157: SPS. SANTIAGO VS.

CA (1995)
Facts:

Santiago spouses, bought 2 parcels of land from Evelyn Mercado, with the latter acting as
attorney-in-fact of her brothers and sisters.

Evelyn Mercado turned over the owner's copy of the Torrens title to petitioners. A new title could
not at that time be issued to petitioners because Evelyn Mercado had the power of attorney only
from one sister Melita.

Two months before the registration of the deed of sale, Evelyn Mercado sold the same parcel of
land for the same amount to respondent Aquilino Arevalo. No attempt to register the deed was
made by respondent Arevalo.

Arevalo had filed an affidavit of adverse claim.

Issues:

Who has the superior right to a parcel of land sold to 2 different buyers at different times by its
former owners.

Ruling:

Petitioners were the first buyers of the disputed lot from Evelyn Mercado and her brothers and
sisters, the original owners. Petitioners' purchase was made in good faith.

There is nothing to remotely suggest that the purchase of the lot was characterized by anything
other than good faith. Respondent Arevalo was still out of the picture when the meeting of the
minds of petitioners and Evelyn Mercado et al. on the sale took place.

It appears that nobody else was interested in the lot at that time. There is furthermore no issue
over the fact that petitioners were first to register their purchase of the lot. In fact, the second
buyer, herein respondent, has not been able to have his deed. of sale registered at all, up to the
present time.

WHEREFORE, Petitioners Honorio and Estrellita Santiago are hereby declared owners in fee
simple of the disputed property.
158: CAMPILLO VS. CA (1984)

Facts:

Tomas de Vera and his wife Felisa Serafico sold two (2) parcels of land to Simplicio Santos.
Said sale was however never presented for registration in the office of the Registry of Deeds of
Manila nor noted in the title covering the property.

Sostenes Campillo obtained a judgment for a sum of money against Tomas de Vera. The
judgment became final and executory, and petitioner obtained an order for the issuance of a writ
of execution. The City Sheriff levied on the two (2) parcels of land which the latter previously
sold to Simplicio Santos.

Issues:

Who has a better right or title to the herein disputed two (2) parcels of land - one who earlier
purchased them in a private sale but failed to register his sale, or one who subsequently
purchased them at an execution sale and obtained a certificate of title.

Ruling:

We are constrained to rule in favor of the herein petitioner.

It is settled in this jurisdiction that a sale of real estate, whether made as a result of a private
transaction or of a foreclosure or execution sale, becomes legally effective against third persons
only from the date of its registration.

Consequently, and considering that the properties subject matter hereof were actually attached
and levied upon at a time when said properties stood in the official records of the Registry of
Deeds as still owned by and registered in the name of the judgment debtor, Tomas de Vera, the
attachment, levy and subsequent sale of said properties are proper and legal. The net result is
that the execution sale made in favor of the herein petitioner transferred to him all the rights,
interest and participation of the judgment debtor in the afore-stated properties as actually
appearing in the certificate of title, unaffected by any transfer or encumbrance not so recorded
therein.
159: SOLIVEL VS. FRANCISCO (1989)

Facts:

Valentin Solivel and Petra Mente are the registered owners of two parcels of land.

Federico Tompong, a practicing lawyer, and Isaias Ngoho obtained the former's agreement to
sell their property to a certain Espinosa and agreed on the terms of the sale.

Tompong and Ngoho never returned to make good their promise. They could not in fact be
located until some months later when they were arrested by the Philippine Constabulary. That
confrontation brought to light the existence of documents purportedly executed by either or both
of the Solivels.

Never having in fact executed the alleged sale the Solivels procured inscription of an adverse
claim.

Issues:

Whether or not title to real property is passed to an innocent purchaser by a deed of sale in his
favor executed in the name of the owners by one falsely claiming to be said owners' duly
appointed and authorized attorney-in-fact.

Ruling:

When the instrument presented is forged, even if accompanied by the owner's duplicate
certificate of title, the registered owner does not thereby lose his title, and neither does the
assignee in the forged deed acquire any right or title to the property.

Petitioner herein is not the innocent purchaser for value protected by law. The innocent
purchaser for value protected by law is one who purchases a titled land by virtue of a deed
executed by the registered owner himself, not by a forged deed, as the law expressly states.
Such is not the situation of the petitioner, who has been the victim of impostors pretending to be
the registered owners but who are not said owners.

It was petitioner who was negligent, as he did... not take enough care to see to it that the
persons who executed the deed of mortgage are the real registered owners of the property.

