Immediately register under name when buying land?

In Mahilum v. Ilano (G.R. No. 197923, June 22, 2015), the Supreme Court made a quite - uh - interesting statement about the immediate issuance of certificate of title over real property under the name of the buyer. The issue in that case was whether respondents are an innocent purchaser for value of a piece of land.

The High Court said that there were circumstances which could lead one to believe that respondents are not exactly innocent of the charge. It was held:
Their failure to register the unnotarized and undated deed of absolute sale is at the very least unusual; it is contrary to experience. It is uncharacteristic of a conscientious buyer of real estate not to cause the immediate registration of his deed of sale as well as the issuance of a new certificate of title in his name. Having supposedly paid a considerable amount (P250,000.00) for the property, respondents certainly would have protected themselves by immediately registering the sale and obtaining a new title in their name; but they did not. Even after petitioner caused the annotation of her affidavit of loss, respondents did not register their supposed sale, but merely annotated an "affidavit of non-loss." This, together with the fact that the deed of absolute sale is undated and unnotarized, places their claim that they are purchasers in good faith seriously in doubt. (Emphases supplied)

It appears from the above that the Supreme Court is of the opinion that a buyer of real estate must cause the immediate registration of the deed of sale as well as the issuance of a new certificate of title under said buyer's name. Otherwise, factual findings by the court regarding the buyer's good faith or bad faith, including whether or not he is an innocent purchaser for value, may be affected.

It can be recalled that no law requires the buyer of a piece of land to cause the immediate issuance of a new certificate of title under said buyer's name. In fact, a notarized and registered deed of sale alone is very strong evidence of the sale that took place between the contracting parties. It is worth to mention that the statement by the Supreme Court regarding immediate registration and issuance of a new certificate of title is very interesting, especially in the field of land law and evidence law.

The ruling in Rufloe v. Burgos[1] was cited by the Supreme Court. In that case, it was held that good faith cannot be ascribed to those who have not shown any diligence in protecting their rights. Respondents had knowledge of facts that should have led them to inquire and investigate in order to acquaint themselves with possible defects in the title of the seller of the property. However, they failed to do so. Thus, Leonarda, as well as the Burgos siblings, cannot take cover under the protection the law accords to purchasers in good faith and for value. They cannot claim valid title to the property.

The defense of indefeasibility of a Torrens title does not extend to a transferee who takes it with notice of a flaw in the title of his transferor. To be effective, the inscription in the registry must have been made in good faith. A holder in bad faith of a certificate of title is not entitled to the protection of the law, for the law cannot be used as a shield for fraud.

Back to the case of Rufloe v. Burgos[2], the sale was not registered, a circumstance which is inconceivable in a legitimate transfer. A true vendee would not brook any delay in registering the sale in his favor. Not only because registration is the operative act that effects property covered by the Torrens System, but also because registration and issuance of new title to the transferee enable this transferee to assume domiciliary and possessory rights over the property. These benefits of ownership shall be denied him if the titles of the properly shall remain in the name of vendor. Therefore, it was held inconceivable as contrary to behavioral pattern of a true buyer and the empirical knowledge of man to assume that a buyer who invested on the property he bought would be uninvolved and not endeavor to register the property he bought.[3]

[1] 597 Phil. 261 (2009).

[2] Id.

[3] Id. at 272-273.

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