SUGGESTED ANSWERS QUIZ NO.

QUESTION NO. 1
a) The possible strong indications to impel a closer inquiry on the circumstances
surrounding the transfer of the title to the bank are the boundaries and
condition of the lot. That inquiry is dictated by common sense, expected of a
man of ordinary prudence. The earth as it has been said is that universal
manuscript open to the eyes of all. When a man proposes or deals with
realty, his first duty is to read this public manuscript, that is to look and see
who is there upon it, and what are his rights. [Francisco vs. CA, GR. 30162,
August 31, 1987]
b) Ellens complaint will prosper. The general rule that reliance of persons on the
certificate of title alone does not apply to banks as held by jurisprudence
(Robles vs. CA, 328 SCRA 97; Rural Bank of Compostela vs. CA, 337 Phil. 521;
Tomas vs. Tomas, 98 SCRA 280). The degree of diligence required of banks is
more than that of a good father of a family in keeping with their responsibility
to exercise the necessary care and prudence in dealing even with a
registered or titled property. The business of a bank is affected with public
interest, holding in trust the money of the depositors, which the bank should
guard against loss due to negligence or bad faith. For this reason, the bank is
not allowed to rely merely on the protective mantle of the land registration
law, which is normally accorded only to purchasers or mortgagees for value
and in good faith. (Canlas vs. CA, 326 SCRA 415; Rural Bank of Sta. Ignacia,
Inc. vs. Dimatulac, et al., G.R. No. 142015, April 29, 2003).

QUESTION NO. 2
No. Xander can still transfer the properties to his siblings even if 5 years have
already passed. Alex, the father, registered the properties in trust. The Civil Code
provides the definition and elements for trust to exist:
Art. 1441. Trusts are either express or implied. Express trusts are
created by the intention of the trustor or of the parties. Implied trusts come
into being by operation of law.
Art. 1444. No particular words are required for the creation of an
express trust, it being sufficient that a trust is clearly intended.
A trust is a fiduciary relationship with respect to property which involves the
existence of equitable duties imposed upon the holder of the title to the property to
deal with it for the benefit of another. A person who establishes a trust is called the

trustor while the one whose confidence is reposed is the trustee, and the person for
whose benefits the trust has been created is referred to as the beneficiary. It is the
right to the beneficial enjoyment of property, the legal title to which is vested in
another.
Additionally, NO PARTICULAR FORM REQUIRED BY LAW WITH REGARD
TRUSTS PRESCRIPTIVE PERIOD.
Ten years from the repudiation of the trust. It is ten years because just as a
resulting trust is an offspring of the law, so is the corresponding obligation to
convey the property and title thereto to the true owner.Reckoning point of
repudiation is from the moment his possession thereof becomes adverse.
TRUSTS, HOW EXPRESSED AND REGISTERED (PD 1529, Sections 65 and 66)
If a deed or other instrument is filed in order to transfer registered land in
trust, or upon any equitable condition or limitation expressed therein, or to create or
declare a trust or other equitable interests in such land without transfer, the
particulars of the trust, condition, limitation or other equitable interest shall not be
entered on the certificate but only a memorandum thereof shall be entered by the
words in trust, or upon condition, or other apt words, and by a reference by
number to the instrument authorizing or creating the same.
A similar instrument shall be made upon the original instrument creating or
declaring the trust or other equitable interest with a reference by number to the
certificate of title to which it relates and to the volume and page in the registration
book in which it is registered
No instrument which transfers, mortgages, or in any way deals with
registered land in trust shall be registered, unless the enabling power thereto is
expressly conferred in the trust instrument or unless a final judgment or order of
court of competent jurisdiction has construed the instrument in favor of the power,
in which case a certified copy of such judgment or order may be registered

QUESTION NO. 3
The issuance of a writ of possession over a foreclosed real property
does not prescribe in 5 years. The buyer in a foreclosure sale becomes the
absolute owner of the property purchased if it is not redeemed during the
period of one year after the registration of the sale. As such, he is entitled
to the possession of the said property and can demand it at any time
following the consolidation of ownership in his name and the issuance to
him of a new transfer certificate of title. The buyer can in fact demand
possession of the land even during the redemption period except that he

has to post a bond in accordance with Section 7 of Act No. 3135, as

amended. No such bond is required after the redemption period if the
property is not redeemed. Possession of the land then becomes an
absolute right of the purchaser as confirmed owner. Upon proper
application and proof of title, the issuance of the writ of possession
becomes a ministerial duty of the court.
(CHINA BANKING CORPORATION v. SPOUSES TOBIAS L. LOZADA and
ERLINA P. LOZADA, G.R. NO. 164919 : July 4, 2008)

