Florentino W. Leong And Elena Leong, Et Al. vs. Edna See G.R. No. 194077 December 3, 2014
FACTS:
The spouses Florentino Leong and Carmelita Leong used to own the property located at No. 539–41 Z.P. De Guzman Street, Quiapo, Manila.
Petitioner Elena Leong (Elena) is Florentino's sister-in-law. She had stayed with her in-laws on the property rental-free for over two decades until the building they lived in was razed by fire. They then constructed makeshift houses, and the rental-free arrangement continued.
Florentino and Carmelita immigrated to the United States and eventually had their marriage dissolved in Illinois. A provision in their marital settlement agreement states that ―Florentino shall convey and quitclaim all of his right, title and interest in and to 540 De Guzman Street, Manila, Philippines . . . to Carmelita.‖
On November 14, 1996, Carmelita sold the land to Edna. In lieu of Florentino's signature of conformity in the deed of absolute sale, Carmelita presented to Edna and her father, witness Ernesto See, a waiver of interest notarized on March 11, 1996 in Illinois. In this waiver, Florentino reiterated his quitclaim over his right, title, and interest to the land. Consequently, the land‘s title, covered by TCT No. 231105, was transferred to Edna's name.
On April 1, 1997, Edna filed a complaint for recovery of possession against Elena and the other relatives of the Leong ex-spouses. The complaint alleged that in 1995 after the fire had razed the building on the land, Elena erected makeshift houses on the land without Carmelita‘s knowledge or consent.
On April 23, 1997, Florentino filed a complaint for declaration of nullity of contract, title, and damages against Carmelita Leong, Edna C. See, and the
Manila Register of Deeds, alleging that the sale was without his consent.
The two cases were consolidated.
The Regional Trial Court, in its decision ruled in favor of Edna which was affirmed by CA.
Thus, a petition for review was filed.
Petitioners contend that the principle of indefeasibility of Torrens titles does not apply when fraud exists, and respondent was a buyer in bad faith.
Respondent knew at the time of the purchase that Elena had actual possession of the property, thus, she should have made inquiries on their right to the property.
Petitioners argue the conjugal nature of the property, evidenced by the title in the names of Florentino and Carmelita Leong, and the waiver relied upon by respondent. They cite Articles 3 and 15 of the Civil Code, and Articles 87 and 134of the Family Code, to support their contention that respondent should have demanded Florentino‘s consent to the sale. Petitioners submit that Florentino‘s waiver is void since donations between spouses are void.
Petitioners argue that respondent should bear the loss of her negligence in purchasing the property without Florentino‘s consent. They cite at length Aggabao v. Parulan, Jr. to support their argument that respondent failed to exercise the required due diligence in the purchase of the property.
Consequently, petitioners submit that the lower courts erred in ruling that respondent was entitled to possession of the property.
Respondent counters that only questions of law can be raised in a petition for review on certiorari, and petitioners raise purely factual questions.
In any event, the lower courts correctly found that respondent is a purchaser in good faith for value who exercised the necessary diligence in purchasing the property.
ISSUE:
Whether or not the CA erred in its decision affirming in to the trial court's decision granting Edna possession and ownership over the land upon finding her to be a buyer in good faith and for value, and resolution denying reconsideration.
RULING:
Petition lacks merit.
The Torrens system was adopted to ―obviate possible conflicts of title by giving the public the right to rely upon the face of the Torrens certificate and to dispense, as a rule, with the necessity of inquiring further.‖
One need not inquire beyond the four corners of the certificate of title when dealing with registered property. Section 44 of Presidential Decree No.
1529 known as the Property Registration Decree recognizes innocent purchasers in good faith for value and their right to rely on a clean title. An innocent purchaser for value refers to someone who ―buys the property of another without notice that some other person has a right to or interest in it, and who pays a full and fair price at the time of the purchase or before receiving any notice of another person‘s claim.‖ One claiming to be an innocent purchaser for value has the burden of proving such status.
Generally, factual findings of lower courts are deemed conclusive and binding upon this court. No cogent reason exists to overturn the findings of both lower courts.
Even assuming the procurement of title was tainted with fraud and misrepresentation, ―such defective title may still be the source of a completely legal and valid title in the hands of an innocent purchaser for value.‖
Respondent, an innocent purchaser in good faith and for value with title in her name, has a better right to the property than Elena. Elena‘s possession was neither adverse to nor in the concept of owner.
Barstowe Phils vs Republic G.R. No. 133110 Mach 28, 2007
The Republic may not go after innocent purchasers of lots of a subdivision owner (who is guilty of securing titles fraudulently) who looked into TCTs of developer and found nothing to raise doubts as to their validity and authenticity.
