March 2010 - Philippine Supreme Court Resolutions
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[G.R. No. 169887 : March 10, 2010] ARNALDO, RAMONA, ELISA AND ELENA, ALL SURNAMED ATANOSO, JUDITH AND JUANITO, BOTH SURNAMED BALIAO, VIRGINIA, TOMAS, HENRY, EUTIQUIANO, ROSARIO, MARCELO, JOSEPHINE AND CINDERELLA, ALL SURNAMED RABUSA, PETITIONERS, V. SPOUSES JOSE CHUA, JR. AND RIMA CHUA,:
[G.R. No. 169887 : March 10, 2010]
ARNALDO, RAMONA, ELISA AND ELENA, ALL SURNAMED ATANOSO, JUDITH AND JUANITO, BOTH SURNAMED BALIAO, VIRGINIA, TOMAS, HENRY, EUTIQUIANO, ROSARIO, MARCELO, JOSEPHINE AND CINDERELLA, ALL SURNAMED RABUSA, PETITIONERS, V. SPOUSES JOSE CHUA, JR. AND RIMA CHUA, RESPONDENTS
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 10 March 2010:
G.R. No. 169887 (ARNALDO, RAMONA, ELISA and ELENA, all surnamed ATANOSO, JUDITH and JUANITO, both surnamed BALIAO, VIRGINIA, TOMAS, HENRY, EUTIQUIANO, ROSARIO, MARCELO, JOSEPHINE and CINDERELLA, all surnamed RABUSA, Petitioners, v. SPOUSES JOSE CHUA, JR. and RIMA CHUA, Respondents)
This is a petition for review[1] of the 29 March 2005 Decision[2] and 21 September 2005 Resolution[3] of the Court of Appeals in CA-G.R. CV No. 76154. In its 29 March 2005 Decision, the Court of Appeals set aside the 14 January 2002 Decision[4] of the Regional Trial Court, Branch 66, Barotac Viejo, Iloilo (trial court), and dismissed Civil Case No. 97-100 for lack of cause of action. In its 21 September 2005 Resolution, the Court of Appeals denied the motion for reconsideration of petitioners Arnaldo, Ramona, Elisa and Elena, all surnamed Atanoso; Judith and Juanito, both surnamed Baliao; Virginia, Tomas, Henry, Eutiquiano, Rosario, Marcelo, Josephine and Cinderella, all surnamed Rabusa (petitioners).
Sometime in early 1910, Macario Atanoso (Macario), predecessor-in-interest of petitioners, took possession of and cultivated a parcel of land situated in Barangay Tamangue, San Dionisio, Iloilo. Macario had the land privately surveyed in 1928 and the survey was verified by the Director of Lands on 13 May 1955.[5] Macario developed the land with about 18 hectares planted to coconut and about 23 hectares converted into fishponds. In 1930, Macario died. Macario left behind four sons: Matias, Fortunato, Manuel, and Mateo.
In 1955, Mateo and Manuel sold their pro-indiviso share in the land to Matias.[6] In 1958, Fortunato also sold his share to Matias.[7]
Matias died in 1960. On 26 December 1966, Salvacion Bacanto, widow of Matias, and petitioners filed an application for registration of title to said land with the Court of First Instance of Iloilo.[8] The application was docketed as Land Registration Case No. N-627, Record No. 33742. The following opposed the application: Eugenio Juaneza, Amado Bacano, Salome Dolendo, the Philippine Fisheries Commission, and the Director of Forestry. The application was dismissed without prejudice on 1 February 1973. Petitioners tried to have the order of dismissal set aside but it was denied by the land registration court on 17 April 1997.[9]
On 14 October 1970, while the land registration, proceedings were still pending, Original Certificate of Title No. S-45 (OCT No. S-45) was issued to Vicente Baccay (Vicente) and Esperanza Claraval (Esperanza) covering the fishpond portion of the property consisting an area of 23,9676 hectares.[10] OCT No. S-45 was issued pursuant to Sales Patent No. 083.
On 2 April 1987, by virtue of OCT No. S-45, Esperanza sold her � undivided share in the property to respondents Jose Chua, Jr. and Rima Chua (respondents) for P240,000.[11] On 23 May 1988, Vicente also sold his � undivided share in the property to respondents for P240,000.[12] Both Vicente and Esperanza are now dead.
