VII.

SUBSEQUENT REGISTRATION

Chapter V. Sections 51-77

I. Voluntary Dealings with Registered Lands

a. Primary Entry Book

1. DBP vs Register of Deeds of Nueva Ecija, UDK No. 7671, June 23, 1998

Provisional Registration; Effect. In view of the provisional nature of the registration process, the
vendors certificate of title is not stamped cancelled until the title is reconstituted and a new one issued
to the vendee. The effect of the provisional registration, however, is to effectively convey the property
to the vendee since the entry of an instrument in the primary entry book is not rendered ineffective
because the title involved has not yet been reconstituted when such entry was made and therefore
registration of the instrument may resume once the title has been reconstituted using the old entry
(DBP vs. Actg. Register of Deeds of Nueva Ecija, UDK No. 7671, June 23, 1988). Consulta No. 1815

Two Ways of Dealing with Lands: Voluntary

Transactions and Involuntary Transactions.
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 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. ...

2. National Housing Authority vs Augusto Basa, GR 149121, April 20, 2010

FACTS:
Spouses Basa loaned from NHA secured by a real estate mortgage over their properties. Spouses Basa
did not pay the loan despite repeated demands. To collect its credit, the NHA filed a verified petition for
extrajudicial foreclosure of mortgage before the Sheriffs Office in Quezon City.

After notice and publication, the properties were sold at public auction where NHA emerged as the
highest bidder. 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.

On April 16, 1992, the redemption period expired, without respondents having redeemed the
properties. Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of
Ownership over the foreclosed properties, and the same was inscribed by the Register of Deeds on the
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certificates of title in the hand of NHA.

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NHA moved for the issuance of an alias writ of possession. Before the RTC could resolve the motion for
the issuance of an alias writ of possession, respondents, filed a Motion for Leave to Intervene and
Petition in Intervention.
Respondents theorized that the instrument is deemed registered only upon actual inscription on the
certificate of title in the custody of the civil registrar. 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.
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.

RTC issued an Order admitting the Petition in Intervention and treating the same as the petition to set
aside sale.

NHA filed a special civil action for certiorari and prohibition before the Court of Appeals.
The Court of Appeals rendered a Decision in favor of the NHA. Respondents filed a motion for
reconsideration.

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.

ISSUE:
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.

HELD:
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.

NHA followed the procedure in order to have its sheriffs certificate of sale annotated in the transfer
certificates of title. 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. NHA did everything within its power to assert its right.
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.
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3. Durawood vs Candice Bona, GR 179884, January 25, 2010

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 b. Double Sales

1. Rodriguez vs. Sioson, GR 199180, July 27, 2016

THELMA RODRIGUEZ, joined by her husband vs. SPS. JAIME and ARMI SIOSON
G.R. No. 199180, July 27, 2016
Ponente: J. Reyes, 3rd Division

Nature of Action: Petition for review under rule 45.

Facts:
In 1997, Municipality of Bataan purchased from Neri delos Reyes an area of about 1.7 ha. of Lot 398 to
be used for the extension of the Municipalitys public market. It was agreed that Neri will surrender the
mother title to the municipality upon full payment of purchase price.

Lot 398 was subsequently divided into 5 lots: A, B, C, D, and E. Lots C and D pertain to the portions that
were sold to the municipality while E is a road lot. Consequently, A and B were left as remaining portions
over which Neri retained absolute title. TCTs T-209894 and T-209895 were then issued over lots A and B
respectively and registered in Neris name married to Violeta Lacuata. The owners duplicate copies
were however retained by the municipality pending Neris payment in the share in expenses incurred for
the subdivision of the lot 398.

Neri, however, sold lot A to Thelma for P1,243,000 and on Mar. 20, 1997, Thelma issued a check for said
amount payable to Neri. When it fell due, no sufficient funds were available to cover the check. Thelma
promised to pay the purchase price in installments until Sept. 4, 1997 but Thelma was only able to pay
P442,293.50. On Nov. 12, 2001, Thelma caused the annotation of an adverse claim on lot As title. She
saw an announcement that a new Orani Common Terminal will be built on lot A. Thelma then filed a
complaint for injunction against incumbent Mayor Pascual and municipality under claim of ownership.

