GR 41377; (July, 1935) (Digest)
G.R. No. 41377; July 26, 1935
ANGELA BLONDEAU and FERNANDO DE LA CANTERA Y UZQUIANO, plaintiffs-appellants, vs. AGUSTIN NANO and JOSE VALLEJO, defendants-appellees.
FACTS
Plaintiff Angela Blondeau sought to foreclose a mortgage dated November 5, 1931, securing a P12,000 loan, covering property on Calle Georgia, Manila, executed by defendants Agustin Nano and Jose Vallejo. Defendant Vallejo alleged his signature on the mortgage was forged. The trial court rendered judgment against Nano but absolved Vallejo. Plaintiffs appealed.
ISSUE
Whether defendant Vallejo is bound by the mortgage, notwithstanding his claim of forgery, in light of the principles underlying the Torrens system of land registration.
RULING
Yes. The Supreme Court reversed the trial court’s judgment and held the mortgage valid and enforceable against Vallejo. The Court found the evidence, including testimony from witnesses present at the mortgage execution, weighed against Vallejo’s denial and alibi. More decisively, the Court applied principles of the Torrens system. Vallejo, by allowing Nano possession of his certificate of title and other muniments of title, enabled the fraud. Under the Land Registration Act, a forged transfer can become the root of a valid title in favor of an innocent purchaser for value, especially where the registered owner’s negligence or acquiescence made the forgery possible. The maxim applies: as between two innocent parties (Blondeau, the mortgagee who relied on the Torrens title in good faith, and Vallejo), the one whose act made the fraud possible must bear the loss.
AI Generated by Armztrong.