case to other cases, absent any
statement thereof to such effect, contravenes the principle of stare decisis which urges that courts
are to apply principles declared in prior decisions that are substantially similar to a pending case.
[60]

Since entry of the certificate of sale was validly registered, the redemption period accruing to
respondents commenced therefrom, since the one-year period of redemption is reckoned from
the date of registration of the certificate of sale. [61] It must be noted that on April 16, 1991, the
sheriffs certificate of sale was registered and annotated only on the owners duplicate copies of
the titles and on April 16, 1992, the redemption period expired, without respondents having
redeemed the properties. In fact, on April 24, 1992, NHA executed an Affidavit of Consolidation
of Ownership. Clearly, respondents have lost their opportunity to redeem the properties in
question.

As regards respondents allegation on the defect in the publication and notice requirements of the
extrajudicial foreclosure sale, the same is unavailing. The rule is that it is the mortgagor who
alleges absence of a requisite who has the burden of establishing such fact. [62] This is so because
foreclosure proceedings have in their favor the presumption of regularity and the burden of
evidence to rebut the same is on the party who questions it. [63] Here, except for their bare
allegations, respondents failed to present any evidence to support them. In addition, NHA stated
in its Comment to Motion for Leave of Court to Intervene that it had complied with the
publication of the Notice of Sheriffs Sale in the Manila Times in the latters issues dated July 14,
21 and 28, 1990.[64] It also claimed that an Affidavit of Publication of said newspaper was
attached as Annex B in the said comment.[65] NHA also said that respondents had been furnished
with a copy of the Notice of Sheriffs Sale as shown at the bottom portion of said notice. [66] From
all these, it would tend to show that respondents aspersion of non-compliance with the
requirements of foreclosure sale is a futile attempt to salvage its statutory right to redeem their
foreclosed properties, which right had long been lost by inaction.
Considering that the foreclosure sale and its subsequent registration with the Register of Deeds
were done validly, there is no reason for the non-issuance of the writ of possession. A writ of
possession is an order directing the sheriff to place a person in possession of a real or personal
property, such as when a property is extrajudicially foreclosed. [67] Section 7 of Act No. 3135
provides for the rule in the issuance of the writ of possession involving extrajudicial foreclosure
sales of real estate mortgage, to wit:
Sec. 7. In any sale made under the provisions of this Act, the purchaser
may petition the [Regional Trial Court] of the province or place where the
property or any part thereof is situated, to give him possession thereof during
the redemption period, furnishing bond in an amount equivalent to the use of the
property for a period of twelve months, to indemnify the debtor in case it be
shown that the sale was made without violating the mortgage or without
complying with the requirements of this Act. Such petition shall be made under
oath and filed in the form of an ex parte motion in the registration or cadastral
proceedings if the property is registered, or in special proceedings in the case of
property registered under the Mortgage Law or under section one hundred and
ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of
deeds in accordance with any existing law, and in each case the clerk of the
court shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act Numbered Four
Hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred

and sixty-six, and the court shall, upon approval of the bond, order that a writ of
possession issue, addressed to the sheriff of the province in which the property
is situated, who shall execute said order immediately.

This provision of law authorizes the purchaser in a foreclosure sale to apply for a writ of
possession during the redemption period by filing an ex parte motion under oath for that purpose
in the corresponding registration or cadastral proceeding in the case of property
with Torrens title.[68] Upon the filing of such motion and the approval of the corresponding bond,
the law also in express terms directs the court to issue the order for a writ of possession.[69]
The time-honored precept is that after the consolidation of titles in the buyers name, for failure of
the mortgagor to redeem, the writ of possession becomes a matter of right. [70]Its issuance to a
purchaser in an extrajudicial foreclosure is merely a ministerial function. [71] The writ of
possession issues as a matter of course upon the filing of the proper motion and the approval of
the corresponding bond. The judge issuing the writ following these express provisions of law
neither exercises his official discretion nor judgment. [72] As such, the court granting the writ
cannot be charged with having acted without jurisdiction or with grave abuse of discretion. [73] To
accentuate the writs ministerial character, the Court disallowed injunction to prohibit its issuance
despite a pending action for annulment of mortgage or the foreclosure itself.[74]
Believing that the instant case does not come within the penumbra of the foregoing rule,
respondents resort to the ruling in Barican v. Intermediate Appellate Court.[75]Unfortunately for
them, the instant case does not even come close to the cited case. There, the Court deemed it
inequitable to issue a writ of possession in favor of the purchaser in the auction sale considering
that the property involved was already in the possession of a third person by virtue of a deed of
sale with assumption of mortgage even before the purchaser could register the sheriffs certificate
of sale. Also, the auction buyer therein unreasonably deferred to exercise its right to acquire
possession over the property. These circumstances are not present in the instant case.
Moreover, in Fernandez v. Espinoza,[76] the Court refused to apply the ruling in Barican v.
Intermediate Appellate Court[77] and Cometa v. Intermediate Appellate Court,[78] two cases which
are exemptions to the stated rule, reasoning that:
In Cometa, which actually involved execution of judgment for the prevailing
party in a damages suit, the subject properties were sold at the public auction at an
unusually lower price, while in Barican, the mortgagee bank took five years from
the time of foreclosure before filing the petition for the issuance of writ of

possession. We have considered these equitable and peculiar circumstances

in Cometa and Barican to justify the relaxation of the otherwise absolute rule.
None of these exceptional circumstances, however, attended herein so as to place
the instant case in the same stature as that of Cometa and Barican. Instead, the
ruling in Vaca v. Court of Appeals is on all fours with the present petition. In Vaca,
there is no dispute that the property was not redeemed within one year from the
registration of the extrajudicial foreclosure sale; thus, the mortgagee bank
acquired an absolute right, as purchaser, to the issuance of the writ of possession.
Similarly, UOB, as the purchaser at the auction sale in the instant case, is entitled
as a matter of right, to the issuance of the writ of possession.

