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Finals Reviewer in Land Titles

and Deeds

CERTIFICATE OF TITLE
A Torrens title is the certificate of ownership issued
under the Torrens system of registration by the
government, thru the Register of Deeds naming and
declaring the owner in fee simple of the real property
described therein, free from all liens and encumbrances
except such as may be expressly noted thereon or
otherwise reserved by law.

Who has right to possess owner’s duplicate
certificate.
Section 41 of Act No. 496, as amended by P.D. No.
1529, provides that the owner’s duplicate certificate shall
be issued by the Register of Deeds in the name of the
person in whose favor the land was decreed, and further
disposes that said duplicate shall be delivered to the
registered owner.

Protection of innocent third person.
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.
CASE
Evidence in the case at bar discloses that when
petitioner purchased the subject property on June 10,
1970, the title thereto was in the name of her vendor
Rafaela Donato alone. The rule that all persons dealing
with property covered by Torrens certificate of title are
not required to go beyond what appears on the face of
the title is well-settled. The remedy of the defrauded
party is to bring action for damages against those who
caused the fraud or were instrumental in depriving him of
the property. In the case at bar, because the action
prescribes in 10 years from the issuance of the Torrens
title over the property, the action is said to have already
prescribed because it was fi led 15 years after the
issuance to TCT No. T-32682.

An ―innocent purchaser for value‖ or any equivalent
phrase shall be deemed, under the Torrens system, to
include an innocent lessee, mortgagee; or other
encumbrancer for value.

Good faith, how determined.
Good faith, or the lack of it, is in its last analysis a
question of intention; but, in ascertaining the intention by
which one is actuated on a given occasion, we are
necessarily controlled by the evidence as to the conduct
and outward acts by which alone the inward motive may,
with safety, be determined. So it is that ―the honesty of
intention,‖ ―the honest lawful intent,‖ which constitutes
good faith, implies freedom from knowledge and
circumstances which ought to put a person on inquiry,‖
and so it is that proof of such knowledge that overcomes
the presumption of good faith in which the courts always
indulge in the absence of proof to the contrary. ―Good
faith, or the want of it, is not visible, tangible fact
that can be seen or touched, but rather a state or
condition of mind which can only be judged of by
actual or fancied tokens or signs.’’
It has been held that a purchaser in good faith is one
who buys the property of another without notice that
some other person has a right to or interest on such
property and pays a full and fair price for the same at the
time of such purchase or before he has notice of the
claim or interest of some other person in the property.

When actual knowledge of purchaser does not
constitute bad faith.
In a case where A sold the same property fi rst to B and
then to C, C as a purchaser in good faith for value
registered the deed and obtained a title in his name, free
from all liens and encumbrances.
Thereafter, C sold the same property to D who relied on
C’s good title. But before D finally acquired the property,
he became aware of the fact that there was some
trouble or pending litigation involving the same property
between A and B, the information having been relayed to
him by the tenant of the place. From these facts two
questions have been raised, namely: (1) whether D is a
purchaser in good faith, notwithstanding his knowledge
of the pending litigation; and (2) whether D acquired
valid title to the property free from lien or encumbrance.
With respect to the fi rst question, it was held that D is
still a purchaser in good faith, notwithstanding his
knowledge of the pending litigation, because of the fact
that C from whom he bought the property was not a
party to the litigation. D stepped only into the shoes of C,
a previous purchaser in good faith, and thereby he
became entitled to all the defenses available to C,
including those arising from the acquisition of the
property in good faith and for value. With respect to the
second question, it was held that C acquired valid title to
the property, in view of Article 1544 of the Civil Code
providing that registration in the Registry of the real
property the ownership of which is claimed by different
persons shall have the effect of transferring ownership
thereof to the party who, in good faith, fi rst recorded it in
the Registry of Property. Furthermore, Article 526 of the
Civil Code provides that ―He is deemed a possessor in
good faith who is not aware that there exists in his title or
mode of acquisition any fl aw which invalidates it.’’
Again, under Section 39 of Act No. 496, as amended by
Act No. 2011, ―every person receiving a certifi cate of
title in pursuance of a decree of registration, and every
subsequent purchaser of registered land who takes a
certifi cate of title for value in good faith shall hold the
same free of all encumbrances except those noted on
said certifi cate.‖ When the pending litigation between A
and B is fi nally decided, the decision of the court cannot
operate to divest the right of D who is not and has never
been a party to the litigation, either as plaintiff or as
defendant.

