512 Phil. 237
GARCIA, J.:
Culled from the records are the following factual antecedents:
- Decision dated July 16, 1998,[1] affirming an earlier decision of the Regional Trial Court at General Santos City which ordered the petitioners, in particular petitioner Atanacio M. Villegas, to present before the Register of Deeds of General Santos City TCT No. T-32610 covering Lot 908-B-6-L-4-B for the annotation thereon of a Memorandum of Agreement establishing an easement of right-of-way in favor of private respondent General Santos Doctor's Hospital, Inc.; and
- Resolution dated January 8, 1999,[2] denying petitioners' motion for reconsideration.
True enough, on September 25, 1968, the interior lot was bought by GSDHI, as evidenced by a Deed of Absolute Sale.[6]
- The vendors shall construct a 10 meter wide road commencing from the National Highway, traversing the property of the Vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of this Option, facing the national highway. Additionally, the vendors shall also construct a 10 meter wide road alongside the same southern boundary of the subject land, forming a right angle with the road first above described. The Vendors shall also provide drainage facilities.[5]
Years later, or on September 30, 1977, the exterior lot was mortgaged by the Narcisos to one of the petitioners herein, Private Development Corporation of the Philippines (PDCP). Upon the Narcisos' failure to pay the mortgage obligation, the mortgage was foreclosed and the mortgaged property (exterior lot) sold at a public auction on June 21, 1982 with PDCP as the lone bidder. Accordingly, the Narcisos' title covering the exterior lot was cancelled and in lieu thereof TCT No. 23202 was issued in the name of PDCP.
- The vendors [Narcisos] also known as Party of the First Part, shall construct a ten (10) meter wide road commencing from the National Highway, traversing the property of the vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of the sale facing the National Highway. Additionally, the vendors or party of the first part, shall also construct a ten (10) meter wide road alongside the same Southern boundary of the subject land, forming a right angle with the road first above-described. The vendors shall also provide drainage facilities.[8]
Accordingly, judgment is rendered for the plaintiff and against the defendants ordering the latter, particularly Atanacio M. Villegas to present before the Register of Deeds of General Santos City Transfer Certificate of Title No. T-32610 for annotation of the Memorandum of Agreement establishing the casement of right-of-way in favor of the plaintiff.Explains the trial court in its decision:
SO ORDERED.
The long and short of the seeming complexity of the issues raised by the parties is summed up by the question of whether or not the plaintiff under the circumstances is entitled to compel the defendants particularly Atanacio M. Villegas to respect and annotate in the certificate of title the easement of right of way, or conversely whether the defendants are innocent mortgagor or purchaser for value, hence not bound by it.From the trial court's decision, petitioners went to the Court of Appeals (CA) whereat their appellate recourse was docketed as CA-G.R. CV No. 52542.
The dominion of the plaintiff over the disputed road that virtually cut into two lot 908-B-6-L-4-B comprising a total area of 1,000 square (10 m x 100m) was elucidated and clarified by Agustin N. Narciso, the source of plaintiff's rights. (Exhibits "A" and "B") When Lot 908-B-L-3-A was sold by Narciso to GSDHI way back on September 25, 1963 the imperfection of the document of absolute sale was discovered at once. (Exhibit "D") So a "Memorandum of Agreement" was executed that same day to rectify the omission and put in black and white the agreement regarding the direct access road to the national highway passing through the adjoining lot 908-B-6-L-4-B then owned by Narciso. (Exhibit "E") The relevant portion of the agreement provides:xxx "7. The vendors also known as Party of the First Part, shall construct a ten (10) meter wide road commencing from the National Highway, traversing the property of the vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of the sale facing the National Highway. Additionally, the vendors or party of the first part, shall also construct a ten (10) meter wide road alongside the same Southern boundary of the subject land, forming a right angle with the road first above-described. The vendors shall also provide drainage facilities." xxxPrior to the execution of the Deed of Absolute Sale and the Memorandum of Agreement, the Narcisos and the plaintiff executed a document denominated "Option to Buy" on September 6, 1968, the pertinent portion of which provides:xxx "5. The vendors shall construct a 10 meter wide road commencing from the National Highway, traversing the property of the Vendors and terminating perpendicularly at the mid-point of the Southern boundary of the property subject of this Option, facing the national highway. Additionally, the vendors shall also construct a 10 meter wide road alongside the same southern boundary of the subject land, forming a right angle with the road first above described. The Vendors shall also provide drainage facilities." xxxIn keeping with their agreement with the plaintiff, the Narcisos caused to be constructed a 10 meter wide road starting from the National Highway passing through Lot 908-B-6-L-4-B until the mid-point of the Southern boundary of Lot 908-B-L-3-A which was the property sold to the plaintiff. He also had a 10 meter wide road alongside the southern boundary of the land sold to the plaintiff forming an angle with the road that commenced from the national highway.
