Biblia Toledo-Banaga V CA, GR No, 127941, January 28, 1989 (302 SCRA 331)

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Biblia Toledo-Banaga and Jovita Tan v CA, GR nO, 127941, January 28, 1989 (302 SCRA 331)

Buyer in Good Faith

Facts:

Petitioner Banaga filed an action for redemption of her property which was earlier foreclosed
and later sold in a public auction to the respondent. The trial court declared petitioner to have
lost her right for redemption and ordered that certificate of title be issued to the respondent
which the petitioner caused an annotation of notice of lis pendens to the title. On appeal, the CA
reversed the decision and allowed the petitioner to redeem her property within a certain period.
Banaga tried to redeem the property by depositing to the trial court the amount of redemption
that was financed by her co-petitioner Tan. Respondent opposed in that she made the
redemption beyond the period ordered by the court. The lower court however upheld the
redemption and ordered the Register of Deeds to cancel the respondent’s title and issue a new
title in favor of the petitioner. In a petition for certiorari before the CA by the respondent, another
notice of lis pendens was annotated to the title. CA issued a temporary restraining order to
enjoin the execution of the court order. Meanwhile, Banaga sold the property to Tan in the
absolute deed of sale that mentions the title of the property still in the name of the respondent
which was not yet cancelled. Despite the lis pendens on the title, Tan subdivided the lot into a
subdivision plan which she made not in her own name but that of the respondent. Tan then
asked the Register of Deeds to issue a new title in her name. New titles were issued in Tan’s
name but carried the annotation of the two notices of lis pendens. Upon learning the new title of
Tan the respondent impleaded her in his petition. The CA later sets aside the trial court’s
decision and declared the respondent as the absolute owner of the property for failure of the
petitioner to redeem the property within the period ordered by the court. The decision was final
and executory and ordered the Register of Deeds to reinstate the title in the name of the
respondent. The Register of Deeds refused alleging that Tan’s certificate must be surrendered
first. The respondent cited the register of deeds in contempt but the court denied contending
that the remedy should be consultation with the Land Registration Commissioner and in its other
order denied the motion of respondent for writ of possession holding that the remedy would be
to a separate action to declare Tan’s title as void. In its motion for certiorari and mandamus to
the CA, the court set aside the two assailed orders of the trial court and declared the title of Tan
as null and void and ordered the Register of Deeds to reinstate the title in the name of the
respondent. Petitioners now argued that Tan is a buyer in good faith and raised the issue on
ownership of the lot.

Issue:

Whether or not petitioner Tan is a buyer in good faith?

Ruling:
The court held that Tan is not a buyer in good faith because when the property was sold to her
she was aware of the interest of the respondent over the property. She even furnished the
amount used by Banaga to redeem the property. When she bought the property from Banaga
she knows that at that time the property was not registered to the seller’s name. The deed of
sale mentioned the title which was named to the respondent. Moreover the title still carries 2
notices of lis pendens. Tan therefore cannot feign ignorance on the status of the property when
she bought it. Because Tan was also impleaded as a party to the litigation, she is bound by the
decision promulgated to the subject of such litigation. It is a settled rule that the party dealing
with a registered land need not go beyond the Certificate of Title to determine the true owner
thereof so as to guard or protect her interest. She has only to look and rely on the entries in the
Certificate of Title. By looking at the title Tan would know that the certificate is in the name of
respondent. Being a buyer in bad faith, Tan does not acquire any better right over the property.
The adjudication of the ownership in favor to the respondent includes the delivery of the
possession by the defeated party to the respondent.
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