DIRECTOR OF LANDS vs.

ABACHE
G. R. No. 47566
July 3, 1942
FACTS:
Lina Imperial and Santiago Imperial, mother and son, appeared in a cadastral proceeding and
claimed Lot No. 8305 asserting their ownership and usufructuary right over the said lot. Santiago
Imperial was the sole witness for the claimants. After hearing, the court awarded the property to
them.
However, in a written decision subsequently rendered, the lot was awarded in favor of
Adornados, who did not present any claim nor appeared at the trial. Certificate of Title No.
15150 was issued in their names.
Adornados mortgaged the property to Meneses.
Santiago Imperial filed a motion asking that Certificate of Title No. 15150 and the lien noted
thereon be declared null and void and that a new Certificate of Title be issued in his favor. The
court ruled in his favor.
ISSUE:
Whether or not the cancellation of Certificate of Title No. 15150 and the lien noted thereon is
proper.
HELD:
As to the Certificate of Title No. 15150, the cancellation is proper. In registration proceedings, a
cadastral court has no authority to award a property in favor of persons who have put in no
claims to it and have never asserted any right of ownership, and the certificate of title issued
under the circumstances to such persons would be declared null and void.
As to the cancellation of the lien, the cancellation is not proper. Where innocent third persons,
relying on the correctness of the certificate of title thus issued, acquire rights over the property,
the court cannot disregard such rights and order the total cancellation of the certificate. The
effect of such an outright cancellation would be to impair public confidence in the certificates of
title, for everyone dealing with property registered under the Torrens System would have to
inquire in every instance as to whether the title has been regularly or irregularly issued by the
court. And this is contrary to the evident purpose of the law. Section 39 of Act No. 496 provides
that every person receiving a certificate of title in pursuance of a decree of registration, and every
subsequent purchaser of registered land who takes a certificate of title for value in good faith,
shall hold the same free of all encumbrance except those noted on said certificate.
A new certificate of title to be issued in favor of Santiago but subject to the mortgage lien of
Meneses which appears duly noted in the certificate to be cancelled.

ABAD vs. SPOUSES GUIMBA

G. R. No. 157002
July 29, 2005
FACTS:
Spouses Ceasar and Vivian Guimba are the registered owners of a parcel of land covered by
Transfer Certificate of Title No. PT-80617. They entrusted said certificate of title to Gemma to
serve as collateral for Vivians application for loan. Thereafter, Vivian informed Gemma that she
had changed her mind and was no longer interested in obtaining the loan and therefore wanted
her TCT back. Gemma told her that the certificate of title was deposited in the vault of a bank.
Vivian inquired at the bank but was advised that the certificate of title was not there.
In November 1997, Vivian received a telegram from Abad, a stranger, reminding her of the
impending maturity of her mortgage. It was the first time Spouses Guimba learned of any actual
mortgage involving their legal property. They filed an adverse claim on their own title and met
Abad for the first time to settle the matter.
Spouses filed a complaint against Gemma and Abad for annulment and cancellation of mortgage.
During the trial, Abad admitted that the couple to whom he had given the loan were not the
Spouses Guimba whom he met only after he sent the telegram.
RTC ordered the cancellation of the annotation on the certificate of title after finding that the
mortgage was a forgery hence an absolute nullity.
ISSUE:
Whether or not Section 52 and 53 of P. D. 1529 may be invoked by Abad.
HELD:
No. The main purpose of land registration, covered by PD1529, is to facilitate the transactions
relative to real estate by giving the right to rely upon the face of the Torrens certificate of title.
Therefore, as a rule, the purchased is not required to explore further than what the Certificate
indicates on its face. This rule, however, applies only to innocent purchaser who has knowledge
of a defect in the title of the vendor, or of facts sufficient to induce a reasonably prudent man to
inquire into the status of the property. Under Section 32 of PD1529, an innocent purchaser for
value is deemed to include an innocent mortgage for value.
By insisting n the application of PD1529 in his favor, Abad begs the question. He invokes
Section 52 and 53 of the law, which protects innocent mortgagees for value, but which the RTC
has already determined he was not.
Abad was not a mortgagee in good faith, not because he neglected to ascertain the authenticity of
the title, but because he did not check if the person he was dealing with had any authority to
mortgage the property. There is no allegation whatsoever that Gemma presented a special power
of attorney to deal with the property of the Guimbas; and even if we accept the story of Abad that
he was duped by a woman posing as Vivian, his negligence lies in not verifying her identity
before accepting the mortgage.