SECOND DIVISION

[G.R. No. 204280. November 9, 2016.]

EVELYN V. RUIZ , petitioner, vs. BERNARDO F. DIMAILIG , respondent.

DECISION

DEL CASTILLO , J : p

This Petition for Review on Certiorari assails the October 22, 2012 Decision 1 of
the Court of Appeals (CA) in CA-G.R. CV No. 95046 which reversed and set aside the
November 26, 2009 Decision 2 and the March 19, 2010 Order 3 of the Regional Trial
Court (RTC) of Cavite City, Branch 16 in Civil Case No. N-7573. The CA declared void the
Real Estate Mortgage (REM) constituted on the property covered by Transfer
Certificate of Title (TCT) No. T-361747.
Factual Antecedents
Respondent Bernardo F. Dimailig (Bernardo) was the registered owner of a
parcel of land covered by TCT No. T-361747 located in Alapan, Imus, Cavite. 4 In
October 1997, he entrusted the owner's copy of the said TCT to his brother, Jovannie, 5
who in turn gave the title to Editha Sanggalang (Editha), a broker, for its intended sale.
However, in January 1998, the property was mortgaged to Evelyn V. Ruiz (Evelyn) as
evidenced by a Deed of REM 6 without Bernardo's knowledge and consent. Hence,
Bernardo instituted this suit for annulment of the Deed of REM. 7
In her Answer, 8 Evelyn contended that she met Jovannie when she inspected the
subject property and assured her that Bernardo owned the property and his title thereto
was genuine. She further claimed that Jovannie mortgaged the property to her. She also
insisted that as a mortgagee in good faith and for value, the REM cannot be annulled
and that she had the right to keep the owner's copy of TCT No. T-361747 until the loan
was fully paid to her. cTDaEH

During pre-trial, the parties arrived at the following stipulations: 9

1. That . . . it was not [Bernardo] who signed as mortgagor in the subject Deed
of Real Estate Mortgage.
2. That there was a demand letter sent to [Evelyn] . . . to cause a release of
mortgage on the subject property.
3. The . . . controversy [was referred] to the Barangay for conciliation and
mediation.
[4.] That Jovannie . . . is the brother of [Bernardo].
Thereafter, trial on the merits ensued.
Bernardo testi ed that when he went abroad on October 19, 1997, he left the
owner's copy of the TCT of the subject property to Jovannie as they intended to sell the
subject property. 10 However, on January 26, 1998, a REM was executed on the subject
property. Bernardo argued that his alleged signature appearing therein was merely
forged 11 as he was still abroad at that time. When he learned in September or
November 1998 that Editha mortgaged the subject property, he personally told Evelyn
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 that the REM was fake and demanded the return of his title. Not heeding his request, he
led a complaint for estafa through falsi cation of public document against Editha and
Evelyn. The criminal case against Evelyn was dismissed 12 while Editha was found
guilty as charged. 13
Jovannie also took the witness stand. He testi ed that sometime in December
1997, Editha convinced him to surrender the owner's copy of TCT No. T-361747 which
she would show her buyer. 14 Subsequently, however, Editha informed him that she
misplaced the title. Hence, he executed in August 1998 15 an af davit of loss and
registered it with the Register of Deeds (RD). 16 In September 1998, Editha nally
admitted that the title was not lost but was in Evelyn's possession because of the REM.
17 Upon learning this, Jovannie inquired from Evelyn if Editha mortgaged Bernardo's
property to her. Purportedly, Evelyn con rmed said mortgage and told him that she
would not return the owner's copy of TCT No. T-361747 unless Editha pay the loan. 18
Jovannie also alleged that he told Evelyn that Bernardo's alleged signature in the REM
was not genuine since he was abroad at the time of its execution. 19
On the other hand, Evelyn maintained that she was a mortgagee in good faith.
She testi ed that sales agents — Editha, Corazon Encarnacion, and a certain Parani, —
and a person introducing himself as "Bernardo" mortgaged the subject property to her
for P300,000.00 payable within a period of three months. 20 She asserted that even
after the expiration of said period, "Bernardo" failed to pay the loan. 21
cSaATC

