G.R. No. L-40858. September 15, 1987
SPOUSES FEDERICO SERFINO AND LORNA BACHAR, PETITIONERS, VS. THE COURT OF APPEALS AND LOPEZ SUGAR CENTRAL MILL CO., INC., RESPONDENTS.
PARAS, J.:
BEFORE US ARE TWO (2)
PETITIONS FOR CERTIORARI TO REVIEW THE DECISION[1] OF THE COURT OF APPEALS IN CA?G.R.
NO. 37748-R, CONSOLIDATED FOR OUR
DISPOSITION SINCE THEY AROSE FROM THE SAME FACTUAL BACKGROUND.
THE RECORDS OF THE CASE SHOW THAT ON AUGUST 25, 1937, A PARCEL OF LAND CONSISTING OF 21.1676 HECTARES
SITUATED IN THE MUNICIPALITY OF SAGAY, PROVINCE OF NEGROS OCCIDENTAL, WAS
PATENTED IN THE NAME OF PACIFICO CASAMAYOR, UNDER HOMESTEAD PATENT NO. 44139.
UPON REGISTRATION OF
SAID PATENT IN THE OFFICE OF THE REGISTER OF DEEDS OF NEGROS OCCIDENTAL, OCT NO. 1839 WAS ISSUED
BY SAID OFFICE IN THE NAME OF PACIFICO CASAMAYOR. ON DECEMBER 14, 1945, THE LATTER SOLD SAID LAND IN FAVOR OF NEMESIA D. BALTAZAR.
APPARENTLY,
OCT NO. 1839 WAS LOST DURING THE WAR AND UPON PETITION OF NEMESIA BALTAZAR, THE
COURT OF FIRST INSTANCE OF NEGROS
OCCIDENTAL ORDERED[2] THE
RE-CONSTITUTION THEREOF. PURSUANT THERETO, OCT NO. 14-R (1839) WAS ISSUED ON JANUARY 18, 1946 IN THE NAME OF PACIFICO CASAMAYOR. ON THAT SAME DAY, TCT NO. 57-N WAS ISSUED IN THE NAME OF NEMESIA BALTAZAR BUT AFTER THE CANCELLATION
OF OCT NO. 14-R
(1839).
ON AUGUST 25, 1951, NEMESIA BALTAZAR, SOLD SAID PROPERTY TO LOPEZ SUGAR CENTRAL MILL CO.,
INC. (LOPEZ SUGAR
CENTRAL, FOR BREVITY). THE
LATTER, HOWEVER DID NOT PRESENT THE DOCUMENTS FOR REGISTRATION UNTIL DECEMBER
17, 1964 TO
THE OFFICE OF THE REGISTRY OF DEEDS.
SAID OFFICE REFUSED REGISTRATION UPON ITS DISCOVERY THAT THE SAME
PROPERTY WAS COVERED BY ANOTHER CERTIFICATE OF TITLE, TCT NO. 38985, IN THE NAME OF FEDERICO SERFINO.
AN INQUIRY INTO THIS DISCREPANCY REVEALS THAT THE PROVINCIAL
TREASURER OF NEGROS OCCIDENTAL ON OCTOBER 30, 1956 HAD CONDUCTED A PUBLIC AUCTION SALE
OF THIS PROPERTY FOR TAX DELINQUENCY FOR THE PERIOD STARTING THE YEAR 1950. NOTICE
OF THIS PUBLIC AUCTION SALE WAS
SENT TO PACIFICO CASAMAYOR BUT NONE TO NEMESIA BALTAZAR AND LOPEZ SUGAR
MILL. THERE BEING NO PUBLIC BIDDERS ON
THE SCHEDULED DATE OF SALE, THE
PROVINCIAL TREASURER OF NEGROS OCCIDENTAL ISSUED A
CERTIFICATION OF SALE OF DELINQUENT
REAL PROPERTY OVER THE DISPUTED LAND TO THE PROVINCE
OF NEGROS OCCIDENTAL. ON MAY 14, 1964, UPON PAYMENT OF THE AMOUNT OF P1,838.49 BY FEDERICO SERFINO, A CERTIFICATE OF REPURCHASE OF
REAL PROPERTY WAS ISSUED AND EXECUTED BY THE PROVINCIAL TREASURER IN FAVOR OF
FEDERICO SERFINO, FOR AND IN BEHALF OF PACIFICO CASAMAYOR.
