SECOND DIVISION

[G.R. No. 171008. September 13, 2007.]

CARMELITA
respondent.

FUDOT, petitioner, vs.

CATTLEYA

LAND,

INC. ,

DECISION
TINGA, J :
p

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.

aSIDCT

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 led 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 led 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.
EcHTCD

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 respondent's claim for damages
against the Register of Deeds for insuciency of evidence; (v) dismissing Asuncion's
claim for damages against petitioner for lack of factual basis; and (vi) dismissing
petitioner'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 of petitioner. Moreover, based on Asuncion's 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 Asuncion's purported signature
in the deed. The appellate court noted that petitioner failed to rebut Asuncion's
testimony despite opportunities to do so. 14 Moreover, even if there was double sale,
according to the appellate court, respondent's 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 RIGHTIS IT THE FIRST BUYER WHO WAS GIVEN THE OWNER'S DUPLICATE TCT
TOGETHER WITH A DEED OF SALE IN 1986, OR THE SECOND BUYER IN
1992 WITH ONLY A DEED OF SALE.
cEDIAa

II.
IS A BUYER OF REGISTERED LAND WHO DID NOT DEMAND OR REQUIRE
THE DELIVERY OF THE OWNER'S 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 TORRENS SYSTEM. 17

Petitioner avers that she was the rst buyer in good faith and even had in her
possession the owner's 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 owner's copy
carried with it the "conclusive authority of Asuncion Tecson" which cannot be
overturned by the latter's oral deposition. 18
Petitioner claims that respondent did not demand nor require delivery of the
owner's duplicate title from the 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, petitioner concludes that
respondent was not a buyer in good faith. 19
DCaSHI

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 petitioner's rst 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
TcDIaA

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 rst 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 conrmed in the proceedings
before the two courts below. 22
Lastly, respondent argues that P.D. No. 1529 nds no application in the instant case.
The "production of the owner's duplicate certicate . . . 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
certicate 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
IASTDE

The petition is bereft of merit.

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

In the rst 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 dierent 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 dierent 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.
cHCSDa

The trial court declared that the sale between the spouses Tecson and petitioner is
invalid, as it bears the forged signature of Asuncion. Said nding is based on the
unrebutted testimony of Asuncion and the trial court's visual analysis and
comparison of the signatures in her Complaint-in-Intervention and the purported
deed of sale. This nding was upheld by the Court of Appeals, as it ruled that the
purported sale in petitioner's favor is null and void, taking into account Asuncion's
unrefuted deposition. In particular, the Court of Appeals noted petitioner's 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 Asuncion's 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
eect 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 wife's consent.
DcCITS

In this case, following Article 173 29 of the Civil Code, on 26 June 1995, or eight and
a half years (8 1/2) after the purported sale to petitioner, Asuncion led her
Complaint-in-Intervention seeking the nullication thereof, and while her marriage
with Troadio was still subsisting. Both the Court of Appeals and 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 nd no reason to disturb the
ndings 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 rst one to present, the owner's copy of the title for the issuance of a

new TCT. The Court is not persuaded.

SDIaHE

The act of registration does not validate petitioner's 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 Oce of the Register of Deeds and
annotated at the back of the certicate 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 petitioner's 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:
ISCHET

Art. 1544.

....

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.
xxx xxx xxx

In interpreting this provision, the Court declared that the governing principle is
primus tempore, potior jure (rst in time, stronger in right). Knowledge gained by
the first buyer of the second sale cannot defeat the first buyer's rights, except where
the second buyer registers in good faith the second sale ahead of the rst as
provided by the aforequoted provision of the Civil Code. Such knowledge of the rst
buyer does not bar him from availing of his rights under the law, among them to
register rst his purchase as against the second buyer. However, knowledge gained
by the second buyer of the rst sale defeats his rights even if he is rst 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 nally 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.
TaEIAS

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 sucient
in law. But no deed, mortgage, lease or other voluntary instrument, except a
will purporting to convey or aect registered land shall take eect 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.
DTAESI

The act of registration shall be the operative act to convey or

aect the land insofar as third persons are concerned , and in all
cases under this Decree, the registration shall be made in the oce 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
aecting registered land shall, if registered, led or entered in the oce 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.
IaDTES

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 aect the registered land so that a bona de
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 owner's
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 owner's copy,
she had no credible explanation; but it is clear that when she nally did, she already
had constructive notice of the deed of sale in respondent's favor. Without a doubt,
respondent had acquired a better title to the property.
Finally, anent petitioner's 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, suce 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:
EcHIAC

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 certicate of title, unaected
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 aw 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 vs. 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.

Quisumbing, Carpio, Carpio-Morales and Velasco, Jr., JJ., concur.

Footnotes
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 of Bohol.

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 raed 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 dierent
vendees, the ownership shall be transferred to the person who may have rst
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 rst in the possession; and, in the absence thereof to the person
who presents the oldest title, provided there is good 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 civil interdiction or is conned in a leprosarium, the
husband cannot alienate or encumber any real property of the conjugal
partnership without the wife's consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same.
This article shall not apply to property acquired by the conjugal partnership before
the effective date of this 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, when such consent is required, or any
act or contract of the husband which tends to defraud her or impair her interest in
the conjugal partnership property. Should the wife fail to exercise this right, she or
her heirs after the dissolution of the marriage, may demand the value of property
fraudulently alienated by the husband.

30.

The exceptions are: when the ndings are grounded on speculation, surmises or
conjectures; when the inference made is manifestly mistaken, absurd or
impossible; when there is grave abuse of discretion in the appreciation of facts;

when the factual ndings of the trial and appellate courts are conicting; when the
Court of Appeals, in making its ndings, has gone beyond the issues of the case
and such ndings are contrary to the admissions of both appellant and appellee;
when the judgment of the appellate court is premised on a misapprehension of
facts or when it has failed to notice certain relevant facts which, if properly
considered, will justify a dierent conclusion; when the ndings of fact are
conclusions without citation of specic evidence upon which they are based; and
when ndings of fact of the Court of Appeals are premised on the absence of
evidence but are contradicted by the evidence on record. Solid Homes, Inc. v.
Court of Appeals , 341 Phil. 261, 275 (1997).
31.
32.

Salomon v. Intermediate Appellate Court , G.R. No. 70263, 14 May 1990, 185
SCRA 352.
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 CIVIL LAW 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.