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VOL. 153, AUGUST 31, 1987 435
Philippine National Bank vs. Court of Appeals
*
No. L-57757. August 31, 1987.
PHILIPPINE NATIONAL BANK, petitioner, vs. THE
HONORABLE COURT OF APPEALS, PRAGMACIO VITUG
AND MAXIMO VITUG, respondents.
Civil Law; Land Registration; Mortgage; The PNB had the right to
rely on what appears in the certificate of title where on its face the
properties are owned by the mortgagor, and there is no reason to doubt the
status of the registered owner and her ownership thereof.—When the
subject properties were mortgaged to the PNB they were registered in the
name of Donata Montemayor, widow. Relying on the torrens certificate of
title covering said properties the mortgage loan applications of Donata were
granted by the PNB and the mortgages were duly constituted and registered
in the office of the Register of Deeds. In processing the loan applications of
Donata Montemayor, the PNB had the right to rely on what appears in the
certificates of title and no more. On its face the properties are owned by
Donata Montemayor, a widow. The PNB had no reason to doubt nor
question the status of said registered owner and her ownership thereof.
Indeed, there are no liens and encumbrances covering the same.
Same; Same; Same; Same; Rule that a person dealing with a registered
land has a right to rely upon the face of the Torrens certificates of title and
to dispense with the need of inquiring further; Exception.—The well-known
rule in this jurisdiction is that a person dealing with a registered land has a
right to rely upon the f ace of the torrens certificate of title and to dispense
with the need of inquiring further, except when the party concerned has
actual knowledge of facts and circumstances that would impel a reasonably
cautious man to make such inquiry.
Same; Same; Same; Same; Same; A Torrens title concludes all
controversies over ownership of the land covered by a final decree of
registration.—A torrens title concludes all controversy over ownership of
the land covered by a final decree of registration. Once the title is registered
the owner may rest assured without the necessity of stepping into the portals
of the court or sitting in the mirador de su casa to avoid the possibility of
losing his land.
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* FIRST DIVISION.
436
436 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Court of Appeals
Same; Same; Same; Property; Presumption of conjugality, not a case
of; When the property is registered in the name of a spouse only and there is
no showing as to when the property was acquired by said spouse, the
property belongs exclusively to said spouse; Presumption under Art 160 of
the Civil Code cannot prevail when the title is in the name of only one
spouse and the rights of innocent third parties are involved.—The
presumption applies to property acquired during the lifetime of the husband
and wife. In this case, it appears on the face of the title that the properties
were acquired by Donata Montemayor when she was already a widow.
When the property is registered in the name of a spouse only and there is no
showing as to when the property was acquired by said spouse, this is an
indication that the property belongs exclusively to said spouse. And this
presumption under Article 160 of the Civil Code cannot prevail when the
title is in the name of only one spouse and the rights of innocent third parties
are involved.
Same; Same; Same; Same; PNB is a mortgagee in good faith as it was
not aware that at the time the mortgages were constituted there was a flaw
of the mortgagor's title.—The PNB had a reason to rely on what appears on
the certificates of title of the properties mortgaged. For all legal purposes,
the PNB is a mortgagee in good faith for at the time the mortgages covering
said properties were constituted the PNB was not aware to any flaw of the
title of the mortgagor.
Same; Same; Same; Same; Parties; Although actions for recovery of
real property and for partition are real actions, they are actions in
personam that bind only the particular individuals who are parties thereto;
PNB, not being a party to the cases earlier decided nor aware of said
decisions, it is not bound by said decisions; PNB was a purchaser for value
in good faith, when the properties were sold at public auction.—At any rate,
although actions for recovery of real property and for partition are real
actions, however, they are actions in personam that bind only the particular
individuals who are parties thereto. The PNB not being a party in said cases
is not bound by the said decisions, Nor does it appear that the PNB was
aware of the said decisions when it extended the above described mortgage
loans. Indeed, if the PNB knew of the conjugal nature of said properties it
would not have approved the mortgage applications covering said properties
of Donata Montemayor without requiring the consent of all the other heirs
or co-owners thereof. Moreover, when said properties were sold at public
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auction, the PNB was a purchaser for value in good faith so its right thereto
is beyond question.
