November 2009 - Philippine Supreme Court Resolutions
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[G.R. No. 179877 : November 16, 2009] SPS. NESTOR CANADA AND LILIA CANADA V. SPOUSES HELEN NIADAS & INOCENCIO NIADAS, REPRESENTED IN THIS SUIT BY THEIR ATTORNEY-IN-FACT JAIME NIADAS :
[G.R. No. 179877 : November 16, 2009]
SPS. NESTOR CANADA AND LILIA CANADA V. SPOUSES HELEN NIADAS & INOCENCIO NIADAS, REPRESENTED IN THIS SUIT BY THEIR ATTORNEY-IN-FACT JAIME NIADAS
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 16 November 2009:
G.R. No. 179877 (Sps. Nestor Canada and Lilia Canada v. Spouses Helen Niadas & Inocencio Niadas, represented in this suit by their Attorney-in-Fact Jaime Niadas).
This is a Petition for Review on Certiorari of the Decision of the Court of Appeals dated August 30, 2006 in CA-G.R. CV 82522, which reversed the decision of the Regional Trial Court (RTC) of Cebu City, Branch 57 in Civil Case Ceb-22836.
The Facts and the Case
On October 20, 1998 respondent-plaintiff spouses Inocencio and Helen Niadas (the Niadases) filed a complaint for quieting of title, recovery of possession, injunction, and damages against petitioner-defendant spouses Nestor and Lilia Canada and spouses Paulino and Loreta Salve (the Cailadas and the Salves) before the Regional Trial Court (RTC) of Cebu City in Civil Case Ceb-22836.[1] The Ca�adas and the Salves resisted the action mainly upon a defense that petitioner Nestor Ca�ada and his siblings inherited the land from their grandmother Paulina Cariaga.
At the trial, only Jaime Niadas, son and attorney-in-fact of the Niadases, testified. He claimed that his parents owned the land subject of this case, measuring 3,776 square meters, in Barangay Linao, Minglanilla, Cebu, as evidenced by Transfer Certificate of Title (TCT) 45686 that the Register of Deeds issued in their names on August 17, 1979.[2] They acquired the land from Pedro Ca�ada (Pedro) for P20,000.00 as evidenced by a deed of sale dated August 17, 1979.[3] The Niadases have since been paying the real estate taxes on the same.[4]
In 1984, the Ca�adas and the Salves constructed their houses on the land without permission from the Niadases. On hearing of it, the latter filed an ejectment suit against the two couples. But, since the Niadases had to stay abroad and could not attend to the case, it was dismissed without prejudice. When the Niadases returned in 1998, they requested the Ca�adas and the Salves to leave the land so the Niadases could use it. But the Ca�adas refused the request, contending that they owned the land and that the Niadases' title was fake. This prompted the Niadases to file the present action.[5]
In their defense, petitioner Nestor Canada testified that he and his siblings owned the subject land, having inherited it from their father, Moises Ca�ada, Sr., who in turn inherited it from his mother Paulina Cariaga. The Ca�adas had been residing on the land since 1964. On January 11, 1967 the heirs of Paulina executed an extrajudicial declaration of heirs and confirmation of sale in favor of Nestor Ca�ada and his siblings. Afterwards, the latter applied for a title and on July 3, 1967 the Register of Deeds issued TCT 16645 in their names.[6]
In January 1979 Pedro got out of prison after serving sentence for parricide. He went to Nestor and asked that he be the one to keep the title to the land. Nestor and his siblings agreed, given that their father owed some amount to Pedro's father. They also feared Pedro, being a convicted killer.[7] About two months later, Nestor and his siblings learned that Pedro forged their signatures in a deed of sale dated March 5, 1979, and made it appear that they sold the land to him.[8] The following day, or on March 6, 1979, the Register of Deeds issued TCT 44711 in Pedro's name.[9]
Nestor and his siblings caused the filing of a criminal action for falsification of public document against Pedro in Criminal Case CU-5202, for which he was eventually convicted in 1994.[10] But that is another story. Meantime, on June 14, 1979 Pedro sold the land to a certain Ruben Capio for P32,000.00.[11] On the following day or on June 15, 1979 the Register of Deeds issued TCT 45341 in Capio's name.[12]
After learning of the sale, Nestor told Capio that the land Pedro sold to him did not belong to Pedro but to Nestor and his siblings. On hearing this, Capio replied that he would have the sale cancelled and return the land to Pedro. True enough, Capio and Pedro executed a deed of sale or reconveyance on August 15, 1979. On the following day or on August 16, 1979, the Register of Deeds issued TCT 45672 in Pedro's name.[13] And, on the following day, August 17, 1979, Pedro resold the land to the Niadases for P20,000.00. On the same day, the Register of Deeds issued TCT 45686 to the buyers. [14]Nestor Canada also testified that Pedro and the Niadases had known each other way before August 17, 1979. In fact, Pedro had sold his parents' property to them.[15]