Just as in Fernandez, this Court does not see any compelling reason to veer away from
the established rule.
In fine, this Court finds that the Court of Appeals committed reversible error in ruling that
the annotation of NHAs sheriffs certificate of sale on the duplicate certificates of title was not
effective registration and in holding that respondents redemption period had not expired.
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The
Amended Decision of the Court of Appeals dated November 27, 2000 is SET ASIDE.
SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice
WE CONCUR:

REYNATO S. PUNO
Chief Justice
Chairperson

ANTONIO T. CARPIO
Associate Justice

LUCAS P. BERSAMIN
Associate Justice

MARTIN S. VILLARAMA, JR.

Associate Justice

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in
the above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

SECOND DIVISION
REPUBLIC OF THE PHILIPPINES,
Petitioner,

G.R. No. 165114

Present:

QUISUMBING, J. Chairperson,
*
CORONA,
CARPIO MORALES,
VELASCO, JR., and
BRION, JJ.

versus -

MABELLE RAVELO and SPOUSES

EMMANUEL and PERLITA REDONDO,
Respondents.

Promulgated:
August 6, 2008

x -----------------------------------------------------------------------------------------x
DECISION

BRION, J.:

The State seeks in this Petition for Review on Certiorari[1] to secure the cancellation of title and
reversion of a real property granted to Mabelle Ravelo under a sales patent. Title to the property
has passed on to parties who now claim that they are innocent purchasers in good faith; thus their
claim cannot be defeated by any defect in the title of the original grantee.
The records show the pertinent facts summarized below.
On September 17, 1969, Jose Fernando filed a miscellaneous sales application over Lot No. 16,
Block 2 (subject lot) situated in Mabayuan Extension, Gordon Heights,Olongapo City. On June
10, 1970, he relinquished his right over the subject lot to Victoriano Mortera, Jr., who submitted
his own patent application. On June 13, 1983, one Severino Muyco also filed a miscellaneous
sales application for the same property.
The Department of Environment and Natural Resources (DENR)-Region III investigated the
conflict between the two applications. On May 31, 1989, it issued an order in favor of Jose
Fernando and Victoriano Mortera, Jr.
Prior to the DENRs action, specifically on February 16, 1989, the Director of Lands issued Sales
Patent No. 12458 covering the same subject lot to respondent Mabelle B. Ravelo (Ravelo). She
was subsequently issued Original Certificate of Title (OCT) No. P-4517 registered with the
Registry of Deeds of Olongapo City. In effect, the DENR-IIIs Order of May 31, 1989 in the
Fernando-Mortera-Muyco dispute was not enforced; on August 4, 1989 Jose Fernando filed a
protest against Ravelos title.
The petitioner Republic of the Philippines (petitioner), through the DENR-III Executive
Director, filed a complaint[2] for cancellation of title against Ravelo before the Olongapo
Regional Trial Court (RTC) on November 6, 1992. Assisted by the Office of the Solicitor
General (OSG), the petitioner asked for the cancellation of Ravelos OCT No. P-4517 and Sales
Patent No. 12458 on the allegation that the issuance of the patent by the Director of Lands
violated DENR Administrative Order (A.O.) No. 20 dated May 30, 1998. This A.O. mandates
that applications for sales patent should be filed with the DENR regional office that has
jurisdiction over the land applied for, not with the Director of Lands in Manila. Ravelos
application was filed with the Director of Lands in Manila although the subject lot is located
inOlongapo City; the application should have been filed with DENR-III in San Fernando,

Pampanga. The government also accused Ravelo of fraud for asserting in her application that the
land was not occupied and was a part of the public domain.
On March 24, 1994, a notice of lis pendens (indicating the pendency of the petitioners
complaint) was inscribed as Entry No. 7219 on Ravelos OCT No. P-4517.
In a separate development, one Antonio Chieng filed on December 13, 1989 a collection
suit against Ravelo before the RTC of Olongapo City, which suit led to a judgment against
Ravelo and the issuance of a writ of execution. The Notice of Levy was registered with the
Register of Deeds on March 17, 1993. In the auction sale that followed, Wilson Chieng (Chieng),
Antonio Chiengs son, won as highest bidder. A certificate of sale was issued to Chieng and the
sale was registered with the Olongapo Registry of Deeds on May 25, 1993.
The respondent-spouses Emmanuel and Perlita Redondo (Redondos), who own and reside in a
property adjacent to the subject lot, subsequently bought the subject lot from Chieng. The parties
first signed an agreement for the purchase of the subject lot on May 11, 1993, and upon payment
of the agreed purchase price, executed onDecember 20, 1993 a deed of absolute sale.
On September 23, 1994, the final deed of sale (dated June 26, 1994) covering the subject
lot in favor of Chieng was inscribed as Entry No. 2419 on OCT No. P-4517. On the same date,
Transfer Certificate of Title (TCT) No. T-7209 covering the subject lot was issued to
Chieng. Entry No. 7219 (the petitioners complaint for cancellation and reversion) was carried at
the back of Chiengs TCT No. T-7209.
Chieng and the Redondos entered into another deed of sale in the Redondos favor
on November 21, 1994. This deed was inscribed as Entry No. 7554 at the back of TCT T-7209
on December 20, 1994. On the same day, TCT No. T-7261 covering the subject lot was issued to
the Redondos.
In her Answer, Ravelo insisted that her application passed through the regular process; that she
had been in possession of the property from the time of her application; and that Mortera was
never in possession of the land.
The trial court received the governments evidence ex-parte after Ravelo failed to attend the trial.

