operate to divest the right of D who is not and has never been a party to the
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 owners duplicate certificate.
Section 41 of Act No. 496, as amended by P.D. No. 1529, provides that the
owners 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 Cs 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
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 owners 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 owners 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 owners 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 owners 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 owners duplicate
title?
Where a mortgage deed has been fi led for registration and the owners
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 owners 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
nobodys 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 officers
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.