4 fudot v cattleya

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CARMELITA FUDOT, Petitioner, versus CATTLEYA LAND, INC., Respondent. 2007-09-13 | G.R. No. 171008 D E C I S I O N Tinga, J.: For resolution is a petition that seeks to nullify the Decision[1] and Resolution[2] of the Court of Appeals dated 28 April 2005 and 11 January 2006, respectively, in C.A.-G.R. CV No. 73025 which declared respondent as having a better right over a parcel of land located in Doljo, Panglao, Bohol. The facts, as culled from the records, follow. Sometime in July 1992, Cattleya Land, Inc. (hereinafter referred to as respondent) asked someone to check, on its behalf, the titles of nine (9) lots, the subject land included, which it intended to buy from the spouses Troadio and Asuncion Tecson. Finding no defect on the titles, respondent purchased the nine lots through a Deed of Conditional Sale on 6 November 1992. Subsequently, on 30 August 1993, respondent and the Tecsons executed a Deed of Absolute Sale over the same properties. The Deed of Conditional Sale and the Deed of Absolute Sale were registered with the Register of Deeds on 06 November 1992 and 04 October 1993, respectively.[3] The Register of Deeds, Atty. Narciso dela Serna, refused to actually annotate the deed of sale on the titles because of the existing notice of attachment in connection with Civil Case No. 3399 pending before the Regional Trial Court of Bohol.[4] The attachment was eventually cancelled by virtue of a compromise agreement between the Tecsons and their attaching creditor which was brokered by respondent. Titles to six (6) of the nine (9) lots were issued, but the Register of Deeds refused to issue titles to the remaining three (3) lots , because the titles covering the same were still unaccounted for. On 23 January 1995, petitioner presented for registration before the Register of Deeds the owner's copy of the title of the subject property, together with the deed of sale purportedly executed by the Tecsons in favor of petitioner on 19 December 1986. On the following day, respondent sent a letter of protest/opposition to petitioner's application. Much to its surprise, respondent learned that the Register of Deeds had already registered the deed of sale in favor of petitioner and issued a new title in her name.[5] On 5 May 1995, respondent filed its Complaint[6] for Quieting Of Title &/Or Recovery Of Ownership, Cancellation Of Title With Damages before the Regional Trial Court of Tagbilaran City.[7] On 26 June 1995, Asuncion filed a complaint-in-intervention, claiming that she never signed any deed of sale covering any part of their conjugal property in favor of petitioner. She averred that her signature in petitioner's deed of sale was forged thus, said deed should be declared null and void.[8] She also claimed that she has discovered only recently that there was an amorous relationship between her husband and petitioner.[9] Petitioner, for her part, alleged in her answer[10] that the spouses Tecson had sold to her the subject property for P20,000.00 and delivered to her the owner's copy of the title on 26 December 1986. She claims that she subsequently presented the said title to the Register of Deeds but the latter refused to register the same because the property was still under attachment. On 31 October 2001, the trial court rendered its decision:[11] (i) quieting the title or ownership of the subject land in favor of respondent; (ii) declaring the deed of sale between petitioner and spouses

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  • CARMELITA FUDOT, Petitioner, versus CATTLEYA LAND, INC., Respondent.

    2007-09-13 | G.R. No. 171008

    D E C I S I O N

    Tinga, J.:

    For resolution is a petition that seeks to nullify the Decision[1] and Resolution[2] of the Court of Appealsdated 28 April 2005 and 11 January 2006, respectively, in C.A.-G.R. CV No. 73025 which declaredrespondent as having a better right over a parcel of land located in Doljo, Panglao, Bohol.

    The facts, as culled from the records, follow.

