G.R. No. 16448. April 29, 1961
REGISTER OF DEEDS OF QUEZON CITY, PETITIONER, PEOPLE’S HOMESITE AND HOUSING CORPORATION, VENDOR. DEVELOPMENT BANK OF THE PHILIPPINES, VENDEE AND APPELLANT, VS. HONESTO G. NICAND…
BARRERA, J.:
submitted to him en consulta by the Register of Deeds of Quezon City (LRC
Consulta No. 250), the Development Bank of the Philippines (formerly
Rehabilitation Finance Corporation) has appealed to this Court pursuant to
Section 4 of Republic Act No, 1151.
There is no controversy as to the following facts: On October 20, 1955, tha
People’s Homesite and Housing Corporation (PHHC) sold to the Rehabilitation
Finance Corporation, now the Development Bank of the Philippines (DBP), 159 lots
comprised in Blocks 21 to 31 of West Triangle in Diliman, Quezon City; that at
that time, all the 159 lots were included in a larger parcel of land covered by
TCT No. 1356; that subsequently, without the knowledge of the DBP, the 159 lots
were segregated and a new transfer certificate of title No. 36533 covering the
same was issued; that the subdivision plan segregating them was not annotated on
the bigger title No. 1356, nor the fact that the latter was pro tanto
cancelled by the new title No. 36533; that because of these circumstances the
sale agreement between appellant DBP and the PHHC, when presented for
registration on January 15,1959, was entered in the day book under date of
January 15 and inscribed on TCT No. 1356 as a sale of unsegregated portions”
with the note “new titles to be issued upon presentation of the corresponding
subdivision plan and technical descriptions duly approved by the
authorities”.
A month later, or on February 16, 1959, Honesto C. Nicandro and Elisa F.
Nicandro presented to the Register of Deeds for registration two deeds of sale
executed by the PHHC in their favor, involving lots Nos. 2 and 4, Block WT-21 of
Bcs—2076, covered among other lots by TCT No. 36533. These lots were among the
159 lots already sold to the appellant Development Bank of the Philippines.
These deeds of sale of the Nicandros were denied registration for the reason
that only photoatatic copies of the deeds were presented, the lots were
mortgaged to the GSIS whose consent did not appear on the deeds, and they lacked
the necessary documentary stamps. On the following day, February 17, the
Nicandros filed affidavits of adverse claim over the two lots, which were
annotated on TCT No. 36533, and simultaneously filed a petition in the Court of
First Instance of Rizal to require the GSIS to surrender the owner’s duplicate
of said TCT No. 36533 to the Register of Deeds for the annotation of the sale in
their favor.
Discovering that the lots it had purchased are already covered by TCT No.
36533, the vendee DBP, on March 6, 1959, caused the annotation thereon of its
deed of sale of October 20, 1955. It was then found out that the required
subdivision plan covering the lots involved in the sale, was already submitted
and duly recorded in TCT No. 36533.
As a consequence, upon petition of DBP, the Register of Deeds transferred the
annotation of the deed of sale of the DBP appearing on TCT No. 1356 to the new
TCT No. 36533. As the DBP’s demand for the issuance of a new certificate of
title in its name was opposed by the Nicandros, the Register of Deeds referred
the matter en consulta to the Land Registration Commissioner. In the
meantime, upon order of the Court of First Instance, and as prayed for by the
Nicandros, the GSIS surrendered the owner’s duplicate of TCT No. 36533, and both
the adverse claim of the Nicandros and the deed of sale in favor of the Bank
were annotated on the back thereof.
In his Resolution of July 25, 1959, the Land Registration Commissioner ruled
thsjt the annotation on TCT No. 1356 of the sale agreement between the PHHC and
the vendee DBP, did not constitute registration sufficient to bind innocent
third parties (referring to the Nicandros), for the reasons that (1) the deed of
October 20, 1955 did not specify that it was a sale of an unsegregated portion
of land and the deed, consequently, was defective; (2) when the sale agreement
was annotated on TCT No. 3156, the owner’s duplicate certificate was not
surrendered, and even if it did so, it would have no effect at all aa TCT No.
3156 was already cancelled and superseded by TCT No. 36533; and (3) TCT No.
