BIBLIA TOLEDO-BANAGA AND JOVITA TAN V CA, GR

NO, 127941, JANUARY 28, 1989 (302 SCRA 331)

BUYER INGOOD FAITH

Doctrine
Party dealing with a registered land need not
to go beyond the certificate of title to
determine the true owner thereof so as to
guard or protect her interest.

FACTS:

Petitioner Banaga filed an action for

redemption of her property which was
earlierforeclosedand later sold in a
publicauctionto the respondent. The trial
court declared petitioner to have lost her
right for redemption and ordered
thatcertificateof title be issued to the
respondent which the petitioner caused an
annotation of notice of lis pendens to the
title.

.An 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 theRegisterof
Deeds tocancelthe respondents 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
ofsalethat 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 theRegisterof Deeds to issue a

new title in her name. New titles were issued in
Tans 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 courts
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 theRegisterof
Deeds to reinstate the title in the name of the
respondent.

TheRegisterof Deeds refused alleging that

Tanscertificatemust be surrendered first. The
respondent cited theregisterof deeds in contempt but
the court denied contending that the remedy should be
consultation with the Land RegistrationCommissioner 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 Tans 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
theRegisterof Deeds to reinstate the title in the name of
the respondent. Petitioners now argued that Tan is a
buyer ingood faithand raised the issue on ownership of
the lot.

Issue:

Whether or not petitioner Tan is a buyer ingood faith?

Ruling:

The court held that Tan is not a buyer ingood faithbecause when
the property was sold to her she was aware of theinterestof 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 sellers 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 theparty dealing with a registered land need not
go beyond theCertificateof 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 theCertificateof Title.By looking at the title Tan
would know that thecertificateis 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.