ON MAY 28, 1964, SERFINO FILED A PETITION WITH THE COURT OF FIRST INSTANCE OF NEGROS
OCCIDENTAL FOR THE RECONSTITUTION OF OCT
NO. 1839 IN THE NAME OF PACIFICO
CASAMAYOR, UPON THE ALLEGATION THAT SAID TITLE WAS LOST. AFTER DUE PUBLICATION AND
HEARING, SAID OCT WAS ORDERED
RECONSTITUTED AND THUS OCT NO. RP-1304 (1839) WAS ISSUED BY THE
REGISTRY OF DEEDS IN THE NAME OF CASAMAYOR.
ON OCTOBER
30, 1964, SERFINO
PETITIONED THE COURT FOR CONFIRMATION OF HIS TITLE TO THE LAND AS PURCHASER IN
THE AUCTION SALE. ON OCTOBER
31, 1964, COURT
GRANTED THE PETITION AND ON NOVEMBER 2, 1964, OCT NO.
RP-1304 (1839) WAS CANCELLED AND
TCT NO. 38985 WAS ISSUED IN THE
NAME OF FEDERICO SERFINO, MARRIED TO LORNA BACHAR.
ON NOVEMBER
19, 1964, THE SPOUSES SERFINOS MORTGAGED THE LAND TO THE PHILIPPINE NATIONAL
BANK (PNB) TO SECURE A LOAN IN THE AMOUNT OF P5,000.00. SAID MORTGAGE IN FAVOR OF PNB WAS INSCRIBED IN TCT NO.
38985. HENCE, THIS WAS THE SITUATION OF THE LAND WHEN THE OFFICE OF THE
REGISTER OF DEEDS REFUSED REGISTRATION OF THE PROPERTY IN QUESTION REQUESTED BY
THE LOPEZ SUGAR CENTRAL.
THE LOWER COURT IN ITS ORDER, DATED JANUARY 16, 1965 IN
THE PETITION OF THE OFFICE OF THE REGISTER OF DEEDS SEEKING THE CANCELLATION OF
EITHER TCT NO. 57-N (IN THE NAME OF
NEMESIA BALTAZAR) OR TCT NO. 38985 (IN THE NAME OF LOPEZ SUGAR CENTRAL), ORDERED
LOPEZ SUGAR CENTRAL AND SPOUSES SERFINO TO TAKE THE NECESSARY STEPS TOWARDS THE
CLEARING OF THEIR RESPECTIVE TITLES BEFORE A COURT OF GENERAL JURISDICTION.
PURSUANT THERETO, LOPEZ SUGAR CENTRAL, ON MAY 5, 1965,
INSTITUTED AN ACTION FOR 1) ANNULMENT OF OCT NO. RP-1304 (1839), OF TCT NO. 38985 AND OF THE MORTGAGE EXECUTED BY
THE SERFINOS IN FAVOR OF PNB, 2) FOR
THE REGISTRATION OF THE DEED OF SALE, 3) FOR THE ISSUANCE OF A TCT IN ITS NAME AND 4) FOR RECOVERY OF
POSSESSION OF THE DISPUTED LAND FROM THE SERFINOS.
ON FEBRUARY 4, 1966, THE LOWER COURT RENDERED ITS DECISION,[3] THE DISPOSITIVE PORTION READING AS FOLLOWS:
“WHEREFORE, AND
CONSIDERING THE CONCLUSIONS AND OPINION SET FORTH
ABOVE, JUDGMENT IS HEREBY RENDERED AS FOLLOWS:
“1. THE REGISTER OF DEEDS
OF NEGROS OCCIDENTAL IS HEREBY ORDERED TO CANCEL
TRANSFER CERTIFICATE OF TITLE NO.
