LBP v POBLETE Restraining Order and/or Issuance of Writ of Preliminary

Injunction. Named defendants were Maniego, Land Bank,

the Register of Deeds of Occidental Mindoro and Elsa Z.
Respondent Barbara Sampaga Poblete (Poblete) is the
Aguirre in her capacity as Acting Clerk of Court of RTC San
registered owner of a parcel of land, known as Lot No. 29,
Jose, Occidental Mindoro.
in Buenavista, Sablayan, Occidental Mindoro, under
Original Certificate of Title (OCT) No. P-12026. Poblete
obtained a 300,000.00 loan from (Kapantay). Poblete POBLETE: Poblete alleged that despite her demands on
mortgaged Lot No. 29 to Kapantay to guarantee payment Maniego, she did not receive the consideration of
of the loan. Kapantay, in turn, used OCT No. P-12026 as 900,000.00 for Lot No. 29. Upon her verification with the
collateral under its Loan Account No. 97-CC-013 with Register of Deeds, the Deed was used to obtain TCT No. T-
petitioner LBP. 20151. Poblete claimed that the Deed dated 11 August
2000 bearing her and her deceased husbands, Primo
Poblete, supposed signatures was a forgery as their
Poblete decided to sell Lot No. 29 to pay her loan. She
signatures were forged. As proof of the forgery, Poblete
instructed her son-in-law Domingo Balen (Balen) to look
presented the Death Certificate dated 27 April 1996 of
for a buyer. Balen referred Angelito Joseph Maniego
her husband and Report No. 294-502 of the Technical
(Maniego) to Poblete. According to Poblete, Maniego
Services Department of the National Bureau of
agreed to buy Lot No. 29 for 900,000.00, but Maniego
Investigation showing that the signatures in the Deed
suggested that a deed of absolute sale for 300,000.00 be
were forgeries. Accordingly, Poblete also filed a case for
executed instead to reduce the taxes. Thus, Poblete
estafa through falsification of public document against
executed the Deed of Absolute Sale with 300,000.00 as
Maniego and sought injunction of the impending
consideration. In the Deed, Poblete described herself as a
foreclosure proceeding.
"widow." Poblete, then, asked Balen to deliver the Deed
to Maniego and to receive the payment in her behalf.
Balen testified that he delivered the Deed to Maniego. LBP: Land Bank filed its Answer with Compulsory
However, Balen stated that he did not receive from Counterclaim and Cross-claim. Land Bank claimed that it is
Maniego the agreed purchase price. Maniego told Balen a mortgagee in good faith and it observed due diligence
that he would pay the amount upon his return from the prior to approving the loan by verifying Maniegos title
United States. In an Affidavit, Poblete stated that she with the Office of the Register of Deeds. Land Bank
agreed to have the payment deposited in her Land Bank likewise interposed a cross-claim against Maniego for the
Savings Account.6 payment of the loan, with interest, penalties and other
charges. Maniego, on the other hand, separately filed his
Answer. Maniego denied the allegations of Poblete and
Based on a Certification issued by Land Bank-Sablayan
claimed that it was Poblete who forged the Deed dated 11
Branch Department Manager Marcelino
August 2000. He also alleged that he paid the
Pulayan,7 Maniego paid Kapantays Loan Account No. 97-
consideration of the sale to Poblete and even her loans
CC-013 for 448,202.08.
from Kapantay and Land Bank.

Maniego applied for a loan of 1,000,000.00 with Land

RTC AND CA ruled in favour of Poblete.
Bank, using OCT No. P 12026 as collateral. Petitioner LBP
alleged that as a condition for the approval of the loan, the
title of the collateral should first be transferred to Issues: 1. WON the deed is void for being forged; 2. WON
Maniego. LBP was a mortgagee in good faith

Pursuant to the Deed of Absolute Sale, Register of Deeds Ruling: 1. YES; 2. NO. Petition is denied and the CA ruling is
of Occidental Mindoro issued Transfer Certificate of Title affirmed.