On cross, Nestor admitted that after title to the land was placed in Pedro's name in 1979, the Canadas stopped paying taxes on the same. The assessor's office told them that they no longer had that right since Pedro already acquired title to it. In 1979, the Ca�adas filed a civil case for annulment of title and damages against Pedro and the Niadases in court and a notice of lis pendens with the Register of Deeds. The case was dismissed, however, after the Ca�adas' lawyer abandoned them.[16]
On March 9, 2004 the RTC of Cebu City rendered a decision, dismissing the Niadases' complaint for lack of merit. It also dismissed the counterclaims of the Ca�adas and the Salves for lack of support in evidence. The RTC ruled that since the Niadases did not exercise the diligence required of buyers of land, their claim cannot prevail over the parties who were in possession.[17]
On appeal by the Niadases, the Court of Appeals (CA) reversed the RTC decision, upheld the Niadases' title, and ordered the Ca�adas and the Salves to vacate the property. The CA ruled that the Niadases were buyers in good faith because they were unaware of any adverse claim on the property at the time of the sale. The CA also denied their motion for reconsideration.[18]
The Issue Presented
The core issue in this case is whether or not the Niadases bought the subject property from Pedro in good faith.
The Court's Ruling
The CA committed no reversible error. From the point of view of the Niadases, the buyers, the only thing that appeared somewhat remarkable on the face of the TCT in Pedro's name was that he sold the property to them just one day after he got his title. Still, there was nothing illegal or irregular about such a hurried sale. It is not rare that an owner, especially when he is in need of money, would peddle his land even before the title could be issued in his name in order to get advances for expenses. If he succeeds in making the deals, he could do the actual transfer immediately after the issuance of the title.
At any rate, the evidence is clear that Pedro's title had no annotation or encumbrance on it at the time of the sale. That the Niadases did not bother to check if the property was occupied by others could be explained by the fact that Pedro gave his buyers a warranty on the deed of. sale that the property he was selling was an untenanted residential land. Besides, the Ca�adas and the Salves were unable to prove that the Niadases had prior knowledge of their possession or adverse claim or that they knew Pedro to have acquired his title to the land through forgery. The sale took place on August 17, 1979 and Pedro got convicted of falsification of public document only in 1994.
This Court held in Eastworld Motor Industries Corporation v. Skunac Corporation[19] that an innocent purchaser for value is one who, like the Niadases, buys the property of another, without notice that some other person has a right to or interest in the property, for which the buyer paid a full and fair price at the time of the purchase or before receipt of any notice of the claims or interest of some other person in the property. The protection given to innocent purchasers for value is necessary to uphold a certificate of title's efficacy and conclusiveness, which the Torrens system ensures.
What is more Nestor Ca�ada admitted that he handed over the owner's copy of his family's title to the land to Pedro since Nestor's father owed Pedro's father some amount and since they feared Pedro. They, therefore, effectively contributed to his fraudulent sale of the property to others. This is the lesson that an expert in land registration law tries to drive home;
WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Court of Appeals in CA-G.R. CV 82522 dated August 30, 2006.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Teresita Leonardo-De Castro (designated additional member per S.O. No. 776), Arturo D. Brion, Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 16th day of November, 2009.
G.R. No. 179877 (Sps. Nestor Canada and Lilia Canada v. Spouses Helen Niadas & Inocencio Niadas, represented in this suit by their Attorney-in-Fact Jaime Niadas).
This is a Petition for Review on Certiorari of the Decision of the Court of Appeals dated August 30, 2006 in CA-G.R. CV 82522, which reversed the decision of the Regional Trial Court (RTC) of Cebu City, Branch 57 in Civil Case Ceb-22836.
The Facts and the Case
On October 20, 1998 respondent-plaintiff spouses Inocencio and Helen Niadas (the Niadases) filed a complaint for quieting of title, recovery of possession, injunction, and damages against petitioner-defendant spouses Nestor and Lilia Canada and spouses Paulino and Loreta Salve (the Cailadas and the Salves) before the Regional Trial Court (RTC) of Cebu City in Civil Case Ceb-22836.[1] The Ca�adas and the Salves resisted the action mainly upon a defense that petitioner Nestor Ca�ada and his siblings inherited the land from their grandmother Paulina Cariaga.
