G.R. No. 135038 - Tan vs. Court of Appeals

Pedro Torrevillas and Lorenzo Atega were the co‑owners of a parcel known as Lot No. 436‑A in Poblacion, Butuan City, covering 9,321 square meters.
A petition for reconstitution of title was initiated by Torrevillas before the Court of First Instance of Agusan.
During the pendency of that case, Torrevillas and Atega entered into an agreement partitioning the lot:

Atega was to own the northern portion consisting of 5,938 square meters (designated Lot 436‑A‑1).
Torrevillas was to own the southern portion consisting of 3,383 square meters (designated Lot 436‑A‑2).

On April 8, 1940, Lorenzo Atega sold a 322‑square meter portion of the lot to Faustino Fortun.
On November 2, 1946, Atega sold an additional 56‑square meter portion to Fortun.
On August 9, 1951, Bernardo Atega, with Lorenzo Atega’s consent, sold a 450‑square meter portion to Eduardo Amper.
Faustino Fortun and Eduardo Amper subsequently sold a combined total of 828 square meters to Ismael Elloso through deeds of sale executed in July and November 1951.
Later, Torrevillas and Atega agreed that the reconstituted title would be issued in Torrevillas’ name, with a memorandum of encumbrances containing Atega’s and other vendees’ claims, including Elloso’s.

On March 30, 1955, Original Certificate of Title (OCT) No. RO‑99 was issued in the name of Torrevillas, with an annotation reflecting Atega’s claim.
On March 4, 1957, Torrevillas executed a Deed of Quitclaim recognizing Ismael Elloso’s rights over the 828‑square meter portion of Lot 436‑A‑1.

This quitclaim was annotated as Entry No. 2700 on OCT No. RO‑99 on April 15, 1959.

Subsequent titles (TCT Nos. RT‑1451, RT‑5511, and RT‑5758) also had annotations regarding the claims of Lorenzo Atega and Ismael Elloso.

On November 24, 1975, Rolando Tan (the petitioner) acquired from the Estate of Ismael Elloso the disputed 828‑square meter portion in Lot 436‑A‑1.
In July 1978, Tan discovered that respondent Leoncio Paderes had built a structure on the property, prompting him to demand that Paderes vacate the land.
On November 13, 1978, Tan instituted a complaint for accion publiciana (Civil Case No. 2116) to assert his right over the land.
Meanwhile, additional transactions complicated the situation:

After Lorenzo Atega’s death, his son Jose Atega sold a 40‑square meter portion of Lot 436‑A‑1 to Barbara QuiAones on March 3, 1975.
On February 11, 1977, QuiAones transferred the same portion to Antipolo Paderes, Leoncio Paderes’ wife.
On August 7, 1990, Jose Atega executed a Deed of Confirmation transferring 29 square meters to Leoncio Paderes.
TCT No. RT‑22040, covering 69 square meters, was later issued in Leoncio Paderes’ name.
Additionally, another portion of the lot changed hands when Lorenzo Atega sold a 305‑square meter area to Capistrano Leyson (later conveyed to respondent Francisco B. Aala) and respondent Hayden Luzon acquired 430 square meters through transactions originating from Lorenzo Atega.

Petitioner Tan filed a complaint for quieting of title, reconveyance, annulment of several certificates of title, damages, and attorney’s fees (Civil Case No. 381), which was consolidated with Civil Case No. 2116.
To safeguard his interest in the subject land, Tan registered an adverse claim on the title (annotated as Entry No. 32638).
On April 27, 1995, the trial court rendered a decision in favor of Tan:

Declaring Tan the absolute owner of the 828‑square meter portion.
Ordering respondent Francisco Aala to adjust his title boundaries and reconvey a 100‑square meter portion encroaching on Tan’s land.
Ordering respondent Hayden Luzon (covering 430 square meters) to vacate and reconvey his portion.
Ordering respondent Leoncio Paderes to reconvey the 69‑square meter portion and demolish any structures thereon.
Imposing orders for the cancellation of disputed certificates and requiring the Register of Deeds to take corrective action.
Awarding attorney’s fees and litigation expenses.

Respondents appealed the trial court decision (CA-G.R. CV No. 50400), and the Court of Appeals, on July 31, 1998, reversed the trial court’s decisions by dismissing both Civil Cases Nos. 381 and 2116.
The petitioner then elevated the case to the Supreme Court, arguing that:

The Court of Appeals gravely abused its discretion by excluding questions of fact which were relevant.
The appellate court erred by determining that Tan was not the owner of the disputed 828 square meters, contrary to the trial court’s findings.

Evidence presented showed that respondents (Luzon and Paderes) were aware of the prior sale (to Elloso) and the corresponding adverse claim by petitioner Tan.
Petitioner’s prompt registration of his deed in November 1979 and his adverse claim registration provided him with notice that was later ignored by respondents.
Expert testimony by geodetic engineers established overlapping boundaries between the titles held by respondents and the petitioner’s property.
Additional documentary evidence and cross‑examinations highlighted inconsistencies in the respondents’ claims, including discrepancies in lot numbering and technical descriptions.

Whether the prior registration of the transfers to respondents, absent the requisite good faith (given their knowledge of the earlier sale to Elloso), conferred upon them a superior right to the property.
Whether petitioner Tan’s act of promptly registering his deed of sale and recording an adverse claim was sufficient to establish his ownership over the 828‑square meter portion of Lot 436‑A‑1.
Whether the Court of Appeals erred in holding that the appellants’ briefs raised only questions of law and in its determination that Tan was not the owner of the disputed property.
How Article 1544 of the Civil Code, concerning double sales of immovable property, should be properly applied in resolving conflicts between prior registration and bona fide registration.