Lawyerly

GR No. 214057

2015-10-19

FLORENTINA BAUTISTA-SPILLE v. NICORP MANAGEMENT

MENDOZA, J.

In the same vein, NICORP cannot be considered a purchaser in good faith. The well-settled rule is that a person dealing with an assumed agent is bound to ascertain not only the fact of agency but also the nature and extent of the agent's authority.[28] The law requires a higher degree of prudence from one who buys from a person who is not the registered owner. He is expected to examine all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land.[29] In ascertaining good faith, or the lack of it, which is a question of intention, courts are necessarily controlled by the evidence as to the conduct and outward acts by which alone the inward motive may, with safety, be determined. Good faith, or want of it, is not a visible, tangible fact that can be seen or touched, but rather a state or condition of mind which can only be judged by actual or fancied token or signs.[30]

GR No. 191849

2015-09-23

FREDERICK F. FELIPE v. MGM MOTOR TRADING CORPORATION

PEREZ, J.

A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts. There is a question of fact when doubt. arises as to the truth or falsity of the statement of facts. The resolution of a question of fact necessarily involves a calibration of the evidence, the credibility of the witnesses, the existence and the relevance of surrounding circumstances, and the probability of specific situations. It is for this reason that this Court defers to the factual findings of a trial judge, who has had the distinct advantage of directly observing the witnesses on the stand and determining from their demeanor whether they were speaking or distorting the truth.[13]

GR No. 193517

2014-01-15

HEIRS OF VICTORINO SARILI v. PEDRO F. LAGROSA

PERLAS-BERNABE, J.

However, a higher degree of prudence is required from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. In such a case, the buyer is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor.[35] The buyer also has the duty to ascertain the identity of the person with whom he is dealing with and the latter's legal authority to convey the property.[36]

GR No. 171464

2013-11-27

SPS. ELISEO R. BAUTISTA AND EMPERATRIZ C. BAUTISTA v. SPS. MILA JALANDONI AND ANTONIO JALANDONI AND MANILA CREDIT CORPORATION

MENDOZA, J.

Spouses Bautista's claim of good faith is negated by their failure to verify the extent and nature of Nasino's authority. Since Spouses Bautista did not deal with the registered owners but with Nasino, who merely represented herself to be their agent, they should have scrutinized all factual circumstances necessary to determine her authority to insure that there are no flaws in her title or her capacity to transfer the land.[33] They should not have merely relied on her verbal representation that she was selling the subject lots on behalf of Spouses Jalandoni. Moreover, Eliseo's claim that he did not require Nasino to give him a copy of the special power of attorney because he trusted her is unacceptable. Well settled is the rule that persons dealing with an assumed agency are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it.[34] As stated, Spouses Bautista's failure to observe the required degree of caution in ascertaining the genuineness and extent of Nasino's authority is tantamount to bad faith that precludes them from claiming the rights of a purchaser in good faith.[35]

GR No. 165803

2010-09-01

SPS. REX v. DIONISIO Z. PARULAN

BERSAMIN, J.

It is true that a buyer of registered land needs only to show that he has relied on the face of the certificate of title to the property, for he is not required to explore beyond what the certificate indicates on its face.[37] In this respect, the petitioners sufficiently proved that they had checked on the authenticity of TCT No. 63376 and TCT No. 63377 with the Office of the Register of Deeds in Pasay City as the custodian of the land records; and that they had also gone to the Los Baños Rural Bank to inquire about the mortgage annotated on TCT No. 63377. Thereby, the petitioners observed the requisite diligence in examining the validity of the TCTs concerned.

GR No. 160346

2009-08-25

PURITA PAHUD v. CA

NACHURA, J.

The Belarminos, for their part, cannot argue that they purchased the property from Virgilio in good faith. As a general rule, a purchaser of a real property is not required to make any further inquiry beyond what the certificate of title indicates on its face.[39] But the rule excludes those who purchase with knowledge of the defect in the title of the vendor or of facts sufficient to induce a reasonable and prudent person to inquire into the status of the property.[40] Such purchaser cannot close his eyes to facts which should put a reasonable man on guard, and later claim that he acted in good faith on the belief that there was no defect in the title of the vendor. His mere refusal to believe that such defect exists, or his obvious neglect by closing his eyes to the possibility of the existence of a defect in the vendor's title, will not make him an innocent purchaser for value, if afterwards it turns out that the title was, in fact, defective. In such a case, he is deemed to have bought the property at his own risk, and any injury or prejudice occasioned by such transaction must be borne by him.[41]

GR No. 160743

2009-08-04

CORNELIA BALADAD v. SERGIO A. RUBLICO AND SPS. LAUREANO F. YUPANO

NACHURA, J.