On January 6, 1995, the Redondos intervened, alleging that they acquired the subject lot in good
faith and for value. Emmanuel Redondo testified that Antonio Chiengs son Wilson executed a
deed of sale dated December 20, 1993 in his and his wife Perlitas favor. After their purchase,
they secured a certification from the Bureau of Forestry declaring the land for taxation purposes.
The Trial Court Decision
On May 12, 1998, the RTC decided in the petitioners favor and cancelled Ravelos Sales
Patent No. 12458 and OCT No. P-4517, Chiengs TCT No. T-7209, and the Redondos TCT No.
T-7261. The court also ordered the reversion of the land to the mass of the public domain,
[3]
relying on the Bureau of Lands recommendation to cancel Ravelos title and patent for being
fraudulently obtained.It explained that the intervenors were not buyers in good faith because they
failed to inquire with the trial court whether other cases have been filed against Ravelo. It agreed
with the OSG that the land should revert to petitioner pursuant to Commonwealth Act (C.A.) No.
141 or the Public Land Act, as amended by Republic Act (R.A.) No. 6516[4] because it was sold in
a public auction within the period when the alienation of lands granted through sales patent is
prohibited.
The Court of Appeals Decision
The Court of Appeals, on the Redondos appeal docketed as CA-G.R. CV No. 60665, [5] reversed
and set aside the trial courts ruling and declared the Redondos as innocent purchasers in good
faith. The appellate court also declared the Redondos TCT No. T-7261 valid.[6]
The appellate court ruled that the Redondos were buyers in good faith because they and Chieng
entered their agreement for the purchase of the subject lot on May 11, 1993 and executed their
Deed of Sale on December 20, 1993, prior to the annotation of the notice of lis pendens on
March 24, 1994, and prior as well to any awareness by the Redondos of the existence of any flaw
in the vendors title. It explained that the Redondos conduct carried all the badges of propriety
and regularity as they verified the regularity of the title to the property with the proper registry of
deeds before buying it. Ravelos title, even if tainted with fraud, may be the source of a
completely legal and valid title in the hands of an innocent purchaser for value.
The Petition and the Parties Positions
The petitioner comes to this Court in the present petition to assail the
Court of Appeals decision and submits the following assigned errors:

I.
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
REVERSING THE DECISION OF THE TRIAL COURT[,]CANCELING THE
TITLES OF RESPONDENTS AND REVERTING [THE] SUBJECT LAND TO
THE MASS OF PUBLIC DOMAIN[,]ON THE GROUND THAT A
FRAUDULENT TITLE MAY NOT BE THE BASIS OF A VALID TITLE.
II.
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
DECLARING THAT RESPONDENTS REDONDO SPOUSES ARE
INNOCENT PURCHASERS IN GOOD FAITH AND FOR VALUE OF THE
PROPERTY.[7]
The petitioner argues that the innocent purchaser for value doctrine is inapplicable because the
mother title was procured through fraud. Specifically, Ravelos title could not have been the
source of valid titles for Chieng and the Redondos because it was void in the first place. Ravelos
failure to disclose in her patent application that Victoriano Mortera, Jr. was in possession of the
subject lot constituted fraud and misrepresentation -- grounds for the annulment of her title. If a
public land is acquired by an applicant through fraud and misrepresentation, the State may
institute reversion proceedings even after the lapse of one year.
The petitioner likewise contends that the Redondos as vendees cannot rely solely on the face of
the title as they did not transact directly with the registered owner; they transacted with Chieng
whose right to the property was based on a certificate of sale.Thus, the Redondos merely relied
on the certificate of sale instead of examining the title covering the subject lot. To be deemed a
buyer in good faith and for value, the vendee must at least see the registered owners duplicate
copy of the title and must have relied on it in examining the factual circumstances and in
determining if there is any flaw in the title. Petitioner finally notes that lis pendens was already
annotated on the title at the time the deed of sale was registered.
The respondent Redondos spouses counter they are not obliged by law to go beyond the
certificate of registration to determine the condition of the property. Any alleged irregularity in
the issuance of Ravelos OCT No. P-4517 cannot affect them since a patent issued
administratively has the force and effect of a Torrens Title under Act No. 496 (the Land
Registration Act) and partakes of the nature of a certificate of title issued in judicial
proceedings. At the time they purchased the property from Chieng with the execution of their
Agreement dated May 11, 1993, there was no encumbrance on OCT No. P-4517 except the
notice of levy and certificate of sale in favor of Chieng. They had full notice of the physical

condition of the land, and no adverse claim of ownership or possession existed when they
inspected the records of the Register of Deeds and of the City Assessor. Since their residence
adjoins the subject lot, they could attest that no one used the subject lot and no improvement has
been introduced showing that there was adverse possession by any party.[8]
Respondent Ravelo failed to file a comment.
Two issues are effectively submitted to us for resolution, namely:
1.

Whether there is basis for the cancellation of Ravelos original title and the
reversion of the subject lot to the public domain; and

2.

Whether the Redondos are innocent purchasers in good faith and for value,
whose title over the subject lot that could defeat the petitioners cause of action
for cancellation of title and reversion.

The Courts Ruling

We find the petition meritorious.
The Reversion Issue:
Misrepresentation in the Application
Under Section 91 of CA No. 141, the statements made in application shall be considered
essential conditions and parts of any concession, title or permit issued on the basis of such
application, and any false statement therein or omission of facts altering or changing or
modifying the consideration of the facts set forth in such statements . . . shall ipso facto produce
the cancellation of the concession, title, or permit granted. This provision is reinforced by
jurisprudential rulings that stress in no uncertain terms the consequences of any fraud or
misrepresentation committed in the course of applying for a land patent.[9]
The record shows that Ravelo, the grantee, limited herself in her Answer to the position
that the application passed through the regular process; that she had been in possession of the
property from the time of her application; and that Mortera was never in possession of the
land. Thereafter, Ravelo failed to attend trial and present evidence so that the lower court
received the governments evidence ex-parte. The Redondos, who intervened after title to the

