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SECOND DIVISION

CARMELITA FUDOT, G.R. No. 171008


Petitioner,
Present:
QUISUMBING, J.,
- versus - Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
CATTLEYA LAND, INC., VELASCO, JR., JJ.
Respondent.
Promulgated:
September 13, 2007
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DECISION
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 owners 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
petitioners 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 ofTagbilaran 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 petitioners 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 owners
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 Tecson invalid; (iii) ordering the registration of the

subject land in favor of respondent; (iv) dismissing respondents claim for damages
against the Register of Deeds for insufficiency of evidence; (v) dismissing
Asuncions claim for damages against petitioner for lack of factual basis; and (vi)
dismissing petitioners 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 of petitioner. Moreover, based on Asuncions convincing and
unrebutted testimony, the trial court concluded that the purported signature
of Asuncion in the deed of sale in favor of petitioner was forged, thereby rendering
the sale void.[13]
Petitioner sought recourse to the Court of Appeals, arguing in the main that the rule
on double sale was applicable to the case. The appellate court, however, dismissed
her appeal, holding that there was no double sale because the alleged sale to
petitioner was null and void in view of the forgery of Asuncions purported
signature in the deed. The appellate court noted that petitioner failed to
rebut Asuncions testimony despite opportunities to do so.[14] Moreover, even if
there was double sale, according to the appellate court, respondents claim would
still prevail since it was able to register the second sale in its favor in good faith,
had made inquiries before it purchased the lots, and was informed that the titles
were free 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 for reconsideration 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 FIRST BUYER WHO WAS GIVEN
THE OWNERS DUPLICATE TCT TOGETHER WITH A DEED
OF SALE IN 1986, 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 OF THE OWNERS DUPLICATE
TCT A BUYER IN GOOD FAITH.
III.
II. IN SUBSEQUENT REGISTRATION OF REGISTERED
LANDS, AS BY SALE, WHICH LAW SHALL GOVERN,
ARTICLE 1455 OF CIVIL CODE OR P.D. 1529
OR TORRENSSYSTEM.[17]

Petitioner avers that she was the first buyer in good faith and even had in her
possession the owners copy of the title so much so that she was able to register the
deed of sale in her favor and caused the issuance of a new title in her name. She
argues that the presentation and surrender of the deed of sale and the owners copy
carried with it the conclusive authority of Asuncion Tecson which cannot be
overturned by the latters oral deposition.[18]
Petitioner claims that respondent did not demand nor require delivery of the
owners duplicate title from the spouses Tecson, neither did it investigate the
circumstances surrounding the absence of the title. These indicate respondents
knowledge of a defect in the title of the spouses and, thus, petitioner concludes 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 dealing precisely with the registration of registered lands or
any subsequent sale thereof, and not Article 1544 of the Civil Code which deals
with immovable property not covered by the Torrens System.[20]
Respondent points out, on one hand, that petitioners first two issues which
present an inquiry on who has a better right or which one is a buyer in good faith,
are questions of fact not proper in a petition for review. The third issue, on the
other hand, is ostensibly a question of law which had been unsuccessfully raised
below.[21]
Respondent maintains that there is no room to speak of petitioner as a buyer
in good faith since she was never a buyer in the first place, as her claim is based on

a null and void deed of sale, so the court a quo found. Respondent also asserts that
its status as a buyer in good faith was established and confirmed in the proceedings
before the two courts below.[22]
Lastly, respondent argues that P.D. No. 1529 finds no application in the
instant case. The production of the owners duplicate certificate x x x being
conclusive authority from the registered owner is only true as 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 certificate or to make a memorandum of registration in
accordance with such instrument. It cannot cure the fatal defect that the instrument
from which such registration was effected is null and void ab initio, respondent
concludes.[23]
The petition is bereft of merit.
Petitioners 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 the rule on double sale, applies only to a situation where the
same property is validly sold to different vendees. In this case, there is only one
sale to advert to, that between the spouses Tecson and respondent.
In Remalante v. Tibe,[25] this Court ruled that the Civil Law provision on double
sale is not applicable where there is only one valid sale, the previous sale having
been found to be fraudulent. Likewise, in Espiritu and Apostol v. Valerio,[26] where
the same parcel of land was purportedly sold to two different parties, 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 that the right of the other vendee should prevail.
The trial court declared that the sale between the spouses Tecson and petitioner is
invalid, as it bears the forged signature of Asuncion. Said finding is based on the
unrebutted testimony of Asuncion and the trial courts visual analysis and
comparison of the signatures in her Complaint-in-Intervention and the purported