1356, on which said sale was first annotated, no longer covers the 159 lots
subject of the sale. It was, therefore, held that the Nicandros are entitled to
the issuance of the corresponding certificates of title, subject to the mortgage
in favor of the GSIS. Hence, this appeal by DBP.
A careful consideration of the facts and the law involved in this appeal
induces us to conclude and hold that the Land Registration Commissioner erred in
declaring the Nicandros entitled to registration of Lots Nos. 2 and 4 in their
names and in directing the issuance to them of the corresponding
certificates.
The Commissioner’s finding that the sale-contract in favor of the appellant
DBP is defective, for failure to specify that it was for an unsegregated
portion, is without factual basis. The pertinent provisions of the sale
agreement textually read:
“That for and in consideration of the sum of eight hundred two thousand one
hundred fifty-five pesos and fifty-six centavoa (P802,155.56), Philippine
Currency, of which the receipt of the amount of four hundred thousand pesos
(P400,000.00) is hereby acknowledged as advance payment to defray the expenses
which the PHHC will incur in carrying out the obligations imposed upon it under
Conditions Nos. 7 & 8 of this Agreement and the balance to be payable upon
compliance by the PHHC of Condition No. 7, the PHHC, by these presents,
hereby conveys, sells and transfers unto the RFC the lots in Blocks 21 to 31,
West Triangle, totalling 91,188.30 square meters, as listed in the schedule
attached hereto as Annex A, described in Annex B, and shown in the plan Annex C,
of which lots the PHHC is the absolute owner as evidenced by TCT No. 1356 of
the land records of Quezon City, subject to the following terms, and conditions
and undertakings:* * * *
* * *“8. The PHHC shall complete the subdivision of this area in accordance
with the plan approved by the RFC, secure the approval of the subdivision plan
by the Bureau of Lands, the hand Registration Commission and the appropriate
court of first instance, and to register said plan with the Register of Deeds of
Quezon City, in order that title/s to the lots conveyed herein may be issued
in favor of the RFC.” (Italics supplied.)
It may be gathered from the foregoing that the subject of the sale were
certain “lots in Blocks 21 to 31, West Triangle, totalling 91,188.30 square
meters, * * * of which the PHHC is the absolute owner as evidenced by TCT No.
1356”; that while there was a subdivision plan prepared by the PHHC, to which
the vendee DBP is agreeable, the same was not yet approved by the proper
authorities, nor duly recorded in the Register of Deeds’ office at the time of
the execution of the contract. Thus, under said agreement, the vendor was still
obliged to complete the subdivision of the area, secure its approval by the
Bureau of Lands, Land Registration Commission, and the court of first instance,
and cause the registration thereof in the office of the Register of Deeds.
Clearly, from the language of the document, the area comprising the 159 lots
subject of the sale, although perhaps already surveyed for purposes of
segregation, had not yet been officially segregated from the bigger tract of
land in the records of the Register of Deeds. In the circumstances, the
contract, evidently, is for the sale of an unsegregated portion of West Triangle
area owned by the PHHC. And the denomination of the deed simply as a “Deed of
Sale” did not transform said contract into one for the sale of segregated parcel
of land. The nature of a contract is not determined, by the title given to it
but by the intention of thp parties and the legal effect of the instrument.[1] The deed of sale in favor of the DBP is,
clearly, a registerable document.
Too, there was a finding that when the deed of sale was presented for
registration, the registrant (DBP) failed to surrender the owner’s duplicate
certificate; thus, the Commissioner ruled that the annotation thereof on TCT No.
1356 on January 15,1959, was made in disregard of Section 55 of Act 496, and,
consequently, invalid.
It appears on record, however, that by virtue of an arrangement between the
PHHC and the Register of Deeds of Quezon City, the last sheets of the
certificates of title covering all the properties of the PHHC were kept in
possession of the Register of Deeds, to facilitate the annotation on the
certificates of title of the transactions entered into by the housing
corporation, (pp. 77-78, Record on Appeal.) To effect registration of lands
purchased from the PHHC, therefore, the vendee would only have to present the
deed of sale to the Register of Deeds, and the latter, who has with him the
corresponding sheets of the owner’s duplicate certificates, could already
register or annotate the said deed on the corresponding title.