On 20 January 1997, petitioners Arnaldo, Ramona, Elisa, and Elena, all surnamed Atanoso, and Judith and Juanito, both sumamed Baliao, as heirs of Matias, filed a complaint for recovery of ownership and possession of the property with damages against respondents.
On 27 December 1999, petitioners Virginia, Tomas, Henry, Eutiquiano, Rosario, Marcelo, Josephina and Cinderella, all surnamed Rabusa, filed a motion for intervention as heirs of Betty Atanoso-Rabusa, daughter of Matias and Salvacion.[13] In its 12 October 2000 Order, the trial court allowed the heirs of Betty Atanoso-Rabusa to intervene.[14]
In its 14 January 2002 Decision, the trial court ruled in favor of petitioners. The dispositive portion of the 14 January 2002 Decision reads:
The trial court found that the fishpond area was already private land when the sales patent was awarded to Vicente and Esperanza in 1970. Since the fishpond was already private land, the Director of Lands had no authority to issue the sales patent to Vicente and Esperanza. Consequently, the trial court declared that the sales patent and OCT No. S-45 were void and that respondents' claim of possession and ownership over the fishpond had no leg to stand on. However, the trial court ruled that respondents were innocent purchasers for value and that there was no proof that they possessed and occupied the fishpond through fraud or misrepresentation.
Petitioners moved for the amendment of the trial court's 14 January 2002 Decision.[16] Petitioners asked the trial court to direct the Register of Deeds to cancel OCT No. S-45 and to issue a new title to them. Petitioners also asked the trial court to declare the sale from Vicente and Esperanza to respondents void and to order respondents to vacate the property. On 27 June 2002, the trial court denied petitioners' motion to amend.[17]
Both the petitioners and the respondents appealed to the Court of
Appeals.
In its 29 March 2005 Decision, the Court of Appeals set aside the 14 January 2002 Decision of the trial court and dismissed Civil Case No. 97-100 for lack of cause of action. The dispositve portion of the 29 March 2005 Decision reads:
According to the Court of Appeals, once the property, which was erroneously registered in another person's name, has been transferred to an innocent purchaser for value, the same cannot be subject to an action for reconveyance. Instead, the true owner is provided with the remedy of claiming damages against the registrant. The Court of Appeals agreed with the trial court that respondents were innocent purchasers for value. The Court of Appeals said that when respondents purchased the property there was no registered annotation as regards to any adverse claim by any party. There was also no indication that should have put respondents on guard as to the property. Since respondents were innocent purchasers for value and they were not the ones who perpetrated the fraud in obtaining the sales patent, the Court of Appeals ruled that petitioners had no cause of action against them.
Hence, this appeal.
Petitioners raise the following issues:
The petition has no merit.
As a general rule, in a sale under the Torrens system, a void title cannot give rise to a valid title. The exception is when the sale of a property with a void title is to a third person who purchased it for value and in good faith.[20]
In Tan v. De La Vega,[21] we said:
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Arturo D. Brion, Mariano C. Del Castillo, Roberto A. Abad and Jose P. Perez, Members, Second Division, this 10th day of March, 2010.
G.R. No. 169887 (ARNALDO, RAMONA, ELISA and ELENA, all surnamed ATANOSO, JUDITH and JUANITO, both surnamed BALIAO, VIRGINIA, TOMAS, HENRY, EUTIQUIANO, ROSARIO, MARCELO, JOSEPHINE and CINDERELLA, all surnamed RABUSA, Petitioners, v. SPOUSES JOSE CHUA, JR. and RIMA CHUA, Respondents)
This is a petition for review[1] of the 29 March 2005 Decision[2] and 21 September 2005 Resolution[3] of the Court of Appeals in CA-G.R. CV No. 76154. In its 29 March 2005 Decision, the Court of Appeals set aside the 14 January 2002 Decision[4] of the Regional Trial Court, Branch 66, Barotac Viejo, Iloilo (trial court), and dismissed Civil Case No. 97-100 for lack of cause of action. In its 21 September 2005 Resolution, the Court of Appeals denied the motion for reconsideration of petitioners Arnaldo, Ramona, Elisa and Elena, all surnamed Atanoso; Judith and Juanito, both surnamed Baliao; Virginia, Tomas, Henry, Eutiquiano, Rosario, Marcelo, Josephine and Cinderella, all surnamed Rabusa (petitioners).