In Abad v. Guimba,[33] we explained: [A]s a rule, the purchaser is not required to explore further than what the Certificate indicates on its face. This rule, however, applies only to innocent purchasers for value and in good faith; it excludes a purchaser who has knowledge of a defect in the title of the vendor, or of facts sufficient to induce a reasonable prudent man to inquire into the status of the property.[34]

GR No. 142309

2009-01-30

JUAN DELA RAMA v. OSCAR PAPA

TINGA, J.

In Abad v. Guimba,[44] we ruled that a party was not an innocent mortgagee in good faith because he neglected to check if the person he was dealing with had any authority to mortgage the property. The rules on ascertaining mortgagee in good faith are the same as those for purchasers in good faith. Without directly communicating with the petitioners, how could have Papa been certain that the persons apparently unknown to him were indeed duly authorized by the petitioners to sell the property.

GR No. 177598

2008-10-16

ROBERT SAN PEDRO v. WILLY ONG

CHICO-NAZARIO, J.

However, the well-entrenched legal principle in our jurisprudence requires a higher degree of diligence to be exercised by the mortgagee when he is not directly dealing with the registered owner of real property. As the Court enunciated in Abad v. Guimba [34]:While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for [one] to determine if there are any flaws in the title of the transferor, or in [the] capacity to transfer the land. Although the instant case does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself includes a mortgagee in the term "purchaser."

GR No. 170452

2008-08-13

SALVADOR CHUA v. RODRIGO TIMAN

QUISUMBING, J.

Petitioners cannot also raise the defenses of in pari delicto and good faith. The defense of in pari delicto was not raised in the RTC, hence, such an issue cannot be raised for the first time on appeal. Petitioners must have seasonably raised it in the proceedings before the lower court, because questions raised on appeal are confined only within the issues framed by the parties. [14] The defense of good faith must also fail because such an issue is a question of fact [15] which may not be properly raised in a petition for review under Rule 45 of the Rules of Civil Procedure which allows only questions of law. [16]

GR No. 167098

2008-03-28

PHILIPPINE VETERANS BANK

NACHURA, J.

therefore, had every reason to expect that its rights were amply protected. And the mortgagor was even benefited by this late registration of the Sheriff's Sale, because then, he would still have a chance to redeem the property. Laches, being a doctrine in equity, cannot be invoked to resist the enforcement of a legal right.[23] Furthermore, oft-repeated is the rule that the foreclosure sale retroacts to the date of the registration of the mortgage.[24] Thus, it no longer matters that the annotation of the sheriff's certificate of sale and the affidavit of consolidation of ownership was made subsequent to the annotation of the notice of lis pendens. WHEREFORE, premises considered, the petition for review on certiorari is GRANTED. The November 3, 2004 Decision and the February 10, 2005 Order of the RTC of Santiago City, Branch 35, in Civil Case No. 35-3123, are hereby REVERSED AND SET ASIDE,

GR NO. 171460

2007-07-27

LILLIAN N. MERCADO v. ALLIED BANKING CORPORATION

CHICO-NAZARIO, J.

Further, in the case of Abad v. Guimba,[21] we laid down the principle that where the mortgagee does not directly deal with the registered owner of real property, the law requires that a higher degree of prudence be exercised by the mortgagee, thus: While [the] one who buys from the registered owner does not need to look behind the certificate of title, one who buys from [the] one who is not [the] registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for [one] to determine if there are any flaws in the title of the transferor, or in [the] capacity to transfer the land. Although the instant case does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself includes a mortgagee in the term "purchaser."[22] This principle is applied more strenuously when the mortgagee is a bank or a banking institution. Thus, in the case of Cruz v. Bancom Finance Corporation,[23] we ruled: Respondent, however, is not an ordinary mortgagee; it is a mortgagee-bank. As such, unlike private individuals, it is expected to exercise greater care and prudence in its dealings, including those involving registered lands. A banking institution is expected to exercise due diligence before entering into a mortgage contract. The ascertainment of the status or condition of a property offered to it as security for a loan must be a standard and indispensable part of its operations.[24] Hence, considering that the property being mortgaged by Julian was not his, and there are additional doubts or suspicions as to the real identity of the same, the respondent bank should have proceeded with its transactions with Julian only with utmost caution. As a bank, respondent must subject all its transactions to the most rigid scrutiny, since its business is impressed with public interest and its fiduciary character requires high standards of integrity and performance.[25] Where respondent acted in undue haste in granting the mortgage loans in favor of Julian and disregarding the apparent defects in the latter's authority as agent, it failed to discharge the degree of diligence required of it as a banking corporation.