deed of sale. This finding was upheld by the Court of Appeals, as it ruled that the
purported sale in petitioners favor is null and void, taking into account Asuncions
unrefuted deposition. In particular, the Court of Appeals noted petitioners failure to
attend the taking of the oral deposition and to give written interrogatories. In short,
she did not take the necessary steps to rebut Asuncions definitive assertion.
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 the deed of sale was purportedly executed, the
husband cannot generally alienate or encumber any real property of the conjugal
partnership without the wifes 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 the nullification thereof, and while her marriage
with Troadio was still subsisting. Both the Court of Appeals and the trial court
found Asuncions 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 trial court and the Court of Appeals. Findings of fact
of lower courts are deemed conclusive and binding upon the Supreme Court
subject to certain exceptions,[30] none of which are present in this case. Besides, it
has 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 to present, the owners copy of the title for the issuance of a new
TCT. The Court is not persuaded.
The act of registration does not validate petitioners otherwise void contract.
Registration is a mere ministerial act by which a deed, contract, or instrument is
sought to be inscribed in the records of the Office of the Register of Deeds and
annotated at the back of the certificate of title covering the land subject of the deed,
contract, or instrument.While it operates as a notice of the deed, contract, or
instrument to others, it does not add to its validity nor converts an invalid
instrument into a valid one as between the parties, [32] nor amounts to a declaration
by the state that the instrument is a valid and subsisting interest in the land. [33] The

registration of petitioners void deed is not an impediment to a declaration by the


courts of its invalidity.
Even assuming that there was double sale in this case, petitioner would still not
prevail. The pertinent portion 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 faith first 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, potior jure (first in time, stronger in right). Knowledge gained
by the first buyer of the second sale cannot defeat the first buyers rights, except
where the second buyer registers in good faith the second sale ahead of the first as
provided by the aforequoted provision of the Civil Code. Such knowledge of the
first buyer does not bar him from availing of his rights under the law, among them
to register first his purchase as against the second buyer. However, knowledge
gained by the second buyer of the first sale defeats his rights even if he is first to
register the second sale, since such knowledge taints his prior registration with bad
faith.[34] It is thus essential, to merit the protection of Art. 1544, second paragraph,
that the second realty 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, having purchased the nine (9) lots, including the subject lot, without
any notice of a previous sale, but only a notice 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 the
notice 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 use such
forms of deeds, mortgages, lease or other voluntary instruments as are

sufficient in law. But 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, but shall operate only
as a contract between 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 third persons are concerned, and in all
cases under this Decree, the registration shall be made in the office of
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 the office
of the Register of Deeds for the province or city where the land to
which it relates lies, be constructive 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 registered transaction prevails over the earlier unregistered right. The act of
registration operates to convey and affect the registered land so that a bona fide
purchaser of such land acquires good title as against a prior transferee, if such prior
transfer was unrecorded.[36] As found by the courts a quo, respondent was able to
register its purchase ahead of petitioner. It will be recalled that respondent was able
to register its Deed of Conditional Sale with the Register of Deeds as early as 6
November 1992, and its Deed of Absolute Sale on 14 October 1993. On the other
hand, petitioner was able to present for registration her deed of sale and owners
copy of the title only on 23 January 1995, or almost nine years after the purported
sale. Why it took petitioner nine (9) years to present the deed and the owners copy,
she had no credible explanation; but it is clear that when she finally did, she
already had constructive notice of the deed of sale in respondents favor. Without a
doubt, respondent had acquired a better title to the property.
Finally, anent petitioners claim that P.D. No. 1529 applies to registered lands or
any subsequent sale thereof, while Art. 1544 of the Civil Code applies only to

immovable property not covered by the Torrens System, suffice it to say that this
quandary has already been answered by an eminent former member of this
Court, Justice Jose Vitug, who explained that the registration contemplated under
Art. 1544 has been 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 Act 496 Land Registration Act (now PD
1529) which considers the act of registration as the operative act that
binds the land (see Mediante v. Rosabal, 1 O.G. [12] 900, Garcia v.
Rosabal, 73 Phil 694). On lands covered by the Torrens System, the
purchaser acquires such rights and interest as they appear in the
certificate of title, unaffected by any prior lien or encumbrance not noted
therein. The purchaser is not required to explore farther than what
the Torrens title, upon its face, indicates. The only exception is where the
purchaser has actual knowledge of a flaw or defect in the title of the
seller or of such liens or encumbrances 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, 27 March 1981) (Emphasis supplied)[37]

WHEREFORE, the petition is DENIED. The assailed decision and


resolution of the Court of Appeals are affirmed. Costs against petitioner.
SO ORDERED.