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FABIO CAHAYAG and CONRADO RIVERA, petitioners, vs. COMMERCIAL CREDIT CORPORATION, represented by its
President, LEONARDO B. ALEJANDRO; TERESITA T. QUA, assisted by her husband ALFONSO MA. QUA; and the
REGISTER OF DEEDS OF LAS PIÑAS, METRO MANILA, DISTRICT IV, respondents.
* FIRST DIVISION.
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SUPREME COURT REPORTS ANNOTATED
Cahayag vs. Commercial Credit Corporation
of Appeals (CA) must yield in this case, as it falls under one (1) of the exceptions: when the findings of the CA are
contradicted by the evidence on record.—At this juncture, we note that the CA, for reasons unknown, specified 29
September 1980, and not 29 March 1981, as the date of the execution of the Contract to Sell in its Decision.
Respondent Qua has raised this point in her Memorandum filed with us. This Court cannot be bound by the factual
finding of the CA with regard to the date of the Contract to Sell in favor of Cahayag. The general rule that the Court
is bound by the factual findings of the CA must yield in this case, as it falls under one of the exceptions: when the
findings of the CA are contradicted by the evidence on record. In this case, there is nothing in the records to
support the CA’s conclusion that the Contract to Sell was executed on 29 September 1980. The evidence on record,
however, reveals that the correct date is 29 March 1981.
Civil Law; Mortgages; Registration of the mortgage establishes a real right or lien in favor of the mortgagee, as
provided by Articles 1312 and 2126 of the Civil Code.—Registration of the mortgage establishes a real right or lien
in favor of the mortgagee, as provided by Articles 1312 and 2126 of the Civil Code. Corollary to the rule, the lien
has been treated as “inseparable from the property inasmuch as it is a right in rem.” In other words, it binds third
persons to the mortgage.
Same; Same; The purpose of registration is to notify persons other than the parties to the contract that a
transaction concerning the property was entered into.—The purpose of registration is to notify persons other than
the parties to the contract that a transaction concerning the property was entered into. Ultimately, registration,
because it provides constructive notice to the whole world, makes the certificate of title reliable, such that third
persons dealing with registered land need only look at the certificate to determine the status of the property.
Same; Sales; The general rule is that the purchaser is not required to go beyond the Torrens title if there is nothing
therein to indicate any cloud or vice in the ownership of the property or any encumbrance thereon; The exception
arises when the purchaser or mortgagee has knowledge of a defect in the vendor’s title or lack thereof, or is aware
of sufficient facts to induce a reasonably prudent
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SUPREME COURT REPORTS ANNOTATED
Cahayag vs. Commercial Credit Corporation
the validity of the sale. But the Latin precept has been jurisprudentially held to apply to a contract of sale at its
consummation stage, and not at the perfection stage.
Same; Same; Ownership is not a requirement for a valid contract of sale; it is a requirement for a valid transfer of
ownership.—Case law also provides that the fact that the seller is not the owner of the subject matter of the sale
at the time of perfection does not make the sale void. Hence, the lesson: for title to pass to the buyer, the seller
must be the owner of the thing sold at the consummation stage or at the time of delivery of the item sold. The
seller need not be the owner at the perfection stage of the contract, whether it is of a contract to sell or a contract
of sale. Ownership is not a requirement for a valid contract of sale; it is a requirement for a valid transfer of
ownership.
Same; Same; Innocent Purchaser for Value; Words and Phrases; An innocent purchaser for value is one who “buys
the property of another without notice that some other person has a right to or interest in it, and who pays a full
and fair price at the time of the purchase or before receiving any notice of another person’s claim.”—An innocent
purchaser for value is one who “buys the property of another without notice that some other person has a right to
or interest in it, and who pays a full and fair price at the time of the purchase or before receiving any notice of
another person’s claim.” The concept thus presupposes that there must be an adverse claim or defect in the title
to the property to be purchased by the innocent purchaser for value.
Remedial Law; Evidence; Formal Offer of Evidence; Evidence not formally offered may be admitted and considered
by the trial court so long as the following requirements obtain: (1) the evidence is duly identified by testimony duly
recorded; and (2) the evidence is incorporated into the records of the case.—Evidence not formally offered may be
admitted and considered by the trial court so long as the following requirements obtain: (1) the evidence is duly
identified by testimony duly recorded; and (2) the evidence is incorporated into the records of the case. The
exception does not apply to the case of Baldoza. While she duly identified the Contract to Sell during her direct
examination, which was duly recorded, Exhibit “L” was not incorporated into the records.
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