We find nothing wrong in this procedure. As so declared by the Land
Eegistration Act[2] the production of the
owner’s duplicate certificate, whenever any voluntary instrument is presented
for registration, is conclusive authority from the registered owner to the
register of deeds to enter a new certificate or make the corresponding
memorandum of such document. In the instant case, the owner (PHHC) by its
delivery of the pertinent sheets of its certificates of title to the Register of
Deeds of Quezon City already authorized said official to make the corresponding
entries of all transactions entered into by the housing corporation.
Neither can it be claimed that the annotation of the deed of sale in favor of
the DBP on TCT No. 1356, under date of January 15, 1959, does not constitute
sufficient registration to bind third parties. True it may be that when the
instrument was presented to the Register of Deeds for registration, and in fact
it was so inscribed in the day book, the 159 lots subject of the sale were
already covered by a separate certificate of title, TCT No. 36533. It must be
remembered, however, that on said date, January 15, 1959, TCT No. 1356 which
originally covered the whole tract of land, including the 159 lots, was yet
uncancelled nor any inscription appeared thereon to the effect that new
certificate was already issued in respect to the said 159 lots. Evidently, when
the DBP presented the deed of sale for registration there were two subsisting
titles covering the 159 lots subject of the sale. As TCT No. 1356, being
uncancelled, did, for all intents and purposes, still cover the 159 lots, the
annotation thereon of the sale to DBP is valid and effective. For this reason,
the Register of Deeds acted correctly in transferring the inscription
from TCT No. 1356 to TCT No. 36533 upon discovery that the subdivision plan had
already been approved, submitted and annotated, and a new certificate of title
issued. Even on this score alone, considering that the adverse claim of the
Nicandros was annotated on TCT No. 35633 only on February 17, 1959, whereas, the
sale to DBP was registered as of January 15, 1959, the certificate of
title on the two lots in controversy should be issued in favor of the first
registrant, the DBP.
There is, however, another reason why the Commissioner’s ruling must be set
aside.
Although admittedly we have here a case of double sale, actually this is not
an instance of double registration. As above stated, only the deed of sale in
favor of appellant was inscribed on the certificate of title covering the lots
in question. The Nicandros were not able to register their deeds of sale;
instead, informed of the prior registration by the DBP, they sought to protect
their right by filing adverse claims based on the said deeds of sale under
Section 110 of Act 496, which provides:
“SEC. 110. Whoever claims any right or interest in registered land adverse to
the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Act for registering
the same, make a statement in writing setting forth fully his alleged right
or interest, and how or under whom acquired, and a reference to the volume and
page of the certificate of title of the registered owner, and a description of
the land in which the right or interest is claimed. * * *.” (Italics
supplied.)
It is clear from the above quotation that for this special remedy (adverse
claim) to be availed of, it must be ishown that there is no other provision in
the law for registration of the claimant’s alleged right or interest in the
property. The herein claim of the Nicandros is based on a perfected contract of
sale executed in their favor by the lawful owner of the land. Considering that
the Land Registration Act specifically prescribes the procedure for registration
of a vendee’s right on a registered property[3] the remedy provided in Section 110, which was
resorted to and invoked by appellees, would be ineffective for the purpose of
protecting their said right or interest on the two lots.
Wherefore, the Resolution appealed from is hereby set aside, and the Register
of Deeds of Quezon City ordered to issue the corresponding certificate of title
in favor of appellant DBP. Without costs. So ordered.
Bengzon, C.J.,
Labrador, Concepcion, Reyes, J.B.L., Paredes, and Dizon, JJ., concur.
[1] Morrison vs. St. Paul &
N.P.R. Co., 63 Minn. 78, 65 N.W. 141, 30 L.R.A. 546; Intermountain Bldg. &
Loan Assn. vs. Gallegos, C.C.A. Ariz., 78 F. 2d 972; Suburban Improvement
Co. vs. Scott Lumber Co., C.C.A. W. Va., 59 F. 2d 711, A.L.R. 555.
[2] Section 55, Act 496.
[3] Section 57, Act 496.