G.R. Nos.

L-48971 & 49011 January 22, 1980

PACIFICO GARCIA, petitioner-appellant,
vs.
BNJA!IN !. GO"ON, #CLA G$#IRR", RO%ARIO FLI&, PA$LINO '. B$NA(N#$RA,
RA)!$N'O 'IONI%IO, (IRGILIO A$%#RIA an* !ARCON (ICNCIO, respondents-appellees;
P+ILIPPIN NA#IONAL BAN,, petitioner-appellant,
vs.
CO$R# OF APPAL% -#./r* '/0/s/on1, CAROLINA LAP$"- GO"ON, ass/s23* 4y .3r .us4an*
BNJA!IN !. GO"ON, #CLA G$#IRR", RO%ARIO FLI&, PA$LINO '. B$NA(N#$RA,
RA)!$N'O 'IONI%IO, (IRGILIO A$%#RIA an* !ARCON (ICNCIO, respondents-appellees.
A5$INO, 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 ugust !, 1!1", a deed of sale for two parcels of land, # and $ %with a total area of more than
seven hectares& of the 'acienda (aysilo, located in (alabon, )i*al and covered by Original
+ertificate of Title ,o. !"-, was e.ecuted in favor of /smael 0apus a bona fide occupant thereof. The
deed was e.ecuted pursuant to an order of the +ourt of 1irst /nstance of )i*al in +ivil +ase ,o. -!1,
Negao vs. Vidal, a partition proceeding involving the said hacienda %2ee 3ustamante vs. Tuason, 45
6hil. 4--, 4-4&.
7. The deed of sale was presented for registration at two-twenty five in the afternoon of 8anuary 19,
1!7: and was recorded as 6rimary #ntry ,o. 551:. That deed of sale itself contains the following
entries showing that it was annotated on the back of OCT NO. 983
6resentado en este )egistro a las 7:79 de la tarde del dia de hoy segun el siento
,o. 551: de tomo 1: del 0ibro ;iario, 6asig, )i*al, #nero 19, 1!7:.
)egister of ;eeds %#.h. 3-17&
!nscrito el documento "ue #recede al dorso del certificado de Titulo Original No. 983
del Tomo $%9, de inscritor en las #aginas &&3 ' &&( ambos del libro T%)* de registro
como certificados de titulo Nos. (9&+ ' (9&&, archivado en el lega,o T%-(9&+. .asig,
/i0al, 1nero &*, &9)+.
)egister of ;eeds %#.h. 3-1&.
'owever, it seemed that, contrary to the foregoing entry and the official routine or standard operating
procedure, the deed of sale was not annotated on O+T ,o. !"- and that, conse<uently, that title
was apparently not cancelled. =hy that annotation did not appear in O+T ,o. !"- and why there
was no notation of the cancellation of that title, as it appeared in &92), is a mystifying circumstance
in this case.
-. s a result of the registration of that deed of sale, Transfer +ertificate of >Title ,o. 4!1: was
issued to 0apus for the two parcels of land, # and $, and / Transfer +ertificate of Title ,o. 4!11 was
issued for the remaining five lots covered by O+T ,o. !"- %which embrace an area of more than two
hundred fifty-eight hectares registered in the names of more than twenty-si.-co-owners&. T+T ,os.
4!1: and 4!11 contain the following entries: ?Transfer from No. 983. Originally registered on the
7!th day of 8anuary, in the year 1!15 in 3ook ,o. -!, page 719, of the said 6rovince of )i*al,
pursuant to a decree entered in +ase ,o. -"9:.?
4. 0apus on different occasions mortgaged the two parcels of land to secure his obligations to the
6hilippine ,ational 3ank, the $overnment and the 6hilippine Trust +ompany. 'e died in 1!91. The
two parcels of land were inherited by his daughter, +arolina 0apu*-$o*on. 2he became the
registered owner of the two lots. 2he subdivided them into fifty-five lots. 2he sold some of the
subdivision lots to her co-respondents-appellees herein. 0apus and his successors-in-interest have
been in possession of the two parcels even before 1!1: or for more than seventy years.