Sale by co-owners
Under Article 493 of the Civil Code, the owner of an
undivided interest in the property has the right to freely
sell and dispose of only his rights, participation and
interest in an undivided property held in common with
others, but has no right to sell a specifi c part, by metes
and bounds, of the property. The sale or other
disposition can affect only his undivided share, and the
transferee gets only what corresponds to his grantor in
the property owned in common.

it was held that a co-heir who signs a deed of sale
executed by the other co-heirs conveying the community
property in favor of someone, not as vendor but only
as an instrumental witness, without objecting to the
sale of his alleged share in the property, is bound by
the conveyance, and he cannot afterwards sue for
partition after the vendee has already acquired
ownership of the property by adverse possession.

Registration of sale with right of legal redemption
right of legal pre-emption or redemption that may be
exercised within thirty days from the date of written
notice by the vendor.

Torrens title not subject to prescription.
No title to registered land in derogation to that of the
registered owner shall be acquired by prescription or
adverse possession.

Right to recover possession equally imprescriptible.
To a registered owner under the Torrens system, the
right to recover possession of the registered property is
equally imprescriptible, since possession is a mere
consequence of ownership.



Evidentiary value of certifi cate of title
A certifi cate of title is conclusive evidence with respect
to the ownership of the land described therein, and other
matters which can be litigated and decided in land
registration proceedings.

Torrens title not subject to collateral attack.
Torrens title can be attacked only for fraud, within one
year after the date of the issuance of the decree of
registration. Such attack must be direct, and not by a
collateral proceeding The title represented by the
certificate cannot be changed, altered, modified,
enlarged, or diminished in a collateral proceeding.

VOLUNTARY DEALINGS WITH REGISTERED LANDS

An innocent purchaser for value of registered land
becomes the registered owner and in the contemplation
of law the holder of a certificate thereof the moment he
presents and files a duly notarized and lawful deed
of sale and the same is entered on the day book and
at the same time he surrenders or presents the
owner’s duplicate certificate of title to the property
sold and pays the full amount of registration fees,
because what remains to be done lies not within his
power to perform. The Register of Deeds is in duty
bound to perform it. We believe that is a reasonable and
practical interpretation of the law under consideration —
a construction which would lead to no inconsistency and
injustice.
FORMAL DETAILS REQUIRED OF VOLUNTARY
INSTRUMENTS.
requires that every deed or other voluntary instrument
presented for registration shall contain or have endorsed
upon it the full name, nationality, place of residence, post
office address of the grantee or other person acquiring
or claiming an interest under such instrument, and every
such instrument shall also state whether the grantee is
married or unmarried, and, if married, the full name of
the husband or wife. If the grantee is a corporation or
association, the deed must show that such corporation
or association has the requirements prescribed by
existing law for acquiring public land, in case the land
sold or conveyed was originally public land. This latter
requirement may be expressed in the deed by means of
a statement to the effect that such corporation or
association has at least sixty (60) percent of its capital
belonging to Filipinos.

Register of Deeds not authorized to determine
whether or not fraud was committed in the deed
sought to be registered. The duties enjoined upon the
Register of Deeds by Section 57 of the Land
Registration Act are clearly ministerial and mandatory in
character, not only as indicated by the auxiliary ―shall‖
but by the nature of such functions required to be
performed by him.

nature of such functions required to be performed by
him.
The requirements for deeds and other voluntary
instruments of conveyance to be registrable there
under are specified in the law, thus:
(1) The presentation of the owner’s duplicate certificate
whenever any duly executed voluntary instrument is filed
for registration;
(2) the payment of the prescribed registration fees and
the requisite documentary stamps;
(3) the evidence of full payment of real estate tax as may
be due; and
(4) the inclusion of one extra copy of any document of
transfer or alienation of real property, to be furnished the
city or provincial assessor.

Sales of Land to Aliens
Krivenko vs. Register of Deeds of Manila held that
aliens are not allowed to acquire ownership of
urban or residential lands in the Philippines, and as a
consequence, all acquisitions made in contravention of
the prohibition since the fundamental law became
effective are null and void per se and ab initio.

