1/29/2021 PHILIPPINE REPORTS ANNOTATED VOLUME 106

[No. L-13551. January 30, 1960]

CONSTANCIO JOAQUIN, petitioner, vs. ABUNDIO

MADRID, ET AL., respondents.

1. REGISTRATION OF LAND TITLES; FORGED

DOCUMENTS; TRANSFER OF RIGHT NOT
EFFECTED.—In order that the holder of a certif-icate for
value issued by virtue of the registration of a voluntary
instrument may be considered a holder in good faith for
value, the instrument registered should not be forged.
When the instrument presented is forged, even if
accompanied by the owner's duplicate certificate of title,
the registered owner does not thereby lose his title, and
neither does the assignee in the forged deed acquire any
right or title to the property.

2. ID.; ID.; ID.; INNOCENT PURCHASER FOR VALUE;

WHEN HE IS PROTECTED BY LAW.—The innocent
purchaser for value protected by law is one who purchases
a titled land by virtue of a deed executed by the registered
owner himself, not by a forged deed. Such situation does
not obtain where the purchaser has been the victim of
impostors pretending to be the registered owners but who
are not said owners.

3. ID.; ID.; ID.; ID.; DUTY OF MORTGAGEE TO

ASCERTAIN IDENTITY OF MORTGAGOR.—The giving
of a certificate of title by the owners to another person is
not in itself an act of negligence on the part of the former;
it is a perfectly legitimate act. Delay in demanding that
certificate of title is likewise not an act of neglect where it
does not appear that the owners have executed any deed
or document authorizing the holder of the certificate to
execute deeds for and in their behalf. But one who
consents to be the mortgagee of said certificate of title
without taking sufficient care to see to it that the person
who excuted the deed of mortgage is the real registered
owner of the property is guilty of negligence and must
suffer for it.

1061

VOL. 106, JANUARY 30, 1960 1061

Joaquin vs. Madrid, et al.

PETITION for review by certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.
central.com.ph/sfsreader/session/000001774d1210e297df9844003600fb002c009e/t/?o=False 1/5
1/29/2021 PHILIPPINE REPORTS ANNOTATED VOLUME 106

M. S. Calayag for petitioner.

Rodolfo R. Medina for respondents.

LABRADOR, J.:

This is a petition to review the decision of the Court of

Appeals against petitioner and in favor of respondents. The
facts found in the appellate court below are as f ollows:

"The spouses Abundio Madrid and Rosalinda Yu are the owners of

a residential lot at 148 Provincial Road, corner Sto. Sacramento,
Makati, Rizal, covered by Transfer Certificate of Title No. 31379
(for Rizal). Planning to build a house thereon, the said spouses
sought a loan from the Rehabilitation Finance Corporation, RFC
for short, in November, 1953. One Carmencita de Jesus,
godmother of Rosalinda, offered to work for the shortening of the
usually long process before a loan could be granted and the
spouses, accepting the proferred assistance, delivered to her the
Transfer Certificate of Title covering the lot in January, 1954, to
be surrendered to the RFC. Later, the spouses were able to secure
a loan of P4,000.00 from their parents for the construction of their
house and they decided to withdraw the application for a loan
they had filed with the RFC. They so informed Carmencita de
Jesus and asked her to retrieve the Transfer Certificate of Title
and return it to them. Shortly thereafter, Carmencita told them,
however, that the RFC employee in charge of keeping the
Transfer Certificate of Title was out on leave. In August, 1954,
one Florentino Calayag showed up in the house of the spouses and
asked for Abundio Madrid and Rosalinda Yu. Rosalinda answered
that she was Rosalinda Yu and Abundio, that he was Abundio
Madrid. Calayag would not believe them. He said that he was
looking for Abundio Madrid and Rosalinda Yu who had executed a
deed of mortgage on the lot where the house they were in then
stood, and that the term of the mortgage had already expired, he
added. Abundio and Rosalinda then retorted that they had not
mortgaged their land to anyone. The spouses immediately went to
consult with a lawyer who accompanied them to the Office of the
Register of Deeds of Rizal. They found out then that the land had
been mortgaged to Constancio

1062

1062 PHILIPPINE REPORTS ANNOTATED

Joaquin vs. Madrid, et al.

Joaquin on January 21, 1954 (Exh. B). Thus runs the evidence of
the plaintiffs-appellees.
The appellant admits that Abundio Madrid and Rosalinda Yu,
the registered owners of the mortgaged property, were not those
persons who had signed the deed of mortgage. His version of the
case is as follows: In the month of January, 1954 Carmencita de
Jesus saw Florentino Calayag and asked the latter to find a
moneylender who could grant a loan on a security of real
property, showing, at the same time, a Transfer Certificate of
Title in the name of the spouses Abundio Madrid and Rosalinda
Yu. Calayag approached Constancio Joaquin who having funds to
spare for the purpose, visited the land and, finding it well
central.com.ph/sfsreader/session/000001774d1210e297df9844003600fb002c009e/t/?o=False 2/5
1/29/2021 PHILIPPINE REPORTS ANNOTATED VOLUME 106

situated, told Calayag to show to him the prospective borrowers.

