THIRD DIVISION
SHOPPER’S
PARADISE
REALTY
& DEVELOPMENT
CORPORATION,
Petitioner,
G.R.
No.
148775
January 13, 2004
-versus-
EFREN P. ROQUE,
Respondent.
D E C I S I
O N
VITUG,
J.:chanroblesvirtuallawlibrary
On 23 December 1993, petitioner
Shopper’s Paradise Realty & Development Corporation, represented by
its president, Veredigno Atienza, entered into a twenty-five year lease
with Dr. Felipe C. Roque, now deceased, over a parcel of land, with an
area of two thousand and thirty six (2,036) square meters, situated at
Plaza Novaliches, Quezon City, covered by Transfer of Certificate of
Title
(TCT) No. 30591 of the Register of Deeds of Quezon City in the name of
Dr. Roque. Petitioner issued to Dr. Roque a check for P250,000.00 by
way
of "reservation payment." Simultaneously, petitioner and Dr. Roque
likewise
entered into a memorandum of agreement for the construction,
development
and operation of a commercial building complex on the property.
Conformably
with the agreement, petitioner issued a check for another P250,000.00
"downpayment"
to Dr. Roque.
The contract of lease
and the memorandum of agreement, both notarized, were to be annotated
on
TCT No. 30591 within sixty (60) days from 23 December 1993 or until 23
February 1994. The annotations, however, were never made because of the
untimely demise of Dr. Felipe C. Roque. The death of Dr. Roque on 10
February
1994 constrained petitioner to deal with respondent Efren P. Roque, one
of the surviving children of the late Dr. Roque, but the negotiations
broke
down due to some disagreements. In a letter, dated 3 November 1994,
respondent
advised petitioner "to desist from any attempt to enforce the
aforementioned
contract of lease and memorandum of agreement". On 15 February 1995,
respondent
filed a case for annulment of the contract of lease and the memorandum
of agreement, with a prayer for the issuance of a preliminary
injunction,
before Branch 222 of the Regional Trial Court of Quezon City. Efren P.
Roque alleged that he had long been the absolute owner of the subject
property
by virtue of a deed of donation inter vivos executed in his favor by
his
parents, Dr. Felipe Roque and Elisa Roque, on 26 December 1978, and
that
the late Dr. Felipe Roque had no authority to enter into the assailed
agreements
with petitioner. The donation was made in a public instrument duly
acknowledged
by the donor-spouses before a notary public and duly accepted on the
same
day by respondent before the notary public in the same instrument of
donation.
The title to the property, however, remained in the name of Dr. Felipe
C. Roque, and it was only transferred to and in the name of respondent
sixteen years later, or on 11 May 1994, under TCT No. 109754 of the
Register
of Deeds of Quezon City. Respondent, while he resided in the United
States
of America, delegated to his father the mere administration of the
property.
Respondent came to know of the assailed contracts with petitioner only
after retiring to the Philippines upon the death of his father.cralaw:red
On 9 August 1996, the
trial court dismissed the complaint of respondent; it explained:chanrobles virtuallaw libraryred
"Ordinarily, a deed
of donation need not be registered in order to be valid between the
parties.
Registration, however, is important in binding third persons. Thus,
when
Felipe Roque entered into a leased contract with defendant corporation,
plaintiff Efren Roque (could) no longer assert the unregistered deed of
donation and say that his father, Felipe, was no longer the owner of
the
subject property at the time the lease on the subject property was
agreed
upon.cralaw:red
"The registration of
the Deed of Donation after the execution of the lease contract did not
affect the latter unless he had knowledge thereof at the time of the
registration
which plaintiff had not been able to establish. Plaintiff knew very
well
of the existence of the lease. He, in fact, met with the officers of
the
defendant corporation at least once before he caused the registration
of
the deed of donation in his favor and although the lease itself was not
registered, it remains valid considering that no third person is
involved.