These undertakings of the Narcisos were in compliance with their agreement with the plaintiff to guarantee direct access to the national highway from the hospital that was to be constructed by the plaintiff on inner Lot 908-B-L-3-A. The total consideration for the sale of Lot 908-B-L-3-A covering an area of one hectare was P100,000.00 and an additional of P10,000.00 was paid for the 10 meter wide road right-of-way from the southern boundary of the property straight to the national highway with an approximate length of 100 meters. This was not specifically mentioned in the Deed of Absolute Sale but this was in pursuance of their agreement that the one hectare lot was priced at P10.00 per square meter, or for P100,000.00. Narcisos' agreement with the plaintiff for the construction of the road right-of-way was for its use in perpetuity by the plaintiff as well as the public. The road right-of-way was constructed immediately upon execution of the Deed of Sale but it is being maintained ever since by the plaintiff. The road was located in the shortest distance between the national highway and the hospital of the plaintiff and because of it the property over which the easement of road right-of-way passing through at the middle was substantially benefited making it commercial.
Sometime in 1976 or 1977, the Narcisos mortgaged Lot 908-B-6-L-4-B which was the servient estate to PDCP thru its branch office in Davao City. As a requirement, the Narcisos submitted to PDCP the title of the land, the map and the sketch on the easement that was granted by the plaintiff to the CSDHI. When the property was inspected, Agustin Narciso showed the extent of the property offered as collateral and together with the manager and other officers of the PDCP even passed through the road right-of-way in question. The metes and bounds of the Narcisos property was also shown to the officers of the PDCP including the signboard along the national highway leading to the hospital. Thereafter the loan was approved.
On cross-examination, Agustin Narciso admitted having mortgaged the property covered by his title but excluding the 10 X 100 meter road which was paid for by the plaintiff. The "Memorandum of Agreement," however, and the "Option to Buy" which embodied the meeting of minds of the plaintiff and the Narcisos regarding the easement of right-of-way over Lot 908-B-6-L-4-B was not registered or annotated. Agustin Narciso reiterated that when the property mortgaged to PDCP was verified, several personnel of PDCP came, a certain Mr. Rey Feria, Mr. Lim, Mr. Alcantara and a certain Mr. Delgado. He did not, however, furnish them copies of the "Option to Buy" and the "Memorandum of Agreement."
The importance of the road right-of-way to the plaintiff was underscored by officers of the plaintiff. Acquisition of the hospital site was premised on the grant by the then owner and seller Agustin Narciso of the ten meter wide access road through the servient property owned by the seller. It was a condition sine qua non of the contract between plaintiff and the Narcisos because the plaintiff wanted the site to be a bit far from the national highway but with easy and direct access to the highway because of the nature of the business they were putting up. The hospital having been constructed sometime in 1968, plaintiff maintained the 10 x 100 meters road to the highway and used it including the public openly, continuously and notoriously without being challenged by any party.
When the Narcisos failed to pay their account with the defendant PDCP Lot 908-B-L-3-B which was put up as guarantee thereof was foreclosed and in the subsequent public auction sale the defendant PDCP was the lone bidder and therefore it became the owner.
The plaintiff learned of the acquisition by PDCP of the property previously owned by the Narcisos and steps were taken by the plaintiff to buy peace when it was realized that the "Memorandum of Agreement" as well as the "Option to Buy" evidencing their ownership of the road right-of-way of 10 x 100 meters was only duly recorded with the Register of Deeds. Negotiations were had with the defendant PDCP but no agreement was reached because of the wide gap between the offers and counter offers made.
In the meantime, the defendant PDCP never asserted that it is the rightful owner of the road right-of-way, neither did it interrupt the continued use by the plaintiff and the general public of the road in question.
Requests were made of the defendant PDCP to allow the plaintiff to have its right over the road right-of-way annotated in the title of the said defendant but it was ignored. Overtures were made by the plaintiff to buy peace or as gesture of compromise to the defendant PDCP but those were fruitless.
The defendants, particularly the original and one of the principal defendants, did not challenge the genuiness and authenticity of the documents in the possession of the plaintiff and presented in evidence like the Option to Buy, Memorandum of Agreement and the Deed of Absolute Sale. The centerpiece of PDCP's defense was the nonregistration of the "Option to Buy" and "Memorandum of Agreement" embodying the right of the plaintiff over the contested road right of way.