    Sometime in July 1992, Cattleya Land, Inc. (hereinafter referred to as respondent) asked someone tocheck, on its behalf, the titles of nine (9) lots, the subject land included, which it intended to buy from thespouses Troadio and Asuncion Tecson. Finding no defect on the titles, respondent purchased the ninelots through a Deed of Conditional Sale on 6 November 1992. Subsequently, on 30 August 1993,respondent and the Tecsons executed a Deed of Absolute Sale over the same properties. The Deed ofConditional Sale and the Deed of Absolute Sale were registered with the Register of Deeds on 06November 1992 and 04 October 1993, respectively.[3] The Register of Deeds, Atty. Narciso dela Serna,refused to actually annotate the deed of sale on the titles because of the existing notice of attachment inconnection with Civil Case No. 3399 pending before the Regional Trial Court of Bohol.[4] The attachmentwas eventually cancelled by virtue of a compromise agreement between the Tecsons and their attachingcreditor which was brokered by respondent. Titles to six (6) of the nine (9) lots were issued, but theRegister of Deeds refused to issue titles to the remaining three (3) lots , because the titles covering thesame were still unaccounted for.

    On 23 January 1995, petitioner presented for registration before the Register of Deeds the owner's copyof the title of the subject property, together with the deed of sale purportedly executed by the Tecsons infavor of petitioner on 19 December 1986. On the following day, respondent sent a letter ofprotest/opposition to petitioner's application. Much to its surprise, respondent learned that the Register ofDeeds had already registered the deed of sale in favor of petitioner and issued a new title in her name.[5]

    On 5 May 1995, respondent filed its Complaint[6] for Quieting Of Title &/Or Recovery Of Ownership,Cancellation Of Title With Damages before the Regional Trial Court of Tagbilaran City.[7] On 26 June1995, Asuncion filed a complaint-in-intervention, claiming that she never signed any deed of salecovering any part of their conjugal property in favor of petitioner. She averred that her signature inpetitioner's deed of sale was forged thus, said deed should be declared null and void.[8] She alsoclaimed that she has discovered only recently that there was an amorous relationship between herhusband and petitioner.[9]

    Petitioner, for her part, alleged in her answer[10] that the spouses Tecson had sold to her the subjectproperty for P20,000.00 and delivered to her the owner's copy of the title on 26 December 1986. Sheclaims that she subsequently presented the said title to the Register of Deeds but the latter refused toregister the same because the property was still under attachment.

    On 31 October 2001, the trial court rendered its decision:[11] (i) quieting the title or ownership of thesubject land in favor of respondent; (ii) declaring the deed of sale between petitioner and spouses

  • Tecson invalid; (iii) ordering the registration of the subject land in favor of respondent; (iv) dismissingrespondent's claim for damages against the Register of Deeds for insufficiency of evidence; (v)dismissing Asuncion's claim for damages against petitioner for lack of factual basis; and (vi) dismissingpetitioner's counterclaim for lack of the required preponderance of evidence.[12]

    According to the trial court, respondent had recorded in good faith the deed of sale in its favor ahead ofpetitioner. Moreover, based on Asuncion's convincing and unrebutted testimony, the trial court concludedthat the purported signature of Asuncion in the deed of sale in favor of petitioner was forged, therebyrendering the sale void.[13]

    Petitioner sought recourse to the Court of Appeals, arguing in the main that the rule on double sale wasapplicable to the case. The appellate court, however, dismissed her appeal, holding that there was nodouble sale because the alleged sale to petitioner was null and void in view of the forgery of Asuncion'spurported signature in the deed. The appellate court noted that petitioner failed to rebut Asuncion'stestimony despite opportunities to do so.[14] Moreover, even if there was double sale, according to theappellate court, respondent's claim would still prevail since it was able to register the second sale in itsfavor in good faith, had made inquiries before it purchased the lots, and was informed that the titles werefree from encumbrance except the attachment on the property due to Civil Case No. 3399.[15]

    Petitioner sought reconsideration of the decision but the Court of Appeals denied her motion forreconsideration for lack of merit.[16]

    Petitioner thus presents before this Court the following issues for resolution:

    I.

    BETWEEN 2 BUYERS OF REGISTERED LAND, WHO HAS THE BETTER RIGHT-IS IT THE FIRSTBUYER WHO WAS GIVEN THE OWNER'S DUPLICATE TCT TOGETHER WITH A DEED OF SALE IN1986, OR THE SECOND BUYER IN 1992 WITH ONLY A DEED OF SALE.

