G.R. No. L-13551; January 30, 1960
CONSTANCIO JOAQUIN, petitioner, vs. ABUNDIO MADRID, ET AL., respondents.

FACTS

The spouses Abundio Madrid and Rosalinda Yu, owners of a residential lot, gave their Transfer Certificate of Title to Carmencita de Jesus to facilitate a loan application with the RFC. They later secured funds elsewhere and asked for the title’s return. Carmencita delayed, claiming the RFC employee was on leave. In August 1954, Florentino Calayag visited the spouses, claiming the land had been mortgaged to Constancio Joaquin and the term had expired. The spouses denied mortgaging the land. Investigation revealed a deed of mortgage (Exh. B) dated January 21, 1954, in favor of Joaquin, signed by impostors posing as the spouses. Joaquin’s version was that Carmencita, through Calayag, sought a loan using the title, and two women were presented to him as Rosalinda Yu and Carmencita de Jesus. The impostor “Rosalinda” claimed authorization from her husband. Joaquin visited the property but only inquired from a resident who said the owner was a woman known as “Taba,” ending his inquiry. The Court of Appeals found Joaquin negligent for not sufficiently ascertaining the identity of the mortgagors.

ISSUE

Whether petitioner Constancio Joaquin, as mortgagee via a forged deed executed by impostors, is an innocent purchaser for value protected under the Land Registration Act, thereby acquiring rights against the registered owners.

RULING

No. The Supreme Court affirmed the Court of Appeals’ decision. The petitioner is not an innocent purchaser for value protected by law. Under Section 55 of the Land Registration Act, a registration procured by the presentation of a forged deed is null and void. The protection for an innocent holder for value applies when the instrument is not forged. Here, the deed of mortgage was forged, as it was executed by impostors, not the registered owners. Consequently, the registered owners did not lose their title, and the petitioner acquired no right to the property. The Court found the petitioner negligent for failing to take adequate care to ascertain that the persons executing the deed were the real registered owners, merely relying on information from a resident. In contrast, the respondents’ act of giving the title to Carmencita de Jesus for a legitimate loan application was not negligent, nor was their delay in demanding its return, as they did not authorize her to execute deeds on their behalf. The petitioner alone was guilty of neglect and must bear the loss. Costs were imposed on the petitioner.