property passed on to them, did not touch at all the misrepresentation aspect of the complaint on
the theory that, as purchasers in good faith, the misrepresentation of Ravelo cannot affect their
title.[10] Thus, the presence of fraud or misrepresentation was practically an issue that the Ravelo
and the Redondos conceded to the government.
This legal situation, notwithstanding, the Court of Appeals practically disregarded the
misrepresentation issue and followed the Redondos argument that the flaw in Ravelos title is
immaterial because they were purchasers in good faith of a titled property. This reasoning brings
to the fore the issues of good faith and of the annotations in the original certificate of title
including the notice of lis pendens that was registered on March 24, 1994.
The Good Faith Issue
The Court of Appeals approached the issue of good faith based mainly on its view that there had
been a perfected sale prior to the annotation of the notice of lis pendens. To the appellate court,
the Redondos purchased the subject lot prior to the annotation of the notice of lis pendens by the
petitioner, and were thus without knowledge or notice of any flaw in the title. To quote the
appellate court:
Wilson Chieng and the intervenors entered into said agreement prior to the annotation of
the notice of lis pendens on March 24, 1994. The consensual contract of sale was,
therefore, perfected on May 11, 1993, prior to any awareness on the part of the
intervenors as the existence of any flaw in the vendors title. Said agreement has
been duly notarized. There was a meeting of the minds between Wilson Chieng
and spouses Redondo; there is a determinate subject which is the land covered by
OCT P-4517 and a price certain in the sum of P85,000.00 which intervenors
agreed to pay Wilson Chieng. Intervenors are, thus, buyers in good faith and for
value under the contemplation of our laws. No evidence was presented by the
other parties to refute said fact. Neither was there any evidence introduced to
assail the genuineness and due execution of the agreement. It is a public
instrument which enjoys the presumption of regularity.

We find this approach to be simplistic as it disregards, among others, the nature of a sale
of registered real property, as well as other material and undisputed developments in the
case. For example, while the appellate court was correct in its general statement about the
perfection of a contract of sale, it did not take into account that the subject matter of the sale was
a registered land to which special rules apply in addition to the general rules on sales under the
Civil Code. Section 51 of Presidential Decree No. 1529 which governs conveyances of registered
lands provides:

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, leases 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 in
so far 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.
Thus, bereft of registration, any sale or transaction involving registered land operates only as a
contract between the parties and shall not affect or bind the registered property.
One material development that affected the subject lot as a registered property was the
notice of levy that the sheriff caused to be annotated in Ravelos OCT No. P-4517 on March 17,
1993 pursuant to the order of the court in the collection case filed by Antonio Chieng against
Ravelo. This was followed by the Certificate of Sale that was again annotated in Ravelos title
on May 25, 1993.
Another material development was the annotation of a notice of lis pendens onMarch 24, 1994 at
the instance of the government, to reflect the pendency of the States claim for cancellation of
title and the reversion of the subject lot against Ravelo.
Interestingly, the annotation of the levy in execution and the certificate of sale did not
merit any consideration in the decisions of both the trial and the appellate courts. We, however,
consider these developments material as they embody notices to the whole world of transactions
affecting the registered subject lot; they should be the starting point of any consideration of the
existence of good or bad faith of the parties dealing with the land. These annotations signify that
Chiengs purchase of the subject lot in the execution sale constituted a prior and superior
claim in time over the subject lot by any of the dramatis personae in the present case.
Thus, barring any defect in the sale itself and assuming that Chieng did not have any
prior knowledge, constructive or otherwise, of any defect in Ravelos title, Chieng has a prior
claim to the property that is protected by the fact of registration and by his status as an innocent
buyer in good faith and for value. The legal protection offered by registration under
the Torrens system compels us to recognize the validity of the claim of an innocent purchaser for

value despite any defect in the vendors title.[11] Likewise, it does not matter that the final deed of
sale and transfer of registration of the title to Chieng, as innocent purchaser for value at an
auction sale, occurred subsequent to the annotation of the intervening notice of lis pendens,as the
final deed of sale and transfer are the necessary consequences of the previously registered notice
of levy and certificate of sale.[12]
The Redondos came into the picture when they contracted with Chieng for their purchase
of the subject property. Their inspection of the records at the Registry of Deeds should have
confirmed to them that the subject lot was a registered land and that Chieng, their seller, was not
yet the registered owner, but one who merely had a sheriffs Certificate of Sale. Contrary to the
lower courts reading of the May 11, 1993 transaction between Chieng and the Redondos, what
Chieng sold was not the subject lot because he was not yet a registered owner who could
effectively convey the property at that point. What Chieng sold was his rights under a
Certificate of Sale on the property covered by Original Certificate of Title No. P-4517.
[13]
Significantly, this May 11, 1993 agreement was not registered nor annotated in OCT No. P4517 because it was technically a side agreement relating to but not directly affecting the
registered property, and was thus enforceable only between the parties Chieng and the
Redondos. Thus, the government cannot be effectively put on notice of the May 11,
1993 agreement when it registered its notice of lis pendens on March 24, 1994. Consequently,
too, the Redondos are differently situated in terms of the determination of their good faith and
cannot simply claim what Chieng can personally claim as innocent purchaser for value of the
subject lot at an execution sale.
To complete the whole picture of the series of developments involved, it was not until
September 23, 1994 that the final Bill of Sale dated June 26, 1994 in favor of Chieng was
inscribed as Entry No. 2419 on OCT No. P-4517. OCT No. P-4517 was thereafter cancelled and
TCT No. T-7209 in Chiengs name was issued (carrying the governments notice of lis pendens as
Entry No. 7219). It was only at this point that Chieng, as registered owner, could have sold or
could have done an act binding the subject lot. A deed of sale dated November 21, 1994 in favor
of the Redondos was inscribed at the back of Chiengs TCT No. T-7209 on December 20,
1994. On the same day, TCT No. T-7261 in the Redondos name was issued, still carrying the lis
pendens Entry No. 7219.[14]
From these perspectives, we cannot see how the Redondos could have been purchasers in
good faith in May 1993 when they were not even purchasers of the subject lot at that
point. Specifically, it was not until Chieng and the Redondos executed their November 21,
1994 deed of sale over the subject lot that they had a contract of sale that would have served