    II.

    IS A BUYER OF REGISTERED LAND WHO DID NOT DEMAND OR REQUIRE THE DELIVERY OFTHE OWNER'S DUPLICATE TCT A BUYER IN GOOD FAITH.

    III.

    II. IN SUBSEQUENT REGISTRATION OF REGISTERED LANDS, AS BY SALE, WHICH LAW SHALLGOVERN, ARTICLE 1455 OF CIVIL CODE OR P.D. 1529 OR TORRENS SYSTEM.[17]

    Petitioner avers that she was the first buyer in good faith and even had in her possession the owner'scopy of the title so much so that she was able to register the deed of sale in her favor and caused theissuance of a new title in her name. She argues that the presentation and surrender of the deed of saleand the owner's copy carried with it the "conclusive authority of Asuncion Tecson" which cannot beoverturned by the latter's oral deposition.[18]

  • Petitioner claims that respondent did not demand nor require delivery of the owner's duplicate title fromthe spouses Tecson, neither did it investigate the circumstances surrounding the absence of the title.These indicate respondent's knowledge of a defect in the title of the spouses and, thus, petitionerconcludes that respondent was not a buyer in good faith.[19]

    Finally, petitioner insists that the applicable law in this case is P.D. No. 1529, a special law dealingprecisely with the registration of registered lands or any subsequent sale thereof, and not Article 1544 ofthe Civil Code which deals with immovable property not covered by the Torrens System.[20]

    Respondent points out, on one hand, that petitioner's first two issues which present an inquiry on whohas a better right or which one is a buyer in good faith, are questions of fact not proper in a petition forreview. The third issue, on the other hand, is ostensibly a question of law which had been unsuccessfullyraised below.[21]

    Respondent maintains that there is no room to speak of petitioner as a buyer in good faith since she wasnever a buyer in the first place, as her claim is based on a null and void deed of sale, so the court a quofound. Respondent also asserts that its status as a buyer in good faith was established and confirmed inthe proceedings before the two courts below.[22]

    Lastly, respondent argues that P.D. No. 1529 finds no application in the instant case. The "production ofthe owner's duplicate certificate x x x being conclusive authority from the registered owner" is only trueas between the registration applicant and the register of deeds concerned, but never to third parties.Such conclusive authority, respondent adds, is "only for the Register of Deeds to enter a new certificateor to make a memorandum of registration in accordance with such instrument." It cannot cure the fataldefect that the instrument from which such registration was effected is null and void ab initio, respondentconcludes.[23]

    The petition is bereft of merit.

    Petitioner's arguments, which rest on the assumption that there was a double sale, must fail.

    In the first place, there is no double sale to speak of. Art. 1544 of the Civil Code,[24] which provides therule on double sale, applies only to a situation where the same property is validly sold to differentvendees. In this case, there is only one sale to advert to, that between the spouses Tecson andrespondent.

    In Remalante v. Tibe,[25] this Court ruled that the Civil Law provision on double sale is not applicablewhere there is only one valid sale, the previous sale having been found to be fraudulent. Likewise, inEspiritu and Apostol v. Valerio,[26] where the same parcel of land was purportedly sold to two differentparties, the Court held that despite the fact that one deed of sale was registered ahead of the other, Art.1544 of the Civil Code will not apply where said deed is found to be a forgery, the result of this being thatthe right of the other vendee should prevail.

    The trial court declared that the sale between the spouses Tecson and petitioner is invalid, as it bearsthe forged signature of Asuncion. Said finding is based on the unrebutted testimony of Asuncion and thetrial court's visual analysis and comparison of the signatures in her Complaint-in-Intervention and thepurported deed of sale. This finding was upheld by the Court of Appeals, as it ruled that the purportedsale in petitioner's favor is null and void, taking into account Asuncion's unrefuted deposition. Inparticular, the Court of Appeals noted petitioner's failure to attend the taking of the oral deposition and togive written interrogatories. In short, she did not take the necessary steps to rebut Asuncion's definitiveassertion.

