G.R. No. 75209 - Nestle Philippines, Inc. vs. Sanchez

In July 1992, Cattleya Land, Inc. (Respondent) instructed an agent to verify the titles of nine lots, one of which was the subject land.
After confirmation of the titles’ validity, Respondent purchased these nine lots via a Deed of Conditional Sale dated November 6, 1992.
A subsequent Deed of Absolute Sale was executed on August 30, 1993, by which the Tecsons sold the properties to Respondent.
Both deeds were duly registered—the conditional sale on November 6, 1992, and the absolute sale on October 4, 1993—although complications soon arose.

The Register of Deeds, headed by Atty. Narciso dela Serna, refused to annotate the deed of sale on the titles because a notice of attachment related to Civil Case No. 3399 was in place.
The attachment was later cancelled following a compromise agreement brokered by Respondent, allowing for the issuance of titles to six (6) of the nine (9) lots, while three (3) lots remained with unaccounted titles.

On January 23, 1995, Petitioner Carmelita Fudot presented for registration the owner’s copy of the title for the subject lot along with a deed of sale allegedly executed by the Tecsons on December 19, 1986.
Respondent immediately sent a letter of protest to oppose Petitioner’s registration application.
Despite the protest, the Register of Deeds proceeded to register the deed of sale in Petitioner’s favor and issued a new title in her name on January 24, 1995.

On May 5, 1995, Respondent filed a Complaint for Quieting of Title and/or Recovery of Ownership, Cancellation of Title With Damages before the Regional Trial Court of Tagbilaran City.
On June 26, 1995, Asuncion Tecson intervened by filing a complaint-in-intervention. She claimed that she never executed any valid deed of sale in favor of Petitioner, alleging that her signature on the document was forged.
Petitioner, in her answer, maintained that she purchased the property for P20,000.00 and had in her possession the original title, which she later presented for registration despite the existing attachment.
On October 31, 2001, the trial court rendered a decision that:

Quieted the title in favor of Respondent;
Declared the deed of sale between the Tecsons and Petitioner void due to the forged signature;
Ordered the registration of the subject property in Respondent’s name;
Dismissed claims for damages and counterclaims involving both Petitioner and Asuncion Tecson.

Petitioner raised multiple issues on appeal before the Court of Appeals, including:

The contention that there was a double sale, asserting that her sale—the purported sale of December 19, 1986—was valid and conferred better rights over the property;
The argument that not demanding the owner’s duplicate title should not disqualify her as a buyer in good faith; and
The debate over whether subsequent registration of land should be governed by Article 1544 of the Civil Code, PD No. 1529, or the general principles of the Torrens system.

The appellate court dismissed her appeal by upholding the trial court’s findings that the sale to Petitioner was null and void for lack of proper, genuine consent evidenced by the forged signature.
Respondent defended its status as a good faith purchaser, emphasizing that its prior registration of both the conditional and absolute sales, as well as its inquiry into the title’s status, validated its claim to a better title.

Whether the first buyer, who possessed an owner’s duplicate title along with a purported deed of sale executed in 1986, or the second buyer, who secured a deed of sale in 1992 and later registered it, holds a better right over the property.

Whether a buyer of registered land who does not demand or require the delivery of the owner’s duplicate title can be considered a buyer in good faith.

Whether the operative law is Article 1544 of the Civil Code, Presidential Decree No. 1529, or the guiding principles of the Torrens system.