GR NO. 167848

2007-04-27

BANK OF COMMERCE v. SPS. PRUDENCIO SAN PABLO

CHICO-NAZARIO, J.

In cases where the mortgagee does not directly deal with the registered owner of real property, the law requires that a higher degree of prudence be exercised by the mortgagee. As we have enunciated in the case of Abad v. Guimba:[28]

GR NO. 150066

2007-04-13

SPS. EMMANUEL AND EDNA CHUA AND SPS. MANUEL AND MARIA CHUA v. MSGR. VIRGILIO SORIANO. SUBSTITUTED BY SISTER MARY VIRGILIA CELESTINO SORIANO

AUSTRIA-MARTINEZ, J.

However, when a person who deals with registered land through someone who is not the registered owner, he is expected to look behind the certificate of title and examine all the factual circumstances, in order to determine if the vendor has the capacity to transfer any interest in the land.[34] He has the duty to ascertain the identity of the person with whom he is dealing and the latter's legal authority to convey.[35]

GR NO. 150066

2007-04-13

SPS. EMMANUEL AND EDNA CHUA AND SPS. MANUEL AND MARIA CHUA v. MSGR. VIRGILIO SORIANO. SUBSTITUTED BY SISTER MARY VIRGILIA CELESTINO SORIANO

AUSTRIA-MARTINEZ, J.

The law "requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land."[36]

GR NO. 157434

2006-09-19

SPS. CLARO AND NIDA BAUTISTA v. BERLINDA F. SILVA

AUSTRIA-MARTINEZ, J.

To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title to the property. He need not prove that he made further inquiry for he is not obliged to explore beyond the four corners of the title.[37] Such degree of proof of good faith, however, is sufficient only when the following conditions concur: first, the seller is the registered owner of the land; [38] second, the latter is in possession thereof;[39] and third, at the time of the sale, the buyer was not aware of any claim or interest of some other person in the property,[40] or of any defect or restriction in the title of the seller or in his capacity to convey title to the property.[41]