as evidence of authority to the Register of Deeds to make registration. It was only then when
a sale of real property by a registered owner was concluded where good faith or bad faith on the
part of the buyer would have mattered but at that point a notice of lis pendens had already been
annotated.
The Notice of Lis Pendens
Lis pendens literally means a pending suit, while a notice of lis pendens, inscribed in the
certificate of title, is an announcement to the whole world that the covered property is in
litigation, serving as a warning that one who acquires interest in the property does so at his own
risk and subject to the results of the litigation.[15]This is embodied in Section 76 of Presidential
Decree (P.D.) No. 1529 which provides that no action to recover possession of real estate, or to
quiet title thereto, or to remove clouds upon the title thereof, or for partition, or other
proceedings of any kind in court directly affecting the title to land or the use or occupation
thereof or the buildings thereon, and no judgment, and no proceeding to vacate or reverse any
judgment, shall have any effect upon registered land as against persons other than the parties
thereto, unless a memorandum or notice stating the institution of such action or proceeding and
the court wherein the same is pending, as well as the date of the institution thereof, together with
a reference to the number of the certificate of title, and an adequate description of the land
affected and the registered owner thereof, shall have been filed and registered. The notice that
this provision speaks of the notice of lis pendens is not a lien or encumbrance on the property,
but simply a notice to prospective buyers or to those dealing with the property that it is under
litigation.[16]
As our above discussion shows, the governments notice of lis pendens came after the execution
sale and thus cannot affect Chieng and the conveyance to him of the subject lot. However, the
notice affects all transactions relating to OCT No. P-4517 subsequent to its registration
date March 24, 1994. From that date, there was a binding notice to the whole world that any
subsequent claim on OCT No. P-4517 would be subject to the annotated pending
action. Specifically, the sale by Chieng to the Redondos of the subject lot on December 20,
1994 was subject to the notice of lis pendens duly annotated on Chiengs title.
Cancellation and Reversion

Separately from the misrepresentation that tainted Ravelos sales patent, the RTC decision points
to a supervening cause for cancellation and reversion that transpired after the filing of the
petitioners complaint on November 6, 1992 the sale on execution of the subject lot. According to
the RTC, this was sale prohibited under Section 29 of the CA No. 141 since it was made within
ten years from the grant of the patent [17] and should have the legal effect of voiding the sale on
execution of the subject lot.
We disagree with this conclusion as the applicable law in the sale of land of the public
domain for residential purposes is R.A. No. 730,[18] as amended by P.D. No. 2004.[19] While R.A.
No.730 originally carried the same prohibition that Sec. 29 of CA No. 141 has, P.D. No. 2004
dated December 30, 1985 removed this prohibition for lands sold for residential purposes under
R.A. No. 730. Thus, the execution sale of the subject lot in 1993 was undertaken without any
attendant legal impediment.
Conclusion
In sum, we hold that the Court of Appeals erred in concluding that the Redondos were buyers in
good faith. They purchased the subject lot from Chieng subject to the governments notice
of lis pendens; hence, their purchase was at the risk of the outcome of the States complaint for
cancellation and reversion which we find to be meritorious. The subject lot must therefore revert
back to the public domain.
WHEREFORE, premises considered, we GRANT the petition. We REVERSE the
decision of the Court of Appeals in CA-G.R. CV No. 60665 and accordingly DECLARE
VOID respondent Mabelle B. Ravelos Miscellaneous Sales Patent No. 12458 and OCT No. P4517. We likewise order the CANCELLATIONof Transfer Certificate of Title No. T-7261
issued in the name of Emmanuel and Perlita Redondo and the REVERSION to the mass of the
public domain of the property it covers Lot 16, Block 2, located in Mabayuan
Extension, Gordon Heights,Olongapo City.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

RENATO C. CORONA
Associate Justice

CONCHITA CARPIO MORALES

Associate Justice

PRESBITERO J. VELASCO, JR.

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division

LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons
Attestation, it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

Designated additional member of the Second Division per Special Order No. 512 dated July 16,
2008.

[1]

Filed pursuant to Rule 45 of the Revised Rules of Court.

[2]

Rollo, pp. 43-48.

[3]

Id., pp. 49-62.

[4]

An Act providing for the Sale of Agricultural Public Lands and Authorizing Land Officers in
Every Province of the Bureau of Lands to Sign Patents or Certificates Covering Lands not
Exceeding Five hectares, further Amending for the Purpose Commonwealth Act No. 141.

[5]

Dated August 24, 2004, with Associate Justice Arcangelita M. Romilla-Lontok as ponente, and
Associate Justice Rodrigo V. Cosico and Associate Justice Danilo B. Pine (both retired),
concurring.

[6]

Rollo, pp 36-42.

[7]

Id., p. 19.

[8]

Respondent-spouses Comment; id., pp. 67-79.

[9]

See Heirs of Carlos Alcaraz v. Republic of the Philippines, et al., G.R. No. 131667, July 28,
2005, 464 SCRA 280; Republic of the Philippines v. Heirs of Felipe Alejaga, Sr., et al., G.R.
No. 146030, December 3, 2002, 393 SCRA 361; Republic of the Philippines v. de Guzman,
G.R. No. 105630, February 23, 2000, 326 SCRA 267; Baguio v. Republic of the Philippines,
G.R. No. 119682, January 21, 1999, 301 SCRA 450.

[10]

See RTC Decision, p. 7; rollo, p. 55.

[11]

Cruz v. Court of Appeals, G.R. No. 120122, November 6, 1997, 281 SCRA 491.

