GR L 2722; (December, 1949) (Digest)
G.R. No. L-2722 December 15, 1949
NICOLAS LIZARES & CO., INC., petitioner, vs. BIENVENIDO TAN, Judge of the Court of First Instance of Rizal City, MARY HAYDEN ARCACHE, assisted by her husband, JOSEPH ARCACHE, respondent.
FACTS
Nicolas Lizares & Co., Inc. sold two lots to the spouses Arcache, with payment by installments secured by a mortgage on the lots. The Arcaches filed a motion in the original land registration case (G.L.R.O. No. 320) to cancel the seller’s certificate of title and issue a new one in their name, claiming full payment of the purchase price. The respondent judge initially granted the motion. Upon learning of it, Nicolas Lizares & Co. objected, denying full payment and contesting the validity of the alleged payment of the last installment. The corporation argued that the respondent judge, acting in a land registration proceeding, lacked jurisdiction to resolve the disputed question of payment and mortgage discharge.
ISSUE
Whether a Court of First Instance, acting as a land registration court in a cadastral proceeding, has jurisdiction to resolve a disputed question regarding the validity of payment of a mortgage debt and the consequent cancellation of the mortgage and certificate of title.
RULING
No. The Supreme Court granted the petition for prohibition. It held that the question of whether the last installment had been validly paid, and thus whether the mortgage should be discharged, is a transcendental issue that properly pertains to an ordinary civil action. A land registration court exercises a special and limited jurisdiction. Matters requiring the adjudication of substantial rights, such as the validity of payment and cancellation of a mortgage, fall outside this limited jurisdiction and must be threshed out in an ordinary civil action. The Court, citing Castillo vs. Ramos, emphasized the clear separation between land registration proceedings and ordinary civil actions. Consequently, the order cancelling the original certificate of title and issuing a new one was invalid. The Register of Deeds was ordered to cancel the new title and reinstate the original one, without prejudice to the filing of a proper ordinary action.
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