Philippine Supreme Court Jurisprudence

This is an appeal from the judgment of the Court of Appeals which affirmed the decision of the then Court of First Instance of Quezon, Branch III, requiring the petitioners to restore to the respondents "the share of their grandmother in the old homestead, the ancestral home of the Pinohermosos, which should be preserved in the family and not devoted to speculative purposes" and ordering that "Transfer Certificate of Title No. 15186 (should) be amended accordingly." (p. 27, Rollo)

The assailed decision of the Court of Appeals has the following findings of facts:jgc:chanrobles.com.ph

"The deceased spouses Tiburcio Pinohermoso and Casiana Flores had three children, namely Hermogenes, Felicidad and Pedro, all surnamed Pinohermoso. Hermogenes died single, Felicidad was survived by her husband herein plaintiff Melencio Padrelan and children Lydia, Juliana, Felisa, Nena, Manuel, Rosario, Rosita and Amadeo Padrelan also plaintiffs in this case. Pedro Pinohermoso died on October 17, 1964 and was substituted as party plaintiff by his surviving wife, Juana P. Remolona and children Ceferina, Teresita, Luresita, Anacito, Marciana, Nieves and Aquilino, all surnamed Pinohermoso.

In this complaint dated March 19, 1958, plaintiffs pray among others that judgment be rendered declaring that the property in question belongs to the conjugal partnership of the spouses Tiburcio Pinohermoso and Casiana Flores and that as heirs of Casiana Flores, they became the owners of one-half (1/2) thereof from the time of her death: that they became the owners of the other half pertaining to the late Tiburcio Pinohermoso in the conjugal partnership from the time of his death: that the mortgage executed by defendant spouses Bonifacio B. Lopez and Roberta Llaneras in favor of the Rehabilitation Finance Corporation did not affect the land in question for the reason that the mortgagors were not the owners thereof at the time said mortgage was executed; ordering the defendant Register of Deeds of Quezon to cancel TCT No. 15186 and to issue another certificate of title in the name of plaintiffs as heirs of the late spouses Tiburcio Pinohermoso and Casiana Flores.

Rehabilitation Finance Corporation, now Development Bank of the Philippines was dropped as party defendant by the trial court on September 6, 1960 it appearing that defendants Bonifacio B. Lopez and Roberta Llaneras had already paid the mortgage of the property in litigation to their said co-defendant as shown in the deed of release or cancellation of mortgage.chanrobles law library : red

Defendant Bonifacio B. Lopez Sr. died on April 29, 1970 and was substituted by his legal heirs, namely: Roberta Llaneras, Virginia Lopez, Bonifacio Lopez Jr. and Fernando Lopez.

It appears that on July 19, 1913, Tiburcio Pinohermoso filed Homestead Application No. 19478 (E-12596) and it was approved on October 26, 1914. The applicant had paid the required homestead fees amounting to P20.00 and submitted his final proof on June 29, 1922. On April 5, 1924, Casiana Flores died. Under date of March 20, 1925, an order for the issuance of patent to Tiburcio Pinohermoso was issued by Assistant Director Jose P. Dans of the Bureau of Lands. Original Certificate of Title No. 1406 (Exhibit 1) was issued on April 22, 1926 over the parcel of land in controversy unto the said Tiburcio Pinohermoso "to have and to hold the said tract of land, with the appurtenances thereto of right belonging unto the said Tiburcio Pinohermoso and to his heirs and assigns forever subject to the provisions of sections 116, 119, 120 and 122 of Act. No. 2874 of the Philippine Legislature, as amended, which provides that the land hereby acquired shall be inalienable and shall not be subject to incumbrance for a period of five (5) years from the date of this patent.." . . In consideration of the sum of P550.00 Tiburcio Pinohermoso sold this land to defendants Bonifacio B. Lopez and Roberta Llaneras on May 20, 1939 who took possession of the property and its improvements upon their purchase thereof (Exhibit 1). By virtue of the said sale, OCT No. 1406 was cancelled and Transfer Certificate of Title No. 15186 (Exhibit 3) was issued on February 3, 1940 in the name of Bonifacio B. Lopez married to Roberta Llaneras. Tax Declaration No. 1279 (Exhibit 4) was thereafter issued to Bonifacio Lopez and said defendant has been paying the realty taxes on the land since 1948 up to the filing of this case in 1958 (Exhibit 5 and 5-a)." (p. 29, Rollo).

