GR L 12128; (March, 1959) (Digest)
G.R. No. L-12128; March 31, 1959
BANK OF THE PHILIPPINE ISLANDS in its capacity as the Executor of the Testate Estate of the late GRACIANA DE JESUS, ET AL., petitioner, vs. ANTONIO NOBLEJAS, in his capacity as the duly appointed and qualified Land Registration Commissioner, et al., respondents.
FACTS
On November 12, 1952, Jose J. Gonzales, the registered owner of certain lots in Manila, mortgaged them to Ramon Eugenio to secure a P30,000.00 obligation. The mortgage was registered on November 13, 1952. On November 21, 1953, the Bank of the Philippine Islands, as executor of the estate of Graciana de Jesus, filed a notice of adverse claim, alleging that the transfer of the properties to Gonzales was forged and fraudulent. This adverse claim was annotated on the certificates of title on the same day. Due to Gonzales’s failure to pay, the mortgage was judicially foreclosed. The properties were sold at public auction on October 10, 1956, to respondent Consuelo O. Vda. de Eugenio, as administratrix of Ramon Eugenio’s estate. The sheriff’s sale was confirmed by the court on October 27, 1956. When the sheriff’s deed was presented for registration, Consuelo Vda. de Eugenio insisted that the adverse claim should not be carried over to the new transfer certificates of title to be issued in her favor, while the Bank of the Philippine Islands argued the contrary. The Register of Deeds, doubtful of the proper procedure, elevated the matter to the Commissioner of Land Registration via a consulta under Section 4 of Republic Act No. 1151 . The Commissioner ruled that the notice of adverse claim need not be carried over to the new certificates of title. The Bank of the Philippine Islands, together with estate heir Angustia Jimenez, petitioned to review this ruling, contesting the Commissioner’s jurisdiction and the substantive decision.
ISSUE
1. Whether the Commissioner of Land Registration had jurisdiction to entertain the consulta.
2. Whether the annotation of the notice of adverse claim must be carried over to the new transfer certificates of title to be issued to the purchaser at the foreclosure sale.
3. Whether the petitioners, as adverse claimants, were indispensable parties to the foreclosure proceedings and bound by its outcome.
RULING
1. Yes, the Commissioner had jurisdiction. Under Section 4 of Republic Act No. 1151 , the Commissioner is empowered to resolve consultas when the Register of Deeds is in doubt regarding the proper step to take for registration or when a party in interest disagrees with the Register of Deeds. The consulta was properly brought because the Register of Deeds was in doubt due to the conflicting positions of the parties. This matter falls within the Commissioner’s competence under Republic Act No. 1151 , not under Section 112 of Act No. 496 , which requires a controversial issue to be litigated in an ordinary action.
2. No, the annotation of the adverse claim need not be carried over. The mortgage in favor of Ramon Eugenio was registered on November 13, 1952, while the adverse claim was annotated over a year later, on November 21, 1953. Therefore, the mortgage lien, being prior in registration, was superior to the adverse claim. The foreclosure sale retroacts to the date of the mortgage’s registration. Consequently, the purchaser at the foreclosure sale acquired rights paramount to the subsequent adverse claim. The Commissioner correctly held that carrying over the adverse claim would improperly subordinate a prior, superior lien (the mortgage) to a subsequent claim.
3. No, the petitioners were not indispensable parties to the foreclosure suit. Since the adverse claim was registered after the mortgage, the petitioners were not asserting a right acquired prior to the mortgage. Persons claiming titles adverse and paramount to the mortgagor, and not derived from him, are not proper or necessary parties to a foreclosure suit, as their rights cannot be litigated therein. The foreclosure proceedings were binding without their participation.
The Resolution of the Commissioner of Land Registration is affirmed in toto. Costs against petitioners.