437
VOL. 153, AUGUST 31, 1987 437
Philippine National Bank vs. Court of Appeals
Same; Same; Same; Same; Estoppel; Laches; Respondents are in
estoppel when they never raised the conjugal nature of the property nor took
issue as to the ownership of their mother; For failure of respondents to
assert their rights over the property, respondents are guilty of laches.—
Pragmacio and Maximo Vitug are now estopped from questioning the title
of Donata Montemayor to the said properties. They never raised the
conjugal nature of the property nor took issue as to the ownership of their
mother, Donata Montemayor, over the same. Indeed private respondents
were among the defendants in said two cases wherein in their answers to the
complaint they asserted that the properties in question are paraphernal
properties belonging exclusively to Donata Montemayor and are not
conjugal in nature. Thus they leased the properties from their mother Donata
Montemayor for many years knowing her to be the owner. They were in
possession of the property for a long time and they knew that the same were
mortgaged by their mother to the PNB and thereafter were sold at public
auction, but they did not do anything. It is only after 17 years that they
remembered to assert their rights. Certainly, they are guilty of laches.
PETITION for certiorari to review the decision of the Court of
Appeals.
The facts are stated in the opinion of the Court.
GANCAYCO, J.:
Does the presumption of conjugality of properties acquired by the
spouses during coverture provided for in Article 160 of the Civil
Code apply to property covered by a Torrens certificate of title in the
name of the widow? This is the issue posed in this petition to review
on certiorari of the decision of the Court of Appeals in CA-G.R.
**
No.
60903 which is an action for reconveyance and damages.
On November 28, 1952, Donata Montemayor, through her son,
Salvador M. Vitug, mortgaged to the Philippine National Bank
(PNB) several parcels of land covered by Transfer Certificate of
Title (TCT) No. 2289—Pampanga to guarantee the loan granted by
the PNB to Salvador Jaramiila and Pedro
______________
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** Penned by Mr. Justice Porfirio V. Sison, and concurred in by Messrs. Justices
Juan Sison and Elias B. Asuncion.
438
438 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Court of Appeals
Bacani in the amount of P40,900.00 which was duly registered in
the Office of the Register of Deeds of Pampanga.1 *
On December 1, 1963, Donata Montemayor also mortgaged in
favor of PNB certain properties covered by TCT Nos. 2887 and
2888—Pampanga to guarantee the payment of the loan account of
her son Salvador Vitug in the amount of P35,200.00, which
mortgage 2was duly registered in the Register of Deeds of
Pampanga.
The above-mentioned Transfer Certificates of Titles covering
said properties were all in the name of Donata Montemayor, of legal
age, Filipino, widow and a resident
3
of Lubao, Pampanga at the time
they were mortgaged
4
to PNB and were free from all liens and
encumbrances.
Salvador Vitug failed to pay his account so the bank foreclosed
the mortgaged properties covered by TCT Nos. 2887 and 2888.
They were sold at public auction on May 20,1968 in which the PNB
was the highest bidder. The titles thereto were thereafter
consolidated in the name of PNB.
Likewise, Salvador Jaramilla and Pedro Bacani failed to settle
their accounts with the PNB so the latter foreclosed the properties
covered by TCT No. 2889 which were sold at public auction and
likewise PNB was the buyer thereof. On August 30, 1968, a
certificate of sale was issued by the Register of Deeds covering said
properties in favor of the PNB. When the title 5
of the PNB was
consolidated a new title was issued in its name.
On September 2,1969, the PNB sold the properties covered by
TCT Nos. 2887 and 2888-Pampanga to Jesus M. Vitug, Anunciacion
V. de Guzman, Prudencia V. Fajardo, Salvador Vitug and Aurora V.
Gutierrez in those names the correspond-
_____________
1 Annex 2, Answer of PNB, Record on Appeal; par. 11, Partial Stipulation of
Facts, p. 139; Record on Appeal.
2 Annex 1, Answer of PNB, Record on Appeal; par. 17, Partial Stipulation of
Facts, pp. 141-142, supra.
3 Par. 16, Partial Stipulation of Facts, p. 141, supra.
4 Par. 18, Partial Stipulation of Facts, p. 142, supra.
5 Pars. 12, 13, 19, 20, 21, and 22, Partial Stipulation of Facts, pp. 139-144, supra.
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439
VOL. 153, AUGUST 31, 1987 439
Philippine National Bank vs. Court of Appeals
6
ing titles were issued.