Sometime in early 1910, Macario Atanoso (Macario), predecessor-in-interest of petitioners, took possession of and cultivated a parcel of land situated in Barangay Tamangue, San Dionisio, Iloilo. Macario had the land privately surveyed in 1928 and the survey was verified by the Director of Lands on 13 May 1955.[5] Macario developed the land with about 18 hectares planted to coconut and about 23 hectares converted into fishponds. In 1930, Macario died. Macario left behind four sons: Matias, Fortunato, Manuel, and Mateo.
In 1955, Mateo and Manuel sold their pro-indiviso share in the land to Matias.[6] In 1958, Fortunato also sold his share to Matias.[7]
Matias died in 1960. On 26 December 1966, Salvacion Bacanto, widow of Matias, and petitioners filed an application for registration of title to said land with the Court of First Instance of Iloilo.[8] The application was docketed as Land Registration Case No. N-627, Record No. 33742. The following opposed the application: Eugenio Juaneza, Amado Bacano, Salome Dolendo, the Philippine Fisheries Commission, and the Director of Forestry. The application was dismissed without prejudice on 1 February 1973. Petitioners tried to have the order of dismissal set aside but it was denied by the land registration court on 17 April 1997.[9]
On 14 October 1970, while the land registration, proceedings were still pending, Original Certificate of Title No. S-45 (OCT No. S-45) was issued to Vicente Baccay (Vicente) and Esperanza Claraval (Esperanza) covering the fishpond portion of the property consisting an area of 23,9676 hectares.[10] OCT No. S-45 was issued pursuant to Sales Patent No. 083.
On 2 April 1987, by virtue of OCT No. S-45, Esperanza sold her � undivided share in the property to respondents Jose Chua, Jr. and Rima Chua (respondents) for P240,000.[11] On 23 May 1988, Vicente also sold his � undivided share in the property to respondents for P240,000.[12] Both Vicente and Esperanza are now dead.
On 20 January 1997, petitioners Arnaldo, Ramona, Elisa, and Elena, all surnamed Atanoso, and Judith and Juanito, both sumamed Baliao, as heirs of Matias, filed a complaint for recovery of ownership and possession of the property with damages against respondents.
On 27 December 1999, petitioners Virginia, Tomas, Henry, Eutiquiano, Rosario, Marcelo, Josephina and Cinderella, all surnamed Rabusa, filed a motion for intervention as heirs of Betty Atanoso-Rabusa, daughter of Matias and Salvacion.[13] In its 12 October 2000 Order, the trial court allowed the heirs of Betty Atanoso-Rabusa to intervene.[14]
In its 14 January 2002 Decision, the trial court ruled in favor of petitioners. The dispositive portion of the 14 January 2002 Decision reads:
WHEREFORE, in light of the foregoing, judgment is hereby rendered declaring null and void OCT S-45; Book I, Page 45 Registry of Deeds of Iloilo in the names of Vicente Baccay and Esperanza Claraval and declaring the plaintiffs/intervenors to have better right to own and possess the fishpond area consisting of 23.9676 hectares and turn over possession of the same to the plaintiffs. The court orders likewise defendants to pay plaintiff �100,000.00 as attorney's fees and to pay the costs of this suit.
SO ORDERED.[15]
The trial court found that the fishpond area was already private land when the sales patent was awarded to Vicente and Esperanza in 1970. Since the fishpond was already private land, the Director of Lands had no authority to issue the sales patent to Vicente and Esperanza. Consequently, the trial court declared that the sales patent and OCT No. S-45 were void and that respondents' claim of possession and ownership over the fishpond had no leg to stand on. However, the trial court ruled that respondents were innocent purchasers for value and that there was no proof that they possessed and occupied the fishpond through fraud or misrepresentation.