On the following day, Calayag brought two women to the law
office of Atty. M. S. Calayag and presented them to Constancio
Joaquin as Rosalinda Yu and Carmencita de Jesus. The alleged
Rosalinda Yu claimed to be the owner of the lot with her husband
Abundio Madrid who authorized her to secure a loan on their
property, she assured him, and that Abundio would come when
the contract therefor was ready to sign it with her. Thus, the deed
of mortgage Exhibit I was signed by the persons who posed
themselves as Abundio Madrid and Rosalinda Yu on the following
day. the whole amount of the loan was delivered to the supposed
Rosalinda Yu immediately after the registration of the document
of mortgage in the Office of the Register of Deeds of Rizal,
according to Florentino Calayag." (Dec. of the Court of Appeals,
CA-G. R. No. 16717-R, prom. Nov. 29, 1957).

The appellate court below further found that the petitioner

"visited the property proposed for mortgage to find out at
the same time who was the real owner thereof. But he
contented himself with the information given to him by the
person living then on the land that the owner was a woman
known as 'Taba'. There ended his inquiry about the
identity of the prospective mortgagors". (Dec. of the Court
of Appeals, p. 8). The lower court based its decision on the
case of Lara, et al., vs. Ayroso, 95 Phil., 185, 50 Off. Gaz.,
(10), 4838, in which we held that as the land mortgaged
was still in the name of the real owner when mortgaged to
the mortgagees by an impostor, the mortgagees were
defrauded not because they relied upon what appeared in a
Torrens certificate of title, but
1063

VOL. 106, JANUARY 30, 1960 1063

Joaquin vs. Madrid, et al.

because they believed the words of the impostor; that it

was the duty of the mortgagees to ascertain the identity of
the man with whom they were dealing—which
circumstances differentiate the case from the previous
cases of De la Cruz vs. Fabie, 35 Phil., 144 and Blondeau,
et al., vs. Nano and Vallejo, 61 Phil., 625.
In the first assignment of error it is argued that since
par. 2 of Sec. 55 of the Land Registration Act expressly
provides that "in all cases of registration by fraud the
owner may pursue all his legal and equitable remedies
against the parties to the fraud, without prejudice to the
rights of any innocent holder for value of a certificate of
title", the second proviso in the same section "that a
registration procured by the presentation of a forged deed
shall be null and void" should be overlooked. There is no
merit in this argument, which would have the effect of
deleting the last proviso. This last proviso is a limitation of
the first part of par. 2 in the sense that in order that the
holder of a certificate for value issued by virtue of the
registration of a voluntary instrument may be considered a

central.com.ph/sfsreader/session/000001774d1210e297df9844003600fb002c009e/t/?o=False 3/5
1/29/2021 PHILIPPINE REPORTS ANNOTATED VOLUME 106

holder in good faith for value, the instrument registered

should not be forged. When the instrument presented is
forged, even if accompanied by the owner's duplicate
certificate of title, the registered owner does not thereby
lose his title, and neither does the assignee in the forged
deed acquire any right or title to the property.
In the second assignment of error it is further argued
that as the petitioner is an innocent purchaser for value, he
should be protected as against the registered owner
because the latter can secure reparation from the
assurance fund. The fact is, however, that petitioner herein
is not the innocent purchaser for value protected by law.
The innocent purchaser for value protected by law is one
who purchases a titled land by virtue of a deed executed by
the registered owner himself, not by a forged deed, as the
law expressly states. Such is not the situation of the
petitioner, who has been the victim of impostors pre-

1064

1064 PHILIPPINE REPORTS ANNOTATED

Centenera vs. Hon. Yatco, et al.

tending to be the registered owners but who are not said

owners.
The next assignment of errors are predicated on the
assumption that both the petitioner and the respondents
are guilty of negligence. The giving of the certificate of title
to Carmencita de Jesus is in itself no act of negligence on
the part of respondents; it was perfectly a legitimate act.
Delay in demanding the certificate of title is no act of
neglect either, as respondents have not executed any deed
or document authorizing Carmencita de Jesus to execute
deeds for and on their behalf. It was petitioner who was
negligent, as he did not take enough care to see to it that
the persons who executed the deed of mortgage are the real
registered owners of the property. The argument raised by
petitioner's counsel that in case of negligence on the part of
both the one who committed a breach of faith is
responsible, is not applicable. Petitioner alone is guilty of
neglect, so he must suffer from it.
Finding no error in the decision of the Court of Appeals,
we hereby affirm it with costs against petitioner. So
ordered.

Bautista Angelo, Concepción, Reyes, J. B. L., Endencia,

and Gutiérrez David, JJ., concur.
Padilla, J., concurs in the result.

Decision affirmed.

____________

central.com.ph/sfsreader/session/000001774d1210e297df9844003600fb002c009e/t/?o=False 4/5
1/29/2021 PHILIPPINE REPORTS ANNOTATED VOLUME 106

© Copyright 2021 Central Book Supply, Inc. All rights reserved.

central.com.ph/sfsreader/session/000001774d1210e297df9844003600fb002c009e/t/?o=False 5/5