Torres v. Treasurer of the Philippines
REITERATIONFacts
The Antecedents: The underlying dispute concerns Lot No. 46 in the Manapla cadastre, Occidental Negros. Initially claimed by Anselmo Lagarto based on a homestead application, Vicente Franco also laid claim but later renounced it in open court. A certificate of title was issued to Lagarto. Subsequently, Vicente Franco obtained a court order declaring him the owner of the lot, leading to a new certificate of title in his name. This title was then transferred to his grandson, Antonio Franco, who mortgaged the property. Procedural History: The Supreme Court initially annulled the Court of First Instance's decree awarding Lot No. 46 to Vicente Franco, thereby invalidating the titles issued to Vicente and Antonio Franco. Following this, Antonio Franco filed a complaint against the Insular Treasurer for indemnity, which was amended to include claims for damages. Corazon Veloso de Torres, having acquired the mortgage rights from Visayan Surety and Insurance Corporation, also filed a complaint seeking payment from Antonio Franco. The lower court absolved the Treasurer but ordered Antonio Franco to pay Torres. Both Franco and Torres appealed, and the Court of Appeals affirmed the lower court's decision. The Petition: This case is before the Supreme Court on a writ of certiorari filed by Corazon Veloso de Torres, the petitioner, seeking review of the Court of Appeals' decision. The petitioner argues for indemnity from the assurance fund, contending she was deprived of her vested interest. However, the Court notes that the petitioner acquired the property after a notice of lis pendens was registered, indicating the title was under dispute, thus precluding her claim as a purchaser in good faith. The Court also addresses the alleged misfeasance of the register of deeds, finding no evidence of negligence.
Issue(s)
Whether the petitioner is entitled to indemnity from the assurance fund. Whether the register of deeds committed misfeasance or negligence in issuing the certificates of title.
Ruling
The petition is dismissed, and the judgment of the Court of Appeals is affirmed. Antonio Franco is ordered to pay Corazon Veloso de Torres the sum of P4,000, with interests. The Insular Treasurer is absolved.
Ratio Decidendi
On the entitlement to indemnity from the assurance fund: The Court held that to be entitled to indemnity from the assurance fund, the interest of which a person has been deprived must have been actually vested in him. Furthermore, a claimant must be a purchaser in good faith. In this case, lot No. 46 was already registered in Anselmo Lagarto's name when the Court of First Instance awarded it to Vicente Franco. Vicente Franco had no right or interest to transfer. Crucially, a notice of lis pendens was registered when the Attorney General filed his petition to nullify the title, serving as notice to the world that the title was being contested. The petitioner, Corazon Veloso de Torres, purchased the property after this notice, making it legally impossible to claim she acted as an innocent purchaser in good faith. Therefore, she is not entitled to indemnity from the assurance fund. On the alleged misfeasance of the register of deeds: The Court of Appeals, based on the evidence, found that the register of deeds had not committed the acts imputed to him by the petitioner and had not been negligent in the performance of his duties. This finding was not disturbed by the Supreme Court.
Main Doctrine
A claimant is not entitled to indemnity from the assurance fund if the interest deprived was not actually vested in him, or if the claimant was not a purchaser in good faith, especially when a notice of lis pendens was duly registered, indicating that the title was under judicial contest.