Plaintiff cannot be the third person because he is the
successor-in-interest
of his father, Felipe Roque, the lessor, and it is a rule that
contracts
take effect not only between the parties themselves but also between
their
assigns and heirs (Article 1311, Civil Code) and therefore, the lease
contract
together with the memorandum of agreement would be conclusive on
plaintiff
Efren Roque. He is bound by the contract even if he did not participate
therein. Moreover, the agreements have been perfected and partially
executed
by the receipt of his father of the downpayment and deposit totaling to
P500,000.00."[1]
The Trial court ordered
respondent to surrender TCT No. 109754 to the Register of Deeds of
Quezon
City for the annotation of the questioned Contract of Lease and
Memorandum
of Agreement.cralaw:red
On appeal, the Court
of Appeals reversed the decision of the trial court and held to be
invalid
the Contract of Lease and Memorandum of Agreement. While it shared the
view expressed by the trial court that a deed of donation would have to
be registered in order to bind third persons, the appellate court,
however,
concluded that petitioner was not a lessee in good faith having had
prior
knowledge of the donation in favor of respondent, and that such actual
knowledge had the effect of registration insofar as petitioner was
concerned.
The appellate court based its findings largely on the testimony of
Veredigno
Atienza during cross-examination, viz;
"Q. Aside from these
two lots, the first in the name of Ruben Roque and the second, the
subject
of the construction involved in this case, you said there is another
lot
which was part of development project?
"A. Yes, this was the
main concept of Dr. Roque so that the adjoining properties of his two
sons,
Ruben and Cesar, will comprise one whole. The other whole property
belongs
to Cesar.chanrobles virtuallaw libraryred
"Q. You were informed
by Dr. Roque that this property was given to his three (3) sons; one to
Ruben Roque, the other to Efren, and the other to Cesar Roque?
"A. Yes.cralaw:red
"Q. You did the inquiry
from him, how was this property given to them?
"A. By inheritance.cralaw:red
"Q. Inheritance in the
form of donation?
"A. I mean inheritance.cralaw:red
"Q. What I am only asking
you is, were you told by Dr. Felipe C. Roque at the time of your
transaction
with him that all these three properties were given to his children by
way of donation?
"A. What Architect Biglang-awa
told us in his exact word: "Yang mga yan pupunta sa mga anak. Yong kay
Ruben pupunta kay Ruben. Yong kay Efren palibhasa nasa America sya,
nasa
pangalan pa ni Dr. Felipe C. Roque."chanrobles virtuallaw libraryred
"x x
x
x x x x x x
"Q. When was the information
supplied to you by Biglang-awa? Before the execution of the Contract of
Lease and Memorandum of Agreement?
"A. Yes.cralaw:red
"Q. That being the case,
at the time of the execution of the agreement or soon before, did you
have
such information confirmed by Dr. Felipe C. Roque himself?
"A. Biglang-awa did
it for us.cralaw:red
"Q. But you yourself
did not?
"A. No, because I was
doing certain things. We were a team and so Biglang-awa did it for us.cralaw:red
"Q. So in effect, any
information gathered by Biglang-awa was of the same effect as if
received
by you because you were members of the same team?
"A. Yes."[2]
In the instant petition
for review, petitioner seeks a reversal of the decision of the Court of
Appeals and the reinstatement of the ruling of the Regional Trial
Court;
it argues that the presumption of good faith it so enjoys as a party
dealing
in registered land has not been overturned by the aforequoted
testimonial
evidence, and that, in any event, respondent is barred by laches and
estoppel
from denying the contracts.cralaw:red
The existence, albeit
unregistered, of the donation in favor of respondent is undisputed. The
trial court and the appellate court have not erred in holding that the
non-registration of a deed of donation does not affect its validity. As
being itself a mode of acquiring ownership, donation results in an
effective
transfer of title over the property from the donor to the donee.[3]
In donations of immovable property, the law requires for its validity
that
it should be contained in a public document, specifying therein the
property
donated and the value of the charges which the donee must satisfy.[4]
The Civil Code provides, however, that "titles of ownership, or other
rights
over immovable property, which are not duly inscribed or annotated in
the
Registry of Property (now Registry of Land Titles and Deeds) shall not
prejudice third persons."[5]
It is enough, between the parties to a donation of an immovable
property,
that the donation be made in a public document but, in order to bind
third
persons, the donation must be registered in the registry of Property
(Registry
of Land Titles and Deeds).[6]
Consistently, Section 50 of Act No. 496 (Land Registration Act), as so
amended by Section 51 of P.D. No. 1529 (Property Registration Decree),