(TCT) No. T-20151 in Maniegos name. One day later,
Maniego and Land Bank executed a Credit Line Agreement 1. A forged or fraudulent deed is a nullity and
and a Real Estate Mortgage over TCT No. T- 20151. On the conveys no title. Moreover, where the deed of
same day, Land Bank released the 1,000,000.00 loan sale states that the purchase price has been
proceeds to Maniego. Subsequently, Maniego failed to paid but in fact has never been paid, the deed
pay the loan with Land Bank. LBP filed an Application for of sale is void ab initio for lack of
Extra-judicial Foreclosure of Real Estate Mortgage stating consideration.18 Since the Deed dated 11
that Maniegos total indebtedness amounted to August 2000 is void, the corresponding TCT No.
1,154,388.88. T-20151 issued pursuant to the same deed is
likewise void.
Poblete filed a Complaint for Nullification of the Deed
dated 11 August 2000 and TCT No. T-20151, Reconveyance
of Title and Damages with Prayer for Temporary
When the instrument presented for registration is forged, under the name of Poblete. Land Bank even ignored the
even if accompanied by the owners duplicate certificate fact that Kapantay previously used Pobletes title as
of title, the registered owner does not thereby lose his collateral in its loan account with Land Bank. The records
title, and neither does the mortgagee acquire any right or do not even show that Land Bank investigated and
title to the property. In such a case, the mortgagee under inspected the property to ascertain its actual occupants.
the forged instrument is not a mortgagee protected by Land Bank merely mentioned that it inspected Lot No. 29
law. to appraise the value of the property. Land Bank claims
that it conditioned the approval of the loan upon the
It is settled that a decision that has acquired finality transfer of title to Maniego, but admits processing the
becomes immutable and unalterable and may no longer loan based on Maniegos assurances that title would soon
be modified in any respect, even if the modification is be his.37 Thus, only one day after Maniego obtained TCT
meant to correct erroneous conclusions of fact or law and No. T-20151 under his name, Land Bank and Maniego
whether it will be made by the court that rendered it or by executed a Credit Line Agreement and a Real Estate
the highest court of the land. This is without prejudice, Mortgage. Because of Land Banks haste in granting the
however, to the right of Maniego to recover from Poblete loan, it appears that Maniegos loan was already
what he paid to Kapantay for the account of Poblete, completely processed while the collateral was still in the
otherwise there will be unjust enrichment by Poblete. name of Poblete. This is also supported by the testimony
of Land Bank Customer Assistant Andresito Osano. Where
Since TCT No. T-20151 has been declared void by final
the mortgagee acted with haste in granting the mortgage
judgment, the Real Estate Mortgage constituted over it is
loan and did not ascertain the ownership of the land being
also void. In a real estate mortgage contract, it is essential
mortgaged, as well as the authority of the supposed agent
that the mortgagor be the absolute owner of the
executing the mortgage, it cannot be considered an
property to be mortgaged; otherwise, the mortgage is
innocent mortgagee.
void.
LEGARDA v CA ET AL
2. There is indeed a situation where, despite the
fact that the mortgagor is not the owner of the Facts: The parties hereto entered into a lease agreement
mortgaged property, his title being fraudulent, over a certain Quezon City property owned by petitioner
the mortgage contract and any foreclosure sale Victoria Legarda. She refused to sign the contract
arising therefrom are given effect by reason of although respondent lessee, Cathay, made a deposit and
public policy. This is the doctrine of "the a down payment of rentals, prompting the latter to file
mortgagee in good faith" based on the rule that before the RTC a complaint against the former for specific
buyers or mortgagees dealing with property performance with preliminary injunction and damages.
covered by a Torrens Certificate of Title are not The court a quo issued the injunction. In the meantime,
required to go beyond what appears on the face Legardas counsel, Coronel, requested a 10-day extension
of the title.However, it has been consistently of time to file an answer which the court granted. Atty.
held that this rule does not apply to banks, Coronel, failed to file an answer within the extended
which are required to observe a higher standard period. His client was eventually declared in default,
of diligence. A bank whose business is impressed Cathay was allowed to present evidence ex-parte, and a
with public interest is expected to exercise more judgment by default was reached by the trial court
care and prudence in its dealings than a private ordering Legarda to execute the lease contract in favor of
individual, even in cases involving registered Cathay and to pay her damages.
lands. A bank cannot assume that, simply
because the title offered as security is on its RTC Ruling: A copy of said decision was served on Atty.
face free of any encumbrances or lien, it is Coronel but he took no action until the judgment became
relieved of the responsibility of taking further final and executor. RTC issued a writ of execution and a
steps to verify the title and inspect the public auction was held where Cathays manager, Cabrera
properties to be mortgaged. as highest bidder, was awarded the property for
P376,500.00 in satisfaction of the judgment debt.