38985;
“2. THE SAME REGISTER OF DEEDS IS ORDERED TO REGISTER THE
DEED OF SALE EXECUTED BY NEMESIA D. BALTAZAR ON AUGUST 25, 1951,
AND AFTER CANCELLING TRANSFER CERTIFICATE OF TITLE NO. 57-N AND OTHER TITLES ISSUED PRIOR THERETO, TO ISSUE A NEW
TRANSFER CERTIFICATE OF TITLE IN THE NAME OF LOPEZ SUGAR CENTRAL MILL CO.,
INC., UPON PREVIOUS PAYMENTS OF THE LEGAL FEES;
“3. THE LOPEZ SUGAR
CENTRAL MILL CO., INC., SHALL PAY THE PHILIPPINE NATIONAL BANK, BACOLOD BRANCH,
THE SUM OF P5,261.11
SECURED BY A REAL ESTATE MORTGAGED REGISTERED AND ANNOTATED ON TRANSFER
CERTIFICATE OF TITLE 38985 WHICH SHALL BE CARRIED OVER IN THE NEW
TRANSFER CERTIFICATE OF TITLE TO BE ISSUED TO THE LOPEZ SUGAR CENTRAL MILL CO., INC. WITH THE RIGHT OF RECOURSE TO THE ASSURANCE FUND; AND
“4. THE DEFENDANT, FEDERICO SERFINO, IS HEREBY ORDERED TO
VACATE THE LAND IN QUESTION AND TO DELIVER THE
POSSESSION THEREOF TO THE PLAINTIFF;
“5. THE PLAINTIFF IS
EXEMPT FROM REIMBURSING THE DEFENDANT, FEDERICO SERFINO, FOR THE SUM OF P602.94 WHICH THE LATTER PAID FOR THE
REPURCHASE OF THE LAND IN
QUESTION FOR THE REASON THAT THE FORMER IS ALREADY BURDENED WITH THE PAYMENT OF
THE MORTAGE INDEBTEDNESS WITH THE PHILIPPINE NATIONAL BANK IN THE AMOUNT OF P5,261.11; AND
“6. THE COURT MAKES NO
AWARD FOR DAMAGES AND COSTS.
“SO ORDERED.” (ROLLO – L-40751,
PP. 117 & 118, JOINT RECORD
ON APPEAL, ANNEX “D”, P. 50)
BOTH PARTIES APPEALED
FROM THIS DECISION OF THE TRIAL COURT.
RULING ON THE ASSIGNMENT OF ERRORS, THE APPELLATE COURT AFFIRMED THE JUDGMENT OF THE TRIAL COURT WITH
MODIFICATION IN ITS DECISION, THE PERTINENT PORTION READING AS FOLLOWS:
“PLAINTIFF CONTENDS THAT THE MORTGAGE EXECUTED BY THE SERFINOS
IN FAVOR OF PNB IS NULL AND VOID, BECAUSE THE PROPERTY CONVEYED IN MORTGAGE DID
NOT BELONG TO THEM. THE CONTENTION IS
MERITORIOUS. THAT THE MORTGAGOR SHOULD
BE THE ABSOLUTE OWNER OF THE PROPERTY MORTGAGED IS AN ESSENTIAL REQUISITE FOR
THE VALIDITY OF A CONTRACT OF MORTGAGE (ART. 2085, CIVIL CODE); AND A MORTGAGE
CONSTITUTED BY ONE NOT THE OWNER OF THE PROPERTY MORTGAGED IS NULL AND VOID,
THE REGISTRATION OF THE MORTGAGE NOTWITHSTANDING (PARQUI VS. PNB, 96 PHIL.
157). THUS, THE MORTGAGE LIEN OF PNB IN
THE CONTRACT EXECUTED IN ITS FAVOR BY THE SERFINOS DID NOT ATTACH TO THE
PROPERTY IN QUESTION.
“THE ARGUMENT ADVANCED BY APPELLEE PNB THAT IT IS A MORTGAGEE
IN GOOD FAITH DESERVES SCANT CONSIDERATION.
NOTE THAT WHEN THE MORTGAGE WAS CONSTITUTED, THE DISPUTED LAND WAS
COVERED BY A VALID AND EXISTING TITLE, TCT NO. 57-N, IN THE
NAME OF NEMESIA D. BALTAZAR.