At the trial, only Jaime Niadas, son and attorney-in-fact of the Niadases, testified. He claimed that his parents owned the land subject of this case, measuring 3,776 square meters, in Barangay Linao, Minglanilla, Cebu, as evidenced by Transfer Certificate of Title (TCT) 45686 that the Register of Deeds issued in their names on August 17, 1979.[2] They acquired the land from Pedro Ca�ada (Pedro) for P20,000.00 as evidenced by a deed of sale dated August 17, 1979.[3] The Niadases have since been paying the real estate taxes on the same.[4]
In 1984, the Ca�adas and the Salves constructed their houses on the land without permission from the Niadases. On hearing of it, the latter filed an ejectment suit against the two couples. But, since the Niadases had to stay abroad and could not attend to the case, it was dismissed without prejudice. When the Niadases returned in 1998, they requested the Ca�adas and the Salves to leave the land so the Niadases could use it. But the Ca�adas refused the request, contending that they owned the land and that the Niadases' title was fake. This prompted the Niadases to file the present action.[5]
In their defense, petitioner Nestor Canada testified that he and his siblings owned the subject land, having inherited it from their father, Moises Ca�ada, Sr., who in turn inherited it from his mother Paulina Cariaga. The Ca�adas had been residing on the land since 1964. On January 11, 1967 the heirs of Paulina executed an extrajudicial declaration of heirs and confirmation of sale in favor of Nestor Ca�ada and his siblings. Afterwards, the latter applied for a title and on July 3, 1967 the Register of Deeds issued TCT 16645 in their names.[6]
In January 1979 Pedro got out of prison after serving sentence for parricide. He went to Nestor and asked that he be the one to keep the title to the land. Nestor and his siblings agreed, given that their father owed some amount to Pedro's father. They also feared Pedro, being a convicted killer.[7] About two months later, Nestor and his siblings learned that Pedro forged their signatures in a deed of sale dated March 5, 1979, and made it appear that they sold the land to him.[8] The following day, or on March 6, 1979, the Register of Deeds issued TCT 44711 in Pedro's name.[9]
Nestor and his siblings caused the filing of a criminal action for falsification of public document against Pedro in Criminal Case CU-5202, for which he was eventually convicted in 1994.[10] But that is another story. Meantime, on June 14, 1979 Pedro sold the land to a certain Ruben Capio for P32,000.00.[11] On the following day or on June 15, 1979 the Register of Deeds issued TCT 45341 in Capio's name.[12]
After learning of the sale, Nestor told Capio that the land Pedro sold to him did not belong to Pedro but to Nestor and his siblings. On hearing this, Capio replied that he would have the sale cancelled and return the land to Pedro. True enough, Capio and Pedro executed a deed of sale or reconveyance on August 15, 1979. On the following day or on August 16, 1979, the Register of Deeds issued TCT 45672 in Pedro's name.[13] And, on the following day, August 17, 1979, Pedro resold the land to the Niadases for P20,000.00. On the same day, the Register of Deeds issued TCT 45686 to the buyers. [14]Nestor Canada also testified that Pedro and the Niadases had known each other way before August 17, 1979. In fact, Pedro had sold his parents' property to them.[15]
On cross, Nestor admitted that after title to the land was placed in Pedro's name in 1979, the Canadas stopped paying taxes on the same. The assessor's office told them that they no longer had that right since Pedro already acquired title to it. In 1979, the Ca�adas filed a civil case for annulment of title and damages against Pedro and the Niadases in court and a notice of lis pendens with the Register of Deeds. The case was dismissed, however, after the Ca�adas' lawyer abandoned them.[16]
On March 9, 2004 the RTC of Cebu City rendered a decision, dismissing the Niadases' complaint for lack of merit. It also dismissed the counterclaims of the Ca�adas and the Salves for lack of support in evidence. The RTC ruled that since the Niadases did not exercise the diligence required of buyers of land, their claim cannot prevail over the parties who were in possession.[17]
On appeal by the Niadases, the Court of Appeals (CA) reversed the RTC decision, upheld the Niadases' title, and ordered the Ca�adas and the Salves to vacate the property. The CA ruled that the Niadases were buyers in good faith because they were unaware of any adverse claim on the property at the time of the sale. The CA also denied their motion for reconsideration.[18]
The Issue Presented
The core issue in this case is whether or not the Niadases bought the subject property from Pedro in good faith.
