SOME DOCTRINES IN LAND TITLES AND DEEDS

a. Forged document can be a source of a valid title

A forged or fraudulent document may become the root
of a valid title if the property has already been transferred
from the name of the owner to that of the forger. This
doctrine serves to emphasize that a person who deals with
registered property in good faith will acquire good title from a forger
and be absolutely protected by a Torrens title.(Sps. Villamil vs.
Velasco, G.R. No. 177187, 2009)
b. Mirror doctrine
General Rule:
1.
Consistently, this Court has ruled that every person dealing
with registered land may safely rely on the correctness of
the certificate of title issued therefor and the law will in no
way oblige him to go beyond the certificate to determine the
condition of the property. Where there is nothing in the
certificate of title to indicate any cloud or vice in the ownership of
the property, or any encumbrance thereon, the purchaser is not
required to explore further than what the Torrens Title upon its face
indicates in quest for any hidden defects or inchoate right that may
subsequently defeat his right thereto. (Chua vs. Soriano, G.R. NO.
150066, 2007)
2.
Time and again, this Court has ruled that a person dealing with
the owner of registered land is not bound to go beyond the
certificate of title as he is charged with notice of burdens on the
property which are noted on the face of the register or on the
certificate of title. (San Lorenzo Devt Corp vs. CA, G.R. No. 124242,
2005)

Exception/s:
1. However, when a person who deals with registered
land through someone who is not the registered owner, he is
expected to look behind the certificate of title and examine
all the factual circumstances, in order to determine if the
vendor has the capacity to transfer any interest in the land.
He has the duty to ascertain the identity of the person with whom
he is dealing and the latters legal authority to convey.
The law requires a higher degree of prudence from one who
buys from a person who is not the registered owner, although the
land object of the transaction is registered. While one who buys
from the registered owner does not need to look behind the
certificate of title, one who buys from one who is not the registered
owner is expected to examine not only the certificate of title but all
factual circumstances necessary for him to determine if there are
any flaws in the title of the transferor, or in his capacity to transfer
the land. The strength of buyers inquiry on the sellers capacity
or legal authority to sell depends on the proof of capacity of the
seller. If the proof of capacity consists of a special power of attorney
duly notarized, mere inspection of the face of such public document
already constitutes sufficient inquiry. If no such special power of
attorney is provided or there is one but there appear flaws in its
notarial acknowledgment, mere inspection of the document will not
do; the buyer must show that his investigation went beyond the
document and into the circumstances of its execution. (Chua vs.
Soriano, G.R. NO. 150066, 2007)
2. This principle does not apply when the party has
actual knowledge of facts and circumstances that would
impel a reasonably cautious man to make such inquiry or
when the purchaser has knowledge of a defect or the lack of

title in his vendor or of sufficient facts to induce a

reasonably prudent man to inquire into the status of the
title of the property in litigation. One who falls within the
exception can neither be denominated an innocent purchaser for
value nor a purchaser in good faith. (Sps. Villamil vs. Velasco, G.R.
No. 177187, 2009)
3.
In case of banking institutions..
While the cases cited by petitioner held that the mortgagee is not
under obligation to look beyond the certificate of title when on its
face, it was free from lien or encumbrances, the mortgagees therein
were considered in good faith as they were totally innocent and free
from negligence or wrongdoing in the transaction. In this case,
petitioner
knew
that
the
loan
it
was
extending
to
Garcia/TransAmerican was for the purpose of the development of the
eight-unit townhouses. Petitioners insistence that prior to the
approval of the loan, it undertook a thorough check on the property
and found the titles free from liens and encumbrances would not
suffice. It was incumbent upon petitioner to inquire into the
status of the lots which includes verification on whether
Garcia had secured the authority from the HLURB to
mortgage the subject lots. Petitioner failed to do so. We
likewise find petitioner negligent in failing to even ascertain from
Garcia if there are buyers of the lots who turned out to be private
respondents. Petitioners want of knowledge due to its negligence
takes the place of registration, thus it is presumed to know the
rights of respondents over the lot. The conversion of the status of
petitioner from mortgagee to buyer-owner will not lessen the
importance of such knowledge. Neither will the conversion set aside
the consequence of its negligence as a mortgagee.
Judicial notice can be taken of the uniform practice of banks
to investigate, examine and assess the real estate offered as