	GR No. 214057 2015-10-19	FLORENTINA BAUTISTA-SPILLE v. NICORP MANAGEMENT MENDOZA, J.
In the same vein, NICORP cannot be considered a purchaser in good faith. The well-settled rule is that a person dealing with an assumed agent is bound to ascertain not only the fact of agency but also the nature and extent of the agent's authority.[28] The law requires a higher degree of prudence from one who buys from a person who is not the registered owner. He is expected to examine all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land.[29] In ascertaining good faith, or the lack of it, which is a question of intention, courts are necessarily controlled by the evidence as to the conduct and outward acts by which alone the inward motive may, with safety, be determined. Good faith, or want of it, is not a visible, tangible fact that can be seen or touched, but rather a state or condition of mind which can only be judged by actual or fancied token or signs.[30]
	GR No. 191849 2015-09-23	FREDERICK F. FELIPE v. MGM MOTOR TRADING CORPORATION PEREZ, J.
A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts. There is a question of fact when doubt. arises as to the truth or falsity of the statement of facts. The resolution of a question of fact necessarily involves a calibration of the evidence, the credibility of the witnesses, the existence and the relevance of surrounding circumstances, and the probability of specific situations. It is for this reason that this Court defers to the factual findings of a trial judge, who has had the distinct advantage of directly observing the witnesses on the stand and determining from their demeanor whether they were speaking or distorting the truth.[13]
	GR No. 193517 2014-01-15	HEIRS OF VICTORINO SARILI v. PEDRO F. LAGROSA PERLAS-BERNABE, J.
However, a higher degree of prudence is required from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. In such a case, the buyer is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor.[35] The buyer also has the duty to ascertain the identity of the person with whom he is dealing with and the latter's legal authority to convey the property.[36]
	GR No. 171464 2013-11-27	SPS. ELISEO R. BAUTISTA AND EMPERATRIZ C. BAUTISTA v. SPS. MILA JALANDONI AND ANTONIO JALANDONI AND MANILA CREDIT CORPORATION MENDOZA, J.
Spouses Bautista's claim of good faith is negated by their failure to verify the extent and nature of Nasino's authority. Since Spouses Bautista did not deal with the registered owners but with Nasino, who merely represented herself to be their agent, they should have scrutinized all factual circumstances necessary to determine her authority to insure that there are no flaws in her title or her capacity to transfer the land.[33] They should not have merely relied on her verbal representation that she was selling the subject lots on behalf of Spouses Jalandoni. Moreover, Eliseo's claim that he did not require Nasino to give him a copy of the special power of attorney because he trusted her is unacceptable. Well settled is the rule that persons dealing with an assumed agency are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it.[34] As stated, Spouses Bautista's failure to observe the required degree of caution in ascertaining the genuineness and extent of Nasino's authority is tantamount to bad faith that precludes them from claiming the rights of a purchaser in good faith.[35]
	GR No. 165803 2010-09-01	SPS. REX v. DIONISIO Z. PARULAN BERSAMIN, J.
It is true that a buyer of registered land needs only to show that he has relied on the face of the certificate of title to the property, for he is not required to explore beyond what the certificate indicates on its face.[37] In this respect, the petitioners sufficiently proved that they had checked on the authenticity of TCT No. 63376 and TCT No. 63377 with the Office of the Register of Deeds in Pasay City as the custodian of the land records; and that they had also gone to the Los Baños Rural Bank to inquire about the mortgage annotated on TCT No. 63377. Thereby, the petitioners observed the requisite diligence in examining the validity of the TCTs concerned.
	GR No. 160346 2009-08-25	PURITA PAHUD v. CA NACHURA, J.
The Belarminos, for their part, cannot argue that they purchased the property from Virgilio in good faith. As a general rule, a purchaser of a real property is not required to make any further inquiry beyond what the certificate of title indicates on its face.[39] But the rule excludes those who purchase with knowledge of the defect in the title of the vendor or of facts sufficient to induce a reasonable and prudent person to inquire into the status of the property.[40] Such purchaser cannot close his eyes to facts which should put a reasonable man on guard, and later claim that he acted in good faith on the belief that there was no defect in the title of the vendor. His mere refusal to believe that such defect exists, or his obvious neglect by closing his eyes to the possibility of the existence of a defect in the vendor's title, will not make him an innocent purchaser for value, if afterwards it turns out that the title was, in fact, defective. In such a case, he is deemed to have bought the property at his own risk, and any injury or prejudice occasioned by such transaction must be borne by him.[41]
	GR No. 160743 2009-08-04	CORNELIA BALADAD v. SERGIO A. RUBLICO AND SPS. LAUREANO F. YUPANO NACHURA, J.
In Abad v. Guimba,[33] we explained: [A]s a rule, the purchaser is not required to explore further than what the Certificate indicates on its face. This rule, however, applies only to innocent purchasers for value and in good faith; it excludes a purchaser who has knowledge of a defect in the title of the vendor, or of facts sufficient to induce a reasonable prudent man to inquire into the status of the property.[34]
	GR No. 142309 2009-01-30	JUAN DELA RAMA v. OSCAR PAPA TINGA, J.
In Abad v. Guimba,[44] we ruled that a party was not an innocent mortgagee in good faith because he neglected to check if the person he was dealing with had any authority to mortgage the property. The rules on ascertaining mortgagee in good faith are the same as those for purchasers in good faith. Without directly communicating with the petitioners, how could have Papa been certain that the persons apparently unknown to him were indeed duly authorized by the petitioners to sell the property.
	GR No. 177598 2008-10-16	ROBERT SAN PEDRO v. WILLY ONG CHICO-NAZARIO, J.