In its decision, the trial court declared the lot in question a conjugal property of Tiburcio Pinohermoso and Casiana Flores. Consequently, it ruled that Tiburcio had authority only to administer and not to sell the share of Casiana which passed on to her heirs. It held that the action for reconveyance of said share had not prescribed in view of the relation of trust and confidence between Tiburcio and his children. On these bases, the trial court ordered the reconveyance of half of the land to the respondents, with a condition that they first reimburse the petitioners the value of half of the coconut trees the latter had planted on the land since 1940 when they entered into the possession of the land. The reimbursement of half of the purchase price was not ordered as the court believed that the petitioners had been amply compensated by the profits they derived from the use of the portion of land in question.

On appeal to the Court of Appeals, the appellate court affirmed the trial court’s decision, it, however, opined that "the alleged sale made by Tiburcio of the whole homestead is void and non-existent with respect to the one-half thereof and it is settled that the action to declare the inexistence of a contract does not prescribe." (Rollo, p. 30)

The petitioner now comes to this Court assailing the decisions of the courts below. He alleges that the validity of the deed of sale executed in 1939 by Tiburcio may no longer be attacked in an action in 1958, or 19 years after its execution; that assuming, without admitting, that the property is a conjugal property of the vendor and his deceased spouse, the petitioner is not bound by such fact because he is a buyer in good faith and for value who relied on the property’s certificate of title issued only in the name of the vendor; and, that assuming that he is bound by the conjugal nature of the property, it was error for the courts to hold that the vendor validly sold only one-half of the property without including another one-eighth part of it which represents the vendor’s share in hereditary succession from his wife.chanrobles.com : virtual law library

The respondents, however, counter that Bonifacio Lopez should be bound by the conjugal nature of the property as "anyone dealing with a homestead is charged with the notice of how the requirements of the public land law for the acquisition of the right to the patent had been fulfilled." (Rollo, p. 129) They allege that "where as in the instant case, the requirements of law had been fulfilled during the marriage of the spouses Pinohermoso and Flores, Bonifacio Lopez should be bound by the hard and unalterable fact that the homestead in question was a conjugal property notwithstanding that only the name of Tiburcio Pinohermoso appeared in the patent or title." (Ibid.) The respondents further state that the petitioners’ claim to an additional one-eighth part of the land has no basis in law because under the old law, Tiburcio inherited only a unsufructuary right over the portion of the conjugal property left by his wife. Lastly, the respondents aver that their cause of action had not prescribed inasmuch as the sale is void and inexistent and that the defense of laches was not pleaded by the petitioners in their answer and therefore cannot be considered on appeal.

We rule for the petitioners.

The land in question is a homestead titled under the Land Registration Act. In the case of Iglesia ni Cristo v. Hon. Judge, CFI of Nueva Ecija, Branch I, [123 SCRA 516 (1983)], this Court citing the case of Pajomayo, Et. Al. v. Manipon, Et. Al. [39 SCRA 676 (1971)] held that once a homestead patent granted in accordance with the Public Land Act is registered pursuant to Section 122 of Act 496, the certificate of title issued in virtue of said patent has the force and effect of a Torrens Title issued under the Land Registration Act.

Under the established principles of land registration law, the presumption is that the transferee of registered land is not aware of any defect in the title of the property he purchased. [See Tajonera v. Court of Appeals, 103 SCRA 467 (1981)] Moreover, the person dealing with registered land may safely rely on the correctness of its certificate of title and the law will in no way oblige him to go behind the certificate to determine the condition of the property. (Director of Lands v. Abache, Et Al., 73 Phil. 606, 1942).

No strong considerations of public policy have been presented which would lead us to reverse the established and sound doctrine that the buyer in good faith of a registered parcel of land does not have to look beyond the Torrens Title and search for any hidden defect or inchoate right which may later invalidate or diminish his right to what he purchased. (See Fule v. de Legare, 7 SCRA 351, [1963]).

The respondent court glossed over this issue completely. There is nothing in the questioned decision which indicates why Bonifacio Lopez should have looked beyond the title and why he should have taken notice of the fact that the sole registered owner had a legitimate wife who died in 1924 or 16 years before the land was offered to him by the sole registered owner in 1940.