In 2002, Neri executed an affidavit claiming that the owners copies of TCTs covering lots A and B were
lost and caused for the reconstitution of new owners copies. After new copies were issued, Neri sold lot
A to respondent Sps. Sioson, Sps. Camacho, and Agnes Samonte. Consequently, the TCT covering lot A
was cancelled and a new TCT was thus issued in the respondents names. Respondents filled the said lot
with about 40 truckloads of soil/fillings but Thelma sent two armed blue guards who entered the
premises and set up a tent therein. Respondents brought the matter to the attention of the barangay
who referred them to the mayor but mayor did not take any action. Respondents filed a forcible entry
case against Thelma.

Pending the ejectment case, Thelma sought for the annulment of the second sale of lot A. RTC in its joint
decision ruled in favor of Thelma. Respondents moved for reconsideration but was denied by RTC. On
appeal, CA granted the appeal and ruled that there was no double sale since the contract between Neri
and Thelma was a mere contract to sell and not contract of sale. Thelma moved for reconsideration but
was denied. Hence, this petition.
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Issues:
1) Whether the contract entered into by Neri and Thelma is a contract to sell or a contract of sale.

2) Whether double sale exists in the instant case.

Ruling:
1) The contract entered by Neri and Thelma is a contract to sell.

In determining the nature of the agreement between Thelma and Neri, the CA took note of these two
documents and coupled with Thelmas own admissions, correctly found that it was a mere contract to
sell. According to CA:

During trial, Thelma explained the apparent disparity between the 2 deeds of absolute sale by testifying
that the undated and unnotarized deed of sale served only as a receipt which was signed by Neri when
the latter received the downpayment for the lot. The dated and notarized deed of sale, on the other
hand, was signed by both Thelma and Neri upon Thelmas alleged full payment of purchase price.

xxx

Second, the execution of the deed of absolute sale and the transfer and delivery of the title to Thelmas
name were conditional upon full payment of purchase price.

xxx

Despite the denomination of their agreement as one of sale, the circumstances tend to show that Neri
agreed to sell the subject property to Thelma on the condition that title and ownership would pass or be
transferred upon full payment of the purchase price. This is the very nature of a contract to sell which is
a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the
property despite delivery thereof to the buyer, binds himself to sell the property exclusively to the buyer
upon fulfillment of the condition agreed upon, i.e. full payment of purchase price.

2) Double sale doesnt exist in this case.

It was established that Thelma was not able to pay the full purchase price. To bolster her claim, Thelma
insists that she holds title over the property after Neri allegedly delivered the subject lot to her right
after the execution of sale. There is however nothing on record to support this claim aside from her bare
allegations.

Moreover, the alleged delivery of property, even if true, is irrelevant considering that in a contract to
sell, ownership is retained by the registered owner in spite of the partial payment of the purchase price
and delivery of possession of the property.

2. Melencio vs CA, GR 148846, Sept 25, 2007

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 3. Antonio vs Santos, GR 149238, 538 SCRA 1, Nov, 22, 2007

c. Buyer in Good Faith

1. LBP vs Poblete, GR 196577, February 25, 2013

FACTS:
On October 1997, respondent Poblete obtained a loan worth P 300,000.00 from Kapantay Multi-
Purpose. She mortgaged her Lot No. 29 located in Buenavista, Sablayan, Occidental Mindoro, under
OCT No. P-12026. Kapantay, in turn, used OCT No. P-12026 as collateral under its Loan Account No. 97-
OC-013 with Land Bank Sablayan Branch.

After a year, Poblete instructed her son-in-law Domingo Balen to look for a buyer for the Lot No. 29 in
order to pay her loan and he referred Angelito Joseph Maniego. Both parties agreed that the lot shall
amount to P 900,000.00 but in order to reduce taxes they will execute a P 300,000.00 agreed price
appearing in the Deed of Absolute Sale dated November 9, 1998. In the Deed, Poblete specifically
described herself as a widow. Baledn, then, delivered the Deed to Maniego. Instead of paying the
price, Maniego promised in an affidavit dated November 19, 1998 stating that the said amount will be
deposited to her Land Bank Savings Account but he failed to do so.