However, the well-entrenched legal principle in our jurisprudence requires a higher degree of diligence to be exercised by the mortgagee when he is not directly dealing with the registered owner of real property. As the Court enunciated in Abad v. Guimba [34]:While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for [one] to determine if there are any flaws in the title of the transferor, or in [the] capacity to transfer the land. Although the instant case does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself includes a mortgagee in the term "purchaser."
	GR No. 170452 2008-08-13	SALVADOR CHUA v. RODRIGO TIMAN QUISUMBING, J.
Petitioners cannot also raise the defenses of in pari delicto and good faith. The defense of in pari delicto was not raised in the RTC, hence, such an issue cannot be raised for the first time on appeal. Petitioners must have seasonably raised it in the proceedings before the lower court, because questions raised on appeal are confined only within the issues framed by the parties. [14] The defense of good faith must also fail because such an issue is a question of fact [15] which may not be properly raised in a petition for review under Rule 45 of the Rules of Civil Procedure which allows only questions of law. [16]
	GR No. 167098 2008-03-28	PHILIPPINE VETERANS BANK NACHURA, J.
therefore, had every reason to expect that its rights were amply protected. And the mortgagor was even benefited by this late registration of the Sheriff's Sale, because then, he would still have a chance to redeem the property. Laches, being a doctrine in equity, cannot be invoked to resist the enforcement of a legal right.[23] Furthermore, oft-repeated is the rule that the foreclosure sale retroacts to the date of the registration of the mortgage.[24] Thus, it no longer matters that the annotation of the sheriff's certificate of sale and the affidavit of consolidation of ownership was made subsequent to the annotation of the notice of lis pendens. WHEREFORE, premises considered, the petition for review on certiorari is GRANTED. The November 3, 2004 Decision and the February 10, 2005 Order of the RTC of Santiago City, Branch 35, in Civil Case No. 35-3123, are hereby REVERSED AND SET ASIDE,
	GR NO. 171460 2007-07-27	LILLIAN N. MERCADO v. ALLIED BANKING CORPORATION CHICO-NAZARIO, J.
Further, in the case of Abad v. Guimba,[21] we laid down the principle that where the mortgagee does not directly deal with the registered owner of real property, the law requires that a higher degree of prudence be exercised by the mortgagee, thus: While [the] one who buys from the registered owner does not need to look behind the certificate of title, one who buys from [the] one who is not [the] registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for [one] to determine if there are any flaws in the title of the transferor, or in [the] capacity to transfer the land. Although the instant case does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself includes a mortgagee in the term "purchaser."[22] This principle is applied more strenuously when the mortgagee is a bank or a banking institution. Thus, in the case of Cruz v. Bancom Finance Corporation,[23] we ruled: Respondent, however, is not an ordinary mortgagee; it is a mortgagee-bank. As such, unlike private individuals, it is expected to exercise greater care and prudence in its dealings, including those involving registered lands. A banking institution is expected to exercise due diligence before entering into a mortgage contract. The ascertainment of the status or condition of a property offered to it as security for a loan must be a standard and indispensable part of its operations.[24] Hence, considering that the property being mortgaged by Julian was not his, and there are additional doubts or suspicions as to the real identity of the same, the respondent bank should have proceeded with its transactions with Julian only with utmost caution. As a bank, respondent must subject all its transactions to the most rigid scrutiny, since its business is impressed with public interest and its fiduciary character requires high standards of integrity and performance.[25] Where respondent acted in undue haste in granting the mortgage loans in favor of Julian and disregarding the apparent defects in the latter's authority as agent, it failed to discharge the degree of diligence required of it as a banking corporation.
	GR NO. 167848 2007-04-27	BANK OF COMMERCE v. SPS. PRUDENCIO SAN PABLO CHICO-NAZARIO, J.
In cases where the mortgagee does not directly deal with the registered owner of real property, the law requires that a higher degree of prudence be exercised by the mortgagee. As we have enunciated in the case of Abad v. Guimba:[28]
	GR NO. 150066 2007-04-13	SPS. EMMANUEL AND EDNA CHUA AND SPS. MANUEL AND MARIA CHUA v. MSGR. VIRGILIO SORIANO. SUBSTITUTED BY SISTER MARY VIRGILIA CELESTINO SORIANO AUSTRIA-MARTINEZ, J.
However, when a person who deals with registered land through someone who is not the registered owner, he is expected to look behind the certificate of title and examine all the factual circumstances, in order to determine if the vendor has the capacity to transfer any interest in the land.[34] He has the duty to ascertain the identity of the person with whom he is dealing and the latter's legal authority to convey.[35]
	GR NO. 150066 2007-04-13	SPS. EMMANUEL AND EDNA CHUA AND SPS. MANUEL AND MARIA CHUA v. MSGR. VIRGILIO SORIANO. SUBSTITUTED BY SISTER MARY VIRGILIA CELESTINO SORIANO AUSTRIA-MARTINEZ, J.
The law "requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land."[36]
	GR NO. 157434 2006-09-19	SPS. CLARO AND NIDA BAUTISTA v. BERLINDA F. SILVA AUSTRIA-MARTINEZ, J.
To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title to the property. He need not prove that he made further inquiry for he is not obliged to explore beyond the four corners of the title.[37] Such degree of proof of good faith, however, is sufficient only when the following conditions concur: first, the seller is the registered owner of the land; [38] second, the latter is in possession thereof;[39] and third, at the time of the sale, the buyer was not aware of any claim or interest of some other person in the property,[40] or of any defect or restriction in the title of the seller or in his capacity to convey title to the property.[41]

JOSE T. ABAD v. SPS. CEASAR AND VIVIAN GUIMBA