The defendant Atanacio M. Villegas relied entirely on the defenses put up by its predecessor-in-interest PDCP.
It was the contention also of the defendant PDCP that had it known of the existence of the road right-of-way over the property mortgaged and subsequently acquired by it in a public auction sale, they would not have paid the big amount for the property considering that with the existence of the road right-of-way the value of the property was very much diminished.
Considering, however, that the defendant PDCP is a banking institution and it is normal business practice that when loan is granted the property offered as security is invariably inspected, it would be unlikely cr unrealistic that the defendant PDCP accepted Lot-908-B-6-L-4-B without knowing its actual state. The evidence also disclosed that when the loan was contracted by the previous owner Agustin Narciso several officers of the bank repaired to the area and made an on-the-spot verification of the land.
On the part of Atanacio Villegas, his attorney-in-fact who took the witness stand affirmed that the road right-of-way has been in existence way back in the late 1960's and he noticed it when he frequently traveled to General Santos City even when this was still a rustic community as reflected in his testimony.
In the light of the undisputed facts obtaining that the road right-of-way is conspicuously situated and has been in existence and in constant use for a long period of time, or for over 25 years failure of the plaintiff to cause the registration of its road right-of-way did not in the face of reality militate against its right over the casement.[12]
The total consideration for the sale of Lot 908-B-L-3-A covering an area of one hectare was P100,000.00 and an additional of P10,000.00 was paid for the 10 meter wide road right-of-way from the southern boundary of the property straight to the national highway with an approximate length of 100 meters. This was not specifically mentioned in the Deed of Absolute Sale but this was in pursuance of their agreement that the one hectare lot was priced at P10.00 per square meter, or for P100,000.00.[16]In any event, it bears stressing that the two courts below are one in their common factual finding about the existence of the conventional easement of right of way in favor of respondent. Absent, as here, of any credible evidence to the contrary, the Court is not inclined to disturb such a finding. After all, this Court is not a trier of facts.
xxx Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private individuals, for their business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of land registration statute, Act 496, extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description. xxxConsidering the foregoing, and bearing in mind that judicial notice is taken of the standard practice for banks, before approving a loan, to send representatives to the premises of the land offered as collateral,[22] PDCP's feigned ignorance of the road right-of-way, much less of the existence of the road itself along the exterior lot, is simply ridiculous, to say the least, more so in the light of the factual findings of the two courts below that PDCP, contrary to its assertion, had indeed sent its personnel to inspect the land when the same was mortgaged to it by the Narcisos. For sure, as found by the appellate court, no less than PDCP's own Legal Officer, Virgilio Lagunilla, admitted that an appraisal was conducted by the bank on the exterior lot before accepting the mortgage thereof. Says the appellate court in this respect:
We have the confirmation on cross examination of the PDCP Legal Officer, Virgilio Lagunilla, in the matter of PDCP's practice of appraising the property, being offered as collateral, which calls for an actual examination of the condition of the property. He even admitted that an appraisal was conducted by the bank on the exterior lot before the mortgage, the reason being that it is the Central Bank's requirement to limit the loans of commercial banks to only 70% of the appraise value of the security being offered. As for PDCP, there was an "uncharacteristic silence" on the result of the appraisal of the exterior lot which presupposes the observation that the bank, at the time of the mortgage, knew about the existence of the easement. The nature alone of the easement of right-of-way, which is ten meters wide and open to the public for its use continuously supports the observation that its easement was never overlooked by the bank at the time of the property's appraisal. We cannot allow actual notice of knowledge of the burden on the property to be denied on the mere pretension alone that the title does not bear any annotation of such burden.Equally unworthy of belief is petitioner Villegas' protestation of innocence of the easement in question.
xxx His (Miranda's) other admission was that Villegas knew of the easement before purchasing the property. He even added that he was consulted by Villegas himself before the purchase and he told him (Villegas) that there was an existing road from the hospital leading to the national highway.In Lagandaon vs. CA,[23] we said:
As a general rule, every buyer of a registered land who takes a certificate of title for value and in good faith shall hold the same free of all encumbrances except those noted on said certificate. It has been held, however, that "where the party has knowledge of a prior existing interest which is unregistered at the time he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him. xxx "WHEREFORE, the assailed issuances of the appellate court are AFFIRMED and this petition DISMISSED for lack of merit.