QUESTION NO. 4
The complaint for the annulment of Catalino's Title will prosper.
In the first place, the second owner's copy of the title secured by him from
the Land Registration Court is void ab initio, the owner's copy thereof having never
been lost, let alone the fact that said second owner's copy of the title was
fraudulently procured and improvidently issued by the Court.
In the second place, the Transfer Certificate of Title procured by Catalino is
equally null and void, it having been issued on the basis of a simulated or forged
Deed of Sale. A forged deed is an absolute nullity and conveys no title. The
mortgage in favor of Desiderio is likewise null and void because the mortgagor is
not the owner of the mortgaged property.
While it may be true that under the "Mirror Principle" of the Torrens System of
Land Registration, a buyer or mortgagee has the right to rely on what appears on
the Certificate of Title, and in the absence of anything to excite suspicion, is under
no obligation to look beyond the certificate and investigate the mortgagor's title,
this rule does not find application in the case at hand because here. Catalino's title
suffers from two fatal infirmities, namely: a) The fact that it emanated from a forged
deed of a simulated sale; b) The fact that it was derived from a fraudulently
procured or improvidently issued second owner's copy, the real owner's copy being
still intact and in the possession of the true owner, Bruce.
The mortgage to Desiderio should be cancelled without prejudice to his right
to go after Catalino and/or the government for compensation from the assurance
fund.
Therefore, the complaint for the annulment of Catalino's Title will prosper.

QUESTION NO. 5

a. No. The appeal is not meritorious.

Settled jurisprudence provides that an innocent purchaser for value is one
who buys the property of another, without notice that some other person has a right
to, or interest in, such property and pays a full and fair price for the same at the
time of such purchase, or before he has notice of the claims or interest of some
other person in the property. [Republic v. CA G.R. No. 99331. April 21, 1999]
In the given case, the defendants are innocent purchasers for value and have
acted in good faith, therefore no cause of action should be directed against them.
b. No. The result of the litigation would not be changed even the
concerned government agency joined Caloy in filing the action against defendants.
The law provides that lands acquired under the free patent or homestead
provisions shall not be subject to encumbrance or alienation from the date of the
approval of the application and for a term of five years from and after the date of
issuance of the patent or grant, except in favor of the Government or any of its
branches, units or institutions, or legally constituted banking corporations nor shall
they become liable to the satisfaction of any debt contracted prior to the expiration
of said period.
Any acquisition, conveyance, alienation, transfer, or other contract
made or executed shall be unlawful and null and void from its execution and shall
produce the effect of annulling and canceling the grant, title, patent, or permit
originally issued, recognized, or confirmed, actually or presumptively, and cause the
reversion of the property and its improvements to the Government.
Farah acquired the land in 1957 after full payment of the price. She sold the
property in 1963 or six (6) years after, therefore she should not faulted.

QUESTION NO. 6
No. Spouses Xavier and Yolanda may not file an action for reconveyance of
the land in question against Bertha.
Settled jurisprudence provides that insofar as a person who has fraudulently
obtained property is concerned, the consequently fraudulent registration of the
property in the name of such person would not be sufficient to vest in him or her
title to the property. Certificates of title merely confirm or record title already
existing and vested. The indefeasibility of the Torrens title should not be used as a

means to perpetrate fraud against the rightful owner of real property. Good faith
must concur with registration because, otherwise, registration would be an exercise
in futility. However, where good faith is established, as in the case of an innocent
purchaser for value, a forged document may become the root of a valid title.

A person is considered in law as an innocent purchaser for value when he buys the
property of another, without notice that some other person has a right or an interest
in such property, and pays a full price for the same at the time of such purchase, or
before he has notice of the claims or interest of some other person in the
property. A person dealing with registered land may safely rely on the correctness of
the certificate of title of the vendor/transferor, and the law will in no way oblige him
to go behind the certificate to determine the condition of the property. The courts
cannot disregard the rights of innocent third persons, for that would impair or erode
public confidence in the Torrens system of land registration. Thus, a title procured
by fraud or misrepresentation can still be the source of a completely legal and valid
title if the same is in the hands of an innocent purchaser for value.