INDEED, THE WHOLE WORLD, INCLUDING APPELLEE PNB, IS CHARGED WITH NOTICE
THEREOF. CONSEQUENTLY, THAT PORTION OF
THE TRIAL COURT’S DECISION DECLARING PLAINTIFF LIABLE TO THE PNB FOR PAYMENT OF
THE SUM OF P5,261.11 SHOULD BE SET ASIDE.
“AS TO THE PLAINTIFF’S CLAIM FOR DAMAGES AGAINST THE SERFINOS,
WE FIND THE SAME DEVOID OF MERIT.
WHATEVER INJURY PLAINTIFF MAY HAVE SUFFERED WAS OCCASIONED BY THE FAULTY
AND DEFECTIVE INDEXING AND FILING SYSTEM IN THE OFFICE OF THE REGISTER OF DEEDS
OF NEGROS OCCIDENTAL, AND NOT BY ANY INTENTIONAL ACT ON
THE PART OF THE SERFINO SPOUSES. ANYWAY,
THE EVIDENCE FAILS TO SHOW THAT THEY DELIBERATELY INTENDED TO CAUSE DAMAGE TO
PLAINTIFF.
“HOWEVER, EQUITY DICTATES THAT PLAINTIFF SHOULD REIMBURSE THE
SERFINO SPOUSES OF THE SUM OF P1,839.49, REPRESENTING
THE UNPAID TAXES AND PENALTIES PAID BY THE LATTER WHEN THEY REPURCHASED THE PROPERTY
FROM THE PROVINCE OF NEGROS
OCCIDENTAL.
“WHEREFORE, WITH THE MODIFICATIONS ABOVE INDICATED, THE
JUDGMENT APPEALED FROM IS HEREBY AFFIRMED.
NO COSTS.
“SO ORDERED.” (DECISION, ANNEX
“A”, PP. 40-42, ROLLO – L-40751)
FROM THE AFORESAID
RULING, THE SPOUSES SERFINO AND THE PHILIPPINE NATIONAL BANK APPEALED TO US
BY WAY OF CERTIORARI. PETITIONERS, SPOUSES-SERFINOS[4] ASSIGN THE FOLLOWING ERRORS:
I. THE PURCHASE BY PLAINTIFF-APPELLANT CORPORATION (LOPEZ
SUGAR CENTRAL) OF THE LOT IN QUESTION WAS NULL AND VOID
FROM THE BEGINNING.
II. PETITIONERS ARE PROPER PARTIES TO CHALLENGE
THE LEGALITY OF THE SALE OF THE
LAND IN QUESTION TO PRIVATE RESPONDENT.
III. NOTICE TO NEMESIA BALTAZAR OF THE TAX SALE
OF THE LAND IN QUESTION WAS NOT ESSENTIAL TO THE VALIDITY OF THE SALE.
IV. THE LEGALITY OF THE AUCTION SALE OF THE
PROPERTY IN QUESTION WAS NOT IN ISSUE BEFORE THE COURT A QUO.
PETITIONER PHILIPPINE
NATIONAL BANK[5] SUBMITS THE FOLLOWING:
ASSIGNMENT OF ERRORS
I. THE COURT OF APPEALS ERRED IN HOLDING THAT
THE AUCTION SALE OF THE DISPUTED PROPERTY WAS NULL AND VOID.
II. THE COURT OF APPEALS ERRED IN NOT HOLDING
THAT PETITIONER IS A MORTGAGEE IN GOOD FAITH.
PETITIONERS SPOUSES
SERFINOS MAINTAIN THAT SALE OF A LAND COVERED BY HOMESTEAD TO BE VALID MUST
HAVE THE FOLLOWING REQUISITES: 1)
CONSENT OF THE GRANTEE 2) APPROVAL OF THE SECRETARY OF AGRICULTURE AND NATURAL
RESOURCES 3) SALE IS SOLELY FOR EDUCATIONAL, RELIGIOUS, OR CHARITABLE PURPOSES
OR FOR A RIGHT OF WAY (SEC. 121, CA
No. 141).
PETITIONER SPOUSES
SERFINOS IN SUPPORT OF THEIR
FIRST ASSIGNMENT OF ERROR CITED SEC. 121, CA NO. 141 READING AS FOLLOWS:
“SEC.