9. (eanwhile, in &92), certain. alleged heirs %collectively known as the )iveras& of the late (aria de
la +oncepcion @idal filed a motion in 0and )egistration +ases ,os. 447! and 44!A of the +ourt of
1irst /nstance of )i*al, alleging that they were deprived of their participation in the 'acienda (aysilo
covered by O+T ,o. !"- and for other titles and that, since only O+T ,o. !"- was supposedly
unencumbered, all the land covered by that title should be adBudicated to them. The court granted
the motion. /t should be stressed that O+T ,o. !"- appears to have remained uncancelled
notwithstanding the sale to 0apus of two parcels covered by it and the fact that it had been replaced
by T+T ,os. 4!1: and 4!11.
A. On 8une 5, 1!A-, O+T ,o. !"- was definitely cancelled and in lieu thereof Transfer +ertificate of
Title ,o. 1177-A was issued to the )iveras. 0ater, 0ots 9 and 5 of the said title %corresponding to
parcels # and $ which were sold to /smael 0apus in 1!1" as stated earlier& were assigned by
3artolome )ivera to 2ergio +ru* and 6acifico $arcia and T+T ,os. 11754- and 117547 were
issued to +ru* and $arcia, respectively. Thus, two sets of transfer certificates of title for 0ots # and
$ or 9 and 5, originally covered by O+T ,o. !"-, were issued, one to the heir of /smael 0apus and
another set to the successors-in-interest of the )iveras.
5. On October 77, 1!A4, $arcia subdivided 0ot 5 %$& into 0ots and 3. $arcia retained 0ot and
obtained T+T ,o. 1-4!9" for it. 'e assigned 0ot 3 to ntonio (uCo* on ,ovember 9, 1!A4. s a
conse<uence of the assignment, T+T ,o. 117547 was cancelled and T+T ,o. 1-4!95 was issued
to (uCo*. /n 1!A9, he mortgaged 0ot 3 to the ssociated 3anking +orporation to secure a loan of
67::,:::.
". On the other hand, on 8uly 15, 1!A4 +ru* sold to 2antiago $o 0ot 9 %#& covered by T+T ,o.
11754-. T+T ,o. 1-1-7! was issued to $o on ugust 79,1!A4. On ;ecember 7-, 1!A4, $o
mortgaged 0ot A to the 6hilippine ,ational 3ank %6,3& to secure a loan of 69:,::: which was later
increased to 6A:,:::.
!. (uCo* and $o did not pay their mortgage debts. The two banks foreclosed the mortgages. The
6,3 bought the mortgaged lot at the auction sale held on (ay 4. 1!A5. The sheriff issued to it a
certificate of sale dated (ay 1!, 1!A5 but at that time there was already a notice of lis #endens
annotated on the title of the mortgaged lot. T+T ,os. 7171A- and 7-A""1 for the mortgaged lots
were issued to the ssociated 3anking +orporation and the 6hilippine ,ational 3ank, respectively.
1:. The )iveras and their successors-in-interest have never set foot on the disputed lots.
11. (rs. $o*on later learned that the )iveras and their successors-in-interest had ac<uired the land
%more than two hundred fifty-eight hectares& covered by O+T ,o. !"-. 'er lawyer and a surveyor
informed her that parcels # and $, which she inherited from her father, were identical to 0ots 9 and 5
which were conveyed to +ru* and $arcia. 2he registered adverse claims on the titles covering 0ots
9 and 5. On ;ecember 75, 1!A9 she and the persons to whom she had transferred portions of
parcels # and $ filed with the +ourt of 1irst /nstance of )i*al at +aloocan +ity against the )iveras,
+ru*, (uCo*, $arcia, ssociated 3anking +orporation, 6,3 and others an action to <uiet title and
for damages.
17. notice of lis #endens was annotated on 8anuary 79, 1!AA on the titles of $arcia, (uCo* and
$o. The notice of lis #endens was annotated on the title of the 6,3 when the sale in its favor was
registered on ;ecember 1-, 1!A!.
