Jimenez v. Ele

 

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.