121. EXCEPT WITH THE CONSENT OF THE GRANTEE
AND THE APPROVAL OF THE SECRETARY OF AGRICULTURE AND COMMERCE, AND SOLELY FOR
COMMERCIAL, INDUSTRIAL, EDUCATIONAL, RELIGIOUS OR CHARITABLE PURPOSES OR FOR A
RIGHT OF WAY, NO CORPORATION, ASSOCIATION, OR PARTNERSHIP MAY ACQUIRE OR HAVE
ANY RIGHT, TITLE, INTEREST, OR PROPERTY RIGHT WHATSOEVER TO ANY LAND GRANTED
UNDER THE FREE PATENT, HOMESTEAD OR INDIVIDUAL SALE PROVISIONS OF THIS ACT OR
TO ANY PERMANENT IMPROVEMENT ON SUCH LAND.”
THEY ARGUE THAT SINCE
PRIVATE RESPONDENT IS A CORPORATION, IT IS BARRED FROM OWNING LAND GRANTED
UNDER THE FREE PATENT IF THE AFOREMENTIONED REQUISITES ARE NOT PRESENT. SUCH CONTENTIONS DO NOT MERIT OUR
APPROVAL. IT IS NOT DISPUTED THAT THE
ORIGINAL GRANTEE WAS PACIFICO CASAMAYOR WHO OBTAINED A HOMESTEAD PATENT AND
LATER AN ORIGINAL CERTIFICATE OF TITLE IN HIS NAME. LATER IT WAS THIS ORIGINAL GRANTEE WHO SOLD
THE LAND IN QUESTION TO NEMESIA BALTAZAR ON DECEMBER 14, 1945 OR MORE THAN EIGHT (8) YEARS AFTER HE OBTAINED HIS HOMESTEAD PATENT ON
AUGUST 25, 1937. ON
THESE FACTS, WE NOW APPLY SEC. 118
OF COMMONWEALTH ACT NO. 141 WHICH PROHIBITS THE ALIENATION OF HOMESTEAD LOTS TO PRIVATE INDIVIDUAL
WITHIN FIVE (5) YEARS FROM THE
DATE OF THE ISSUANCE OF THE PATENT AND NOT SEC. 121 WHICH GOVERNS SALE
TO CORPORATION.
SINCE THE GRANT WAS MORE THAN FIVE (5) YEARS BEFORE, THE TRANSFER
TO NEMESIA BALTAZAR WAS VALID AND LEGAL.
NEMESIA BALTAZAR WHO BECAME THE TITLED OR REGISTERED OWNER AS EVIDENCED
BY TCT NO. 57-N, COULD EXERCISE
ACTS OF OWNERSHIP OVER THE LAND SUCH AS DISPOSING OF IT TO PRIVATE RESPONDENT
BY A DEED OF SALE.
THE ASSAILED DECISION OF
THE APPELLATE COURT DECLARES THAT THE PRESCRIBED PROCEDURE IN AUCTION SALES OF
PROPERTY FOR TAX DELINQUENCY BEING IN DEROGATION OF PROPERTY RIGHTS SHOULD BE
FOLLOWED PUNCTILIOUSLY. STRICT ADHERENCE
TO THE STATUTES GOVERNING TAX SALES IS IMPERATIVE NOT ONLY FOR THE PROTECTION
OF THE TAX PAYERS, BUT ALSO TO ALLAY ANY POSSIBLE SUSPICION OF COLLUSION
BETWEEN THE BUYER AND THE PUBLIC OFFICIALS CALLED UPON TO ENFORCE SUCH
LAWS. NOTICE OF SALE TO THE DELINQUENT
LAND OWNERS AND TO THE PUBLIC IN GENERAL IS AN ESSENTIAL AND INDISPENSABLE
REQUIREMENT OF LAW, THE NON-FULFILLMENT OF WHICH VITIATES THE SALE.
WE GIVE OUR STAMP OF
APPROVAL ON THE AFOREMENTIONED RULING OF THE RESPONDENT COURT. IN THE CASE AT BAR, THERE IS NO EVIDENCE THAT NEMESIA BALTAZAR, WHO HAD OBTAINED A TRANSFER
CERTIFICATE OF TITLE IN HER NAME ON JANUARY 18, 1946, WAS NOTIFIED
OF THE AUCTION SALE WHICH WAS SCHEDULED ON OCTOBER 30, 1956.