  • The congruence of the wills of the spouses is essential for the valid disposition of conjugal property.[27]Thus, under Article 166 of the Civil Code[28] which was still in effect on 19 December 1986 when thedeed of sale was purportedly executed, the husband cannot generally alienate or encumber any realproperty of the conjugal partnership without the wife's consent.

    In this case, following Article 173[29] of the Civil Code, on 26 June 1995, or eight and a half years (8 )after the purported sale to petitioner, Asuncion filed her Complaint-in-Intervention seeking thenullification thereof, and while her marriage with Troadio was still subsisting. Both the Court of Appealsand the trial court found Asuncion's signature in the deed of sale to have been forged, and consequently,the deed of sale void for lack of marital consent. We find no reason to disturb the findings of the trialcourt and the Court of Appeals. Findings of fact of lower courts are deemed conclusive and binding uponthe Supreme Court subject to certain exceptions,[30] none of which are present in this case. Besides, ithas long been recognized in our jurisprudence that a forged deed is a nullity and conveys no title.[31]

    Petitioner argues she has a better right over the property in question, as the holder of and the first one topresent, the owner's copy of the title for the issuance of a new TCT. The Court is not persuaded.

    The act of registration does not validate petitioner's otherwise void contract. Registration is a mereministerial act by which a deed, contract, or instrument is sought to be inscribed in the records of theOffice of the Register of Deeds and annotated at the back of the certificate of title covering the landsubject of the deed, contract, or instrument. While it operates as a notice of the deed, contract, orinstrument to others, it does not add to its validity nor converts an invalid instrument into a valid one asbetween the parties,[32] nor amounts to a declaration by the state that the instrument is a valid andsubsisting interest in the land.[33] The registration of petitioner's void deed is not an impediment to adeclaration by the courts of its invalidity.

    Even assuming that there was double sale in this case, petitioner would still not prevail. The pertinentportion of Art. 1544 provides:

    Art. 1544. x x x.

    Should it be immovable property, the ownership shall belong to the person acquiring it who in good faithfirst recorded it in the Registry of Property.

    x x x x.

    In interpreting this provision, the Court declared that the governing principle is primus tempore, potiorjure (first in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot defeatthe first buyer's rights, except where the second buyer registers in good faith the second sale ahead ofthe first as provided by the aforequoted provision of the Civil Code. Such knowledge of the first buyerdoes not bar him from availing of his rights under the law, among them to register first his purchase asagainst the second buyer. However, knowledge gained by the second buyer of the first sale defeats hisrights even if he is first to register the second sale, since such knowledge taints his prior registration withbad faith.[34] It is thus essential, to merit the protection of Art. 1544, second paragraph, that the secondrealty buyer must act in good faith in registering his deed of sale.[35]

    We agree with the trial court and the Court of Appeals that respondent was a buyer in good faith, havingpurchased the nine (9) lots, including the subject lot, without any notice of a previous sale, but only anotice of attachment relative to a pending civil case. In fact, in its desire to finally have the title to the

  • properties transferred in its name, it persuaded the parties in the said case to settle the same so that thenotice of attachment could be cancelled.

    Relevant to the discussion are the following provisions of P.D. No. 1529:

    Sec. 51. Conveyance and other dealings by registered owner.- An owner of registered land may convey,mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may usesuch forms of deeds, mortgages, lease or other voluntary instruments as are sufficient in law. But nodeed, mortgage, lease or other voluntary instrument, except a will purporting to convey or affectregistered land shall take effect as a conveyance or bind the land, but shall operate only as a contractbetween the parties and as evidence of authority to the Register of Deeds to make Registration.

    The act of registration shall be the operative act to convey or affect the land insofar as thirdpersons are concerned, and in all cases under this Decree, the registration shall be made in the officeof the Register of Deeds for the province or city where the land lies. (Emphasis supplied)

    Sec. 52. Constructive notice upon registration.-Every conveyance, mortgage, lease, lien attachment,order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in theoffice of the Register of Deeds for the province or city where the land to which it relates lies, beconstructive notice to all persons from the time of such registering, filing or entering.

