Forged Title Not Spotted by Register of Deeds Examiner: No Gross Negligence Without Bad Faith

A bank that lends millions on the strength of a forged land title cannot automatically shift its loss to the employees of the Register of Deeds. In Office of the Ombudsman v. Manalastas (G.R. No. 208264, July 27, 2016), the Supreme Court Second Division ruled that registration is a ministerial act, and the examiner who processes an apparently genuine title is entitled to the presumption of regularity in the performance of official duty.

The ruling matters beyond administrative law: it defines how far public officers must go in verifying documents, and reminds lending institutions that they bear the primary duty to check the identity of borrowers and the genuineness of collateral.

The Case Behind the Headlines

In September 2000, Marian Dy Tiu applied for a ₱20-million loan from BPI Family Savings Bank, offering her husband's property in San Juan City as collateral. The property was covered by Transfer Certificate of Title No. 1035 in the name of Paquito Tiu. BPI Family approved the loan, and on January 25, 2001, a person introduced as Paquito Tiu signed the mortgage documents.

BPI Family personnel brought the Real Estate Mortgage to the Register of Deeds of San Juan City for annotation. Rico Manalastas, the examiner, reviewed the documents, entered the mortgage in the registration book, and endorsed it to his superiors. The mortgage was duly annotated.

Days later, the real Paquito Tiu appeared at the bank and declared that the signatures were forged. The owner's duplicate copy of the title submitted by the borrowers was a fake — albeit one so accurate it passed as genuine.

The Ombudsman's Finding and the CA Reversal

BPI Family filed an administrative complaint for grave misconduct against the Register of Deeds, the examiner, and the acting deputy register of deeds. The O