[12]

Prineda v. Court of Appeals, G.R. No. 114172, August 25, 2003, 409 SCRA 438.

[13]

Court of Appeals Decision, p. 5; rollo, p. 40.

[14]

Id.,pp. 38 -39.

[15]

Heirs of Eugenio Lopez, Sr. v. Enriquez, G.R. No. 146262, January 21, 2005, 449 SCRA
173; Legarda v. Court of Appeals, G.R. No. 94457, October 16, 1997, 280 SCRA 642.

[16]

People v. Regional Trial Court of Manila, G.R. No. 81541, October 4, 1989, 178 SCRA 299.

[17]

Section 29. After title has been granted, the purchaser may not, within a period of ten years
from such cultivation or grant, convey or encumber or dispose said lands or rights thereon to
any person, corporation or association, without prejudice to any right or interest of the
Government in the land; Provided, That any sale and encumbrance made in violation of the
provisions of this section, shall be null and void and shall produce the effect of annulling the
acquisition and reverting the property and all rights thereto to the State, and all payments on
the purchase price therefore made to the Government shall be forfeited (As amended by Rep.
Act No. 6516)
[18]
Republic Act No. 730 An Act to Permit the Sale without Public Auction of Public Lands of
the Republic of the Philippines for Residential Purposes to Qualified Applicants under
Certain Conditions.
SECTION 1. Notwithstanding the provisions of sections sixty-one and sixty-seven of
Commonwealth Act Numbered One hundred forty-one, as amended by Republic Act
Numbered Two hundred ninety-three, any Filipino citizen of legal age who is not the owner

of a home lot in the municipality or city in which he resides and who has in good faith
established his residence on a parcel of the public land of the Republic of the Philippines
which is not needed for the public service, shall be given preference to purchase at a private
sale of which reasonable notice shall be given to him not more than one thousand square
meters at a price to be fixed by the Director of Lands with the approval of the Secretary of
Agriculture and Natural Resources. It shall be an essential condition of this sale that the
occupants has constructed his house on the land and actually resided therein. Ten per cent of
the purchase price shall be paid upon the approval of the sale and the balance may be paid in
full, or in ten equal annual installments.
SECTION 2. Except in favor of the Government or any of its branches, units, or institutions
lands acquired under the provisions of this Act shall not be subject to encumbrance or
alienation before the patent is issued and for a term of ten years from the date of the issuance
of such patent, nor shall they become liable to the satisfaction of any debt contracted prior to
the expiration of said period. No transfer or alienation made after the said period of ten years
and within fifteen years from the issuance of such patent except those made by virtue of the
right of succession shall be valid unless when duly authorized by the Secretary of Agriculture
and Natural Resources and the transferee or vendee is a Filipino citizen. Every conveyance
made shall be subject to repurchase by the original purchaser or his legal heirs within a
period of five years from the date of conveyance.
Any contract or agreement made or executed in violation of this section shall be void ab
initio.
SECTION 3. The provisions of the Public Land Act with respect to the sale of lands for
residential purposes which are not inconsistent herewith shall be applicable.
SECTION 4. This Act shall take effect upon its approval.
Approved: June 18, 1952; Published in the Official Gazette, Vol. 48, No. 7 in July 1952
[19]

P.D. No. 2004 Amending Section Two of Republic Act 730 relative to the Sale without Public
Auction of Public Lands of the Republic of the Philippines for Residential Purposes to
Qualified Applicants under Certain Conditions.
WHEREAS, Republic Act No. 730 permits the sale without public auction of public
lands of the Republic of the Philippines for residential purposes to qualified applicants under
certain conditions;
WHEREAS, land required thereunder are subject to onerous restrictions against
encumbrance or alienation;
WHEREAS, it is necessary to remove these onerous restrictions to allow the effective
utilization of these lands.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,

pursuant to the powers vested in me by the Constitution, do hereby decree:
SECTION 1. Section Two of Republic Act Numbered Seven Hundred and Thirty is hereby
amended to read as follows:
"Sec. 2. Lands acquired under the provisions of this Act shall not be subject
to any restrictions against encumbrance or alienation before and after
the issuance of the patents thereon."
SECTION 2. This Decree shall take effect immediately.
IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the
Republic of thePhilippines to be affixed.
DONE in the City of Manila, this 30th day of December, in the year of Our Lord,
Nineteen Hundred and Eighty-Five.

THIRD DIVISION
ARMED FORCES AND POLICE
MUTUAL BENEFIT ASSOCIATION,
INC.,

G.R. No. 147559

Present:

Petitioner,
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus -

CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:

INES BOLOS SANTIAGO,

Respondent.

June 27, 2008

x------------------------------------------------------------------------------------x

DECISION
NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule

45 of the Rules of Court assailing the Decision [1] dated July 31,
2000 and the Resolution[2] datedMarch 15, 2001 of the Court of
Appeals (CA).

The Facts of the Case

The antecedent facts, as culled by the CA from the findings of the

Land Registration Authority (LRA), are as follows:
This refers to a Notice of Levy on Attachment on Real Property
dated September 12, 1994, issued in Civil Case No. Q-92-11198
entitled The Armed Forces of the Philippines Mutual Benefit
Association, Inc., Plaintiff, vs. Eurotrust Capital Corporation, Elsa B.
Reyes, Rene M. Reyes, Celedonio N. Reyes, Digna Blanca, Fernando C.
Francisco, Ma. Cristina C. Cornista, EBR Realty Corporation and B.E.
Ritz Mansion International Corporation, Defendants, Regional Trial
Court, Branch 216, Quezon City, levying all the rights, claims, shares,
interests and participation of EBR Realty Corporation in the real
property covered by Transfer Certificate of Title No. PT-79252.