Facts of how LBP did not act in good faith: Based on the Consequently, a Certificate of Sale was issued by the
evidence, Land Bank processed Maniegos loan application sheriff. Upon failure of Legarda to redeem her property
upon his presentation of OCT No. P-12026, which was still
within the one-year redemption period, a Final Deed of such unjust enrichment of Cathay at Legardas expense,
Sale was issued which was registered by Cabrera with the and noted that counsels lack of devotion to duty is so
Register of Deeds three days later. Title was transferred gross and palpable that this Court must come to the aid of
from the name of Legarda to Cabrera. his distraught client. ***This was held by the Court as
impermissible, for the Court seeks sound judgment and
Despite the lapse of over a year since the judgment by does not consider emotions.
default became final and executory, Atty. Coronel made
no move on behalf of his client. He did not even inform CATHAYS DEFENSE: Cathay filed the instant motion for
her of all these developments. When Legarda did learn of reconsideration, alleging, inter alia, that reconveyance is
the adverse decision, she retained Coronel as her counsel not possible because the subject property had already
and prevailed upon him to seek appropriate relief. Thus, been sold by its owner, Cabrera, even prior to the
he filed a petition for annulment of judgment with prayer promulgation of said decision.
for the issuance of a writ of preliminary mandatory
injunction before the Court of Appeals. The impossibility of this directive is immediately apparent,
for two reasons: First, Cathay neither possessed nor
CA Ruling: CA rendered a decision affirmed the decision of owned the property so it is in no position to reconvey the
the RTC and dismissed the petition for annulment of same; second, even if it did, ownership over the property
judgment, and holding Legarda bound by the negligence had already been validly transferred to 3 innocent third
of her counsel. It considered her allegation of fraud by parties at the time of promulgation of said judgment.
Cathay to be improbable, and added that there was pure
and simple negligence on the part of petitioners counsel Issue: WON Cabrera was a purchaser in good faith
who failed to file an answer and, later, a petition for relief
Ruling: YES.
from judgment by default.
1. Cabrera was simply a vendee whose payment
THE NEW LAWYER: Legarda learned of the adverse
effectively extinguished Legardas liability to
decision of the Court of Appeals not from Atty. Coronel
Cathay as the judgment creditor. What is clear
but from his secretary. She then hired a new counsel for
from the records is that the auction sale was
the purpose of elevating her case to this Court. The new
conducted regularly, that a certificate of sale
lawyer filed a petition for certiorari praying for the
and, subsequently, a final deed of sale were
annulment of the decision of the trial and appellate courts
issued to Cabrera which allowed him to
and of the sheriffs sale, alleging, among other things, that
consolidate his ownership over the subject
Legarda lost in the courts below because her previous
property, register it and obtain a title in his own
lawyer was grossly negligent and inefficient, whose
name, and sell it to Nancy Saw, an innocent
omissions cannot possibly bind her because this amounted
purchaser for value, at a premium price. Nothing
to a violation of her right to due process of law. She,
on record would demonstrate that Cathay was
therefore, asked Cathay (not Cabrera) to reconvey the
the beneficiary of the sale between Cabrera and
subject property to her.
Saw. Cabrera himself maintained that he was
DECISION BY GANCAYCO: A decision was rendered in this acting in his private (as distinct from his
case by Mr. Justice Gancayco, ruling in favour of the corporate) capacity when he participated in the
request by Legardas new counsel. The decisions of the bidding.
