Case Digest – Land, Titles & DeedsIntroduction & Modes of Acquiring Ownership
CAPITOL SUBDIVISION, INC. v. CAPITOL SUBDIVISION, INC.
G.R. No. L-16257 January 31, 1963
Said Lot 378 is part of Hacienda Mandalagan consisting of Lots 378, 405, 407,410, 1205, 1452 and 1641 of the cadastral survey, originally registered in the nameof Agustin Amenabar and Pilar Amenabar. In 1920, the latter sold the hacienda to JoseBenares who obtained Original Certificate Title in lieu thereof. In 1921, he mortgagedthe Hacienda, including Lot 378 to the Bacolod-Murcia Milling Co. On 1926, JoseBenares again mortgaged the Hacienda, including said Lot 378, on the PhilippineNational Bank, subject to the first mortgage held by the Bacolod-Murcia Milling Co. These transactions were duly recorded in the office of the Register of Deeds of NegrosOccidental. The mortgage in favor of the Bank was subsequently foreclosed, and theBank acquired the Hacienda, including Lot 378, and had the title in its name.However, Bank did not take possession of the property for Jose Benares claimed to beentitled to retain it under an alleged right of lease. On 1935, the Bank agreed to sellthe Hacienda to Carlos P. Benares, son of Jose Banares. Thereafter, Carlos P. Benarestransferred his rights, under this contract with the Bank, to plaintiff herein, whichcompleted the payment of the installments due to the Bank in 1949. Hence, on 1949,the Bank executed the corresponding deed of absolute sale to the plaintiff and Transfer Certificate of Title in plaintiff's name. When upon the execution of the deedof absolute sale by the Bank, plaintiff took steps to take possession the Hacienda, itwas discovered that Lot 378 was the land occupied by the Provincial Hospital of Negros Occidental. Defendant claims that it acquired Lot 378 through expropriationproceedings in 1924,it took possession of said lot and began the construction thereonof the provincial hospital, which was completed in 1926. It maintains that it paid to Jose Benares the assessed value of Lot 378.
Whether or not the defendant herein had acquired Lot 378 in the expropriationproceedings.
Several circumstances strongly indicate that the expropriation had not beenconsummated. The mortgage to the Bacolod-Murcia Milling Co., as well as thesubsequent mortgage in favor of the Bank was duly registered and annotated,
, on Transfer Certificate of Title. Hence, Lot 378 would not have possibly beenexpropriated without the intervention of the aforementioned mortgagees. What ismore, the deed executed by the Bank, among other evidences, promising to sell theHacienda to Carlos Benares explicitly states that portions of Lot 405, 407 and 410,had been expropriated by the Provincial Government of Negros Occidental, thusindicating, by necessary implication, that Lot 378 had not been expropriated. Uponthe other hand, the main purpose of the Torrens System is to avoid possible conflictsof title in and to real estate, and to facilitate transactions relative thereto giving thepublic the right to rely upon the face of Torrens certificate of title and to dispensewith the of inquiring further, except when the party concerned has actual knowledgeof facts and circumstances that should impel a reasonably cautious man to makesuch further inquiry. In the case at bar plaintiff had no such actual knowledge, it beingan established fact that he was not aware until 1949 that the land on which theprovincial hospital stood was Lot 378. Thus, Lot 378, must be held, therefore, to bethe exclusive property of plaintiff herein.Alpha Bonifacio. Cherry Chao. Myra Chavez. Harriett Gutierrez. Jose Sotelo. KimVillanueva