THIRD DIVISION
|
PHILIPPINE VETERANS BANK, Petitioner, - versus - BENJAMIN MONILLAS, Respondent. |
G.R.
No. 167098
Present: AUSTRIA-MARTINEZ, J.,
Acting Chairperson, TINGA,* CHICO-NAZARIO, NACHURA, and REYES, JJ. Promulgated: March 28, 2008 |
x------------------------------------------------------------------------------------x
D E C I S I O
N
NACHURA, J.:
Challenged
in this petition for review on certiorari
under Rule 45 of the Rules of Court is the November 3, 2004 Decision[1] of
the Regional Trial Court (RTC) of Santiago City, Branch 35 in Civil Case No.
35-3123. Also assailed is the
The antecedent facts and proceedings follow.
Respondent
Benjamin Monillas and his brother, Ireneo, inherited from their father a parcel
of land covered by TCT No. T-53038. On May 21, 1973, respondent executed a deed
of sale of his share over the property to Ireneo under the latter’s
representation that he would use the deed to facilitate the procurement of a
loan (with the Development Bank of the Philippines) for a planned housing
project on the land. Ireneo then caused the transfer of the title in his name,
the property’s subdivision into 308 lots, and the issuance of individual titles
for the subdivided lots.[3]
In 1978, Ireneo mortgaged twenty-two
(22) lots covered by TCT Nos. T-75517 to 75539, to petitioner Philippine
Veterans Bank (PVB). Three years thereafter or in 1981, respondent instituted
Civil Case No. 24-0047 before the RTC of Echague, Isabela, for the
nullification of the 1973 deed of sale, the recovery of the property, and the
payment of damages.[4]
While the case remained pending, PVB
foreclosed the mortgage on
Later, on
On
On
After trial on the merits, the court
rendered the assailed November 3, 2004 Decision[9] ruling
that petitioner was bound by the outcome of Civil Case No. 24-0047 because notices
of lis pendens were annotated in the
properties’ titles. The RTC rationalized that while the annotation of the
notices succeeded the registration of the mortgage, still the effect of the notices
was that PVB acquired knowledge of an impediment against its interest, and as a
matter of fact, petitioner ignored the notices and slept on its rights, as it
did not intervene in the said civil case.[10]
The trial court proceeded to dispose of the case as follows:
WHEREFORE, in view of all the foregoing
considerations, judgment is hereby rendered in favor of the plaintiff and
against the defendant as follows:
1)
DECLARING
as null and void the mortgage contract between Ireneo Monillas, Jr. and
defendant Philippine Veterans Bank (PVB) over TCT Nos. T-75517 to T-75539,
inclusive;
2)
DECLARING
as null and void the foreclosure of the mortgage contract mentioned in the
preceding paragraph over the same properties;
3)
DECLARING
as null and void TCT Nos. T-323794 to T-323816, inclusive, in the name of
defendant Philippine Veterans Bank (PVB); and
4)
ORDERING
defendant Register of Deeds of Isabela (Ilagan and Santiago City Office) to
cancel TCT Nos. T-323794 to T-323816, inclusive, all in the name of defendant
PVB, and issue corresponding certificates of title thereto in the name of
plaintiff Benjamin Monillas, upon payment of required fees.
No other pronouncements.
SO ORDERED.[11]
Petitioner’s Motion for
Reconsideration[12] was
later denied by the trial court in the likewise challenged
Frustrated at these developments,
petitioner filed before the Court the instant petition for review on certiorari on the following grounds:
THE
I.
It
denied Philippine Veterans Bank the status of the mortgagee in good faith
despite the undisputed fact that defendant did not know of any infirmity
whatsoever in the titles when they were mortgaged.
II.
It in
effect gave a notice of lis pendens a retroactive effect contrary to the
provision of the Rules of Court that lis pendens only effects (sic) subsequent dealings.
III.
It in effect
made petitioner bound by a decision it was not a party (sic).[14]
Whether the prior registered mortgage
and the already concluded foreclosure proceedings should prevail over the subsequent
annotation of the notices of lis pendens
on the lot titles, is the central question to be addressed by the Court in this
case.
The petition is meritorious.
On the procedural issue raised, we declare
that the instant petition, contrary to respondent’s contention, is the correct
remedy to question the challenged issuances. Under the Rules of Court, a party
may directly appeal to this Court from a decision of the trial court only on
pure questions of law.[15] A
question of law lies, on one hand, when the doubt or difference arises as to
what the law is on a certain set of facts; on the other hand, a question of
fact exists when the doubt or difference arises as to the truth or falsehood of
the alleged facts.[16] Here,
the facts are not disputed; the controversy merely relates to the correct
application of the law or jurisprudence to the undisputed facts.