*** No entity, except the legislature itself, may add to
or detract from or otherwise alter or amend the
requirements it has so enumerated — and then only by
the corresponding amendment of the existing statutes or
the enactment of new ones. The local government
cannot impose additional requirements; and for a
chartered city to add new requirements for registration
not otherwise provided by statutory law in the matter is
tantamount to amending or modifying the law, a power
which is not vested in such a chartered city.

REAL MORTGAGE
MORTGAGE, according to Sanchez Roman, is a real
right constituted to secure an obligation upon real
property or rights therein to satisfy with the proceeds of
the sale thereof such obligation when the same
becomes due and has not been paid or fulfilled.

Kinds of mortgages.
1. conventional - or voluntary mortgage is one created by
agreement of the parties.
2. legal mortgage - is one created by operation of law,
wherein the creditor is given a mortgage on the property
of his debtor, without the necessity of the parties actually
stipulating for it.
- as one required by express provision of law to be
executed in favor of certain persons to secure the
performance of a principal obligation.
3. judicial mortgage is one resulting from a judgment.
4. equitable mortgage is one that is not a mortgage in
form but in substance a mere security for a debt or
obligation. This commonly occurs in the case of pacto de
retro sales.

ESSENTIAL REQUISITES OF MORTGAGE.
POF
(a) That it be constituted to secure the fulfillment of a
principal obligation;
(b) That the mortgagor be the absolute owner of the
thing mortgaged;
(c) That the person constituting the mortgage has
the free disposal of the property, and in the absence
thereof, that he be legally authorized for the purpose.
DBP vs. CA Thus, a person who deliberately ignores a
signifi cant fact that would create suspicion in an
otherwise reasonable person is not an innocent
purchaser for value

Who may constitute a mortgage.
It is only the absolute owner of the property who can
constitute a valid mortgage on it.

Consent of both parties not necessary to
registration of mortgage.
A mortgage may be registered at the instance of the
mortgagee alone, even over the objection of the
mortgagor.

Special characteristics of real mortgage.
The following are the special characteristics of a real
mortgage:
(a) Realty as subject matter: Only real property or
alienable rights and interests therein may be the subject
matter of a mortgage. Thus, not only the land and
improvements thereon may be mortgaged, but also the
credits or rights of the mortgagee or other
encumbrancers.
(b) Real right: A mortgage lien is a real right and as
such it is good and binding against the whole world, and
may be enforced by real action against all persons who
may have existing rights or interests in the same
property, not registered prior to the mortgage.

(c) Accessory obligation: As an obligation, a mortgage
is only accessory and presupposes the existence of a
principal obligation. In the absence therefore of a
principal obligation, a mortgage cannot stand.
(d) Indivisibility: Even though the debt secured may be
divided among the debtors or the creditors or their
successors in interest, the mortgage shall remain as one
and indivisible, unless there have been several things
given in mortgage and each of them guarantees only a
determinate portion of the obligation.
(e) Inseparability: The mortgage lien and the property
affected are inseparable, so much so that whoever may
subsequently acquire title to the mortgaged property is
bound by the terms of the mortgage, whether the
transfer be with or without the consent of the mortgagee.
In other words, the mortgage, until discharged, follows
the property to whomever it may be transferred no
matter how many times over it changes hands as long
as the annotation is carried over.
(f) Retention of possession. The mortgagor
generallyretains possession of the mortgaged property
inasmuch as a mortgage is a mere lien and title to the
property does not pass to the mortgagee.


The contract shall be presumed to be an equitable
mortgage, in any of the following cases:
(1) When the price of a sale with right to repurchase is
usually inadequate;
(2) When the vendor remains in possession as lessee or
otherwise;
(3) When upon or after the expiration of the right to
repurchase another instrument extending the period of
redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the
purchase price;
(5) When the vendor binds himself to pay the taxes on
the thing sold;
(6) In any other case where it may be fairly inferred that
the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance of
any other obligation.

