G. R. No. L-18178. January 31, 1963
THE REGISTER OF DEEDS OF ILOILO, PETITIONER AND APPELLEE, VS. C. N. HODGES, OPPOSITOR AND APPELLANT, FERMIN JALOVER, INTERVENOR AND APPELLEE.
BAUTISTA ANGELO, J.:
which is covered by Transfer Certificate of Title No. T-2125. On March
25, 1953 , Jalover mortgaged the lot to the Rehabilitation Finance
Corporation to guarantee a loan of P6,500.00, which was registered on
the same date.
On May 31, 1957 , the said lot, together with another of the same
cadastre, was sold at public auction by the sheriff by virtue of a writ
of execution issued in Civil Case No. 3316 in favor of C. N. Hodges as
the highest bidder, the same sale having been repeated in connection
with Civil Case No. 3520, with the result that the sheriff executed two
separate certificates of sale in favor of Hodges covering the amounts
adjudicated in said cases. These two certificates of sale were
registered in the office of the register of deeds, having been
annotated on the back of Transfer Certificate of Title No. T-2125 as
entries Nos. 15102 and 15104, respectively.
On March 14, 1960 , Jalover wrote a letter to the register of deeds
requesting the cancellation of the aforesaid entries alleging that
their annotation was null and void being contrary to Section 26 of
Commonwealth Act 459. The register of deeds denied the request on the
ground that he had no authority to cancel the registration without an
order of the court, whereupon Jalover elevated the matter en consulta
to the Land Registration Commissioner who in due time rendered decision
directing the register of deeds to file a petition with the proper
court of land registration to secure the cancellation requested
pursuant to Section 112 of Act 496. And complying with this directive,
the register of deeds filed on June 28, 1960 a petition with the Court
of First Instance of Iloilo praying for the cancellation of entries
Nos. 15102 and 15104 from Transfer Certificate of Title No. T-2125.
On July 26, 1960 , C. N. Hodges, the purchaser of the lot in
question, opposed the petition on the grounds, among others, (1) that
the court has no jurisdiction to entertain the petition because it is
beyond its limited jurisdiction as court of land registration, and (2)
Fermin Jalover has no right to avail of Section 26, Commonwealth Act
No. 459, because said Act refers only to loans obtained from the
Agricultural and Industrial Bank and not from the Rehabilitation
Finance Corporation.
After hearing the petition, as well as the opposition interposed
thereto, together with the memoranda submitted by the parties, the
court on September 10, 1960 issued an order assuming jurisdiction over
the case and ordering the cancellation of the entries requested.
Oppositor Hodges interposed the present appeal.
While Section 112 of Act 496, among other things, authorizes a
person in interest to ask the court for any erasure, alteration, or
amendment of a certificate of title upon the ground that the registered
interests of any description, whether vested, contingent, expectant or
inchoate, have terminated and ceased, such relief can only be granted
if there is unanimity between the parties, or there is no adverse claim
or serious objection on the part of any party in interest; otherwise,
the case becomes controversial and should be threshed out in an
ordinary case or in the case where the incident properly belongs
(Tangunan, et al. vs. Republic of the Philippines, 94 Phil., 171, December 29, 1953; See also Government of the Philippine Islands vs.
Jalandoni, 44 Off. Gaz., p. 1837). Here, the petition is seriously
opposed by C. N. Hodges who purchased the lot in question at a public
auction sale carried out by the sheriff of Iloilo City and in whose
favor the entries which petitioner now seeks to cancel have been made.
And the basis of his objection is important for it raises the validity
of the claim that the properties encumbered in favor of the
Rehabilitation Finance Corporation enjoy the same privilege of
exemption from subsequent attachment as those encumbered with the
defunct Agricultural and Industrial Bank. This is an important legal
issue that cannot be determined under Section 112 of Act 496. There is,
therefore, merit in the contention that the court a quo cannot act on the petition under consideration in its capacity as court of land registration.
Even if we hold that the court a quo could act on the
matter, still we say that its finding that the lot in question is
exempt from any additional encumbrance in the same manner as any
property mortgaged to the defunct Agricultural and Industrial Bank is
untenable, it appearing that said lot was encumbered to guarantee the
payment of a loan obtained from the Rehabilitation Finance Corporation.
Being a security created to secure a loan not originally obtained from
the Agricultural and Industrial Bank, the same does not enjoy the
privilege of exemption from subsequent attachment as provided for in
Section 26 of Act No. 459.[1] Republic Act No. 85, which creates the
Rehabilitation Finance Corporation, successor to the Agricultural and
Industrial Bank, does not contain a similar provision with regard to
loans obtained from said Corporation. The transitory provisions of
Section 9 of Republic Act 85 which refer to the transfer of the powers
and duties formerly conferred upon the Agricultural and Industrial Bank
to the Rehabilitation Finance Corporation merely have reference1 to
transactions contracted with the former, the latter having been charged
merely with the duty of dealing with them as trustee until they are
liquidated or terminated. In fact, said section provides that ‘The
Agricultural and Industrial Bank shall stand abolished on the date when
the Corporation shall begin to operate.”
Wherefore, the order appealed from is reversed. No costs.
Bengzon, C. J., Padilla, Labrador , Concepcion , Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.
[1] “Securities on loans granted by the Agricultural and Industrial Bank shall not be subject to attachment, nor can they be included and obligations of the debtor to the Agricultural and Industrial in the properties of insolvent persons or institution, unless all debts Bank have been previously paid, including, accrued interest, collection expenses and other charges.”