FACTS:
This case involves the conflicting titles to the same parcels of land (subject lots) of petitioner Barstowe Philippines Corporation (BPC) and the respondent Republic of the Philippines (Republic). Due to the fire that gutted the Office of the Quezon City Register of Deeds on 11 June 1988 and destroyed many certificates of title kept therein, Antonio sought the administrative reconstitution of the original copies and owner‘s duplicate copies of 2 TCTs. The Republic applied for administrative reconstitution of the same with the LRA. It was then that the Republic came to know that another party had applied for reconstitution which also covered the same lots. The RTC rendered judgment declaring both BPC and Republic as buyers in good faith. But it upheld BPC‘s rights over the republic since it was registered earlier. The Ca ruled for the Republic.
ISSUE:
Who between BPC and the Republic has a better title over the subject lots?
HELD:
Ultimately, this Court is called upon to determine which party now has superior title to the subject lots: the Republic, BPC, the intervenors Abesamis, Nicolas-Agbulos, and spouses Santiago, or Servando‘s heirs?
BPC, the intervenors Abesamis, Nicolas-Agbulos, spouses Santiago, and Servando‘s heirs derived their title to the subject lots from Servando‘s TCTs No. 200629 and 200630. This Court then is compelled to look into the validity, authenticity, and existence of these two TCTs.
However, there is an absolute dearth of information and proof as to how Servando acquired ownership and came into possession of the subject lots.
Relying on the findings of the LRA, it was established that TCTs No. 200629 and 200630 were forged and spurious, their reconstitution was also attended with grave irregularities. BPC was unable to attack the authenticity and validity of the titles of the Republic to the subject lots, and could only interpose the defense that it was a buyer in good faith. It points out that it purchased the subject lots from Servando and registered the same, way before the titles of Servando were declared null by the RTC. Under Section 55 of the Land Registration Act, as amended by Section 53 of Presidential Decree No. 1529, an original owner of registered land may seek the annulment of a transfer thereof on the ground of fraud. However, such a remedy is without prejudice to the rights of any innocent holder for value with a certificate of title.
A purchaser in good faith and for value is one who buys the property of another, without notice that some other person has a right to or interest in such property, and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property.
It has been consistently ruled that a forged deed can legally be the root of a valid title when an innocent purchaser for value intervenes. A deed of sale
executed by an impostor without the authority of the owner of the land sold is a nullity, and registration will not validate what otherwise is an invalid document. However, where the certificate of title was already transferred from the name of the true owner to the forger and, while it remained that way, the land was subsequently sold to an innocent purchaser, the vendee had the right to rely upon what appeared in the certificate and, in the absence of anything to excite suspicion, was under no obligation to look beyond the certificate and investigate the title of the vendor appearing on the face of said certificate.
Now the question is whether BPC qualifies as an innocent purchaser for value which acquired valid titles to the subject lots, despite the fact that the titles of its predecessor-in-interest were found to be forged and spurious.
This Court finds in the negative.
BPC cannot really claim that it was a purchaser in good faith which relied upon the face of Servando‘s titles. It should be recalled that the Quezon City Register of Deeds caught fire on 11 June 1988. Presumably, the original copies of TCTs were burnt in the said fire. Servando‘s heirs sought the administrative reconstitution of the TCTs. If BPC bought the subject lots after TCTs were destroyed when the Quezon City Register of Deeds burned down, but before the said certificates were reconstituted, then on the face of what titles did BPC rely on before deciding to proceed with the purchase of the subject lots? There was no showing that there were surviving owner‘s duplicate copies of TCTs.
Without the original copies and owner‘s duplicate copies of TCTs, BPC had to rely on the reconstituted certificates. Under section 7 of Republic Act No.
26,57 "Reconstituted titles shall have the same validity and legal effect as the originals thereof" unless the reconstitution was made extrajudicially.58 In this case, TCTs were reconstituted administratively, hence, extrajudicially. In contrast to the judicial reconstitution of a lost certificate
of title which is in rem, the administrative reconstitution is essentially ex-parte and without notice.59 The reconstituted certificates of title do not share the same indefeasible character of the original certificates of title for the following reason –
x x x the nature of a reconstituted Transfer Certificate of Title of registered land is similar to that of a second Owner's Duplicate Transfer Certificate of Title. Both are issued, after the proper proceedings, on the representation of the registered owner that the original of the said TCT or the original of the Owner's Duplicate TCT, respectively, was lost and could not be located or found despite diligent efforts exerted for that purpose. Both, therefore, are subsequent copies of the originals thereof. A cursory examination of these subsequent copies would show that they are not the originals. Anyone dealing with such copies are put on notice of such fact and thus warned to be extra-careful. x x x.
The fact that the TCTs were reconstituted should have alerted BPC and its officers to conduct an inquiry or investigation as might be necessary to acquaint themselves with the defects in the titles of Servando. This Court cannot declare BPC an innocent purchaser for value, and it acquired no better titles to the subject lots than its predecessors-in-interest, Servando and Antonio.