NEITHER WAS SHE FURNISHED
AS THE OWNER OF THE DELINQUENT REAL PROPERTY WITH THE CERTIFICATE OF SALE AS
PRESCRIBED BY SEC. 37 OF COMMONWEALTH ACT NO. 470. THESE INFIRMITIES ARE FATAL. WORTH MENTIONING ALSO IS THE FACT THAT LOPEZ
SUGAR CENTRAL WAS NOT ENTIRELY NEGLIGENT IN ITS PAYMENT OF LAND
TAXES. THE RECORD SHOWS THAT TAXES WERE
PAID FOR THE YEARS 1950 TO 1953 AND A RECEIPT THEREFOR WAS OBTAINED
IN ITS NAME. THE SALE
THEREFORE BY THE PROVINCE OF NEGROS
OCCIDENTAL OF THE LAND IN DISPUTE TO THE SPOUSES SERFINOS WAS VOID SINCE THE PROVINCE
OF NEGROS OCCIDENTAL WAS NOT THE
REAL OWNER OF THE PROPERTY THUS SOLD.
IN TURN, THE SPOUSES SERFINOS TITLE WHICH HAS BEEN DERIVED FROM THAT OF
THE PROVINCE OF NEGROS
OCCIDENTAL IS LIKEWISE VOID. A PURCHASER OF REAL ESTATE AT THE TAX SALE
OBTAINS ONLY SUCH TITLE AS THAT HELD BY THE TAXPAYER, THE PRINCIPLE OF CAVEAT EMPTOR APPLIES.
WHERE LAND IS SOLD FOR DELINQUENCY TAXES UNDER THE PROVISIONS OF THE
PROVINCIAL ASSESSMENT LAW, RIGHTS OF REGISTERED BUT UNDECLARED OWNERS OF THE
LAND ARE NOT AFFECTED BY THE PROCEEDINGS AND THE SALE
CONVEYS ONLY SUCH INTEREST AS THE PERSON WHO HAS DECLARED THE PROPERTY FOR
TAXATION HAS THEREIN.
WE NOW COME TO THE ARGUMENTS OF PETITIONER PHILIPPINE NATIONAL
BANK. THE APPELLATE COURT IN MODIFYING
THE TRIAL COURT’S DECISION NULLIFIED THE MORTGAGE IN FAVOR OF PHILIPPINE
NATIONAL BANK AND EXEMPTED LOPEZ SUGAR CENTRAL FROM THE PAYMENT TO PNB OF THE AMOUNT OF THE MORTGAGE
LOAN. PETITIONER PHILIPPINE NATIONAL
BANK NOW QUESTIONS THIS MAINTAINING THAT IT IS A MORTGAGEE IN GOOD FAITH AND AS
SUCH IS ENTITLED TO THE PROTECTION OF THE LAW.
WE FIND MERIT IN PETITIONER’S CONTENTION. THE FINDINGS
OF FACT BY THE TRIAL COURT WHICH WERE UNDISPUTED BY THE CONTENDING
PARTIES SHOW THAT AFTER TCT NO. 38985 HAD
BEEN ISSUED IN THE NAME OF FEDERICO SERFINO, HE DECLARED THE PROPERTY IN HIS
NAME FOR THE YEAR 1965 UNDER
T.D. No. 9382, CONTINUOUSLY PAID
THE TAXES AND INTRODUCED IMPROVEMENTS THEREON IN THE NATURE OF FEEDER ROADS AND
SUGAR CANE PLANTS. IT WAS UNDER THESE
CIRCUMSTANCES THAT PNB EXTENDED A LOAN TO SERFINO, SECURED BY THE LAND IN
QUESTION ON THE STRENGTH OF TCT NO. 38985 IN THE NAME OF THE SERFINOS AND AFTER
A SPOT INVESTIGATION BY ONE OF THE BANK INSPECTORS WHO MADE A REPORT OF HIS
INVESTIGATION. AFTER THE EXECUTION OF A
REAL ESTATE MORTGAGE IN FAVOR OF THE PHILIPPINE NATIONAL BANK DULY ANNOTATED ON
THE TITLE OF THE SERFINOS’ TCT NO. 38985,
THE BANK ACTUALLY LOANED SERFINO THE AMOUNT OF P5,000.00
WHICH AMOUNTED TO P5,261.11 AS
OF AUGUST 17, 1965. PETITIONER PHILIPPINE NATIONAL BANK
RELIED ON TCT NO. 38985, THE GENUINENESS OF WHICH IS NOT
IN ISSUE AS IT WAS REALLY ISSUED BY THE REGISTER OF DEEDS OF NEGROS
OCCIDENTAL. PHILIPPINE NATIONAL BANK HAD
EVERY RIGHT TO RELY ON TCT NO. 38985 AS
IT WAS A SUFFICIENT EVIDENCE OF OWNERSHIP OF THE MORTGAGOR. THE PHILIPPINE NATIONAL BANK AT THAT TIME HAD
NO WAY OF KNOWING OF THE EXISTENCE
OF ANOTHER GENUINE TITLE COVERING THE SAME LAND IN QUESTION.