While it may be true that Anna forged the deed of sale to transfer the land in her
favor and sold it, Bertha, an innocent purchaser for value is under the law, has
better right over the property.

QUESTION NO. 7

a. Yes. The suit filed by Peter is barred by Prescription.

Settled jurisprudence provides that although the deed of real estate
mortgage and the promissory note executed by Datuin expressly declared that the
date of maturity of the loan was May 14, 1974 or one year after the real estate
mortgage was entered into between Datuin and petitioner, the same could not be
the reckoning point for purposes of counting the prescriptive period of the
mortgage. This is because Datuin and respondents executed a deed of absolute sale
on October 30, 1975 whereby the latter acknowledged and assumed the mortgage
obligation of the former in favor of petitioner. Under Article 1155 of the Civil Code,
the written acknowledgment and assumption of the mortgage obligation by
respondents had the effect of interrupting the prescriptive period of the mortgage
action.
A mortgage action prescribes after ten (10) years from the time the right of
action accrued, which is obviously not the same as the date of the mortgage
contract. Stated differently, an action to enforce a right arising from a mortgage

should be enforced within ten (10) years from the time the right of action accrues;
otherwise, it will be barred by prescription and the mortgage creditor will lose his
rights under the mortgage. The right of action accrues when the mortgagor defaults
in the payment of his obligation to the mortgagee.
In the instant case, it appeared that petitioners filed the suit to annul the
mortgage 17 years from the date of mortgage which was over the 10-year
prescriptive period. Even assuming that the prescriptive period is interrupted by the
sheriffs final deed of sale and registration in January of 1966, petitioners still failed
to file the action at earlier time having filed said action only in 1977 or eleven years
after.
b. No. Under the law, petitioners may have exercised their right to
redemption at any time within one year from and after the registration of sale, and
that good faith concurred with the registration.

QUESTION NO. 8
A.) No. Under Section 53, PD 1529, after the entry of the decree of
registration on the original petition or application, any subsequent registration
procured by the presentation of a forged duplicate certificate of title, or a forged
deed or other instrument shall be null and void. In this case, Rod forged Cesars
signature on the deed of sale and used it to obtain a new title. Rods title to the land
is null and void, hence he did not acquire title to the land.
B.) The rights of Don over the property are those rights of an owner. If the
certificate of title has already been transferred from the name of the true owner to
the name of the forger, and while it remained that way, the land was subsequently
sold to an innocent purchaser, the forged deed or document may be the root of a
valid title. In this case, Don was a buyer in good faith and for value and was able to
register the lot in his name. Therefore, his title to over the lot is valid and he has all
the rights over the lot as that of an owner.

QUESTION NO. 9
a. In the case of Claudio vs. Sps. Saraza, the Supreme Court held that the
doctrine of mortgagee in good faith only applies when the mortgagor has already
obtained a certificate of title in his or her name at the time of the mortgage.
Accordingly, an innocent mortgagee for value is one who entered into a mortgage
contract with a mortgagor bearing a certificate of title in his name over the

mortgaged property. Hence, the Spouses Saraza cannot claim the protection
accorded by law to innocent mortgagees for value considering that there was no
certificate of title yet in the name of the mortgagor to rely on when the mortgage
contract was executed.
b. Under P.D 1529, Section 61, registration of mortgage will effect by the
following:
a. Filing for registration of the deed of mortgage together with owners
duplicate with the Register of Deeds;
b. The Register of Deeds shall enter upon the original of the certificate of
title and also upon the owners duplicate certificate a memorandum
thereof, the date and time of filing and the file number assigned to the
deed, and shall sign the said memorandum;
c. Note on the deed the date and time of filing and a reference to the volume
and page of the registration book in which it is registered.

QUESTION NO. 10
No. The rule is that where the Torrens title of the land was in the name of the
mortgagor and later given as security for a bank loan, the subsequent declaration of
said title as null and void is not a ground for nullifying the mortgage right of the
bank, which had acted in good faith. Being an innocent mortgagee for value, its
right or lien upon the land mortgaged must be respected and protected, even if the
mortgagors obtained their title thereto thru fraud. (Gonzales vs. IAC)