DURAN v.

INTERMEDIATE APPELLATE COURT

Doctrine:
– The fraudulent and forged document of sale may become the root of a valid title if the certificate
has already been transferred from the name of the true owner to the name indicated by the forger.

– The mortgagee has the right to rely on what appears in the certificate of title and, in the absence of
anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate
the title of the mortgagor appearing on the face of the said certificate.

– Good faith, while it is always to be presumed in the absence of proof to the contrary, requires a
well-founded belief that the person from whom title was received was himself the owner of the land,
with the right to convey it.

Facts: Petitioner Duran owned 2 parcels of land. She left the Philippines in June 1954 and returned
in May 1966. On 1963, a Deed of Sale was made in favor of the petitioner’s mother. On December
1965, Duran’s mother mortgaged the same property to private respondent Erlinda Marcelo-Tiangco.
When Duran came to know about the mortgage made by her mother, she wrote the Register of
Deeds informing the latter that she had not given her mother any authority to sell or mortgage any of
her properties in the Philippines. Meanwhile, foreclosure proceedings were initiated by Tiangco upon
the failure of Duran’s mother to redeem the mortgaged properties.

Duran claims that the Deed of Sale is a forgery, saying that at the time of its execution in 1963 she
was in the United States. Respondent Court ruled that there is a presumption of regularity in the
case of a public document.

Issue: Whether private respondent was a buyer in good faith and for value

Held: Yes. Good faith consists in the possessor’s belief that the person from who he received the
thing was the owner of the same and could convey his title (Arriola v. Gomez Dela Serna, 14 Phil.
627). Good faith, while it is always to be presumed in the absence of proof to the contrary, requires
a well-founded belief that the person from whom title was received was himself the owner of the
land, with the right to convey it (Santiago v. Cruz, 19 Phil. 148).

The mortgagee has the right to rely on what appears in the certificate of title and, in the absence of
anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate
the title of the mortgagor appearing on the face of the said certificate. Every person dealing with
registered land may safely rely on the correctness of the certificate of title issued therefore and the
law will in no way oblige him to go behind the certificate to determine the condition of the property. If
the rule were otherwise, the efficacy and conclusiveness of the Torrens Certificate of Titles would be
futile and nugatory. Thus the rule is simple: the fraudulent and forged document of sale may become
the root of a valid title if the certificate has already been transferred from the name of the true owner
to the name indicated by the forger.

While it is true that under Article 2085 of the Civil Code, it is essential that the mortgagor be the
absolute owner of the property mortgaged, and while as between the daughter and her mother, it
was the daughter who still owns the lots, STILL insofar as innocent third persons are concerned the
owner was already the mother inasmuch as she had already become the registered owner.