RTC and the CA were all reversed and the title was given
Since the decision of the Court of Appeals gained finality
back to Legarda.
the subject property has been sold and ownership thereof
The Court then declared that Atty. Coronel committed, not transferred no less than three times.
just ordinary or simple negligence, but reckless,
As a result, all the successors-in-interest of Cabrera to the
inexcusable and gross negligence, which deprived his
subject lot were transferees for value and in good faith,
client of her property without due process of law. His
having relied as they did on the clean titles of their
acts, or the lack of it, should not be allowed to bind
predecessors. The successive owners were each armed
Legarda who has been consigned to penury because her
with their own indefeasible titles which automatically
lawyer appeared to have abandoned her case not once
brought them under the aegis of the Torrens System.
but repeatedly. Thus, the Court ruled against tolerating
2. Though not raised as an issue in this case, is the proceedings were complete with notice and
fact that Cabrera was impleaded as a party- publication, so Legarda could not be held as
respondent only after the promulgation of the totally in the dark about the status of her
Gancayco decision. The dispositive portion itself property.
ordered Cathay, instead of Cabrera to reconvey
the property to Legarda. Cabrera was never a 5. These twin judgments, which were nullified by
party to this case, either as plaintiff-appellee the Gancayco decision, should be respected and
below or as respondent in the present action. allowed to stand by this Court for having become
Neither did he ever act as Cathays final and executory.
representative. Assuming arguendo that
reconveyance is possible, it would still not Void judgments may be classified into two groups: those
address the issue in this case. rendered by a court without jurisdiction to do so and
those obtained by fraud or collusion.This case must be
3. Under the Gancayco ruling, the order of tested in light of the guidelines governing the latter class
reconveyance was premised on the alleged gross of judgments. In this regard, an action to annul a
negligence of Legardas counsel which should not judgment on the ground of fraud will not lie unless the
be allowed to bind her as she was deprived of fraud is extrinsic or collateral and facts upon which it is
her property without due process of law. based (have) not been controverted or resolved in the
case where (the) judgment was rendered.
It is, however, basic that as long as a party was given
the opportunity to defend her interests in due course, It must be noted that, aside from the fact that no
she cannot be said to have been denied due process extrinsic fraud attended the trial and resolution of this
of law, for this opportunity to be heard is the very case, the jurisdiction of the court a quo over the parties
essence of due process. The chronology of events and the subject matter was never raised as an issue by
shows that the case took its regular course in the trial Legarda. Such being the case, the decision of the trial
and appellate courts but Legardas counsel failed to court cannot be nullified.
act as any ordinary counsel should have acted, his
negligence every step of the way amounting to GABUTAN v NACALABAN
abandonment, in the words of the Gancayco decision.
Godofredo Nacalaban (Godofredo) purchased a land
Absent any irregularity on the part of Cabrera and
(property) in Poblacion, Cagayan de Oro City from three
the proceedings he underwent to acquire valid title
people surnamed Daamo. Pursuant to the sale, title
over the land, the presumption of regularity stands.
covering the property was issued in the name of
Nor did the fact that Cabrera is an officer of Cathay
Godofredo. He thereafter built a house on it.
make him a purchaser in bad faith. His act in
representing the company was never questioned nor
Godofredo died and was survived by his wife, Baldomera,
disputed by Legarda.
and their children. Baldomera issued a Certification in
favor of her mother, Melecia, allowing her to build and
4. Neither Cathay nor Cabrera should be made to
occupy a house on the portion of the property.
suffer for the gross negligence of Legardas
Accordingly, the house was declared for taxation
counsel. If she may be said to be innocent
purposes. The tax declaration presented in evidence
because she was ignorant of the acts of
showed that Melecia owned the building on the land
negligence of her counsel, with more reason are
owned by Godofredo.
respondents truly innocent. As between two
parties who may lose due to the negligence or
Baldomera died, so her children executed an Extrajudicial
incompetence of the counsel of one, the party
Settlement of Estate of Deceased Person with Sale where
who was responsible for making it happen
they adjudicated unto themselves the property and sold
should suffer the consequences. This reflects the
it to the College. Title covering the property was issued in
basic common law maxim that was stated by
the name of the College.