Moreover, Tiburcio Pinohermoso had another wife in 1940, a certain Generosa Canete (or Magigad according to the respondents’ witnesses) whose name appears in the deed of sale as the legitimate wife of Tiburcio. The decision of the respondent court would have the buyer inquire first as to the rights of Generosa Canete. If she had no right to the land, the buyer’s next step would be to ascertain the exact date the rights of Tiburcio to the homestead were perfected prior to issuance of the title after which he would find out who the wife was at that time. Then, he would ask for a search of marriage records in 1909 when the marriage to Casiana Flores was allegedly solemnized to determine whether or not there was a valid marriage. These are precisely what the law says do not have to be done.

If we are to accept the respondents’ contentions, a buyer of registered land would have to look beyond the title for any unregistered owner, any earlier buyer who failed to register his purchase, all possible actual owners who used the registered buyer as a dummy, and so many other defects or vices of the title, ad infinitum. The ruling of the respondent court is contrary to the reasons behind the indefeasibility of a Torrens Title.

The records before us also show that the attributions of fraud or bad faith were found false. The respondents’ evidence showed that Tiburcio Pinohermoso could not have traveled from Lucena to Lucban on May 20, 1939 to sign a deed of sale because he had a severe hernia reaching up to the knees until it burst in 1940 thus causing his death. Yet, the death certificate of Tiburcio shows that he died of "malaria" on June 17, 1940 at the age of 68. There is no evidence to show bad faith or knowledge of any defect in the title of the vendor when the land was purchased by Bonifacio Lopez. As the land was titled only in the name of the vendor Tiburcio Pinohermoso, the petitioner may not be faulted for purchasing what now appears to have been conjugal property at the time. This is reinforced by the fact that the respondents’ attempt to impute bad faith to the petitioners were not successful in the courts below.

Whether the action is one for the annulment of a deed of sale executed by means of fraud, or for reconveyance based on implied trust is, however, of no moment. Both causes of action had prescribed, applying the law of the old Civil Code and the Code of Civil Procedure which governed the contract of sale executed in 1939.

In the case of Cultura v. Tapucar, (140 SCRA 311 [1985]), this Court ruled that the period of prescription for the annulment of the deed of sale dated 26 November 1934 the execution of which was tainted by fraud is four years from the discovery of fraud according to Section 43 of Act 190, the old Code of Civil Procedure. Applied to the instant case, the fraud attendant in the contract of sale was discovered by the respondents or their predecessors-in-interest in 1940 when the petitioners showed to them the deed of sale and ordered them to vacate the land. The action to annul the sale, commenced after 19 years, had clearly prescribed.chanrobles.com:cralaw:red

The same is true as regards an action for reconveyance of property based on implied trust assuming implied trust is applicable.

This Court ruled in Salao v. Salao (70 SCRA 65, 84 [1976]):jgc:chanrobles.com.ph

"There was no resulting trust in this case because there never was any intention on the part of Juan Y. Salao, Sr., Ambrosia Salao and Valentin Salao to create any trust. There was no constructive trust because the registration of the two fishponds in the names of Juan and Ambrosia was not vitiated by fraud or mistake. This is not a case where to satisfy the demands of justice it is necessary to consider the Calunuran fishpond as being held in trust by the heirs of Juan Y. Salao, for the heirs of Valentin Salao.

And even assuming that there was an implied trust, plaintiffs’ action is clearly barred by prescription or laches (Ramos v. Ramos, L-19872, December 3, 1974, 61 SCRA 284; Quiniano v. Court of Appeals, L-23024, May 31, 1971, 39 SCRA 221; Varsity Hills, Inc. v. Navarro, L-30889, February 29, 1972, 43 SCRA 503; Alzona v. Capunitan and Reyes, 114 Phil. 377).

Under Act No. 190, whose statute of limitation would apply if there were an implied trust in this case, the longest period of extinctive prescription was only ten years (Sec. 40; Diaz v. Gorricho and Aguado, 103 Phil. 261, 266)"

The reasons alleged by the respondents for the long delay in filing the action — that they were poor and had to save for the expenses of litigation and that the Japanese occupation prevented them from filing the case immediately — are not meritorious.

Whatever right the respondents had over one half of the registered property had already prescribed through lapse of time by reason of their negligence and abandonment.

WHEREFORE, the petition is hereby granted. The assailed decision of the Court of Appeals affirming the decision of the trial court is REVERSED and SET ASIDE. The complaint is DISMISSED.

SO ORDERED.

Fernan, (C.J., Chairman), Feliciano, Bidin and Cortes, JJ., concur.