The Court's Ruling
The CA committed no reversible error. From the point of view of the Niadases, the buyers, the only thing that appeared somewhat remarkable on the face of the TCT in Pedro's name was that he sold the property to them just one day after he got his title. Still, there was nothing illegal or irregular about such a hurried sale. It is not rare that an owner, especially when he is in need of money, would peddle his land even before the title could be issued in his name in order to get advances for expenses. If he succeeds in making the deals, he could do the actual transfer immediately after the issuance of the title.
At any rate, the evidence is clear that Pedro's title had no annotation or encumbrance on it at the time of the sale. That the Niadases did not bother to check if the property was occupied by others could be explained by the fact that Pedro gave his buyers a warranty on the deed of. sale that the property he was selling was an untenanted residential land. Besides, the Ca�adas and the Salves were unable to prove that the Niadases had prior knowledge of their possession or adverse claim or that they knew Pedro to have acquired his title to the land through forgery. The sale took place on August 17, 1979 and Pedro got convicted of falsification of public document only in 1994.
This Court held in Eastworld Motor Industries Corporation v. Skunac Corporation[19] that an innocent purchaser for value is one who, like the Niadases, buys the property of another, without notice that some other person has a right to or interest in the property, for which the buyer paid a full and fair price at the time of the purchase or before receipt of any notice of the claims or interest of some other person in the property. The protection given to innocent purchasers for value is necessary to uphold a certificate of title's efficacy and conclusiveness, which the Torrens system ensures.
What is more Nestor Ca�ada admitted that he handed over the owner's copy of his family's title to the land to Pedro since Nestor's father owed Pedro's father some amount and since they feared Pedro. They, therefore, effectively contributed to his fraudulent sale of the property to others. This is the lesson that an expert in land registration law tries to drive home;
"A forger cannot effectuate his forgery in the case of registered land by executing a transfer which can be registered, unless the owner has allowed him, in some way, to get possession of the owner's certificate. The Act has erected in favor of the owner, as a safeguard, against a forged transfer being perpetrated against him, the requirement that no voluntary transfer shall be registered unless the owner's certificate is produced along with the instrument of transfer. Therefore, if the owner had voluntarily or carelessly allowed the forger to come into possession of his owner's certificate he is to be judged according to the maxim, that when one of two innocent persons must suffer by the wrongful act of a third person the loss fall on him who put it into the power of that third person to perpetrate the wrong."[20]
WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Court of Appeals in CA-G.R. CV 82522 dated August 30, 2006.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Teresita Leonardo-De Castro (designated additional member per S.O. No. 776), Arturo D. Brion, Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 16th day of November, 2009.
Very truly yours.
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
Endnotes:
[1] Records, p. 1.
[2] Exhibit "B," records, p. 8.
[3] Exhibit "11," folder of exhibits, p. 36.
[4] Exhibit "C," id. at 1-6; TSN, November 4,1999, p. 8; TSN, July 19,2000, pp. 5-7.
[5] TSN, November 4, 1999, pp. 8-9.
[6] TSN, March 26, 2002, pp. 5-8; Exhibits "1," "2," and "3," folder of exhibits, pp. 7-11.
[7] Id. at 9-10.
[8] Id. at 10-11; Exhibit "4," folder of exhibits, p. 12-13.
[9] Id. at 11-12; Exhibit "5," folder of exhibits, p. 14.
[10] Id. at 10,12-13; July 9, 2002, p. 4; Exhibit "6," folder of exhibits, pp. 15-27.
[11] TSN, July 9, 2002, pp. 4-7; Exhibit "7," folder of exhibits, pp. 28-30.
[12] Id. at 8-9; Exhibit "10," folder of exhibits, p. 35;
[13] Id. at 6-8; Exhibits "8" and "9," pp. 32, 34.
[14] Id. at 9; Exhibit "11," folder of exhibits, p. 36-37; Exhibit "B," records, p. 8.
[15] Id. at 10.
[16] TSN, March 17, 2003, pp. 4-5.
[17] Records, pp. 131-135.
[18] CA rollo, pp. 36-43.
[19] G.R. No. 163994, December 16, 2005, 478 SCRA 420.
[20] Blondeau and De la Cantera v. Nano and Vallejo, 61 Phil. 625,631 (1935).