On the merits of the petition, the
Court rules that the prior registered mortgage of PVB and the foreclosure
proceedings already conducted prevail over respondent’s subsequent annotation
of the notices of lis pendens on the
titles to the property. Settled in this jurisdiction is the doctrine that a
prior registration of a lien creates a preference;[17]
hence, the subsequent annotation of an adverse claim cannot defeat the rights
of the mortgagee, or the purchaser at the auction sale whose rights were
derived from a prior mortgage validly registered. A contrary rule will make a
prior registration of a mortgage or any lien nugatory or meaningless.[18] It
may not be amiss to point out, at this juncture, that the doctrine applies with
greater force in this case considering that the annotation of the notice of lis pendens was made not only after the
registration of the mortgage, but also, and much later, after the conclusion of
the foreclosure sale. Furthermore, the
mortgagee itself, PVB, is the purchaser of the subject properties in the
foreclosure sale.
The Court also notes that PVB is an
innocent mortgagee for value. When the lots were mortgaged to it by Ireneo, the
titles thereto were in the latter’s name, and they showed neither vice nor
infirmity.[19] In
accepting the mortgage, petitioner was not required to make any further
investigation of the titles to the properties being given as security,[20] and
could rely entirely on what is stated in the aforesaid titles.[21]
The public interest in upholding the indefeasibility of a certificate of title,
as evidence of the lawful ownership of the land or of any encumbrance thereon,
protects a buyer or mortgagee who, in good faith, relied upon what appears on
the face of the certificate of title.[22]
PVB cannot even be considered to have
slept on its rights when it only registered the Sheriff’s certificate of sale
after the lapse of almost 15 years, because, as already discussed, it
registered its prior mortgage and had already foreclosed on the same. Petitioner,
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
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, and another judgment is hereby rendered DISMISSING the complaint for lack of
merit.
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
Acting Chairperson
|
DANTE O.
TINGA Associate
Justice |
MINITA V. CHICO-NAZARIO Associate
Justice |
RUBEN T. REYES
Associate Justice
A
T T E S T A T I O N
I
attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
MA. ALI
Associate
Justice
Acting Chairperson, Second Division
C
E R T I F I C A T I O N
Pursuant
to Article VIII, Section 13 of the Constitution, and the Division Acting Chairperson's
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court.
REYNATO
S. PUNO
Chief
Justice
* In lieu of Associate Justice Consuelo
Ynares-Santiago, per Special Order No. 497, dated
[1] Rollo,
pp. 49-59.
[2]
[3]
[4]
[5]
[6]
[10] Rollo,
pp. 53-58.
[11]
[12]
[13] Supra note 2.
[14] Rollo,
pp. 14-15.
[15] See RULES
OF COURT, Rule 45, Sec. 1; see
[16] Cebu
Women’s Club v. Hon. De la Victoria, 384 Phil. 264, 269 (2000); see
[17] Lavides
v. Pre, 419 Phil. 665, 672 (2001).
[18] See
Pineda v. Court of Appeals, 456 Phil. 732, 751-752 (2003); see also Gonzales v. Intermediate Appellate Court,
No. L-69622, January 29, 1988, 157 SCRA 587, 598 and Bank of the Philippine Islands, v. Noblejas, 105 Phil. 418, 424
(1959), in which the Court ruled that any subsequent lien or encumbrance
annotated at the back of the certificates of title can not in any way prejudice
the mortgage previously registered, and the lots subject thereto pass to the
purchaser at the public auction sale free from any lien or encumbrance;
otherwise, the value of the mortgage can be easily destroyed by a subsequent
record of an adverse claim, for no one will purchase at a foreclosure sale if
bound by the posterior claim; but see
Rehabilitation Finance Corp. v. Morales, 101 Phil. 171 (1957), in which the
Court held that, while the notice of lis
pendens cannot affect the mortgagee’s right as such because the same was
annotated subsequent to the mortgage, yet the said notice affects its right as
purchaser because notice of lis pendens
simply means that a certain property is involved in a litigation and serves as
a notice to the whole world that one who buys the same does so at his own risk.
[19] In Duran
v. Intermediate Appellate Court, No. L-64159, September 10, 1985, 138 SCRA
489, 494, the Court, citing prior cases, stated that good faith requires a
well-founded belief that the person from whom title was received was himself
the owner of the land, with the right to convey it.
[20] See
Planters Development Bank v. Court of Appeals, G.R. No. 96357, May 29,
1991, 197 SCRA 698, 702; Mallorca v.
Deocampo, 143 Phil. 17, 20 (1970).
[21] La
Urbana v. Bernardo, 62 Phil. 790, 800 (1936).
[22] Cavite Development Bank v. Spouses Lim,
381 Phil. 355, 368 (2000).
[23] Abad v. Guimba, G.R. No. 157002,
[24] Bank of the Philippine Islands, v. Noblejas, supra note 18; Gonzales v. Intermediate Appellate Court, supra note 18.