G.R. No. 222031 - Calma vs. Lachica, Jr.

The dispute involves a 20,000-square meter parcel of land located in Sumacabeste, Cabanatuan City.
The subject property was originally covered by Transfer Certificate of Title (TCT) No. T-28380 and later reissued under other numbers.
The primary litigants are:

Respondent – Atty. Jose M. Lachica, Jr., who claims to be the absolute owner and actual physical possessor of the land.
Petitioner – Emilio Calma, who acquired the property from Ricardo Tolentino through a subsequent sale.

Additional parties include Ricardo Tolentino, originally involved in the earlier transactions, and Pablo Tumale, who was later impleaded as defendant concerning a 5,000-square meter portion of the property.

In 1974, respondent allegedly acquired the subject property from Ceferino Tolentino for PhP15,000, with the title being transferred to him the same year.
The original 1974 Deed of Sale was reportedly lost, prompting the execution of a subsequent Deed of Sale on April 29, 1979.

In the 1979 Deed of Sale, the sales consideration was raised to PhP30,000 after Ceferino and his son, Ricardo, allegedly took advantage of the situation by demanding additional payment.

Following the notarization of the 1979 deed, respondent initiated further steps by requesting the Tolentinos to execute additional documents (such as an Affidavit of Non-A-Tenancy) necessary for transferring the title in his name.
An arrangement was purported wherein Ceferino and his son permitted the cultivation of a 5,000-square meter portion of the land in exchange for processing the title transfer.
Maintaining possession, respondent, through his tenant/helper Oscar, continued to cultivate the property, and to protect his claim, he annotated a Notice of Adverse Claim on TCT No. T-28380 on May 25, 1981.

Respondent initiated a complaint for the annulment of void deeds of sale, annulment of titles, reconveyance of the property, and damages.
The RTC of Cabanatuan City, Branch 30 rendered a decision on January 20, 2009:

It declared petitioner an innocent purchaser for value with indefeasible rights over his title.
It ordered Ricardo Tolentino to pay respondent actual, moral, exemplary damages, attorney’s fees, and litigation expenses.
It dismissed the complaint against petitioner and Pablo Tumale.

Respondent’s motion for reconsideration was subsequently denied by the RTC on March 24, 2009.
On appeal, the Court of Appeals (CA) reversed the RTC decision by ruling that:

Both Ricardo and petitioner acted in bad faith in their respective transactions.
Consequently, the CA annulled petitioner’s title and ordered the cancellation of the previous transfers.

The sale from Ceferino Tolentino to him was marred by fraud, deceit, breach of trust, and lack of lawful consideration.
The adverse claim which was annotated on the title, and later carried over to Ricardo’s title, should have precluded full faith in the title; moreover, petitioner is alleged to be an alien and a buyer in bad faith.

His acquisition of the property from Ricardo was that of an innocent purchaser for value.
He relied on the certificate of title (TCT No. T-96168), which showed that respondent’s adverse claim had been cancelled, thereby assuring him of a clean title.
His good faith was further evidenced by his own inquiries with the Register of Deeds and the bank prior to the purchase.

Testimonies of respondent, his tenant/helper Oscar Justo, and other witnesses.
Documentary evidence such as the notarized deeds of sale (from 1979 and July 10, 1998), the respective TCTs with relevant annotations, and other supporting documents like the passport, marriage certificate, and certificate of live birth to establish petitioner’s citizenship.

Whether respondent’s claim based on the earlier sale from Ceferino Tolentino establishes a superior right over the subject property.
Whether petitioner, having acquired the property from Ricardo and relying on the certificate of title, qualifies as an innocent purchaser for value, thereby entitling him to indefeasible title.

Whether petitioner’s actions before purchasing the property (including inquiries at the Register of Deeds and the bank) amount to sufficient due diligence, considering the presence and earlier cancellation of the adverse claim.
Whether the existence and cancellation of respondent’s adverse claim on the title should affect petitioner’s claim, given the provisions of the Torrens system.

Whether the bad faith associated with Ricardo’s acquisition, as found by both the RTC and the CA, impacts the subsequent transfer of title to petitioner.