Justice JBL Reyes. In this case, Legarda was
clearly at fault in retaining her counsels services
despite his gross negligence over her case. The
Melecia died and was survived by her children, Trifonia registered owner of the property and not
Gabutan, Buna, Felisia, Crisanta, and Tirso. Nacalaban, et al., the College should have
exercised a higher degree of prudence in
In a letter, the College demanded Trifonia D. Gabutan, establishing their capacity to sell it. Further,
and other heirs of Melecia who were occupying the despite knowing that other persons possessed the
house on the property, to vacate the premises. property, the College did not inquire with
Gabutan, et al. the nature of their stay on the
Gabutan, et al. filed a Complaint for Reconveyance of property.
Real Property, Declaration of Nullity of Contracts, Partition
and Damages with Writ of Preliminary Attachment and Issues:
Injunction against Nacalaban, et al. and the College. They
alleged that: (1) Melecia bought the property using her 1. Whether the petition for certiorari of
Nacalaban, et al. shall prosper; NO
own money but Godofredo had the Deed of Absolute
2. Whether the action for reconveyance was
Sale executed in his name instead of his mother-in- proper; YES
law;22 (2) Godofredo and Baldomera were only trustees 3. Whether the College is a buyer in good
of the property in favor of the real owner and faith. NO
beneficiary, Melecia; (3) they only knew about the
Extrajudicial Settlement with Sale upon verification with Ruling:
the Registry of Deeds; and (4) the College was a buyer in
bad faith, being aware they were co-owners of the 1. Appeal in the form of review of certiorari
not a petition for certiorari is the
property. ***ALL OF THESE WERE DECLARED AFFIRMED
proper remedy. Rule 65 is a limited form
BY THE COURT of review and is a remedy of last
recourse. This extraordinary action lies
MTCC AND RTC WERE IN FAVOR OF THE COLLEGE ON THE only where there is no appeal nor plain,
UNLAWFUL DETAINER CASE. BUT IN THE RECONVEYANCE speedy and adequate remedy in the
ordinary course of law.
CASE, RTC WAS IN FAVOR OF GABUTAN; CA AFFIRMED
THE RTC DECISION ON THE UNLAWFUL DETAINER AND
Under the Rules of Court, Nacalaban had 15 days
RECONVEYANCE CASES. found the testimonies of
or until September 22, 2010 to file an appeal
their witnesses credible, in that the money of before us. Nacalaban, et al. allowed this period to
Melecia was used in buying the property but the lapse without doing so and, instead, filed a
name of Godofredo was used when the title was petition for certiorari on November 5, 2010.
obtained because Godofredo lived in Cagayan de Being the wrong remedy, the petition of
Oro City while Melecia lived in Bornay, Gitagum, Nacalaban, et al. is, therefore, dismissible.
Misamis Oriental.
Requisites: We have the discretion to treat a
Rule 65 petition for certiorari as a Rule 45 petition
NACALABAN: Filed their motion for for review on certiorari if (1) the petition is filed
reconsideration of the CA Decision, but it was within the reglementary period for filing a petition
denied so they filed the present petition for review; (2) when errors of judgment are
for certiorari under Rule 65, where they allege averred; and (3) when there is sufficient reason
that: (1) the action for reconveyance already to justify the relaxation of the rules. The first
expired; (2) for an action for reconveyance and third requisites are absent in this case.
To reiterate, the petition was filed beyond
to prosper, the property should not have
the 15-day reglementary period of filing a
passed into the hands of another who petition for review on certiorari.
bought the property in good faith and for
value; and (3) the title of Godofredo could
2. Action for reconveyance is a proper
not be attacked collaterally. remedy being there an implied trust
between Melecia and Goddofredo, for it
GABUTAN: Filed the present petition for review was Melecias money that was used in
on certiorari under Rule 45, seeking a partial building the house.
appeal of the CA Decision. She alleges that the
College is not a buyer in good faith because Article 1448 of the Civil Code provides in part
it did not buy the property from the that there is an implied trust when property is
registered owner.Since Godofredo was the sold, and the legal estate is granted to one party
but the price is paid by another for the purpose of
having the beneficial interest of the property. The or of any defect or restriction in the
former is the trustee, while the latter is the title of the seller or in his capacity to
beneficiary. Requisites: (1) an actual payment of convey title to the property.
money, property or services, or an equivalent,
constituting valuable consideration; (2) and such Thus, the College, which has the burden to prove
consideration must be furnished by the alleged the status of being a purchaser in good faith, is
beneficiary of a resulting trust.90 These two required to prove the concurrence of the above
elements are present here. conditions. We find that the College failed to
discharge this burden.
