Register of Deeds v. Anglo Case Digest

The Register of Deeds of Negros Occidental and the National Treasurer of the Republic of the Philippines

v.

Oscar Anglo, Sr.

 GR No. 171804,

Aug 05, 2015 

Facts:

• Subject property: two parcels of prime sugar land in Negros Occidental
• On June 29, 1960, Alfredo de Ocampo filed an application for registration of the two parcels of land.
  • This was contested by the Republic of the Philippines Bureau of Education
  • Reason: According to the Republic, the lots were bequeathed to the Bureau of Education by Esteban Jalandoni on September 21, 1926. And by virtue of the donation, they have a TCT.
• In 1965, the CFI ordered the registration of the lot in favor of de Ocampo. In the same year, an OCT was issued in his name.
• On January 6, 1966, de Ocampo sold one whole lot and a portion of the other lot to Anglo Sr. The deed of absolute sale was registered and annotated at the back of the OCTs.
• The Republic caused the annotations of notice of lis pendens in Anglo Sr.’s TCT.
  • Despite the notice of lis pendens, Anglo Sr., conveyed the lots to Anglo Agricultural Corporation in exchange for shares of stock.
• The CA ruled against de Ocampo and ordered his OCT and TCT to be declared null.
• De Ocampo passed away during the pendency of the litigation and left no property to his heirs. The only available remedy for Anglo Sr., and Anglo Agricultural Corporation was to recover the value of the lots from the Assurance Fund as provided under Act No. 496 and PD 1529.
• During trial, Anglo Sr. And Anglo Agricultural Corporation presented Atty. David Lozada, the then Registrar of Deeds of Negros Occidental.
  • He confirmed that ta the time of the sale between de Ocampo and Anglo Sr., there were no annotations of notices of lis pendens in de Ocampo’s OCT.
• The RTC ruled that Anglo Sr., and Anglo Agricultural Corporation were entitled to Php6,623,617 as damages payable under the Assurance Fund.
  • But they did not implead de Ocampo in their claim for damages.
• RP opposed this, saying that Anglo Sr., is a purchaser in bad faith because he did not ascertain the legal condition of the title he was buying.

Issues:

1. WON Anglo Sr., and Anglo Agricultural Corporation are entitled to an award of damages from the Assurance fund
2. WON Anglo Sr., and Anglo Agricultural Corporation should have impleaded de Ocampo in their complain for recovery of damages from the Assurance Fund

Ruling:

1. No. Respondents do not meet the criteria set to recover damages from the Assurance Fund.

In the sale to Anglo Sr., by de Ocampo, the former was in good faith. Individuals who rely on a clean certificate of title in making the decision to purchase the real property are often referred to as innocent purchasers for value and in good faith.

However, Anglo Sr. no longer had an interest over the lots after he had transferred these to Anglo Agricultural Corporation in exchange for shares of stock. Hence, he no longer has a claim from the Assurance Fund.

Anglo Agricultural Corporation cannot be considered as a transferee in good faith because it was already aware of the title’s notices of lis pendens. Thus, it also has no right to claim damages from the Assurance Fund.

The governing law at the time of the transactions in this case is Presidential Decree No. 1529. Based solely on Section 95 of Presidential Decree No. 1529, the following conditions must be met:

1. the individual must sustain loss or damage, or the individual is deprived of land or any estate or interest

2. the individual must not be negligent.

3. the loss, damage, or deprivation is the consequence of either

(a) fraudulent registration under the Torrens system after the land’s original registration, or

(b) any error, omission, mistake, or misdescription in any certificate of title or in any entry or memorandum in the registration book.

4. the individual must be barred or otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein.

Anglo Agricultural Corporation does not meet the first requisite. It no longer suffered a loss due to respondent Anglo Sr.’s undertaking to assume all liability in the agreement

• The respondents complied with the procedural requirement under PD 1529.

The law says (Section 96 in relation to Section 97) that it is required to implead the person causing the fraud, in this case, de Ocampo, in the claim for damages. However, in the proceedings before the Regional Trial Court, respondents Anglo, Sr. and Anglo Agricultural Corporation presented evidence with respect to the death of de Ocampo and the absence of properties that could constitute his estate.

RP did not present countervailing evidence to show that de Ocampo or his estate was still a viable party. Using preponderance of evidence, the Regional Trial Court could reasonably conclude that de Ocampo can no longer be impleaded.

Additional Notes:

What is the purpose of an assurance fund?

• It is used to protect individuals who rely on a property’s certificate of title as evidence of ownership.

Why was the Assurance Fund created?

• Because the Torrens system is not infallible. It is possible that through fraud or error, a person who is not the owner acquires a certificate of title over property. The Assurance Fund addresses this possibility.

Where does the Assurance Fund come from?

• For every certificate of title issued to a registered owner, he contributes ¼ of 1 percent of the assessed value of the real estate on the basis of the last assessment for taxation purposes as contribution to the Assurance Fund.
• If the value has not yet been assessed for taxation purposes, the contribution will be based on the value determined by two disinterested persons.