Evelyn narrated that before accepting the mortgage of the subject property, she,
the sales agents, her aunt, and "Bernardo," visited the property. She pointed out that her
companions inspected it while she stayed in the vehicle as she was still recuperating
from an operation. 22 She admitted that she neither veri ed from the neighborhood the
owner of the property nor approached the occupant thereof. 23
Moreover, Evelyn asserted that when the Deed of REM was executed, the person
who introduced himself as Bernardo presented a community tax certi cate and his
picture as proof of identity. 24 She admitted that she did not ask for any identi cation
card from "Bernardo." 25
Contrary to the allegation in her Answer that Jovannie mortgaged the property,
Evelyn clari ed that she met Jovannie for the rst time when he went to her house and
told her that Bernardo could not have mortgaged the property to her as he was abroad.
26

Corazon Abella Ruiz (Corazon), the sister-in-law of Evelyn, was presented to

corroborate her testimony. Corazon averred that in January 1998, she accompanied
Evelyn and several others in inspecting the subject property. 27 The day after the
inspection, Evelyn and "Bernardo" executed the Deed of REM in the of ce of a certain
Atty. Ignacio; Evelyn handed P300,000.00 to Editha, not to "Bernardo;" 28 in turn, Editha
handed to Evelyn the owner's copy of TCT No. T-361747. 29
Ruling of the Regional Trial Court
On November 26, 2009, the RTC dismissed the Complaint. It held that while
Bernardo was the registered owner of the subject property, Evelyn was a mortgagee in
good faith because she was unaware that the person who represented himself as
Bernardo was an impostor. It noted that Evelyn caused the veri cation of the title of the
property with the RD and found the same to be free from any lien or encumbrance.
Evelyn also inspected the property and met Jovannie during such inspection. Finally, the
RTC declared that there was no showing of any circumstance that would cause Evelyn
to doubt the validity of the title or the property covered by it. In ne, Evelyn did all that
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 was necessary before parting with her money and entering into the REM. cHDAIS

On March 19, 2010, the RTC denied Bernardo's Motion for Reconsideration. Thus,
he appealed to the CA.
Ruling of the Court of Appeals
On October 22, 2012, the CA rendered the assailed Decision reversing and
setting aside the RTC Decision. The decretal portion of the CA Decision reads:
WHEREFORE, the appeal is GRANTED. The assailed dispositions of the
RTC are REVERSED and SET ASIDE. The complaint of Bernardo F. Dimailig is
GRANTED. The Deed of Real Estate Mortgage constituted on the real property
covered by TCT No. T-361747 of the Registry of Deeds for the Province of
Cavite, registered in his name, is DECLARED null and void. Evelyn V. Ruiz is
ORDERED to reconvey or return to him the owner's duplicate copy of the said
title. His claims for the payment of attorney's fees and costs of suits are
DENIED. Costs against Evelyn V. Ruiz.
SO ORDERED. 30
The CA held that the "innocent purchaser (mortgagor in this case) for value
protected by law is one who purchases a titled land by virtue of a deed executed by the
registered owner himself, not by a forged deed." 31 Since the Deed of REM was forged,
and the title to the subject property is still in the name of the rightful owner, and the
mortgagor is a different person who only pretended to be the owner, then Evelyn
cannot seek protection from the cloak of the principle of mortgagee in good faith. The
CA held that in this case, "the registered owner will not personally lose his title." 32
The CA further decreed that Evelyn's claim of good faith cannot stand as she
failed to verify the real identity of the person introduced by Editha as Bernardo. It noted
that the impostor did not even exhibit any identi cation card to prove his identity; and,
by Evelyn's admission, she merely relied on the representation of Editha relative to the
identity of "Bernardo." It also held that Evelyn transacted only with Editha despite the
fact that the purported owner was present during the inspection of the property, and
during the execution of the REM.
In sum, the CA ruled that for being a forged instrument, the Deed of REM was a
nullity, and the owner's copy of TCT No. T-361747 must be returned to its rightful
owner, Bernardo.
Issue
Hence, Evelyn filed this Petition raising the sole assignment of error as follows:
[T]he Court of Appeals erred in holding that petitioner is not a mortgagee in
good faith despite the presence of substantial evidence to support such
conclusion of fact. 33
Petitioner's Arguments
Petitioner insists that she is a mortgagee in good faith. She claims that she was
totally, unaware of the fraudulent acts employed by Editha, Jovannie, and the impostor
to obtain a loan from her. She stresses that a person dealing with a property covered by
a certi cate of title is not required to look beyond what appears on the face of the title.
ISHCcT