security for the application of a loan. We cannot overemphasize the

fact that the Bank cannot barefacedly argue that simply because the
title or titles offered as security were clean of any encumbrances or
lien, that it was thereby relieved of taking any other step to verify
the over-reaching implications should the subdivision be auctioned
on foreclosure. (Homebankers Saving & Trust Co. vs. CA, G.R. No.
128354, 2005)
4. In case of financing institutions
In the case at bar, GSIS is admittedly a financing institution.
In its answer to the complaint filed with the trial court, GSIS
admitted knowledge that the spouses Jose C. Zulueta and Soledad
B. Ramos owned the Antonio Subdivision when they mortgaged the
same with GSIS. In Sunshine Finance and Investment Corp. v.
Intermediate Appellate Court, we held that when the purchaser
or mortgagee is a financing institution, the general rule that
a purchaser or mortgagee of land is not required to look
further than what appears on the face of the title does not
apply. Further:
Nevertheless, we have to deviate from the general rule
because of the failure of petitioner in this case to take the necessary
precautions to ascertain if there was any flaw in the title of the
Nolascos and to examine the condition of the property they sought
to mortgage. The petitioner is an investment and financing
corporation. We presume it is experienced in its business.
Ascertainment of the status and condition of properties
offered to it as security for the loans it extends must be a
standard and indispensable part of its operations. Surely it
cannot simply rely on an examination of a Torrens certificate to
determine what the subject property looks like as its condition is not
apparent in the document. The land might be in a depressed area.
There might be squatters on it. It might be easily inundated. It

might be an interior lot without convenient access. These and other

similar factors determine the value of the property and so should be
of practical concern to the petitioner. (GSIS vs. dela Merced, G.R. No.
140398, 2001)

5.
In the case of Domingo Realty vs. CA (2007), the SC had the
occasion to give a precaution to prospective buyers of titled lands,
to wit:
Hopefully this case will serve as a precaution to prospective parties
to a contract involving titled lands for them to exercise the diligence
of a reasonably prudent person by undertaking measures to ensure
the legality of the title and the accurate metes and bounds of the lot
embraced in the title. It is advisable that such parties(1) verify the
origin, history, authenticity, and validity of the title with the
Office of the Register of Deeds and the Land Registration
Authority; (2) engage the services of a competent and
reliable geodetic engineer to verify the boundary, metes,
and bounds of the lot subject of said title based on the
technical description in the said title and the approved
survey plan in the Land Management Bureau; (3) conduct an
actual ocular inspection of the lot; (4) inquire from the
owners and possessors of adjoining lots with respect to the
true and legal ownership of the lot in question; (5) put up
signs that said lot is being purchased, leased, or
encumbered; and (6) undertake such other measures to
make the general public aware that said lot will be subject
to alienation, lease, or encumbrance by the parties.
c. Rules applicable in Double Sale:
Civil Code, Art. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the person

who may have first taken possession thereof in good faith, if it

should be movable property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry
of Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title,
provided there is good faith.
1.
The principle of primus tempore, potior jure (first in time,
stronger in right) gains greater significance in case of double sale of
immovable property. When the thing sold twice is an
immovable, the one who acquires it and first records it in
the Registry of Property, both made in good faith, shall be
deemed the owner. Verily, the act of registration must be
coupled with good faith that is, the registrant must have
no knowledge of the defect or lack of title of his vendor or
must not have been aware of facts which should have put
him upon such inquiry and investigation as might be
necessary to acquaint him with the defects in the title of his
vendor.(San Lorenzo Devt Corp vs. CA, G.R. No. 124242, 2005)
d. Purchaser in good faith
1.
A purchaser in good faith is one who buys property without
notice that some other person has a right to or interest in such
property and pays its fair price before he has notice of the adverse
claims and interest of another person in the same property. (Chua
vs. Soriano, G.R. NO. 150066, 2007)
2.
Thus, the reliance by the Chuas on the notarial
acknowledgment found in the duly notarized SPA presented by
Celestino is sufficient evidence of good faith. The Chuas need not
prove anything more for it is already the function of the notarial

acknowledgment to establish the appearance of the parties to the

document, its due execution and authenticity. (Chua vs.
Soriano, G.R. NO. 150066, 2007)