During the lifetime of Clodualdo Vitug he married two times. His
first wife was Gervacia Flores with whom he had 3 children, namely,
Victor, Lucina and Julio all surnamed Vitug. Victor now dead is
survived by his 5 children: Leonardo, Juan, Candido, Francisco and
Donaciano, all surnamed Vitug. Juan Vitug is also dead and is
survived by his only daughter Florencia Vitug.
The second wife of Clodualdo Vitug was Donata Montemayor
with whom he had 8 children, namely, Pragmacio, Maximo, Jesus,
Salvador, Prudencio and Anunciacion, all surnamed Vitug, the late
Enrique Vitug represented by his wife Natalia Laquian, and the late
Francisco Vitug who is survived by 11 children, namely, Antonio,
Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno,
Eligio, Jesus and Luz.
Clodualdo Vitug died intestate on May 20,1929 so his estate was
settled and distributed in Special Proceeding No. 422 in the Court of
First Instance of7
Pampanga wherein Donata Montemayor was the
Administratrix.
Meanwhile, on May 12, 1958, Donata Montemayor executed a
contract of lease of Lot No. 24, which is covered by TCT No. 2887-
R in favor of her children Pragmacio and Maximo both surnamed
Vitug. This lease was extended on August 31, 1963. By virtue of a
general power of attorney executed by Donata Montemayor on Sept.
19, 1966 in favor of Pragmacio Vitug, the latter executed a contract8
of lease on Sept. 19, 1967 of the said lot in f avor of Maximo Vitug.
On March 21, 1970 Pragmacio Vitug and Maximo Vitug filed an
action for partition and reconveyance with damages in the Court of
First Instance of Pampanga against Marcelo Mendiola, special
administrator of the intestate estate of Donata Montemayor who died
earlier, Jesus Vitug, Sr.,
______________
6 Pars. 6 to 10 and 11, Partial Stipulation of Facts, pp. 124, 125 and 139, Record
on Appeal.
7 Pars. 22, 23 and 24, Partial Stipulation of facts, pp. 144-145, Record on Appeal.
8 Pars. 5, 6, 7, 8, 15, pp. 136-140, supra.
440
440 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Court of Appeals
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Salvador, Natalia, Prudencia, Anunciacion, all surnamed Vitug,
Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo,
Benigno, Eligio, Jesus and Luz, all surnamed Fajardo and the PNB.
The subject of the action is 30 parcels of land which they claim
to be the conjugal property of the spouses Donata Montemayor and
Clodualdo Vitug of which they claim a share of 2/11 of 1/2 thereof.
They assailed the mortgage to the PNB and the public auction of the
properties as null and void. They invoked the case of Vitug vs.
Montemayor, L-5297 decided by this Court on Oct. 20, 1953 which
is an action for partition and liquidation of the said 30 parcels of
land wherein the properties were found to be conjugal in nature.
In a decision of Sept. 15, 1975, the lower court dismissed the
complaint with costs against the plaintiffs and ordered them to pay
attorney's fees of P5,000.00 to the defendant's counsel. Plaintiffs
then interposed an appeal to the Court of Appeals, wherein in due
course a decision was rendered on May 20, 1981, the dispositive
part of which reads as follows:
"WHEREFORE, in the light of the foregoing, the decision appealed from is
hereby reversed and set aside, and another one entered in accordance with
the tenor of the prayer of appellant's complaint with the modification that
the sale at public auction of the 22 parcels be considered valid with respect
to the 1/2 thereof. No costs."
Hence the herein petition for certiorari filed by the PNB raising the
following assignments of error:
"I
THE RESPONDENT COURT OF APPEALS ERRED IN APPLYING TO
THE CASE AT BAR THE RULING OF THIS HONORABLE SUPREME
COURT IN FLORENCIA VITUG VS. DONATA MONTEMAYOR, ET
AL., 91 PHIL. 286 (1953) BECAUSE:
A. BETWEEN A PROVISION OF A SPECIAL LAW AND THE
JUDICIAL INTERPRETATION AND/OR APPLICATION OF A
PROVISION OF A GENERAL LAW THE FORMER PREVAILS.