Respondent's Arguments
Bernardo, on his end, contends that since the person who mortgaged the
property was a mere impostor, then Evelyn cannot claim that she was a mortgagee in
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 good faith. This is because a mortgage is void where the mortgagor has no title at all to
the property subject of such mortgage.
Bernardo asserts that there were circumstances that should have aroused
suspicion on the part of Evelyn relative to the mortgagor's title over the property. He
speci es that throughout the negotiation of the mortgage, Evelyn transacted only with
Editha, not with "Bernardo," despite the fact that Editha and the other real estate agents
who assisted Evelyn in the mortgage transaction were not armed with a power of
attorney.
Bernardo likewise stresses that although Evelyn caused the inspection of the
subject property, she herself admitted that she did not alight from the vehicle during
the inspection, and she failed to verify the actual occupant of the property.
Our Ruling
The Petition is without merit.
As a rule, the issue of whether a person is a mortgagee in good faith is not within
the ambit of a Rule 45 Petition. The determination of presence or absence of good
faith, and of negligence are factual matters, which are outside the scope of a petition
for review on certiorari. 34 Nevertheless, this rule allows certain exceptions including
cases where the RTC and the CA arrived at different or con icting factual ndings, 35 as
in the case at bench. As such, the Court deems it necessary to re-examine and re-
evaluate the factual findings of the CA as they differ with those of the RTC.
No valid mortgage will arise unless the mortgagor has a valid title or ownership
over the mortgaged property. By way of exception, a mortgagee can invoke that he or
she derived title even if the mortgagor's title on the property is defective, if he or she
acted in good faith. In such instance, the mortgagee must prove that no circumstance
that should have aroused her suspicion on the veracity of the mortgagor's title on the
property was disregarded. 36
Such doctrine of mortgagee in good faith presupposes "that the mortgagor, who
is not the rightful owner of the property, has already succeeded in obtaining a Torrens
title over the property in his name and that, after obtaining the said title, he succeeds in
mortgaging the property to another who relies on what appears on the said title." 37 In
short, the doctrine of mortgagee in good faith assumes that the title to the subject
property had already been transferred or registered in the name of the impostor who
thereafter transacts with a mortgagee who acted in good faith. In the case at bench, it
must be emphasized that the title remained to be registered in the name of Bernardo,
the rightful and real owner, and not in the name of the impostor. CAacTH

