Case Summary (G.R. No. 169568)
Applicable Law
– 1987 Philippine Constitution (decision date 2014)
– Rules of Court (1940), Rule 70 on judicial foreclosure of mortgage
– Rules of Court (1997), Rule 68 on equity of redemption period
Factual Background
- In 1944, Fernando Yapcinco mortgaged the property to Jose Marcelo, whose right was later assigned to Apolinario Cruz.
- Failure to pay led to a 1956 decision of the Court of First Instance ordering judicial foreclosure: if unpaid within 90 days, the property would be sold at public auction.
- On March 18, 1959, Cruz was the highest bidder; a certificate of absolute sale issued but never registered or judicially confirmed.
- Cruz took possession and in 1972 donated the property to his grandchildren, including petitioner Robles.
- In 1991, Apolinario Bernabe (one donee) falsified a deed of sale to appear as if Yapcinco sold the land to him and co-vendees, leading to TCT No. 243719 in their names.
Procedural History
– 1993: Cruz’s other donees filed a cancellation suit but did not vigorously pursue it.
– 2000: Yapcinco heirs sought annulment of TCT No. 243719 and reconveyance, obtaining in 2001 RTC judgment nullifying the forged sale and restoring TCT No. 20458.
– 2002: Petitioner Robles sued for nullification of forged documents, cancellation of title, reconveyance, and damages. In 2003, the RTC ruled for Robles, declaring TCT No. 354067 (erroneously issued in respondents’ names) null and void, and ordering restoration to Cruz’s estate.
– 2005: Court of Appeals reversed, holding failure to register the foreclosure sale prevented Cruz’s title from vesting, and respondents had no knowledge of the sale; TCT No. 243719 validly cancelled, and the property remained part of Yapcinco’s estate.
Issues on Supreme Review
I. Whether non-registration of the judicial foreclosure certificate of sale deprived Cruz of title.
II. Whether respondents, as successors-in-interest, were bound by the foreclosure despite alleged lack of knowledge.
III. Whether respondents’ claims were barred by laches.
Supreme Court’s Analysis
- Registration of a certificate of sale is required only in extra-judicial foreclosures to trigger redemption periods; in judicial foreclosures, the right of redemption is secured by court order (Rule 70, 1940).
- Cruz’s failure to register or confirm the sale did not affect the binding effect of the foreclosure judgment or extinguish the mortgagor’s rights after the 90-day redemption period.
- Procedural technicalities should not override substantive justice. Rules of Court mandate a liberal construction to secure a just, speedy, and inexpensive disposition (Sec. 6, Rule 1).
- The real question is which party had the superior right to ownership. Cruz’s possession was actual, public, notorious, and uninterrupted for over four decades.
- Respondents, as successors-in-interest of Yapcinco, stood in his shoes and were chargeable with knowledge of the forec
Case Syllabus (G.R. No. 169568)
Facts
- The subject land was originally registered under Transfer Certificate of Title (TCT) No. 20458 in the name of Fernando F. Yapcinco, married to Maxima Alcedo.
- On May 4, 1944, Yapcinco mortgaged the property in favor of Jose C. Marcelo; Marcelo’s rights were assigned to Apolinario Cruz on October 24, 1944.
- Upon Yapcinco’s default, Cruz filed for judicial foreclosure in the Court of First Instance of Tarlac, resulting in a July 27, 1956 decision:
- Ordering payment of ₱6,000 plus 8% interest from May 4, 1944;
- Granting 90 days to pay before the Provincial Sheriff would auction the property;
- Adjudging costs against the mortgagor.
- The public auction took place on March 18, 1959; Cruz was the highest bidder and received a Certificate of Absolute Sale, but he did not register it nor secure judicial confirmation of the sale.
- On September 5, 1972, Cruz donated the property to his grandchildren, including petitioner Rolando Robles.
- On August 29, 1991, Apolinario Bernabe (one of the donees’ brothers) falsified a deed of absolute sale purporting that Yapcinco sold the land to him and three co-vendees; TCT No. 20458 was cancelled, and TCT No. 243719 was issued in their names.
- Two instruments dated August 28, 1991—one a sale, the other a release of mortgage—were annotated on TCT No. 20458 on February 11, 1992 without actual mortgage settlement.
- In February 1993, co-donees Carlos C. de la Rosa and Ferdinand Cruz filed to nullify the 1991 sale, but the case was not actively pursued.
- On January 2, 2000, the heirs of the Spouses Yapcinco sued Bernabe and co-vendees for annulment of TCT No. 243719, document restoration, reconveyance, and damages; the defendants defaulted, and on September 13, 2001 the RTC, Branch 64 in Tarlac City, declared TCT No. 243719 and the 1991 deed null and void, restoring TCT No. 20458.
- On December 17, 2002, petitioner filed Civil Case No. 9436 against the Yapcinco heirs for nullification of documents, cancellation of title, reconveyance, and damages, alleging:
- The heirs acted in bad faith issuing TCT No. 354061 despite the 1956 foreclosure;
- A 1959 certificate of sale and 1972 deed of donation vested title in Cruz and his donees.
- The respondents countered that TCT No. 20458 had an annotation of mortgage release and that neither the certificate of sale nor the donation was ins