G.R. No. L-13683; March 28, 1960
PAZ SAMANILLA, petitioner-appellee, vs. CENEN A. CAJUCOM, ET AL., respondents-appellants.

FACTS

Petitioner Paz Samanilla filed a petition in Land Registration Case No. 210, alleging that respondents Cenen A. Cajucom and Jose A. Cajucom executed a real estate mortgage in her favor on December 20, 1955, over their rights in a parcel of land covered by Original Certificate of Title No. O-966, to secure a loan of P10,000.00. She further alleged that in February 1956, the respondents borrowed the title from her under the pretext of needing it to segregate a portion claimed by others, but subsequently refused to return it, preventing her from registering the mortgage. Attached to the petition were the deed of mortgage and supporting affidavits. The respondents opposed the petition, claiming the mortgage was void ab initio for lack of consideration and that such issues should be litigated in an ordinary civil action. The lower court found the petition well-taken and ordered the respondents to surrender their title for annotation of the mortgage. The respondents appealed.

ISSUE

Whether the land registration court can order the surrender of a certificate of title for the annotation of a real estate mortgage, despite the mortgagor’s claim that the mortgage is void for lack of consideration, without first resolving the validity of the mortgage.

RULING

The Supreme Court affirmed the lower court’s order. The Court held that a mortgage, once signed in due form, entitles the mortgagee to its registration as a matter of right. The mortgagor, by executing the mortgage, is understood to have given consent to its registration and cannot unilaterally revoke it. There is a legal presumption of sufficient consideration supporting a contract, which cannot be overcome by a mere assertion of lack of consideration, especially when the contract is a public instrument stating that consideration was given. Registration of a mortgage is necessary only to make it valid against third persons; it is binding between the parties even if unregistered. The respondents retain the right to challenge the mortgage’s validity for lack of consideration in a separate ordinary action and seek its cancellation. However, until such an action is filed and decided, it would be prejudicial to the mortgagee’s rights to deny registration, as her rights could be defeated by a transfer of the property to an innocent third party. The Court distinguished the cited case of Government vs. Payva, as it involved a different procedural context where the parties had submitted the question of validity to the registration court for summary resolution. Here, the respondents refused to submit the question, so the court correctly ordered recording without passing on the mortgage’s validity. The order was affirmed without prejudice to the appellants’ right to bring a separate action to question the mortgage’s validity.