On September 14, 1994, the Notice of Levy was presented for

registration in the Registry of Deeds of Pasig City. The Notice was
entered in the Primary Entry Book under Entry No. PT-1305. However, it
was not annotated on TCT No. PT-79252 because the original copy of
said title on file in the Registry of Deeds was not available at that
time. Aniana Estremadura, the employee who examined the notice of
levy, kept the said document in the meantime hoping some later days
said title may be found as at the time we were yet in turmoil or in
disarray having just transferred from our old office.

On September 20, 1994 or six (6) days after the presentation of the
Notice of Levy, a Deed of Absolute Sale dated February 24, [1994],
executed by EBR Realty Corporation in favor of Ines B. Santiago
involving the same parcel of land covered by TCT No. PT-97252 was
presented for registration and entered under Entry No. PT-1653. The
deed of sale was examined by the same employee who examined the
notice of levy, but she failed to notice that the title subject of the sale
was the same title which was the subject of the notice of levy earlier
presented. Unaware of the previous presentation of the notice of levy,
the Register of Deeds issued TCT No. PT-94912 in the name of vendee
Ines B. Santiago on the basis of the deed of sale. It was only after the
Register of Deeds had already acted on the said deed of sale that
Aniana Estremadura informed him of the presentation of the notice of
levy. (Ltr. dated October 24, 1994 of the Register of Deeds to Ms. Ines
B. Santiago).

Nevertheless, when the Register of Deeds discovered the error he

immediately sent a letter dated October 24, 1994 to Ms. Ines B.
Santiago requesting her to surrender the documents, particularly the
deed of sale and owners duplicate of TCT No. PT-94912 so that he can
take appropriate rectification or correction. Ms. Santiago refused to
surrender the documents and owners duplicate of said title saying that
it was your office that caused this confusion so I do not see an iota of
reason why I should be implicated in this kind of mess. This prompted
the Register of Deeds to file a Manifestation dated November 11,
1995 in Civil Case No. Q-92-11198 informing the court of the foregoing
circumstances and praying that the Register of Deeds be authorized to
annotate on TCT No. PT-94912 the Notice of Levy on Attachment of
Real Property.

Since the court has not yet issued any order on the matter, the
Register of Deeds is now asking if he may proceed with the annotation
of the Notice of Levy on the original copy of TCT No. PT-94912 or wait
for the order of the court.[3]

On May 28, 1997, acting on the consulta by the Registry of Deeds

of Pasig City on the propriety of annotating the notice of levy on
attachment on Transfer Certificate of Title (TCT) No. PT-94912, the
LRA issued a Resolution,[4] the fallo of which reads:
WHEREFORE, premises considered, this Authority is of the opinion and
so holds that the subject Notice of Levy cannot be annotated on TCT
No. PT-94912, except by order of the court.

SO ORDERED.[5]

Petitioner filed a motion for reconsideration. On October 12, 1998,

the LRA issued an Order [6] denying the motion for reconsideration
for lack of merit.

On appeal to the CA, petitioner submitted the following grounds in

support of its contention that a court order is not necessary in
order that the notice of levy on attachment may be annotated on
TCT No. PT-94912: (1) the notice of levy on attachment in favor of
petitioner was registered in the primary entry book before the
deed of absolute sale in favor of respondent and such involuntary
registration already binds the land subject of TCT No. PT-94912;
(2) respondent is not an innocent purchaser for value because she
had actual and constructive knowledge of the issuance of the
notice of levy on attachment dated September 12, 1994; (3) the
annotation of the notice of levy on attachment does not constitute

an alteration,amendment or revocation of TCT No. PT-94912; and

(4) the LRA decision requiring a court order before petitioners
attachment lien can be annotated on TCT No. PT-94912 is
tantamount to penalizing petitioner for the irregularities
committed by the Pasig Registry of Deeds.

On July 31, 2000, the CA dismissed the petition. The pertinent

portions of the Decision read:
Records of the case disclose that at the time the levy on attachment in
issue was inscribed in the Primary Entry Book on September 14, 1994,
the property covered by Transfer Certificate of Title No. PT-79252 in the
name of ERB Realty Corporation had already been previously sold to
private respondent Santiago on February 24, 1994. With this in mind, it
cannot be said at once that respondent Santiago is not a buyer in good
faith and for value. To assume this position is too preposterous,
premature and dangerously unprocedural since at the time of such
sale, the inscription has not been done as yet.

Furthermore, Transfer Certificate of Title No. PT-94912 may undeniably

be derived from Transfer Certificate of Title No. PT-79252, yet, to allow
the inscription of the levy on attachment on TCT No. PT-94912 would
be levying on a property not owned by anyone of the defendants in
this (sic) main civil case. Albeit Ines Bolos Santiago is a sister of Elsa
Bolos Santiago (a defendant in the civil case), the fact still remains that
respondent Santiago is not one of the defendants in the suit.

Upon the other hand, to allow the inscription of the controversial levy
on attachment upon the title of respondent Santiago will be
tantamount to prematurely declaring her as a buyer in bad faith of the
property. Such controversy is substantially a judicial issue over which
the Registry of Deed nor the Land Registration Authority has no
jurisdiction. Verily, on a mere Consulta, the Land Registration Authority
could not rule on such issue on whether or not a registered owner is a
buyer in good faith or not. Only our ordinary courts have that exclusive
jurisdictional prerogative to try and decide such controversy. In fine,
the question of whether or not the conveyance was made to defraud
[the] creditor of the transferor should be left for determination of the
proper court. There is much danger in giving this authority to the

Register of Deeds without judicial intervention as there would be

injustice in the suggested frustrations of a judicial victory for a party to
the case. (In re: Consulta of Vicente J. Francisco on behalf of Cabantug,
67 Phil. 222, Pea on Land Titles, supra, p. 112).

In sum, We find no error in the challenged resolutions of the Land

Registration Authority.

IN VIEW OF ALL THE FOREGOING, the instant petition for review is

ordered DISMISSED. No pronouncement as to costs.