    It has been held that between two transactions concerning the same parcel of land, the registeredtransaction prevails over the earlier unregistered right. The act of registration operates to convey andaffect the registered land so that a bona fide purchaser of such land acquires good title as against a priortransferee, if such prior transfer was unrecorded.[36] As found by the courts a quo, respondent was ableto register its purchase ahead of petitioner. It will be recalled that respondent was able to register itsDeed of Conditional Sale with the Register of Deeds as early as 6 November 1992, and its Deed ofAbsolute Sale on 14 October 1993. On the other hand, petitioner was able to present for registration herdeed of sale and owner's copy of the title only on 23 January 1995, or almost nine years after thepurported sale. Why it took petitioner nine (9) years to present the deed and the owner's copy, she hadno credible explanation; but it is clear that when she finally did, she already had constructive notice ofthe deed of sale in respondent's favor. Without a doubt, respondent had acquired a better title to theproperty.

    Finally, anent petitioner's claim that P.D. No. 1529 applies to registered lands or any subsequent salethereof, while Art. 1544 of the Civil Code applies only to immovable property not covered by the TorrensSystem, suffice it to say that this quandary has already been answered by an eminent former member ofthis Court, Justice Jose Vitug, who explained that the registration contemplated under Art. 1544 hasbeen held to refer to registration under P.D. No. 1529, thus:

    The registration contemplated under Art. 1544 has been held to refer to registration under Act496 Land Registration Act (now PD 1529) which considers the act of registration as the operative actthat binds the land (see Mediante v. Rosabal, 1 O.G. [12] 900, Garcia v. Rosabal, 73 Phil 694). On landscovered by the Torrens System, the purchaser acquires such rights and interest as they appear in thecertificate of title, unaffected by any prior lien or encumbrance not noted therein. The purchaser is notrequired to explore farther than what the Torrens title, upon its face, indicates. The only exception iswhere the purchaser has actual knowledge of a flaw or defect in the title of the seller or of such liens orencumbrances which, as to him, is equivalent to registration (see Sec. 39, Act 496; Bernales v. IAC, G.R.

  • 75336, 18 October 1988; Hernandez vs. Sales, 69 Phil 744; Tajonera s. Court of Appeals, L-26677, 27March 1981) (Emphasis supplied)[37]

    WHEREFORE, the petition is DENIED. The assailed decision and resolution of the Court of Appeals areaffirmed. Costs against petitioner.

    SO ORDERED.

    DANTE O. TINGAAssociate Justice

    WE CONCUR:

    LEONARDO A. QUISUMBINGAssociate JusticeChairperson

    ANTONIO T. CARPIO CONCHITA CARPIO MORALES Associate Justice Associate Justice

    PRESBITERO J. VELASCO, JR.Associate Justice

    ATTESTATION

    I attest that the conclusions in the above Decision had been reached in consultation before the case wasassigned to the writer of the opinion of the Court's Division.

    LEONARDO A. QUISUMBING Associate JusticeChairperson, Second Division

    CERTIFICATION

    Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, it ishereby certified that the conclusions in the above Decision had been reached in consultation before thecase was assigned to the writer of the opinion of the Court's Division.

    REYNATO S. PUNO Chief Justice

  • [1]Rollo, pp. 22-32. Penned by Associate Justice Sesinando E. Villon, with Associate Justices Arsenio J.Magpale and Enrico A. Lanzanas, concurring.

    [2]Id. at 35.

    [3]Id. at 48-49. Vide Entry No. 83422 and Entry No. 87549, respectively of the Register of Deeds ofBohol.

    [4]Tantrade Corporation v. Troadio Tecson, et al.

    [5]Rollo, pp. 51-52.

    [6]Id. at 47-55.

    [7]Docketed as Civil Case No. 5781, Cattleya Land, Inc. v. Carmelita Fudot and Atty. Narciso dela Serna.The case was eventually raffled to Branch 4, 7th Judicial Region, Tagbilaran City.