THE FACT THAT THE PUBLIC AUCTION SALE
OF THE DISPUTED PROPERTY WAS NOT VALID (FOR LACK OF NOTICE OF THE AUCTION SALE
TO THE ACTUAL OWNER) CAN NOT IN ANY WAY BE ATTRIBUTED TO THE MORTGAGEE’S
(PNB’S) FAULT. THE FACT REMAINS THAT IN
SPITE OF THE LACK OF NOTICE TO THE ACTUAL REGISTERED OWNER AT THAT TIME (WHO
WAS NEMESIA BALTAZAR) THE REGISTER OF DEEDS ISSUED A TCT IN THE NAME OF FEDERICO SERFINO MARRIED TO LORNA BACHAR
WHICH TITLE WAS RELIED UPON BY PETITIONER PHILIPPINE NATIONAL BANK. THE REGISTER OF DEEDS DISOWNED LIABILITY AND
NEGLIGENCE OR CONNIVANCE CLAIMING THAT EXISTENCE OF TCT NO. 57-N IN THE NAME OF NEMESIA BALTAZAR WAS NOT FOUND IN
THE RECORDS OF THE REGISTER OF DEEDS FOR THE REASON THAT IT DID NOT EXIST IN
THE INDEX CARD AS THE LAND WAS NOT DESIGNATED BY CADASTRAL LOT
NUMBER. THUS THE DISCREPANCY WAS DUE TO
THE FAULTY SYSTEM OF INDEXING THE PARCELS OF LAND. BE IT NOTED THAT THE INABILITY OF THE
REGISTER OF DEEDS TO NOTIFY THE ACTUAL OWNER OR LOPEZ SUGAR CENTRAL OF THE
SCHEDULED PUBLIC AUCTION SALE WAS
PARTLY DUE TO THE FAILURE OF LOPEZ SUGAR CENTRAL TO DECLARE THE LAND IN ITS
NAME FOR A NUMBER OF YEARS AND TO PAY THE COMPLETE TAXES THEREON. PETITIONER PHILIPPINE NATIONAL BANK IS
THEREFORE ENTITLED TO THE PAYMENT OF THE MORTGAGE LOAN AS RULED BY THE TRIAL
COURT AND EXEMPTED FROM THE PAYMENT OF COSTS.
WHEREFORE, PREMISES
CONSIDERED, WITH THE SLIGHT MODIFICATION THAT THE PNB MORTGAGE CREDIT MUST BE PAID BY LOPEZ SUGAR
CENTRAL, THE ASSAILED DECISION IS
HEREBY AFFIRMED.
SO ORDERED.
Yap, (Chairman), Melencio-Herrera,
Padilla, and Sarmiento,
JJ., concur.
[1]
PENNED BY JUSTICE VENICIO ESCOLIN CONCURRED IN BY JUSTICES RAMON C. FERNANDEZ
AND EFREN I. PLANA.
[2]
THE ORDER WAS PENNED BY JUDGE LOPE CONSING.
[3]
PENNED BY JUDGE JOSE C. DIVINAGRACIA.
[4]
PETITIONER IN L-40858.
[5]
PETITIONER IN L-40751.