CASE DIGEST: Homeowners Savings vs. Felonia
G.R. No. 189477 : February 26, 2014
HOMEOWNERS SAVINGS AND LOAN BANK, Petitioner-Appellant,v. ASUNCION P. FELONIA AND LYDIA C. DE GUZMAN, REPRESENTED BY MARIBEL FRIAS,Respondents-Appellees. V. MARIE MICHELLE P. DELGADO, REGISTER OF DEEDS OF LAS PIS CITY AND RHANDOLFO B. AMANSEC, IN HIS CAPACITY AS CLERK OF COURT EX-OFFICIO SHERIFF, OFFICE OF THE CLERK OF COURT, LAS PIS CITY,Respondents-Defendants.
PEREZ,J.:
FACTS:
The case involved a real property owned by Felonia and De Guzman. Sometime in June 1990, they mortgaged the property to Delgado to secure a loan. However, instead of a real estate mortgage, the parties executed a deed of absolute sale with an option to repurchase. On December 1991, Felonia and De Guzman filed an action for reformation of instrument.
Inspite of the pendency of the Reformation case in which she was the defendant, Delgado filed a Petition for Consolidation of Ownership of Property Sold with an Option to Repurchase and Issuance of a New Certificate of Title. The RTC declared Delgado the absolute owner and ordered the Registry of Deeds to issue a new certificate of title in the name of Delgado.
Aggrieved, Felonia and De Guzman elevated the case to the CA through a petition for annulment of judgment. On June 1995, Delgado mortgage the property to Homeowners Savings and Loan Bank (HSLB) using her newly registered title. On September 1995, Felonia and De Guzman caused the annotation of a notice of lispendens on Delgados title. On November 1997, HLRB foreclosed the property and later consolidated ownership in its favor.
Felonia and De Guzman instituted a complaint before RTC of Las Pinas for reconveyance of possession and ownership of the subject property in their favor. As defendant, HLRC contended that it was a mortgagee in good faith. RTC ruled in favor of Felonia and De Guzman. CA affirmed the RTC decision
ISSUE: Whether or not HSLB is a mortgagee and a purchaser in good faith
HELD: No. Decision of CA sustained.
Civil Law: Who is a Purchaser in good faith
The rights of the parties to the present case are defined not by the determination of whether or not HSLB is a mortgagee in good faith, but of whether or not HSLB is a purchaser in good faith. And, HSLB is not such a purchaser. A purchaser in good faith is defined as one who buys a property without notice that some other person has a right to, or interest in, the property and pays full and fair price at the time of purchase or before he has notice of the claim or interest of other persons in the property.
In the case at bar, HSLB utterly failed to take the necessary precautions. At the time the subject property was mortgaged, there was yet no annotated Notice ofLis Pendens. However, at the time HSLB purchased the subject property, the Notice ofLis Pendenswas already annotated on the title. When a prospective buyer is faced with facts and circumstances as to arouse his suspicion, he must take precautionary steps to qualify as a purchaser in good faith.
Lis pendens is a Latin term which literally means, a pending suit or a pending litigation while a notice oflispendensis an announcement to the whole world that a real property is in litigation, serving as a warning that anyone who acquires an interest over the property does so at his/her own risk, or that he/she gambles on the result of the litigation over the property.It is a warning to prospective buyers to take precautions and investigate the pending litigation. The purpose of a notice of lis pendens is to protect the rights of the registrant while the case is pending resolution or decision. With the notice of lis pendens duly recorded and remaining uncancelled, the registrant could rest secure that he/she will not lose the property or any part thereof during litigation.
Indeed, at the time HSLB bought the subject property, HSLB had actual knowledge of the annotated Notice of Lis Pendens. Instead of heeding the same, HSLB continued with the purchase knowing the legal repercussions a notice of lis pendens details.
HOMEOWNERS SAVINGS AND LOAN BANK, Petitioner-Appellant,v. ASUNCION P. FELONIA AND LYDIA C. DE GUZMAN, REPRESENTED BY MARIBEL FRIAS,Respondents-Appellees. V. MARIE MICHELLE P. DELGADO, REGISTER OF DEEDS OF LAS PIS CITY AND RHANDOLFO B. AMANSEC, IN HIS CAPACITY AS CLERK OF COURT EX-OFFICIO SHERIFF, OFFICE OF THE CLERK OF COURT, LAS PIS CITY,Respondents-Defendants.
PEREZ,J.:
FACTS:
The case involved a real property owned by Felonia and De Guzman. Sometime in June 1990, they mortgaged the property to Delgado to secure a loan. However, instead of a real estate mortgage, the parties executed a deed of absolute sale with an option to repurchase. On December 1991, Felonia and De Guzman filed an action for reformation of instrument.
Inspite of the pendency of the Reformation case in which she was the defendant, Delgado filed a Petition for Consolidation of Ownership of Property Sold with an Option to Repurchase and Issuance of a New Certificate of Title. The RTC declared Delgado the absolute owner and ordered the Registry of Deeds to issue a new certificate of title in the name of Delgado.
Aggrieved, Felonia and De Guzman elevated the case to the CA through a petition for annulment of judgment. On June 1995, Delgado mortgage the property to Homeowners Savings and Loan Bank (HSLB) using her newly registered title. On September 1995, Felonia and De Guzman caused the annotation of a notice of lispendens on Delgados title. On November 1997, HLRB foreclosed the property and later consolidated ownership in its favor.
Felonia and De Guzman instituted a complaint before RTC of Las Pinas for reconveyance of possession and ownership of the subject property in their favor. As defendant, HLRC contended that it was a mortgagee in good faith. RTC ruled in favor of Felonia and De Guzman. CA affirmed the RTC decision
ISSUE: Whether or not HSLB is a mortgagee and a purchaser in good faith
HELD: No. Decision of CA sustained.
Civil Law: Who is a Purchaser in good faith
The rights of the parties to the present case are defined not by the determination of whether or not HSLB is a mortgagee in good faith, but of whether or not HSLB is a purchaser in good faith. And, HSLB is not such a purchaser. A purchaser in good faith is defined as one who buys a property without notice that some other person has a right to, or interest in, the property and pays full and fair price at the time of purchase or before he has notice of the claim or interest of other persons in the property.
In the case at bar, HSLB utterly failed to take the necessary precautions. At the time the subject property was mortgaged, there was yet no annotated Notice ofLis Pendens. However, at the time HSLB purchased the subject property, the Notice ofLis Pendenswas already annotated on the title. When a prospective buyer is faced with facts and circumstances as to arouse his suspicion, he must take precautionary steps to qualify as a purchaser in good faith.
Lis pendens is a Latin term which literally means, a pending suit or a pending litigation while a notice oflispendensis an announcement to the whole world that a real property is in litigation, serving as a warning that anyone who acquires an interest over the property does so at his/her own risk, or that he/she gambles on the result of the litigation over the property.It is a warning to prospective buyers to take precautions and investigate the pending litigation. The purpose of a notice of lis pendens is to protect the rights of the registrant while the case is pending resolution or decision. With the notice of lis pendens duly recorded and remaining uncancelled, the registrant could rest secure that he/she will not lose the property or any part thereof during litigation.
Indeed, at the time HSLB bought the subject property, HSLB had actual knowledge of the annotated Notice of Lis Pendens. Instead of heeding the same, HSLB continued with the purchase knowing the legal repercussions a notice of lis pendens details.