    [8]Rollo, pp. 60-61. Asuncion Tecson's testimony was made through oral deposition; records, pp.497-510.

    [9]Records, Vol. 1, pp. 66-68; Complaint-in-Intervention; id. at 66.

    [10]Volume 1, pp. 35-41; Answer with Counter Claim and Motion to Dismiss, Records.

    [11]Rollo, pp. 57-64.

    [12]Id. at 64.

    [13]Id. at 62-63.

    [14]Id. at 22-32, 28-29; CA Decision dated 28 April 2005.

    [15]Rollo, p. 30.

    [16]Supra note 2; Resolution dated 11 January 2006.

    [17]Rollo, p. 12.

    [18]Id. at 14.

    [19]Id. at 15-16.

    [20]Id. at 12-17.

    [21]Id. at 67.

    [22]Id. at 70-71.

    [23]Id. at 72-73.

    [24]Civil Code, 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 shouldbe movable property.

    Should it be immovable property, the ownership shall belong to the person acquiring it who in good faithfirst 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 thepossession; and, in the absence thereof to the person who presents the oldest title, provided there isgood faith.

    [25]No. L-59514, 25 February 1988, 158 SCRA 138.

    [26]119 Phil. 69 (1963).

    [27]Abalos v. Macatangay, G.R. No. 155043, 30 September 2004, 439 SCRA 649, 661.

    [28]Article 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civilinterdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property ofthe conjugal partnership without the wife's consent. If she refuses unreasonably to give her consent, thecourt may compel her to grant the same.

    This article shall not apply to property acquired by the conjugal partnership before the effective date ofthis Code.

    [29]Art. 173. The wife may, during the marriage and within ten years from the transaction questioned,ask the courts for the annulment of any contract of the husband entered into without her consent, whensuch consent is required, or any act or contract of the husband which tends to defraud her or impair herinterest in the conjugal partnership property. Should the wife fail to exercise this right, she or her heirsafter the dissolution of the marriage, may demand the value of property fraudulently alienated by thehusband.

    [30]The exceptions are: when the findings are grounded on speculation, surmises or conjectures; whenthe inference made is manifestly mistaken, absurd or impossible; when there is grave abuse of discretionin the appreciation of facts; when the factual findings of the trial and appellate courts are conflicting;when the Court of Appeals, in making its findings, has gone beyond the issues of the case and suchfindings are contrary to the admissions of both appellant and appellee; when the judgment of theappellate court is premised on a misapprehension of facts or when it has failed to notice certain relevantfacts which, if properly considered, will justify a different conclusion; when the findings of fact areconclusions without citation of specific evidence upon which they are based; and when findings of fact ofthe Court of Appeals are premised on the absence of evidence but are contradicted by the evidence onrecord. Solid Homes, Inc. v. Court of Appeals, 341 Phil. 261, 275 (1997).

    [31]Salomon v. Intermediate Appellate Court, G.R. No. 70263, 14 May 1990, 185 SCRA 352.

    [32]Pascua v. Court of Appeals, 401 Phil. 350, 367 (2000).

    [33]Agricultural Credit Cooperative Assn. of Hinigaran v. Yusay, et al., 107 Phil 791 (1960).

    [34]Ulep v. Court of Appeals, G.R. No. 125254, 11 October 2005, 472 SCRA 241, 253 citing Uraca v.Court of Appeals, 278 SCRA 702 (1997).

  • [35]Coronel, et al. v. Court of Appeals, 331 Phil. 294, 321-322 (1996) citing Vitug, Compendium of CivilLaw and Jurisprudence, 1993 Ed., p. 604.

    [36]Macadangdang v. Martinez, G.R. No. 158682, 31 January 2005, 450 SCRA 363, 368.

    [37]Vitug, Compendium of Civil Law and Jurisprudence (1993), p. 604, cited in Abrigo v. De Vera, G.R.No. 154409, 21 June 2004, 432 SCRA 544, 557.