G.R. No. 133140, August 10, 1999
JOSE MA. T. GARCIA, petitioner, vs. COURT OF APPEALS, SPS. LUISITO & MA. LUISA MAGPAYO AND PHILIPPINE BANK OF COMMUNICATIONS, respondents.

FACTS

The registered owner of a parcel of land in Makati, Atty. Pedro V. Garcia, with his wife’s consent, sold the property to their daughter Ma. Luisa Magpayo and her husband Luisito Magpayo (the Magpayos) via a deed of sale executed on August 1, 1980. On March 5, 1981, the Magpayos mortgaged the land to Philippine Bank of Communications (PBCom) to secure a loan. The Magpayos’ Transfer Certificate of Title (TCT) was issued on March 9, 1981, and the mortgage was annotated thereon. The Magpayos defaulted on the loan, leading PBCom to extrajudicially foreclose the mortgage, purchase the property at the auction sale, and, after the redemption period, consolidate title in its name. The Magpayos’ suit to nullify the foreclosure was dismissed. PBCom obtained a writ of possession. Jose Ma. T. Garcia, brother of Ma. Luisa Magpayo and an heir of their mother Remedios T. Garcia, who was in possession of the land, refused the writ and filed a suit for recovery of realty and damages against PBCom, the Magpayos, and the sheriff. Garcia claimed he inherited the land from his mother. PBCom countered that the property was not listed in the inventory of his mother’s estate. The Magpayos asserted the property was transferred to them to enable them to borrow. The trial court initially denied motions for summary judgment but later issued one in favor of Garcia, declaring the mortgage void because the Magpayos were not yet owners at the time of its execution on March 5, 1981, as their title was issued only on March 9, 1981, and Garcia was in possession. The Court of Appeals reversed, holding that ownership was transmitted to the Magpayos upon the execution and registration of the deed of sale, and the subsequent issuance of title was merely confirmatory, so they could validly mortgage the property.

ISSUE

Whether the Court of Appeals erred in reversing the trial court’s summary judgment, specifically in its findings regarding the ownership of the Magpayos at the time of the mortgage and the propriety of resolving issues of ownership and possession.

RULING

The Supreme Court denied the petition, affirming the decision of the Court of Appeals. The Court held:
1. The Court of Appeals did not err in resolving the issues of ownership and possession, as these issues were squarely raised by PBCom in its appellant’s brief, which argued that the trial court confused ownership with possession and that Garcia’s possession started only in 1986 and could not ripen into ownership.
2. The Court of Appeals correctly ruled on the merits. The execution of a public instrument of sale effects the delivery of the property sold. Since the land was registered in the vendor’s name and the deed of sale was a public instrument, the sale was consummated upon its execution, and the Magpayos acquired ownership on August 1, 1980, prior to the mortgage. Registration under the Torrens system does not vest ownership but confirms an existing title. Therefore, the Magpayos were the absolute owners when they mortgaged the property to PBCom on March 5, 1981, satisfying the requirement under Article 2085 of the Civil Code. Garcia’s claim of possession at the time of the sale was contradicted by his own admission in his complaint that he entered possession only upon his mother’s death on October 31, 1980, which was after the deed of sale was executed.
3. The summary judgment was proper as there was no genuine issue as to any material fact. The facts material to determining the validity of the mortgage—the execution of the deed of sale, the execution of the mortgage, and the issuance of titles—were undisputed. The only issues left were legal: the effect of the sale and the validity of the mortgage.