Registration of mortgage; how effected.
The procedure in the registration of a mortgage is
outlined in Section 61 of Act No. 496, as amended by
P.D. No. 1529. The mortgage deed is fi led together with
the owner’s duplicate certifi cate of title with the Register
of Deeds of the city or province where the land lies.
Thereupon, this offi cial enters upon the original certifi
cate of title and the owner’s duplicate certifi cate a
memorandum of the purport of the mortgage deed, the
time of fi ling, and the fi le number of the deed, signing
the memorandum after the entry. He also notes down
upon the mortgage deed the time of fi ling and a
reference to the volume and page of the registration
book where it is registered.

*** that in a mortgage of real estate the
improvements on the same are included; therefore,
all objects permanently attached to a mortgaged
building or land, although they may have been
placed there after the mortgage was constituted, are
also included.

May mortgage be registered without the owner’s
duplicate
title?
Where a mortgage deed has been fi led for registration
and the owner’s duplicate certifi cate of title is being
withheld by the owner or otherwise could not be
presented at the time of registration, the Register of
Deeds may be requested to proceed in accordance with
Section 72 of Act No. 496 (now Section 71, P.D. No.
1529), in which case he shall send within twenty-four
hours notice by mail to the registered owner, stating that
such mortgage has been registered, and requesting that
the owner’s duplicate certifi cate be produced in order
that the corresponding memorandum of the mortgage
could be made thereon. If the owner neglects or refuses
to comply within a reasonable time the Registrar may
suggest the fact to the court, and the court, after notice,
may enter an order to the owner to produce his certifi
cate at a time and place to be named therein, and may
enforce the order by suitable process.

Stipulation against subsequent mortgage.

stipulation not to make a new mortgage not being
contrary to law, morals, or public order, is valid and is,
therefore, an obstacle to the registration of subsequent
mortgages in the registry of property.

*** whether the agreement that the mortgagor cannot
sell the mortgaged property without the consent of the
mortgagee such that if it is sold
without his consent, valid or not?
Held:
It is not valid as it contravenes Article 2130, NCC which
provides that a stipulation forbidding the owner from
alienating the immovable mortgaged shall be void.

Pactum commissorium - is a stipulation empowering
the creditor to appropriate the thing given as guaranty for
the fulfi llment of the obligation in the event the obligor
fails to live up to his undertakings, without further
formality, such as foreclosure proceedings, and a public
sale.

Extrajudicial foreclosure of mortgage.
A mortgage may be foreclosed extrajudicially only if
there has been inserted in or attached to the real estate
mortgage a special power of attorney conferring upon
the mortgagee the power to sell the mortgaged property
at public auction in the event of foreclosure, conformably
to the procedure prescribed in Act No. 3135, as
amended by Act No. 4118.
A power to sell extrajudicially conferred upon the
mortgagee is a power that survives the death of the
mortgagor because it is an agency coupled with interest.
To constitute such power coupled with interest, the rule
is that there should coexist in the agent, along with the
power given him, an interest or estate in the thing to be
disposed of. It is not meant an interest in the exercise of
the power but an interest in the property on which the
power is to operate.
As to the place of sale, it cannot be made legally outside
of the province or city in which the property is situated;
and in case the place within said province or city in
which the sale is to be made is the subject of stipulation,
such sale shall be made in said place or in the municipal
building of the municipality in which the property or part
thereof lies.
Publication is also required by posting notices of the sale
for not less than twenty days in at least three public
places of the municipality or city where the property is
situated, and if such property is worth more than four
hundred pesos, by publishing such notice once a week
for at least three consecutive weeks in a newspaper of
general circulation in the municipality or city. In order
that a newspaper may be said to be of general
circulation in a municipality, it must have regular
subscribers, buyers and readers therein. The law does
not require that notice of auction sale be given by the
mortgagee to the mortgagor.


Right of redemption in foreclosure of mortgage.
may redeem the same within the term of one year from
and after the sale.
Reckoning point – from the date of registration of the
sale.