1-. The trial court in its decision of 8uly -:, 1!59 declared valid T+T ,os. 141":7 to 141"99 and
14-917 issued to (rs. $o*on and her co-plaintiffs. /t voided T+T ,o. 1177-9 issued to the )iveras
and all titles and transactions emanating therefrom insofar as those titles covered the lots embraced
in plaintiffs> titles. The )iveras were ordered to pay the plaintiffs twenty thousand pesos as attorney>s
fees.
14. The trial court also ordered (uCo* to pay the ssociated 3anking +orporation, in the event that
the bank would be evicted from the lot covered by T+T ,o. 71719-, two hundred si.ty-five thousand
seventy-two pesos and fifteen centavos with twelve percent interest #er annum from the date of the
eviction plus ten thousand pesos as attorney>s fees.
19. 2antiago $o was ordered to pay the 6,3, should it be evicted from the lot covered by T+T ,o.
7-A""1, the sum of si.ty thousand pesos plus nine percent interest #er annum from the date of the
eviction and si. thousand pesos as attorney>s fees.
1A. That Budgment of the trial court was affirmed by the +ourt of ppeals in its decision of (ay 79,
1!5". $arcia and the 6,3 appealed from that decision. The ssociated 3anking +orporation, now
the ssociated +iti*ens 3ank, tried to appeal but it was not able to file its petition for review %0-
4!:1:&.
$arcia contends that the +ourt of ppeals erred in not holding that his title is valid and that the titles
of /smael 0apus and his successors-in-interest lost their right to the disputed lots due to their
negligence or inaction.
The issue is whether the &9)+ title issued to 0apus and the titles derived therefrom should prevail
over the &923 title issued to the )iveras and the subse<uent titles derived from it. 2hould 0apus> title
prevail even if it was not annotated by the register of deeds on the anterior or parent title which was
not cancelled before 1!A-D /t was that noncancellation which led to the issuance of the duplicative
title to the )iveras and eventually to the e.ecution of the controversial mortgages and foreclosure
sales to the two banks.
=e hold that the two appeals have no merit. The title of 0apus and the titles derived therefrom
should be given effect. The title of the )iveras and the titles springing from it are void.
There can be no doubt that 0apus was an innocent purchaser for value. 'e 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 Eears 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 0apu*. This must be so considering that 0apus 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 #revail, whether the land comprised in the latter certificate be wholly, or only in
part, comprised in the earlier certificate? %'ogg, ustralian Torrens 2ystem "7-, citing cases and
cited in 0egarda and 6rieto vs. 2aleeby, -1 6hil. 9!:, 9!9&.
?=here two certificates %of title& purport to include the same land, the earlier in date prevails. ... /n
successive registrations, where more than once certificate is issued in respect of a party estate or
interest in land, the 6erson claiming under the prior certificate is entitled to the estate or interest; and
that person is deemed to hold under the #rior 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 ? %,iblack, nalysis of the Torrens 2ystem page 7-5, cited in 0egarda and 6rieto vs.
2aleeby, su#ra, pages 9!9-A&.
nd the rule that in case of double registration the owner of the earlier certificate is the owner of the
land a##lies 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? %0egarda
and 6rieto vs. 2aleeby, su#ra, pages 9!5-!&.
/t is settled that is this Burisdiction the ma.im #rior est in tem#ore, #otior est in ,ure %he who is first in
time is preferred in right& is followed in land registration matters %0a Frbana vs. 3ernardo, A7 6hil.
5!:, ":A&.
ppellant $arcia 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 %3ass vs. ;e la )ama, 5- 6hil.
A"7, A"9&.
That ruling was superseded by the holding in the later si. cases of 3evin vs. 4ass, !1 6hil. 47:,
where a distinction was made between voluntar' and involuntar' registration, such as the
registration of an attachment, levy upon e.ecution, notice of his pendens, and the like. /n cases of
involuntar' 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 3evin vs. 4ass, in case of voluntar' 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
notari*ed and valid deed of sale and the same is entered in the day book and at the same time he
surrenders or #resents the owner5s du#licate 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. %2ee 6otenciano vs. ;ineros, !5 6hil. 1!A.&
The instant case is not /dentical to the 3ass cases. 'ere the deed of sale in favor of 0apus, which
was Budicially authori*ed, was entered in the entry book and a new title was issued to him. s
already stated, and this point should be underscored, the deed of sale in favor of 3a#us contains the
notation that it was annotated on the back of OCT No. 983 %presumably, the original and owner>s
duplicate thereof&.