The burden of proof that one is a mortgagee in good faith and for value lies with
the person who claims such status. A mortgagee cannot simply ignore facts that
should have put a reasonable person on guard, and thereafter claim that he or she
acted in good faith under the belief that the mortgagor's title is not defective. 38 And,
such good faith entails an honest intention to refrain from taking unconscientious
advantage of another. 39
In other words, in order for a mortgagee to invoke the doctrine of mortgagee in
good faith, the impostor must have succeeded in obtaining a Torrens title in his name
and thereafter in mortgaging the property. Where the mortgagor is an impostor who
only pretended to be the registered owner, and acting on such pretense, mortgaged the
property to another, the mortgagor evidently did not succeed in having the property
titled in his or her name, and the mortgagee cannot rely on such pretense as what
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 appears on the title is not the impostor's name but that of the registered owner. 40
In this case, Evelyn insists that she is a mortgagee in good faith and for value.
Thus, she has the burden to prove such claim and must provide necessary evidence to
support the same. Unfortunately, Evelyn failed to discharge her burden.
First, the Deed of REM was established to be a forged instrument. As aptly
discussed by the CA, Bernardo did not and could not have executed it as he was abroad
at the time of its execution, to wit:
Verily, Bernardo could not have af xed his signature on the said deed on
January 26, 1998 for he left the Philippines on October 19, 1997, . . . and only
returned to the Philippines on March 21, 1998. Not only that, his signature on his
Seafarer's Identi cation and Record Book is remarkably different from the
signature on the assailed mortgage contract. The variance is obvious even to
the untrained eye. This is further bolstered by Evelyn's admission that Bernardo
was not the one who represented himself as the registered owner of the subject
property and was not the one who signed the questioned contract. Thus, there
can be no denying the fact that the signature on the Deed of Real Estate
Mortgage was not affixed or signed by the same person. 41
In fact, during pre-trial, both parties agreed that it was not Bernardo who signed
as the mortgagor in the Deed of REM. It was only an impostor — representing himself
as Bernardo — who mortgaged the property. This impostor is not only without rightful
ownership on the mortgaged property, he also has no Torrens title in his own name
involving said property.
Simply put, for being a forged instrument, the Deed of REM is a nullity and
conveys no title. 42
Second, Evelyn cannot invoke the protection given to a mortgagee in good faith.
As discussed, the title to the subject property remained registered in the name of
Bernardo. It was not transferred to the impostor's name when Evelyn transacted with
the latter. Hence, the principle of mortgagee in good faith nds no application;
correspondingly, Evelyn cannot not seek refuge therefrom. IAETDc

Third, even assuming that the impostor has caused the property to be titled in his
name as if he had rightful ownership thereof, Evelyn would still not be deemed a
mortgagee in good faith. This is because Evelyn did not take the necessary steps to
determine any defect in the title of the alleged owner of the mortgaged property. She
deliberately ignored pertinent facts that should have aroused suspicion on the veracity
of the title of the mortgagor "Bernardo." 43
One, while "Bernardo" introduced himself to Evelyn as the owner of the property,
he did not present any proof of identi cation. To recall, he only exhibited his community
tax certi cate and a picture when he introduced himself to Evelyn. "Bernardo's" failure
to suf ciently establish his identity should have aroused suspicion on the part of Evelyn
whether the person she was transacting with is the real Bernardo or a mere impostor.
She should have investigated further and veri ed the identity of "Bernardo" but she
failed to do so. She even admitted that she did not at all ask for any identi cation card
from "Bernardo."
Two, Evelyn also ignored the fact that "Bernardo" did not participate in the
negotiations/transactions leading to the execution of the Deed of REM. Notably, no
power of attorney was given to Editha who supposedly transacted in behalf of
Bernardo. Despite "Bernardo's" presence during the ocular inspection of the property
and execution of the mortgage contract, it was Editha who transacted with Evelyn. As
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 gathered from the testimony of Corazon, after the execution of the deed, Evelyn handed
the loan amount of P300,000.00 to Editha, not to "Bernardo," and it was Editha who
handed to Evelyn the owner's copy of TCT No. T-361747.
Three, Evelyn likewise failed to ascertain the supposed title of "Bernardo" over
the property. Evelyn admitted that during the ocular inspection, she remained in the
vehicle. She did not inquire from the subject property's occupant or from the occupants
of the surrounding properties if they knew "Bernardo" and whether or not he owned the
subject property.
Notably, the RTC misapprehended certain facts when it held that Evelyn
inspected the property and met Jovannie during the inspection. By her own account,
Evelyn clari ed that she met Jovannie for the rst time only when the latter visited her
house to inform her that an impostor mortgaged Bernardo's property to her.
Four, the Court observes that Evelyn hastily granted the loan and entered into the
mortgage contract. As also testi ed by Corazon, a day after the supposed ocular
inspection on the property, Evelyn and "Bernardo" executed the Deed of REM even
without Evelyn verifying the identity of the property's occupant as well as the right of
the mortgagor, if any, over the same. Indeed, where the mortgagee acted with haste in
granting the loan, without rst determining the ownership of the property being
mortgaged, the mortgagee cannot be considered as an innocent mortgagee in good
faith. 44
Thus, considering that the mortgage contract was forged as it was entered into
by Evelyn with an impostor, the registered owner of the property, Bernardo,
correspondingly did not lose his title thereon, and Evelyn did not acquire any right or
title on the property and cannot invoke that she is a mortgagee in good faith and for
value. 45 DcHSEa

