Who owns the car?

Good day..my friend bought a car from an authorized buy/sell shop (call him MR.X)thru their in-house loan last Aug.1, 2010. MR.X showed to my friend the original certificate of registrations and other impt. documents. My friend noticed that the CR is encumbered tho with release of chattel. MR.X promised to transfer the ownership on his own name to remove the encumbrance which he showed to my friend the new CR on Aug. 18, 2010. My friend is paying the car for 12 months (in-house mortgaged), and he was also obliged to get a comprehensive insurance which he did. However, when my friend was planning to just pay in full the total amount, MR.X's secretary couldn't show him the original papers. Upon invistigating, my friend learned that the same car he purchased was mortgaged by MR.X in a financing last Aug.20, 2010. The car is still in my friends possesion. What he has right now is the notarized contract/deed of conditional sale signed by MR.X. Obviously, my friend doesn't have the original CR because he bought that in in-house loan. The original CR is in the financing. MR. X is hiding and worst, the shop is already closed..My question is, who has the rights on the car? How come the financing approved the loan of MR.X without seeing/checking the car physically? Otherwise, they will able to see that the car is no longer in MR.X's shop but its in my friend's..

your friend owes the car. mr. x had no right to mortgage the car because he had no rights over it.

what i would try to see is whether the loan and the car payments are compatible, and work out some form of arrangement of paying for the Mr. x's loan.

attyLLL,
Just to confirm, so attyLLL, my friend owns the car even if the new CR was transferred on MR.X's name and currently in the financing's custody? This was done after my friend gave the downpayment required and my friend received the notarized contract/deed of conditional sale. When my friend saw this, MR.X explained to him he transferred the ownership on his own so my friend won't worry anymore about the encumbrance..
My friend, after giving the dp, has a standing loan amount of 200k. But as of now, his balance is 100k. Mr.X mortgaged the same car for 400k and my friend thinks Mr. X balance as of now in the financing is 280K..
How can my friend get the original CR from the financing? I'm sure the financing will not release the CR unless my friend will pay 240K. But my friend likewise will not agree to pay that big amount considering that his balance is just 100k... What are we going to do? Do we need an atty or can the LTO help us? ty again..

the legal presumption is that mr. x owns the car because it is registered in his name. the mortgage is also presumed to be valid, particularly if it is registered to the financing company(probably not). if your friend does not do anything about it, the company will eventually foreclose on the mortgage if mr. x is not paying, and the car will be repossessed

I recommend that he takes action immediately by informing the financing company that he is the owner of the car and that he was the owner of the car even before it was mortgaged.

Thanks attyLLL.. your website helps a lot to many "misinformed" people with regards to legal matters..