WHEREFORE, the Court REVERSES and VACATES the Amended Decision of the Trial Court
insofar as it divests the petitioners Valentin Solivel and Petra Mente of the ownership of the
property in question.
160: PNB VS ICB (1991)

Facts:

Petitioner filed with the Regional Trial Court a petition for the cancellation of a memorandum of
encumbrance annotated upon its sixteen (16) transfer certificates of title.

As a backdrop, petitioner alleged that spouses Archimedes J. Balingit and Ely Suntay executed
in its favor real estate mortgages. Annotated subsequent to the foregoing memoranda of the
mortgage lien of petitioner on the above-mentioned properties is a "Notice of Levy re Civil Case
No. 69035, CFI-Manila, Continental Bank vs. Archimedes J. Balingit and Ely Suntay Balingit".

For failure of the Balingit spouses to settle their loan obligation with petitioner, the latter
extrajudicially foreclosed the sixteen (16) parcels of land covered by the real estate mortgages
executed by the said spouses in favor of petitioner.

private respondent International Corporate Bank, as successor in interest of the defunct

Continental Bank, filed an opposition to the petition contending that, since it was not informed of
the extrajudicial foreclosure proceedings, the new and consolidated titles over the foreclosed
properties issued in favor of herein petitioner are null and void.

Issues:

Whether purchaser of real property at an extrajudicial foreclosure sale acquires such property
free from all liens and encumbrances.

Ruling:

We find the foregoing contentions meritorious.

The facts before us sufficiently show that the cancellation of the disputed annotation from the
certificates of title of petitioner is justified in law.

It is undisputed that private respondent is a subsequent lien holder whose rights over the
mortgaged property are inferior to that of petitioner as a mortgagee.

The rule is that upon a proper foreclosure of a prior mortgage, all liens subordinate to the
mortgage are likewise foreclosed, and the purchaser at public auction held pursuant thereto
acquires title free from the subordinate liens. The failure of the subsequent attaching creditor to
redeem, within the time allowed by Section 6 of Act 3135, the land which was sold extrajudicially
to satisfy the first mortgage, gives the purchaser a perfect right to secure the cancellation of the
annotation of said creditor's attachment lien on the certificates of title of said land.

WHEREFORE, the annotations of the notice of levy in favor of Continental Bank, now
substituted by private respondent, on petitioner's Transfer
Certificates of Title... are hereby, CANCELLED.

161: ARRAZOLA VS. BERNAS (1978)

Facts:

This case is about the cancellation of an adverse claim which was annotated on Transfer
Certificates of Title in the name of Teresita Rosal Bernas (Arrazola).

Teresita was allegedly an adopted daughter of Elviro Bernas who executed a notarized will
wherein he disinherited Teresita and instituted his brother Pedro A. Bernas and his sister
Soledad Bernas Alivio as heirs to all his properties.

A month later, or on June 5, 1967, Elviro Bernas died in Roxas City. His brother Pedro filed with
the Court of First Instance of Capiz a petition for the probate of his will.

Pedro A. Bernas filed with the register of deeds of Capiz a verified notice of adverse claim. He
alleged that adverse claim that the lots were conveyed by his brother Elviro to Teresita Rosal
Bernas "involuntarily, fictitiously and without consideration" and that in Elviro's will the two lots
were devised to him (Pedro) and his sister Soledad.

Issues:

Whether or not the adverse claim should be cancelled

Ruling:

The lower court erred in ordering the cancellation of the adverse claim. It is true that the will of
Elviro Bernas has not yet been probated but the fact is that there is a pending proceeding for its
probate. And in that will the testator transmitted to his surviving brother and sister, the herein
oppositors-appellants or adverse claimants, the right to secure a declaration as to the invalidity
of his conveyance of Lots Nos. 371 and 373 to Teresita Rosal Arrazola.

Because of that will, Teresita's titles to the two lots have become controversial. To alert third
persons, or for that matter the whole world, to the fact that Pedro A. Bernas and Soledad
Bernas Alivio have an adverse claim on the two lots, section 110 of Act No. 496 gives them the
remedy of causing to be annotated their adverse claim on the titles of the two lots. If that
remedy is not given to them, then the registered owner can transfer the lots to an innocent
purchaser for value and, in that event, the unregistered adverse claim will be nullified or
frustrated.

The purpose of annotating the adverse claim on the title of the disputed land is to apprise third
persons that there is a controversy over the ownership of the land and to preserve and protect
the rights of the adverse claimant during the pendency of the controversy.
It has been said that the annotation of an adverse claim should not be confused with its validity
which should be litigated in a proper proceeding and that the registration of an invalid adverse
claim is not as harmful as the non-registration of a valid one