441
VOL. 153, AUGUST 31, 1987 441
Philippine National Bank vs, Court of Appeals
B. THE DOCTRINE OF STARE DECISIS IS NOT A MECHANICAL
FORMULA OF ADHERENCE.
C. PNB WAS NOT A PARTY, AND HAD NO KNOWLEDGE OF
THE ABOVECITED CASE. D. SIMILARLY, PRAGMACIO
VITUG AND MAXIMO VITUG WERE NOT PARTIES IN SAID
CASE.
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II
THE RESPONDENT COURT OF APPEALS ERRED IN NOT
RECOGNIZING THE CONCLUSIVENESS OF THE CERTIFICATE, OF
TITLE, AS PROVIDED IN ACT 496, AS AMENDED (THE LAND
REGISTRATION).
III
THE RESPONDENT COURT OF APPEALS ERRED IN IGNORING
THE CONCLUSIVENESS OF OWNERSHIP OF DONATA
MONTEMAYOR OVER THE PROPERTIES WHICH WERE
REGISTERED EXCLUSIVELY IN HER NAME WHEN PRIVATE
RESPONDENTS (PRAGMACIO VITUG AND MAXIMO VITUG), AS
LESSEES, ENTERED INTO A CONTRACT OF LEASE WITH DONATA
MONTEMAYOR AS THE OWNERLESSOR.
IV
THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT PNB WAS A MORTGAGEE IN BAD FAITH."
The petition is impressed with merit.
When the subject properties were mortgaged to the PNB they
were registered in the name of Donata Montemayor, widow. Relying
on the torrens certificate of title covering said properties the
mortgage loan applications of Donata were granted by the PNB and
the mortgages were duly constituted and registered in the off ice of
the Register of Deeds.
In processing the loan applications of Donata Montemayor, the
PNB had the right to rely on what appears in the certificates of title
and no more. On its face the properties are
442
442 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Court of Appeals
owned by Donata Montemayor, a widow. The PNB had no reason to
doubt nor question the status of said registered owner and her
ownership thereof. Indeed, there are no liens and encumbrances
covering the same.
The well-known rule in this jurisdiction is that a person dealing
with a registered land has a right to rely upon the face of the torrens
certificate of title and to dispense with the need of inquiring further,
except when the party concerned has actual knowledge of facts and
circumstances 9
that would impel a reasonably cautious man to make
such inquiry.
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A torrens title concludes all controversy over10 ownership of the
land covered by a final degree of registration. Once the title is
registered the owner may rest assured without the necessity of
stepping into the portals of the court or sitting11 in the mirador de su
casa to avoid the possibility of losing his land.
Article 160 of the Civil Code provides as follows:
"Art. 160. All property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains exclusively to the
husband or to the wife."
The presumption applies to property acquired during the lifetime of
the husband and wife. In this case, it appears on the face of the title
that the properties were acquired by Donata Montemayor when she
was already a widow. When the property is registered in the name of
a spouse only and there is no showing as to when the property was
acquired by said spouse, this is an12 indication that the property
belongs exclusively to said spouse. And this presumption under
Article 160 of the Civil Code cannot prevail when the title is in the
name of only
13
one spouse and the rights of innocent third parties are
involved.
_______________
9 Capital Subdivision vs. Province of Negros Occidental L16257, January 31,
1963, 7 SCRA 60; Fule vs. Legare, L-17951 Feb 28, 1963, 7 SCRA 351.
10 Legarda and Prieto vs. Salleeby, 31 Phil. 590.
11 Director of Lands vs. Court of Appeals, 122 SCRA 37, 70.
12 Maramba vs. Lozano, 20 SCRA 474.
13 Nable Jose vs. Nable Jose, 41 Phil. 713; Seva vs. Nolan, 340
443
VOL. 153, AUGUST 31, 1987 443
Philippine National Bank vs. Court of Appeals
The PNB had a reason to rely on what appears on the certificates of
title of the properties mortgaged. For all legal purposes, the PNB is a
mortgagee in good faith for at the time the mortgages covering said
properties were constituted 14
the PNB was not aware to any flaw of
the title of the mortgagor.
