Jimenez
v. Ele
G.R.
No. 228011
February
10, 2021
FACTS:
Corona Jimenez owned a 532 sqm lot
when she died. During the settlement of her estate, it was discovered that a
Deed of Donation was made in favour of her son Damian. Damian mortgaged the
property to Calubad and Keh for Php 7 Million loan after the title was
transferred to his name and the mortgage was annotated in the new title. The
other sibling learned of the mortgage but only Sonia registered her Affidavit
of Adverse Claim which was also annotated in the same title. The property was
scheduled for auction which prompted the siblings to file a complaint for the
annulment of the Deed of Donation as well as cancellation and annulment of Deed
of Real Estate Mortgage with prayer for Preliminary Injunction before the RTC
of Quezon City. The prayer was denied by the RTC and the extrajudicial sale
pushed through where Calubad and Keh emerged as the highest bidder. The
Certificate of Sale was issued and the title to the property was consolidated
and issued in favor of Calubad and Keh. A decision was made by the RTC finding
that the signature of Corona in the Deed of Donation was forged and thus made
the Deed void; however the RTC sustained the validity of the title of Calubad
and Keh as they were found to be innocent mortgagees for value and good faith.
The CA affirmed the decision of RTC and denied the appeal of the petitioners.
ISSUE/S:
Whether Calubad and Keh are
purchasers/innocent mortgagees for value and good faith.
HELD:
Yes. Based on jurisprudence, the
Court explained the doctrine of mortgagee in good faith as follows: There is,
however, a situation where, despite the fact that the mortgagor is not the
owner of the mortgaged property, his title being fraudulent, the mortgage
contract and any foreclosure sale arising therefrom are given effect by reason
of public policy. This is the doctrine of "the mortgagee in good
faith" based on the rule that all persons dealing with property covered by
a Torrens Certificate of Title, as buyers or mortgagees, are not required to go
beyond what appears on the face of the title. The public interest in upholding
the indefeasibility of a certificate of title, as evidence of the lawful
ownership of the land or of any encumbrance thereon, protects a buyer or
mortgagee who, in good faith, relied upon what appears on the face of the
certificate of title.
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