The pendency of an action questioning the validity of a
mortgage cannot bar the issuance of the writ of
possession after title to the property has been
consolidated in the mortgagee.
CASE
The period of redemption is not interrupted by the fi ling
of an action assailing the validity of the mortgage, so that
at the expiration thereof, the mortgagee who acquires
the property at the foreclosure sale can proceed to have
the title consolidated in his name and a writ of
possession issued in his favor. To rule otherwise, and
allow the institution of an action questioning the
redemption would constitute a dangerous precedent. A
likely offshoot of such a ruling is the institution of
frivolous suits for annulment of mortgage intended
merely to give the mortgagor more time to redeem the
mortgaged property. (Union Bank of the Philippines
vs. CA)


CHATTEL MORTGAGE - is a sale of personalty
conveying the title to the mortgagee under the condition
that, if the terms of redemption are not complied with,
then the title becomes absolute in the mortgagee.
- it is a transfer of personal property as security for a
debt or obligation in such form that, upon failure of the
mortgagor to comply with the terms of the contract, the
title to the property will be in the mortgagee.
*** the true nature of a chattel mortgage as a sale only in
form, while in substance essentially a contract of
security.

Union Motors Corporation vs. CA, 361 SCRA 506, it
was ruled that the accessory contract of chattel
mortgage has no legal effect whatsoever inasmuch as
the mortgagors are not the absolute owners thereof,
ownership of the mortgagor being an essen tial
requirement of a valid mortgage contract. The
manifestations of ownership are control and enjoyment
over the thing owned.

Subject matter of chattel mortgage -- Only personal
property
House as object of chattel mortgage
If the owner of the building is distinct and different from
the owner of the land, it may be considered a
personal property upon stipulation of the parties, for the
purpose of constituting a chattel mortgage. So, also,
where a building erected on land belonging to another is
merely superimposed on the soil or is sold for immediate
demolition, the same may be considered as movable or
personal property.

Register of Deeds in respect to the registration of
chattel mortgages are purely of a ministerial
character, and he is clothed with no judicial or quasi-
judicial power to determine the nature of the property,
whether real or personal, which is the subject of the
mortgage. Generally speaking, he should accept the
qualifi cation of the property adopted by the person who
presents the instrument for registration and should place
the instrument on record, upon payment of the proper
fees, leaving the effects of registration to be determined
by the court if such question should arise for legal
determination. Registration adds nothing to the
instrument, considered as a source of title, and affects
nobody’s rights except as a species of constructive
notice.

it was held that the view as above enunciated that the
parties to a deed of chattel mortgage may agree to
consider a house as personal property, for purposes of
such a contract, shall be deemed good only insofar as
the contracting parties are concerned and is not
applicable to strangers to the contract or to a case where
there is no contract whatsoever with respect to the
status of the house.

Machinery and fixture as subject matter.

Gen. Rule
Machinery and fi xture are personal property by their
very nature
Exemption:
if they are attached to real property or placed in a factory
building or plant, with the character of permanence
according to their purpose and in such manner that they
cannot be detached therefrom without causing
destruction of, or material injury to, the things real with
which they are connected, they would be regarded as
part of the real estate.

Exemption to the exemption:
if they are so placed by a tenant, or a usufructuary, or
someone else having only a temporary right on the real
property – movable

An interest in a business mortgageable if properly
described. – personal property
Shares of stock as security of an obligation –
personal property
Growing crops as personal property.
Growing crops, like ungathered sugar cane in the fi eld,
are personal property and as such may be subject
matter of chattel mortgage.
Vessels are considered personal property under the
civil law.

Motor vehicle when object of chattel mortgage.
whenever any owner mortgages any motor vehicle as
security for a debt or other obligation, the creditor or
person in whose favor the mortgage is made is required,
within seven days, to notify the Chief of the Motor
Vehicles Offi ce in writing to that effect, stating the
registration number of the motor vehicle, date of
mortgage, names and addresses of both parties, and
such other information as may be required by said offi
ce.

Mortgage of after-acquired property valid.
The problem of whether after-acquired property may be
object of a chattel mortgage has confronted stores open
to the public for retail business, where the goods are
constantly sold and substituted with new stock from time
to time.

Large cattle as object of chattel mortgage; how
described.
Large cattle includes the horse, mule, ass, carabao, or
other domesticated member of the bovine family.

the description thereof shall include the brands, class,
age, knots of radiated hair commonly known as
remolinos, or cowlicks, and other marks of ownership as
described and set forth in the certifi cate of ownership of
said animal or animals,together with the number and
place of issue of such certifi cates ofownership.