On August 1999, Maniego paid Kapantays Loan Account for P 448,202.08 and on subsequent year he
applied for a loan worth P 1,000,000.00 from Land Bank using OCT No. P-12026 as a collateral in a
condition that the title must be first transferred on his name. On August 14, 2000, the Registry of Deeds
issued TCT No. T-20151 in Maniegos name pursuant to a Deed of Absolute Sale with the signatures of
Mrs. Poblete and her husband date August 11, 2000 and Maniego successfully availed the Credit Line
Agreement for P 1,000,000.00 and a Real Estate Mortgage over TCT No. T-20151 on August 15, 2000.
On November 2002, Land Bank filed an Application for an Extra-judicial Foreclosure against the said
Mortgage stating that Maniego failed to pay his loan.

Poblete filed a complaint for nullification of the Deed of Sale dated August 11, 2000 and TCT No. T-
20151, Reconveyance of the Title and Damages with a Prayer for Temporary Restraining Order and/or
Issuance of Writ of Preliminary Injunction against Maniego, Landbank and the Register of Deeds.

The judgment of RTC, affirmed by the CA upon appeal, favors the plaintiff Poblete.
Hence, this petition.

ISSUE:
Whether or not:
1. the CA erred in upholding the finding of the trial court declaring the TCT No. T-20151 as null and
void. The CA misconstrued and misappreciated the evidence and the law in not finding the title
registered in the name of Maniego.

2. the CA promulgated a decision and misconstrued the evidence and the law in not finding the
Land Bank a mortgagee in good faith.
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3. the CA misconstrued the evidence and the law in not finding the respondent and Maniego in
pari delicto.

4. the CA erred in not applying the principle of estoppels or laches on respondent in that the
proximate cause of her loss was negligence to safeguard her rights over the subject property, thereby
enabling Maniego to mortgage the same with Land Bank.

RULING:
The petition is meritorious.
It is well-entrenched rule, as applied, by the CA, that a forged or fraudulent deed is a nullity and conveys
no title. Moreover, where the deed of sale is states that the purchase price has been paid but in fact has
never been, the deed is void ab initio for lack of consideration. Since the deed, is void, the title is also
void.

Since the land title has been declared void by final judgment, the Real Estate Mortgage over it is also
void. It is essential that the mortgagor be the absolute owner of the mortgage; otherwise, the mortgage
is void. The doctrine the mortgagee in good faith as a rule does not apply to banks which are required
to observe a higher standard of diligence. A bank cannot assume that, simply because the title offered
as security is on its face, free of any encumbrances or lien, it is relieved of the responsibility of taking
further steps to verify the title and inspect the properties to be mortgage. The records do not even
show that Land Bank investigated and inspected the actual occupants. Lad Bank merely mentioned
Maniegos loan application upon his presentation of OCT No. P-12026, which was still under the name of
Poblete. Land Bank even ignored the fact that Kapantay previously used Pobletes title as collateral in its
loan account with Land Bank.

Furthermore, only one day after Maniego obtained TCT No. P-20151 under his name, Land Bank and
Maniego executed a Credit Line Agreement and Real Mortgage. It appears that Maniegos loan was
already completely processed while the collateral was still in the name of Poblete. Where said
mortgagee acted with haste in granting the mortgage loan and did not ascertain the ownership of the
land being mortgaged, it cannot be considered innocent mortgagee.

The pari delicto rule provides when two parties are equally at fault, the law leaves them as they are and
denies recovery by either one of them. This court adopt the decisions of RTC and CA that only Maniego
is at fault.

Finally, on the issue of estoppels and laches, such question were not raised before the trial court. It is
settled that an issue which are neither alleged in the complaint nor raised during the trial cannot be
raised for the time on appeal.

2. Legarda vs CA, et al, GR 94457, Oct 16, 1997

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3. Gabutan vs Nacalaban, GR 185857-53, June 29, 2016

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4. Cusi vs Domingo, GR 195825, Feb. 27, 2013

5. Saberon vs Ventanilla, GR 192669, April 21, 2014

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