Republic of the Philippines
Supreme
Court
SECOND DIVISION
|
JOSEPH TYPINGCO, Petitioner, - versus - LINA WONG LIM, JERRY SYCHINGHO, JACKSON SYCHINGHO,
JOHNSON SYCHINGHO, and FAR EAST BANK AND TRUST COMPANY, Respondents. |
G.R. No. 181232 Present:
QUISUMBING, J., Chairperson, CARPIO,* CARPIO
MORALES, BRION, and ABAD, JJ. Promulgated: October
23, 2009 |
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D E C I S I O N
CARPIO MORALES, J.:
Sometime between December 1996 and
February 1997, respondents-spouses Lina Wong Lim (Lina) and Johnson Sychingho
(Johnson) borrowed from petitioner Joseph Typingco (Typingco) the sum of US$600,000
which was later restructured, payable on or before December 31, 1997, under a
promissory note executed by the spouses and co-signed by their children-co-respondents
Jerry Sychingho (Jerry) and Jackson Sychingho (Jackson) as sureties.[1]
Following their default in payment, Lina,
Jerry, and Jackson conveyed on January 29, 1998 to Typingco via dacion en pago their house and lot in
Greenhills, San Juan (subject property), covered by Transfer Certificate of
Title (TCT) No. 6259-R (the title) of the Register of Deeds of San Juan, in the
name of Lina and her sons, after first paying respondent Far East Bank and
Trust Company (FEBTC) the balance of a promissory note to clear the title of a
Real Estate Mortgage annotated thereon in favor of FEBTC.[2]
Typingco’s repeated demands for the delivery
of the owner’s duplicate copy of the title, the last of which was by letter of
March 2, 1998,[3] having remained unheeded, he filed a
complaint for specific performance and recovery of the title against respondents[4]
Sychinghos and FEBTC before the Quezon City Regional Trial Court (RTC).
Respondents
Sychinghos averred in the main that it was FEBTC that was unlawfully
withholding delivery of the owner’s duplicate copy of the title despite full
payment of the mortgage loan[5]
with it.
FEBTC, which was absorbed after a
merger by Bank of the Philippine Islands (BPI), contended that spouses Lina and
Johnson had unsettled obligations as sureties for JSY International
Philippines, Inc. and J&J Brothers Corporation under Comprehensive Surety
Agreements which they had executed authorizing FEBTC to retain and proceed
against their properties in its possession; that the Real Estate Mortgage
annotated on the title was a continuing security for their present and future
obligations; and that Typingco was not a buyer in good faith, he having failed
to conduct further inquiry on the status of the
subject property given that the mortgage in its favor was annotated on
the title.[6]
At the pre-trial, the parties
clarified that the subject matter of the case was only 1/3 inchoate
portion of the subject property[7]
or that pertaining to Lina as co-owner (as the 2/3 belongs to her sons Jerry
and Jackson), she being a signatory to the Real Estate Mortgage, along with her
sons, as well as to the Comprehensive Surety Agreements, along with her
husband, both documents in favor of FEBTC.
By Decision
of March 14, 2003,[8]
Branch 82 of the Quezon City RTC dismissed the complaint, holding that Typingco
was bound by the Real Estate Mortgage in favor of FEBTC not only because the
same was duly annotated on the title,
but also because he failed to verify the status of the subject property despite
his awareness of the said mortgage.
Typingco’s Motion
for Reconsideration having been denied by Order dated May 23, 2003,[9]
he appealed[10]
to the Court of Appeals. The appellate
court dismissed Typingco’s appeal by Decision of September 13, 2007,[11]
it sustaining for the most part the position of BPI.
Typingco’s Motion
for Reconsideration having been denied by Resolution dated January 10, 2008,[12]
he (hereafter petitioner) filed the present Petition for Review on Certiorari.
Petitioner argues that the copy of the
Real Estate Mortgage submitted by BPI (Exhibit “10”) is inadmissible, the witness
who identified it having no personal knowledge of its existence and due
execution, hence, should not be considered annotated on the title; and that there was no evidence that respondents
Sychinghos had other unpaid obligations with FEBTC for which the title should
continue to stand as security.[13]
By Manifestation of June 12, 2008, individual
respondents informed the Court of Johnson’s passing during the proceedings in
the trial court and their waiving of the filing of a Comment to the present petition,
given that their position before the trial and appellate courts[14]
is now also petitioner’s.
BPI, on the other hand, maintains its position before the trial court,
adding that the due execution and authenticity of Exhibit “10,” a notarized
instrument, need not be proved unlike that of a private writing.[15]
The petition is impressed with merit.