states:chanrobles virtuallaw libraryred
"SECTION 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, leases
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.cralaw:red
"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)
A person dealing with
registered land may thus safely rely on the correctness of the
certificate
of title issued therefore, and he is not required to go beyond the
certificate
to determine the condition of the property[7]
but, where such party has knowledge of a prior existing interest which
is unregistered at the time he acquired a right thereto, his knowledge
of that prior unregistered interest would have the effect of
registration
as regards to him.[8]
The appellate court
was not without substantial basis when it found petitioner to have had
knowledge of the donation at the time it entered into the two
agreements
with Dr. Roque. During their negotiation, petitioner, through its
representatives,
was apprised of the fact that the subject property actually belonged to
respondent.cralaw:red
It was not shown that
Dr. Felipe C. Roque had been an authorized agent of respondent.cralaw:red
In a contract of agency,
the agent acts in representation or in behalf of another with the
consent
of the latter.[9]
Article 1878 of the Civil Code expresses that a special power of
attorney
is necessary to lease any real property to another person for more than
one year. The lease of real property for more than one year is
considered
not merely an act of administration but an act of strict dominion or of
ownership. A special power of attorney is thus necessary for its
execution
through an agent.cralaw:red
The Court cannot accept
petitioner’s argument that respondent is guilty of laches. Laches, in
its
real sense, is the failure or neglect, for an unreasonable and
unexplained
length of time, to do that which, by exercising due diligence, could or
should have been done earlier; it is negligence or omission to assert a
right within a reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned or declined to assert it.[10]chanrobles virtuallaw libraryred
Respondent learned of
the contracts only in February 1994 after the death of his father, and
in the same year, during November, he assailed the validity of the
agreements.
Hardly, could respondent then be said to have neglected to assert his
case
for unreasonable length of time.chanrobles virtuallaw libraryred
Neither is respondent
estopped from repudiating the contracts. The essential elements of
estoppel
in pais, in relation to the party sought to be estopped, are: 1) a
clear
conduct amounting to false representation or concealment of material
facts
or, at least, calculated to convey the impression that the facts are
otherwise
than, and inconsistent with, those which the party subsequently
attempts
to assert; 2) an intent or, at least, an expectation, that this conduct
shall influence, or be acted upon by, the other party; and 3) the
knowledge,
actual or constructive, by him of the real facts.[11]
With respect to the party claiming the estoppel, the conditions he must
satisfy are: 1) lack of knowledge or of the means of knowledge of the
truth
as to the facts in question; 2) reliance, in good faith, upon the
conduct
or statements of the party to be estopped; and 3) action or inaction
based
thereon of such character as to change his position or status
calculated
to cause him injury or prejudice. It has not been shown that respondent
intended to conceal the actual facts concerning the property; more
importantly,
petitioner has been shown not to be totally unaware of the real
ownership
of the subject property.chanrobles virtuallaw libraryred
Altogether, there is
no cogent reason to reverse the Court of Appeals in its assailed
decision.chanrobles virtuallaw libraryred
WHEREFORE, the petition
is DENIED, and the decision of the Court of Appeals declaring the
contract
of lease and memorandum of agreement entered into between Dr. Felipe C.
Roque and Shopper’s Paradise Realty & Development Corporation not
to
be binding on respondent is AFFIRMED. No costs.cralaw:red
SO ORDERED.cralaw:red
Sandoval-Gutierrez,
Corona, and Carpio-Morales, JJ.,
concur.
____________________________
Endnotes:
[1]
Rollo, p. 37.chanrobles virtuallaw libraryred
[2]
Rollo, pp. 40-41.chanrobles virtuallaw libraryred
[3]
Article 712, New Civil Code.
[4]
Article 749, New Civil Code.chanrobles virtuallaw libraryred
[5]
Article 709, New Civil Code.chanrobles virtuallaw libraryred
[6]
See Gonzales v. Court of Appeals, G.R. No. 110335, 18 June 2001, 358
SCRA
598.
[7]
Santos v. Court of Appeals, G.R. No. 90380, 13 September 1990, 189 SCRA
550.chanrobles virtuallaw libraryred
[8]
Lagandaon v. Court of Appeals, G.R. No. 102526-31, 21 May 1998, 290
SCRA
330; Fernandez v. Court of Appeals, G.R. No. 83141, 21 September 1990,
189 SCRA 780.
[9]
Article 1868, New Civil Code.chanrobles virtuallaw libraryred
[10]
Tolentino, Civil Code of the Philippines, vol. IV, 1990-1991, p. 661.
[11]
Kalalo v. Luz, G.R. No. L-27782, 31 July 1970, 34 SCRA 337. |