GR 228011; (February, 2021) (Digest)
G.R. No. 228011 , February 10, 2021
DANILO SANTIAGO F. JIMENEZ, AS REPRESENTED BY HIS ATTORNEY-IN-FACT DR. SONIA R. JIMENEZ-CATARROJA, PETITIONER, VS. DAMIAN F. JIMENEZ, JR., AND THE REGISTER (REGISTRAR) OF DEEDS OF QUEZON CITY, ARTURO C. CALUBAD, ANTONIO KEH AND EX-OFFICIO SHERIFF, ATTY. MERCEDES S. GATMAYTAN, NOW ATTY. PERLITA V. ELE, RESPONDENTS.
FACTS
Corona F. Jimenez was the registered owner of a lot. Upon her death, her children discovered a Deed of Donation allegedly executed by Corona in favor of her son, Damian F. Jimenez, Jr., in 2000. Based on this deed, a new Transfer Certificate of Title (TCT) was issued in Damian’s name. In 2001, Damian mortgaged the property to respondents Arturo S. Calubad and Antonio Keh to secure a loan. The mortgage was annotated on the title. In July 2002, one of the siblings, Sonia, registered an Affidavit of Adverse Claim on the title. The siblings later filed a complaint to annul the Deed of Donation and the mortgage. The Regional Trial Court (RTC) found Corona’s signature on the Deed of Donation to be forged and declared it void. However, the RTC upheld the validity of the title subsequently issued to Calubad and Keh, finding them to be innocent mortgagees for value and in good faith. The Court of Appeals affirmed this decision.
ISSUE
Whether Calubad and Keh, as mortgagees in good faith, are also considered purchasers in good faith at the foreclosure sale despite having knowledge of a prior adverse claim annotated on the certificate of title.
RULING
Yes. The Supreme Court denied the petition and affirmed the lower courts’ decisions. The doctrine of mortgagee in good faith protects not only the mortgagee but also extends to the purchaser at a public foreclosure sale, even if the purchaser had notice of an adverse claim prior to the sale. The protection is based on public policy and the nature of a mortgage, ensuring that the value of the mortgage security is not easily destroyed by a subsequent adverse claim. The Court distinguished the cited case of Homeowners Savings and Loan Bank v. Felonia, noting its exceptional factual milieu. Instead, the Court applied the principle that a mortgagee in good faith who purchases the property at the foreclosure sale retains protection, as established in Bank of the Philippine Islands v. Noblejas. The requisites for the doctrine of mortgagee in good faith were satisfied in this case: Damian had a Torrens title, the mortgagees relied on the face of the title and conducted an ocular inspection, and the mortgage was registered. Therefore, Calubad and Keh’s title, acquired through the foreclosure sale, is valid and recognized.