Gabutan, et al., through the testimonies of
Felisia, Crisanta, and Trifonia, established that As correctly pointed out by Gabutan, et al.,
Melecia's money was used in buying the property, Nacalaban, et al. are not the registered
but its title was placed in Godofredo's name. She owners of the property, but Godofredo.
purchased the property because Felisia wanted to In Bautista v. Court of Appeals,129 we held:
build a pharmacy on it. On one occasion in
Melecia's house, and when the entire family was chanRoble svirtual Lawlib ra ry

Secondly, the College was aware that aside

present, Melecia gave Godofredo the money to
purchase the property.Melecia entrusted the from Nacalaban, et al., the Heirs of Melecia,
money to Godofredo because he was in were also in possession of the property. The
Cagayan de Oro, and per Melecia's College cited the tax declaration which bore an
instruction, the deed of sale covering the annotation that Melecia owned a residential
property was placed in his name. It was building and Godofredo owned the lot.
allegedly her practice to buy properties and place
Although the College in its Answer alleged that it
them in her children's name, but it was
understood that she and her children co-own the made an exhaustive investigation and verification
properties.ha nr
from all reliable sources and found that the
possession of Melecia and her heirs was merely
Melecia built a residential building on the tolerated,135 it failed to specify who or what
property, where her daughter Crisanta and
some of her grandchildren these sources were. There is no evidence
resided.95 Godofredo also thereafter built a that the College did inquire from Melecia or
house on the property. Twice, he also her heirs themselves, who were occupying the
mortgaged the property to secure loans. property, the nature and authority of their
Melecia allowed him to do so because she possession.
trusted him.96 After Godofredo's death, and
when Baldomera fell ill, there were family CUSI v DOMINGO
discussions to transfer the title in Melecia's name
so Melecia's children can divide it together with The property in dispute was a vacant unfenced lot situated
the rest of Melecia's properties. The plans, in White Plains, Quezon City and covered TCT issued in the
however, always fell through.
name of respondent Lilia V. Domingo by the Registry of
Deeds of Quezon City. Domingo learned that construction
The action for reconveyance is imprescriptible
because the plaintiffs are in possession of activities were being undertaken on her property without
the property. her consent. She soon unearthed the series of anomalous
transactions affecting her property
3. To prove good faith, a buyer of registered
and titled land need only show that he One Radelia Sy (Sy), representing herself as the owner of
relied on the face of the title to the the property, petitioned the RTC for the issuance of a
property. He need not prove that he
new owners copy of Domingos TCT No. N-165606,
made further inquiry for he is not obliged
to explore beyond the four corners of the appending to her petition a deed of absolute sale dated
title. Such degree of proof of good July 14, 1997 purportedly executed in her favor by
faith, however, is sufficient only Domingo; and an affidavit of loss whereby she claimed
when the following that her bag containing the owners copy of the TCThad
conditions concur: first, the seller is
been snatched from her while she was at the SM City in
the registered owner of the
land; second, the latter is in North EDSA, Quezon City.
