G.R. No. 171804, August 5, 2015.
THE REGISTER OF DEEDS OF NEGROS OCCIDENTAL AND THE NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES, Petitioners, vs. OSCAR ANGLO, SR., and ANGLO AGRICULTURAL CORPORATION, represented by OSCAR ANGLO, JR., Respondents.

FACTS

On June 29, 1960, Alfredo V. de Ocampo filed an application to register two parcels of land. The Republic of the Philippines’ Bureau of Education contested, claiming ownership via a donation evidenced by TCT No. 6014. While registration was pending, de Ocampo entered into a Deed of Conditional Sale with Oscar Anglo, Sr. on June 15, 1962. On August 3, 1965, the Court of First Instance ordered the registration of the lots in favor of de Ocampo, and OCT No. 576-N was issued on October 1, 1965. The Republic filed a Petition for Relief from Judgment on December 28, 1965. On January 6, 1966, de Ocampo sold the lots to Anglo, Sr. via a Deed of Absolute Sale, and TCT No. T-42217 was issued in his name. The Republic annotated notices of lis pendens on this title on March 3 and August 24, 1966. Despite these notices, Anglo, Sr. conveyed the lots to Anglo Agricultural Corporation on May 17, 1976, and TCT No. T-88727 was issued. An amendment on June 7, 1976, made Anglo, Sr. assume all risks from any adverse decision. The Republic’s appeal eventually succeeded; the Court of Appeals, in a Decision promulgated on July 29, 1983, reversed the registration in favor of de Ocampo, declared OCT No. 576-N and subsequent titles null and void, confirmed the Bureau of Education’s title, and ordered the lots reconveyed. After surrendering the title pursuant to court order, Anglo, Sr. and Anglo Agricultural Corporation filed a Complaint for Recovery of Damages from the Assurance Fund on April 5, 1988, alleging they acquired the lots in good faith and for value without negligence, and as de Ocampo had died leaving no property, the Assurance Fund was their only remedy. The Regional Trial Court awarded damages. The Court of Appeals affirmed the award but deleted attorney’s fees. The Register of Deeds and the National Treasurer filed this Petition, arguing Anglo, Sr. was a purchaser in bad faith and negligent.

ISSUE

Whether respondents Oscar Anglo, Sr. and Anglo Agricultural Corporation are entitled to recover damages from the Assurance Fund under Section 95 of Presidential Decree No. 1529.

RULING

No. The Supreme Court denied the claim for compensation from the Assurance Fund. The Court held that to recover under Section 95 of P.D. No. 1529, a claimant must prove loss or damage arising from: (1) bringing the land under the Torrens system, or (2) after original registration, through fraud, error, omission, mistake, or misdescription in a certificate of title or entry, and that the claimant is barred from recovering the land, and (3) the claimant sustained the loss without negligence on his part. The Court found that the respondents’ loss arose not from any error or omission in the certificate of title but from a flaw in the judgment that granted the original registration to de Ocampo, which was later reversed. The fraud or error that caused the loss was in the judicial decree itself, not in the subsequent certificate of title or its entries. Furthermore, the Court ruled that respondents were negligent. Oscar Anglo, Sr. purchased the property while the Republic’s Petition for Relief from Judgment was pending, making him a purchaser pendente lite. The subsequent annotations of lis pendens on his title, and his conveyance of the property to the corporation despite these notices, demonstrated a failure to exercise the diligence required of a prudent buyer. The Assurance Fund is not an all-encompassing insurance against any loss of property but is intended for specific instances of reliance on the Torrens title. Since the loss did not arise from the causes enumerated in the law and was attended by negligence, the claim must fail. The Decision of the Court of Appeals was reversed and set aside.