3ut why in 1!A7 it appeared that no such annotation was found on the back of O+T ,o. !"-,
contrary to what was stated in the 1!1" deed of sale, is a mystery that the trill court and the plaintiffs
failed to unravel during the trial. (oreover, the title issued to 0apus contains the usual notation that it
was a transfer from a previous title which in this case was O+T ,o. !"-.
/t should be further observed that the deed of sale in favor of 0apus and the titles issued to him and
his successors interest together with his mortgage in 1!7! of the disputed lots to the 6,3 itself, are
all a matter of public record in the registry of deeds.
s stressed in 0egarda and .rieto vs. 6aleeb', -1 6hil. 9!:, A::, ?the record is notice to all the
world. ll persons are charged with the knowledge of what it contains. ll 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.
?=hen a conveyance has been properly recorded, such record is constructive notice of its contents
and all interests, legal and e<uitable, included therein.? ?Fnder the rule of notice, it is presumed that
the purchaser has e.amined every instrument of record affecting the title. 2uch presumption is
irrefutable. 'e is charged with notice of every fact shown by the record and is presumed to know
every fact which an e.amination of the record would have disclosed? %0egarda and 6rieto vs.
2aleeby, su#ra, page A::&.
s 8ustice 8ohnson says, ?this presumption cannot be overcome by proof of innocence or good faith.
Otherwise, the very purpose and obBect of the law re<uiring a record would be destroyed. 2uch
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. ny variation would lead to endless confusion and useless litigation? %0egarda
and 6rieto vs. 2aleeby, su#ra, pp. A::-A:1&.
s to the 6,3>s claim that it was a mortgagee and purchaser in good faith and for value, the
ppellate +ourt held that the bank should have made an on-the-spot investigation of the lot
mortgaged by $o to ascertain whether he was in possession of it or it was claimed by other persons.
/ts failure to do so precludes the bank from being considered as a mortgagee in good faith and for
value %$atioan vs. $affud, 0-71!9-, (arch 7", 1!A!, 75 2+) 5:A&.
On the other hand, the trial court held that the 6,3 was not a buyer in good faith when it bought
$o>s lot at the auction sale because there was already a notice of his pendens annotated on his title.
/n the 7atioan case, it appears that in 1!-9 )ufina 6ermison secured a Torrens title for a parcel of
land on the basis of a free patent. The land was sold to #ncarnacion $atioan and Transfer
+ertificate of Title ,o. T-1717 was issued to her. 2he mortgaged the land three times to the 6,3
/n 1!9A, the spouses 2i.to $affud and @illamora 0ogan 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 6,3. The 2ecretary
of griculture and ,atural )esources, on discovering that two Torrens titles were issued for the
same land, recommended the cancellation of the later title issued to the $affud spouses. s the
6,3 refused to cancel the mortgaged e.ecuted by $atioan, in spite of the fact that she had made
full payment of the mortgage debt, she filed against the $affud spouses and the 6,3 an action to
<uiet title.
/t was held that $atioan>s title should prevail over that of the $affud spouses and that the mortgage
e.ecuted by them in favor of the 6,3 was void. The $affud spouse were ordered to pay damages to
$atioan.
2ince the applicable rule in the instant case is that the earlier certificate of title should be recogni*ed
as superior and controlling there is no Bustification for relying on the doctrine laid down by 8ustice
'olmes in 1liason vs. 8ilborn 7"1 F.2. 495, that ?as between two innocent persons, one of whom
must suffer the conse<uence 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. =hat 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. 1or
that anomaly, the purchaser, /smael 0apus, the how? of the earlier title, was not culpable or
blameworthy.
='#)#1O)#, the Budgment of the +ourt of ppeals, affirming the decision of the trial court, should
stand. +osts against the appellants.
2O O);#)#;.