True it is that in the earlier cases decided by this Court, namely
Vitug vs. Montemayor decided on May 15, 1952, which is an 15
action
for recovery of possession of a share in said parcels of land, and in
the subsequent action
16
for partition between the same parties decided
on Oct. 20, 1953, this court found the 30 parcels of land in question
to be conjugal in nature and awarded the corresponding share to the
property of Florencia Vitug, an heir of the late Clodualdo Vitug from
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the first marriage. In said cases this Court affirmed the decision of
the lower court. In the dispositive part of the decision of the trial
court it made the observation that "but from the conduct of
Clodualdo Vitug and Donata Montemayor during the existence of
their marital life, the inference is clear that Clodualdo had the
unequivocal intention of transmitting the full ownership of the 30
parcels of land to his wife Donata Montemayor, thus considering the
1/2 of the funds of the conjugal property so advanced for the
purchase of said parcels of land 17
as reimbursible to the estate of
Clodualdo Vitug on his death." That must be the reason why the
property was registered in the name of18 Donata Montemayor as
widow after the death of Clodualdo Vitug.
At any rate, although actions for recovery of real property and for
partition are real actions, however, they are actions in personam
19
that
bind only the particular individuals who are parties thereto. The
PNB not being a party in said cases is not bound by the said
decisions. Nor does it appear that the
_____________
14 Cui and Joven vs. Henson, 51 Phil. 606, 612; Roxas vs. Dinglasan, L-27234,
May 30, 1969, 28 SCRA 430.
15 91 Phil. 286.
16 93 Phil. 99.
17 91 Phil. 289.
18 Exhibit 17 PNB & 18 PNB, Pp. 210-212, Record on Appeal.
19 Ang Lam vs. Rosillosa, L-3595, May 22, 1950; Hernandez vs. Rural Bank of
Lucena, L-2979, Jan. 10, 1978, 81SCRA 84-85.
444
444 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Court of Appeals
PNB was aware of the said decisions when it extended the above
described mortgage loans. Indeed, if the PNB knew of the conjugal
nature of said properties it would not have approved the mortgage
applications covering said properties of Donata Montemayor
without requiring the consent of all the other heirs or co-owners
thereof. Moreover, when said properties were sold at public auction,
the PNB was a purchaser
20
for value in good faith so its right thereto
is beyond question.
Pragmacio and Maximo Vitug are now estopped from
questioning the title of Donata Montemayor to the said properties.
They never raised the conjugal nature of the property nor took issue
as to the ownership of their mother, Donata Montemayor, over the
same. Indeed private respondents were among the defendants in said
two cases wherein in their answers to the complaint they asserted
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that the properties in question are paraphernal properties belonging21
exclusively to Donata Montemayor and are not conjugal in nature.
Thus they leased the properties from their mother Donata
Montemayor for many years knowing her to be the owner. They
were in possession of the property for a long time and they knew
that the same were mortgaged by their mother to the PNB and 22
thereafter were sold at public auction, but they did not do anything.
It is only after 17 years that they remembered
23
to assert their rights.
Certainly, they are guilty of laches.
Moreover, as correctly held by the lower court. Pragmacio and
Maximo Vitug as occupants and lessees of the property in question
cannot now dispute 24the ownership of their mother over the same
who was their lessor.
WHEREFORE, the subject decision of the respondent
______________
20 Fule vs. Legare, supra; Arches vs. Billanes, L-20452, April 30, 1965, 13 SCRA
715.
21 Vitug vs. Montemayor, 91 Phil. 286, 288; see also Exhibits 3 Mendiola, 3-A
Mendiola, 3-B Mendiola, pp. 238-240, Record on Appeal.
22 Exhibits 1, 1-A, and 1-B Mendiola, 2 and 2-A Mendiola, pp. 236-238, Record
on Appeal.
23 Tijam vs. Sibonghanoy, L-21450, April 15, 1968, 32 SCRA 29.
24 Section 3 (b), Rule 131, Rules of Court.
445
VOL. 153, AUGUST 31. 1987 445
Philippine National Bank vs. Court of Appeals
Court of Appeals is hereby REVERSED and set aside and another
decision is hereby rendered DISMISSING the complaint and
ordering private respondents to pay attorney's fees and expenses of
litigation to petitioner PNB in the amount of P20,000.00 and the
costs of the suit.
SO ORDERED.
Teehankee (C.J.), Narvasa and Cruz, JJ., concur.
Paras, J., in the result.
Decision reversed and set aside.
——o0o——
446
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