Where to register chattel mortgage.
a chattel mortgage shall be recorded in the offi ce of the
Register of Deeds of the province or city where the
mortgagor resides as well as where the property is
situated or ordinarily kept.


Government lien superior to mortgage lien.
Taxes due the government are preferred and superior to
the mortgage lien.

Effect of registration.
While registration adds nothing to the instrument,
considered as the source of title of the mortgagee, it
operates as a constructive notice of the existence of the
chattel mortgage. The transaction
thereby becomes binding against third persons. An
otherwise invalid or legally defective document is not
validated or cured of its legal defects by registration.

Mortgage binding on subsequent purchasers.
Instruments of mortgage are binding, while they subsist,
not only upon the parties executing them but also upon
those who later, by purchase or otherwise, acquire the
mortgaged properties. The right of those who so acquire
said properties should not and cannot be superior to that
of the creditor who has in his favor an instrument of
mortgage executed with the formalities of the law, in
good faith, and without the least indication of fraud.

Sale of chattel without consent of mortgagee.
Art 319 par. 2 of RPC
incurs criminal responsibility. A mere stipulation in the
deed of sale that it revokes the chattel mortgage and
quashes, nullifi es and terminates all proceedings,
judicial or extrajudicial, arising out of and incident to the
transaction, does not and cannot have the effect of
wiping out the criminal liability.

Effect of failure to register.
Where there exists a chattel mortgage contract in due
form, but for some reason or another it was not, as it
should be, registered in the offi ce of the Register of
Deeds concerned, the effect would be that it still remains
a valid chattel mortgage as against the mortgagor, his
executors or administrators,54 but void as against third
persons, such as intervening purchasers or creditors
claiming liens by attachment, judgment or execution.

Affi davit of good faith; effect of omission.
The absence of such affi davit vitiates a mortgage as
against creditors and subsequent encumbrancers

Foreclosure of chattel mortgage; condition
precedent.
Before foreclosure may be resorted to, it is necessary as
a condition precedent that there be a violation of the
condition of the chattel mortgage and that at least thirty
days shall have elapsed since then.

Procedure in foreclosure of chattel mortgage.

The procedure prescribed in Section 14 of the Chattel
Mortgage Law for the foreclosure of chattel mortgage
may be outlined as follows:
―1. Notices are posted for at least ten days in at least two
public places in the municipality where the mortgaged
property is to be sold, designating the time, place, and
purpose of the sale.
―2. The mortgagee, his executor, administrator or assign,
notifies in writing, at least ten days before the sale, the
mortgagor or person holding under him and other
persons holding subsequent mortgages of the time and
place of the sale, said notice to be delivered personally
to the party if
residing in the same municipality or sent by mail if
residing outside.
―3. The mortgaged property is sold at public auction by a
public officer at a public place in the municipality where
the mortgagor resides or where the property is situated,
as designated in the notice.
―4. Within thirty days after the sale, the public official who
conducted the sale makes a return of his doings, the
same to be filed and recorded with the Office of the
Register of Deeds where the mortgage has been
recorded. The officer’s return describing the articles sold
and stating the amount received for each article
operates as a discharge of the lien created by the
mortgage.
―5. The proceeds of the sale will be distributed and
applied to the following payments:
(a) Cost and expenses of keeping and sale;
(b) Amount of demand or obligation secured by the
chattel mortgage;
(c) Obligations due to persons holding subsequent
mortgages, in their order, and
(d) Balance turned over to the mortgagor or person
holding under him on demand.‖


INVOLUNTARY DEALINGS WITH REGISTERED
LAND — ATTACHMENT AND OTHER LIENS
ATTACHMENT is a writ issued at the institution or
during the progress of an action, commanding the sheriff
or other public offi cer to attach the property, rights,
credits, or effects of the defendant to satisfy the
demands of the plaintiff.

Attachment may be classifi ed into three kinds,
namely:
(1) preliminary attachment; is that issued at the
institution or during the progress of an action.
(2) garnishment; plaintiff seeks to subject to his claim
property of the defendant in the hands of a third person
called the garnishee, as well as money owed by such
third person to defendant. Garnishment proceedings are
usually directed to personal property.
(3) levy on execution. is the attachment issued after the
fi nal judgment in satisfaction thereof.