WHEREFORE , the Petition is DENIED . Accordingly, the October 22, 2012

Decision of the Court of Appeals in CA-G.R. CV No. 95046 is AFFIRMED .
SO ORDERED.
Carpio, Brion and Leonen, JJ., concur.
Mendoza, * J., is on official leave.
Footnotes
* On official leave.

1. CA rollo, pp. 70-81; penned by Associate Justice Normandie B. Pizarro and concurred in by
Associate Justices Remedios A. Salazar-Fernardo and Manuel M. Barrios.

2. Records, pp. 124-133; penned by Judge Manuel A. Mayo.

3. Id. at 144.
4. Id. at 6.
5. Spelled in some parts of the records as Giovannie, Giovani, Jiovannie or Jovanie.
6. Records, pp. 8-9.

7. Id. at 1-5.
8. Id. at 16-19.
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 9. Id. at 33-34.

10. TSN, January 9, 2006, pp. 17, 20-A.

11. Id. at 25.
12. Id. at 30-31, 33-35, 37-39.
13. TSN, July 3, 2007, p. 5.
14. TSN, August 15, 2005, p. 18.

15. TSN, October 3, 2005, p. 36.

16. TSN, August 15, 2005, pp. 22-25.
17. Id. at 25.
18. TSN, October 3, 2005, pp. 13, 29.

19. TSN, August 15, 2005, pp. 12-16.

20. TSN, December 4, 2006, pp. 11-13.
21. Id. at 22-23.
22. Id. at 15-18.
23. Id. at 56-59.

24. Id. at 21-22.

25. Id. at 59.
26. Id. at 60-64.
27. TSN, February 16, 2009, pp. 5-6.
28. Id. at 9-14.

29. Id. at 17.

30. CA rollo, p. 80.
31. Id. at 77.
32. Id. at 78.

33. Rollo, p. 8.
34. Claudio v. Spouses Saraza, G.R. No. 213286, August 20, 2015.
35. Ligtas v. People, G.R. No. 200571, August 17, 2015, 767 SCRA 1, 15.
36. Heirs of Gregorio Lopez v. Development Bank of the Philippines , G.R. 193551, November
19, 2014, 741 SCRA 153, 166-167.
37. Claudio v. Spouses Saraza, supra note 34; bold-facing omitted.
38. Republic v. Spouses de Guzman, 383 Phil. 151, 162 (2000).

39. Claudio v. Spouses Saraza, supra note 34.

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 40. See Ereña v. Querrer-Kauffman, 525 Phil. 381, 400 (2006).
41. CA rollo, p. 76.

42. Claudio v. Spouses Saraza, supra note 34.

43. Id.
44. See Land Bank of the Philippines v. Poblete, 704 Phil. 610, 623-624 (2013).
45. Ereña v. Querrer-Kauffman, supra note 40 at 403.

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