SO ORDERED.[7]

Petitioner filed a motion for reconsideration; however, the same

was denied in a Resolution dated March 15, 2001. Hence, this
petition.

The Issues to Be Resolved

I. Whether the notice of levy on attachment may be annotated on

TCT No. PT-94912;

II. Whether a declaration from the court that respondent is a

purchaser in bad faith is necessary before the notice of levy on
attachment may be annotated on TCT No. PT-94912; and

III. Whether a court order is necessary in order that the notice of

levy on attachment may be annotated on TCT No. PT-94912.

The Ruling of the Court

I

The notice of levy on attachment in favor of petitioner may be

annotated on TCT No. PT-94912. Levin v. Bass[8] provided the
distinction between voluntary registration and involuntary
registration. In voluntary registration, such as a sale,
mortgage, lease and the like, if the owner's duplicate certificate
be not surrendered and presented or if no payment of registration
fees be made within fifteen (15) days, entry in the day book of the
deed of sale does not operate to convey and affect the land sold.
In involuntary registration, such as an attachment, levy upon
execution, lis pendens and the like, entry thereof in the day book
is a sufficient notice to all persons of such adverse claim. [9]

The entry of the notice of levy on attachment in the primary entry

book or day book of the Registry of Deeds on September 14,
1994 is sufficient notice to all persons, including the respondent,
that the land is already subject to an attachment. The earlier
registration of the notice of levy on attachment already binds the
land insofar as third persons are concerned. The fact that the
deed of absolute sale was datedFebruary 24, 1994 is of no
moment with regard to third persons.

Sections 51 and 52 of the Property

(Presidential Decree [P.D.] 1529) provide:

Registration

Decree

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, leases 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 Registry 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 f the Register
of Deeds for the province or city where the land lies. (Emphasis
supplied.)

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.

Under the aforesaid provisions, the act of registration is the

operative act to convey or affect the land insofar as third persons
are concerned.[10] Constructive notice is also created upon
registration of every conveyance, mortgage, lease, lien,
attachment, order, judgment, instrument or entry affecting
registered land.

In this case, the preference created by the levy on attachment is

not diminished by the subsequent registration of the prior sale to
respondent. The attachment that was registered before the sale
takes precedence over the latter. [11] Superiority and preference in
rights are given to the registration of the levy on attachment;
although the notice of attachment has not been noted on the
certificate of title, its notation in the book of entry of the Register

of Deeds produces all the effects which the law gives to its
registration or inscription.

II

Respondent cannot be considered an innocent purchaser for

value. Under the rule of notice, it is presumed that the purchaser
has examined every instrument of record affecting the title. Such
presumption is irrebuttable. He is charged with notice of every
fact shown by the record and is presumed to know every fact
shown by the record and to know every fact which an examination
of the record would have disclosed. This presumption cannot be
overcome by proof of innocence or good faith. Otherwise, the very
purpose and object of the law requiring a record would be
destroyed. Such presumption cannot be defeated by proof of want
of knowledge of what the record contains any more than one may
be permitted to show that he was ignorant of the provisions of the
law. The rule that all persons must take notice of the facts which
the public record contains is a rule of law. The rule must be
absolute; any variation would lead to endless confusion and
useless litigation.[12] For these reasons, a declaration from the
court that respondent was in bad faith is not necessary in order
that the notice of levy on attachment may be annotated on TCT
No. PT-94912.

The fact that the notice of levy on attachment was not annotated
on the original title on file in the Registry of Deeds, which resulted
in its non-annotation on TCT No. PT-94912, should not prejudice
petitioner. As long as the requisites required by law in order to
effect attachment are complied with and the appropriate fees
duly paid, attachment is duly perfected. The attachment already
binds the land. This is because what remains to be done lies not

within the petitioners power to perform but is a duty incumbent

solely on the Register of Deeds.

III

The Administrator of the LRA did not commit a reversible error in

referring to the court the propriety of annotating the notice of
levy on attachment. Section 71 of PD 1529 is the controlling law
on the matter, viz.:
SEC. 71. Surrender of certificate in involuntary dealings. If an
attachment or other lien in the nature of involuntary dealing in
registered land is registered, and the duplicate certificate is not
presented at the time of registration, the Register of Deeds shall,
within thirty-six hours thereafter, send notice by mail to the registered
owner, stating that such paper has been registered, and requesting
him to send or produce his duplicate certificate so that a memorandum
of the attachment or other lien may be made thereon. If the owner
neglects or refuses to comply within a reasonable time, the Register of
Deeds shall report the matter to the court, and it shall, after notice,
enter an order to the owner, to produce his certificate at a time and
place named therein, and may enforce the order by suitable
process. (Emphasis supplied.)

In this case, since respondent refuses to surrender the owners

duplicate certificate so that the attachment lien may be
annotated, a court order is necessary in order to compel the
respondent to surrender her title. As a rule, the functions of the
Register of Deeds are generally regarded as ministerial and said
officer has no power to pass upon the legality of an order issued
by a court of justice.[13]

WHEREFORE, in view of the foregoing, the Decision of the Court

of Appeals in CA-G.R. SP No. 50923 is hereby REVERSED AND
SET ASIDE. The Register of Deeds of Pasig City is hereby ordered
to annotate in the original copy of Transfer Certificate of Title No.
PT-97252 the notice of levy on attachment dated September 12,
1994, issued in Civil Case No. Q-92-11198. Respondent is ordered
to surrender the owners duplicate certificate of Transfer
Certificate of Title No. PT-97252 for the proper annotation of the
aforesaid notice of levy on attachment.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA. ALICIA AUSTRIA-

MINITA V. CHICO-

MARTINEZ

NAZARIO

Associate Justice

Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision were reached
in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the
Division Chairperson's Attestation, I certify that the conclusions in
the above Decision had been reached in consultation before the

case was assigned to the writer of the opinion of the Courts

Division.

REYNATO S. PUNO
Chief Justice