The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. However, like all general rules, this is also subject to exceptions, viz:
"Estoppels against the public are little favored. They should not be invoked except in rare and unusual circumstances, and may not be invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with circumspection and should be
applied only in those special cases where the interests of justice clearly require it. Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations x x x the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals."
x x x x
Significantly, the other private respondents – Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya – bought such "expanded" lots in good faith, relying on the clean certificates of St. Jude, which had no notice of any flaw in them either. It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to the innocent purchasers for value.
Abrigo vs. De Vera G.R. No. 154409 June 21, 2004
FACTS:
•Villafania sold a house and lot located Pangasinan and Tigno-Salazar and Cave-Go covered by a tax declaration. ‗Unknown, however to Tigno-Salazar and a Cave-Go, Villafania obtained a free patent over the parcel of land involved. The said free patent was later on cancelled by a TCT.
•On Oct 16, 1997, Tigno-Salazar and Cave-Go, sold the house and lot to the Spouses Abrigo.
•On Oct 23, 1997, Villafania sold the same house and lot to de Vera. De Vera registered the sale and as a consequence a TCT was issued in her name.
•De Vera filed an action for Forcible Entry and Damages against Spouses Abrigo before the MTC.
•Spouses Abrigo filed a case with the RTC for the annulment of documents, injunction, preliminary injunction, restraining order and damages Villafania.
•The parties submitted a Motion for Dismissal in view of their agreement in the instant (RTC) case that neither of them can physically take possession of the property in question until the instant case is terminated. Hence the ejectment case was dismissed.
•The RTC rendered judgment approving the Compromise Agreement submitted by the parties. In the said Decision, Villafania was given one year from the date of the Compromise Agreement to buy back the house and lot, and failure to do so would mean that the previous sale in favor of Tigno-Salazar and Cave-Go shall remain valid and binding and the plaintiff shall voluntarily vacate the premises without need of any demand. Villafania failed to buy back the house and lot, so the [vendees] declared the lot in their name
•The RTC rendered the assailed Decision awarding the properties to Spouses Abrigo as well as damages. Moreover, Villafania was ordered to pay [petitioners and private respondent] damages and attorney‘s fees.
•Not contented with the assailed Decision, both parties [appealed to the CA].
•In its original Decision, the CA held that a void title could not give rise to a valid one and hence dismissed the appeal of Private Respondent de Vera.
Since Villafania had already transferred ownership to Rosenda Tigno-Salazar and Rosita Cave-Go, the subsequent sale to De Vera was deemed void. The CA also dismissed the appeal of Petitioner-Spouses Abrigo and
found no sufficient basis to award them moral and exemplary damages and attorney‘s fees.
•On reconsideration found Respondent De Vera to be a purchaser in good faith and for value. The appellate court ruled that she had relied in good faith on the Torrens title of her vendor and must thus be protected.
•Hence, this Petition.
ISSUE:
•Who between petitioner-spouses and respondent has a better right to the property.
HELD:
•The petition is denied, and the assailed decision affirmed. The present case involves what in legal contemplation was a double sale. Gloria Villafania first sold the disputed property to Tigno-Salazar and Cave-Go, from whom petitioners, in turn, derived their right. Subsequently a second sale was executed by Villafania with Respondent de Vera.
•Article 1544 of the Civil Code states the law on double sale thus:
―Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.
―Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
―Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.‖
There is no ambiguity in the application of this law with respect to lands registered under the Torrens system.
•In the instant case, both Petitioners Abrigo and respondent registered the sale of the property. Since neither petitioners nor their predecessors (Tigno-Salazar and Cave-Go) knew that the property was covered by the Torrens system, they registered their respective sales under Act 3344 For her part, respondent registered the transaction under the Torrens system because, during the sale, Villafania had presented the transfer certificate of title (TCT) covering the property.
•Soriano v. Heirs of Magali held that registration must be done in the proper registry in order to bind the land. Since the property in dispute in the present case was already registered under the Torrens system, petitioners‘
registration of the sale under Act 3344 was not effective for purposes of Article 1544 of the Civil Code.
•More recently, in Naawan Community Rural Bank v. Court of Appeals, the Court upheld the right of a party who had registered the sale of land under the Property Registration Decree, as opposed to another who had registered a deed of final conveyance under Act 3344. In that case, the ―priority in time‖ principle was not applied, because the land was already covered by the Torrens system at the time the conveyance was registered under Act 3344. For the same reason, inasmuch as the registration of the sale to Respondent De Vera under the Torrens system was done in good faith, this sale must be upheld over the sale registered under Act 3344 to Petitioner-Spouses Abrigo.
NOTES:
•The principle in Article 1544 of the Civil Code is in full accord with Section 51 of PD 1529 which provides that:
No deed, mortgage, lease or other voluntary instrument — except a will — purporting to convey or affect registered land shall take effect as a conveyance or bind the land until its registration. Thus, if the sale is not registered, it is binding only between the seller and the buyer but it does not affect innocent third persons.
•Radiowealth Finance Co. v. Palileo explained the difference in the rules of
•Radiowealth Finance Co. v. Palileo explained the difference in the rules of