Flordeliza H. Cabuhat v. The Honorable Court of Appeals

Summary

This case involves a property dispute where Mary Ann Arede fraudulently obtained a reconstituted title to property originally registered in her name by her adoptive mother Mercedes Arede, then mortgaged it to Flordeliza Cabuhat despite having previously sold it back to Mercedes. The Supreme Court ruled in favor of the innocent mortgagee Cabuhat, holding that under the Torrens system, mortgagees who rely in good faith on clean certificates of title are protected even if the mortgagor's title was defectively obtained. The Court applied the exception to Article 2085 of the Civil Code for registered properties, emphasizing that between two innocent parties, the one who made the wrong possible (Mercedes, who failed to register her purchase) should bear the loss. This decision reinforces the integrity and reliability of the Torrens land registration system by protecting innocent mortgagees for value.