Buhat v. Besana
REITERATIONFacts
The Antecedents: On May 31, 1924, Jose M. Besana mortgaged his undivided one-half share in lot No. 1406 to Luis Bernales to secure a P900 debt, payable within six years. Original certificate of title No. RO-1364 (10255) was later issued in the names of Jose M. Besana and Rosario Besana, covering the said lot, with the mortgage noted thereon. Jose M. Besana died, and his share passed to his sister, Rosario Besana. Luis Bernales died, and his mortgage credit was inherited by Antonio Bernales, who then transferred it to the plaintiffs, Esperanza V. Buhat and Mauro A. Buhat. Rosario Besana subsequently sold her portion of the lot to Manuel B. Bernales, who then conveyed it to the plaintiffs on June 30, 1950. Procedural History: As the mortgage indebtedness remained unpaid, the plaintiffs instituted an action for foreclosure of the mortgage on December 6, 1952, in the Court of First Instance of Capiz against Rosario Besana and her husband, Lorenzo Contreras. The defendants moved to dismiss the complaint, arguing that the plaintiffs' cause of action had prescribed, as the filing of the complaint was more than ten years from May 31, 1930 (the due date of the obligation), and indeed some 22 years after the obligation became due and demandable. The Court of First Instance of Capiz granted the motion and dismissed the case on May 6, 1953. The plaintiffs appealed this dismissal. The Appeal: The plaintiffs-appellants contended that because the mortgage was registered, their action to foreclose it did not prescribe. They invoked Section 46 of the Land Registration Act (RA 496), which states that "No title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession." They argued that this provision rendered their right to foreclose imprescriptible.
Issue(s)
Whether the registration of a mortgage on a Torrens title renders the action to foreclose the mortgage imprescriptible against the registered owner. Whether the prescriptive period for foreclosing a mortgage, even if registered, still applies.
Ruling
The appealed order of dismissal is affirmed. The action to foreclose the mortgage has prescribed.
Ratio Decidendi
On Whether the registration of a mortgage on a Torrens title renders the action to foreclose the mortgage imprescriptible against the registered owner: The Supreme Court held that the contention of the appellants is without merit. While Section 46 of the Land Registration Act (RA 496) provides that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession, this provision speaks of the title of the "registered owner" and refers to prescription or adverse possession as a mode of acquiring ownership. The purpose of this provision is to make a Torrens title indefeasible and not to render a registered lien or encumbrance, such as a mortgage, and the right of action to enforce it, imprescriptible as against the registered owner. The important effect of the registration of a mortgage is to bind third parties, not to suspend the running of the prescriptive period for its enforcement. On Whether the prescriptive period for foreclosing a mortgage, even if registered, still applies: The Court affirmed that the prescriptive period for foreclosing a mortgage does apply, even if the mortgage is registered. The appellants' reliance on Section 46 of the Land Registration Act was misplaced, as it pertains to the acquisition of ownership by prescription, not to the enforceability of registered encumbrances. The obligation secured by the mortgage became due on May 31, 1930, and the action to foreclose was filed on December 6, 1952, which is well beyond the prescriptive period. Therefore, the dismissal of the case by the lower court on the ground of prescription was correct.
Main Doctrine
The registration of a mortgage on a Torrens title, as provided under Section 46 of the Land Registration Act (RA 496), primarily serves to bind third parties. However, this registration does not render the mortgage itself or the right to foreclose it imprescriptible against the registered owner. The indefeasibility afforded by the Torrens system pertains to the title of the registered owner and not to the enforceability of registered liens or encumbrances.