possession thereof; and third, at the
time of the sale, the buyer was not The RTC granted Sys petition. The Registry of Deeds of
aware of any claim or interest of Quezon City then issued a new owners duplicate copy of
some other person in the property,
TCT No. N-165606, which was later cancelled by virtue of IN THE NAME OF RADELIA SY IS A
the deed of absolute sale dated July 14, 1997, and in its RECONSTITUTED TITLE. NO
stead the Registry of Deeds of Quezon City issued TCT No. 2. WHETHER OR NOT THE PETITIONERS ARE
186142 in Sys name. BUYERS IN GOOD FAITH AND FOR VALUE. NO

Sy subsequently subdivided the property into two, and Ruling:

sold each half by way of contract to sell to Spouses
Edgardo and Ramona Liza De Vera and to Spouses The sale of the property from Domingo to Sy was null and
Alfonso and Maria Angeles Cusi. The existence of the void and conveyed no title to the latter for being effected
individual contracts to sell was annotated on the dorsal by forging the signature of Domingo; that Sy thereby
portion of Sys TCT stating that the consideration of the acquired no right in the property that she could convey to
sale was 1,000,000.00 for each set of buyers, or for a the Cusis and De Veras as her buyers; that although
total of 2,000,000.00 for the entire property that had an acknowledging that a purchaser could rely on what
actual worth of not less than 14,000,000.00. TCT No. appeared on the face of the certificate of title, the Cusis
186142 in the name of Sy was then cancelled by virtue of and De Veras did not have the status of purchasers in good
the deeds of sale executed between Sy and Spouses De faith and for value by reason of their being aware of Sys
Vera, and between Sy and Spouses Cusi. All the while, the TCT No. 186142 being a reconstituted owners copy,
transactions between Sy and the De Veras, and between thereby requiring them to conduct an inquiry or
Sy and the Cusis were unknown to Domingo, whose TCT investigation into the status of the title of Sy in the
No. N-165606 remained in her undisturbed possession. property, and not simply rely on the face of Sys TCT No.
186142; and that the Cusis and De Veras were also aware
It turned out that the construction activities taking place of other facts that should further put them on guard,
on the property that Domingo learned about were upon particularly the several nearly simultaneous transactions
the initiative of the De Veras in the exercise of their respecting the property, and the undervaluation of the
dominical and possessory rights. purchase price from 7,000,000.00/half to only
1,000,000.00/half to enable Sy to pay a lesser capital
Domingo commenced this action against Sy and her gains tax.
spouse, the De Veras and the Cusis in the RTC, the
complaint entitled Lilia V. Domingo v. Spouses Radelia and There is no question that the petitioners exerted some
Alfred Sy, Spouses Alfonso G. and Maria Angeles S. Cusi, effort as buyers to determine whether the property did
Spouses Edgardo M. and Ramona Liza L. De Vera, BPI rightfully belong to Sy. For one, they did not find any
Family Savings Bank and The Register of Deeds of Quezon encumbrance, like a notice of lis pendens, being annotated
City, seeking the annulment or cancellation of titles, on the TCT of Sy. Nonetheless, their observance of a
injunction and damages. Domingo applied for (TRO). The certain degree of diligence within the context of the
RTC granted Domingos application for the TRO enjoining principles underlying the Torrens system was not their
the defendants from proceeding with the construction only barometer under the law and jurisprudence by which
activities on the property. The RTC later granted her to gauge the validity of their acquisition of title. As the
application for the writ of preliminary injunction. purchasers of the property, they also came under the
clear obligation to purchase the property not only in
RTC RULING: At first, RTC said the purchasers were in good good faith but also for value.
faith, but held a subsequent decision that they were in bad
faith. In both decisions, the deed of absolute sale between Therein lay the problem. The petitioners were shown to
Sy and Domingo was held void. have been deficient in their vigilance as buyers of the
property.
CA affirmed the last decision of the CA and denied the
motions for reconsideration of De Vera, Sy, and Cusi. It was not enough for them to show that the property was
unfenced and vacant; otherwise, it would be too easy for
Issue: any registered owner to lose her property, including its
possession, through illegal occupation. Nor was it safe for
1. WHETHER OR NOT THE HONORABLE COURT OF
them to simply rely on the face of Sys TCT No. 186142 in
APPEALS ERRED IN FINDING THAT TRANSFER
view of the fact that they were aware that her TCT was
CERTIFICATE OF TITLE NO. 186142 REGISTERED
derived from a duplicate owners copy reissued by virtue
of the loss of the original duplicate owners copy. That
circumstance should have already alerted them to the
need to inquire beyond the face of Sys TCT No. 186142.
There were other circumstances, like the almost
simultaneous transactions affecting the property within a
short span of time, as well as the gross undervaluation of
the property in the deeds of sale, ostensibly at the behest
of Sy to minimize her liabilities for the capital gains tax,
that also excited suspicion, and required them to be extra-
cautious in dealing with Sy on the property.