Petitioners moved for the amendment of the trial court's 14 January 2002 Decision.[16] Petitioners asked the trial court to direct the Register of Deeds to cancel OCT No. S-45 and to issue a new title to them. Petitioners also asked the trial court to declare the sale from Vicente and Esperanza to respondents void and to order respondents to vacate the property. On 27 June 2002, the trial court denied petitioners' motion to amend.[17]
Both the petitioners and the respondents appealed to the Court of
Appeals.
In its 29 March 2005 Decision, the Court of Appeals set aside the 14 January 2002 Decision of the trial court and dismissed Civil Case No. 97-100 for lack of cause of action. The dispositve portion of the 29 March 2005 Decision reads:
WHEREFOR.E, premises considered, judgment is hereby rendered by us SETTING ASIDE the decision of the trial court dated January 14, 2002 and DISMISSING Civil Case No. 97-100 for lack of cause of action.
SO ORDERED.[18]
According to the Court of Appeals, once the property, which was erroneously registered in another person's name, has been transferred to an innocent purchaser for value, the same cannot be subject to an action for reconveyance. Instead, the true owner is provided with the remedy of claiming damages against the registrant. The Court of Appeals agreed with the trial court that respondents were innocent purchasers for value. The Court of Appeals said that when respondents purchased the property there was no registered annotation as regards to any adverse claim by any party. There was also no indication that should have put respondents on guard as to the property. Since respondents were innocent purchasers for value and they were not the ones who perpetrated the fraud in obtaining the sales patent, the Court of Appeals ruled that petitioners had no cause of action against them.
Hence, this appeal.
Petitioners raise the following issues:
The petition has no merit.
As a general rule, in a sale under the Torrens system, a void title cannot give rise to a valid title. The exception is when the sale of a property with a void title is to a third person who purchased it for value and in good faith.[20]
In Tan v. De La Vega,[21] we said:
On the other hand, if the title of petitioners' predecessors-in-interest is declared void, the defense of good faith may still be available to petitioners who claim to be purchasers in good faith and for value. The rule is that a void title may be the source of a valid title in the hands of an innocent purchaser for value. An innocent purchaser for value is one who buys the property of another, without notice that some other person has a right to, or interest in, such property and pays a full and fair price for the same at the time of such purchase, or before he has notice of the claim or interest of some other person in the property.[22] (Emphasis supplied)
In this case, both the trial court and the Court of Appeals declared that respondents were innocent purchasers for value. Therefore, even if the sales patent and OCT No. S-45 were declared void, petitioners' action for reconveyance will not prosper for lack of cause of action against respondents. It is a condition sine qua non for an action of reconveyance to prosper that the property should not have passed to the hands of an innocent purchaser for value.[23]
WHEREFORE, we DENY the petition. We AFFIRM the 29 March 2005 Decision and 21 September 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 76154.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Arturo D. Brion, Mariano C. Del Castillo, Roberto A. Abad and Jose P. Perez, Members, Second Division, this 10th day of March, 2010.
Very truly yours,
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
Endnotes:
[1] Under Rule 45 of the Revised Rules of Civil Procedure.
[2] Rollo, pp. 27-37. Penned by Associate Justice Isaias P. Dicdican, with Associate Justices Vicente
L. Yap and Enrico A. Lanzanas, concurring.
[3] Id. at 39-40.
[4] Id. at 93-109. Penned by Judge Rogelio J. Amador.
[5] Records, p. 178.
[6] Id. at 183-187.
[7] Id. at 181-182.
[8] Id. at 6-7.
[9] Id. at 48.
[10] Id. at 28-31.
[11] Id. at 32-33.
[12] Id. at 34-35.
[13] Id. at 327-329.
[14] Id. at 440.
[15] Rollo, p. 109.
[16] Records, pp. 500-503.
[17] Rollo, p. 138.
[18] Id. at 36.
[19] Id. at 225-226.
[20] Modina v. Court of Appeals, 376 Phil. 44 (1999).
[21] G.R. No. 168809, 10 March 2006, 484 SCRA 538.
[22] Id. at 552-553.
[23] Development Bank of the Philippines v. Court of Appeals, 387 Phil. 283 (2000); Lucena v. Court of Appeals, 371 Phil. 788 (1999).