Dacion en pago
is the delivery and transmission of ownership of another thing by the debtor to
the creditor as an accepted equivalent of performance of an obligation. It partakes of the nature of a contract of
sale, where the thing offered by the debtor is the object of the contract,
while the debt is the consideration or purchase price.[16]
The pivotal issue is thus whether respondent
Sychinghos had the right to sell or convey title to the subject property at the
time of the dacion en pago. The Court finds in the affirmative.
There having been no previous
foreclosure of the Real Estate Mortgage on the subject property, respondent Sychinghos’ ownership thereof remained
intact. Indeed, a mortgage does not
affect the ownership of the property as it is nothing more than a lien thereon serving
as security for a debt. The
mortgagee does not acquire title to the mortgaged real estate unless he
purchases it at a public auction, and it is not redeemed within the period
provided for by the Rules of Court.[17] This applies a fortiori to the present case where only 1/3, not the whole, of the subject property
was actually encumbered to FEBTC.
With respect to whatever amount Lina and
her sons may still owe BPI (then FEBTC), the Court finds that this is not a
concern of petitioner as he is not a party to the loan documents covering
it. Since petitioner agreed to the full extinguishment of respondents
spouses’ then outstanding obligation in view of the unconditional conveyance to
him of the subject property,[18]
there is a perfected and enforceable dacion
en pago. He should thus enjoy
full entitlement to the subject property.
The question of whether the subject
property stands as a continuing security for any outstanding obligations of Lina
and her sons to BPI (then FEBTC) should not detain the Court any further. Surrender of the certificate of title will
not impair any existing mortgage on the subject property. It is an elementary principle in civil law
that a real estate mortgage subsists notwithstanding changes in ownership, and
all subsequent purchasers of the property must respect the mortgage.[19]
Finally,
while the remedy of petitioner is to file a petition in court, following Presidential
Decree No. 1529, to compel then FEBTC (now BPI) to surrender the owner’s duplicate copy of the title to the
Register of Deeds of San Juan to facilitate the issuance of a new title in his
name,[20]
the Court deems his action for specific
performance and recovery of the title as
substantial compliance with the prescribed procedure. To require him to institute a new action
seeking essentially the same relief would be to encourage endless litigations
and multiplicity of suits – an end abhorrent to the proper administration of
justice.
WHEREFORE, the
challenged Decision of the Court of Appeals is REVERSED and SET ASIDE. Bank of the Philippine Islands, to which Far
East Bank and Trust Company was merged, is ordered to surrender the owner’s duplicate copy of TCT No. 6259-R to
the Register of Deeds of San Juan, Metro Manila in order to process the issuance
of a new title over the subject property in the name of petitioner, Joseph
Typingco.
SO
ORDERED.
CONCHITA
CARPIO MORALES
Associate
Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
|
ANTONIO
T. CARPIO Associate
Justice |
ARTURO D. BRION Associate Justice |
|
|
|
ROBERTO A.
ABAD
Associate Justice
ATTESTATION
I attest
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
LEONARDO
A. QUISUMBING
Associate
Justice
Chairperson
CERTIFICATION
Pursuant to
Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, I certify that the conclusions in the above decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
* Additional member per Special Order No. 757 dated October 12, 2009.
[1] Records, p. 8.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11] Penned by Associate Justice Ramon M. Bato, Jr., with the concurrence of Associate Justices Andres B. Reyes, Jr. and Jose C. Mendoza; CA rollo, pp. 72-81.
[12] Id. at 109-110.
[13] Vide Petition, rollo, pp. 22-50.
[14]
[15] Vide
Comment of BPI, id. at 143-151.
[16] Vide Aquintey v. Tibong, G.R. No.
166704,
[17] Lagrosa v. Court of Appeals, 371 Phil.
225, 240 (1999).
[18] Records, pp. 11-12.
[19]
[20] Section 107
of Presidential Decree No. 1529 provides:
Section 107. Surrender of withheld duplicate certificates. — Where it is necessary to issue a new certificate of title pursuant to any involuntary instrument which divests the title of the registered owner against his consent or where a voluntary instrument cannot be registered by reason of the refusal or failure of the holder to surrender the owner's duplicate certificate of title, the party in interest may file a petition in court to compel surrender of the same to the Register of Deeds. The court, after hearing, may order the registered owner or any person withholding the duplicate certificate to surrender the same, and direct the entry of a new certificate or memorandum upon such surrender. If the person withholding the duplicate certificate is not amenable to the process of the court, or if for any reason the outstanding owner's duplicate certificate cannot be delivered, the court may order the annulment of the same as well as the issuance of a new certificate of title in lieu thereof. Such new certificate and all duplicates thereof shall contain a memorandum of the annulment of the outstanding duplicate. (Emphasis and underscoring supplied.)