Case Summary (G.R. No. 201193)
Key Dates
• June 7, 1979 – Issuance of Free Patent No. 587747 and OCT No. P-46041 to Tranquilino Agbayani.
• January 21, 1992 – Purported sale by Tranquilino to his brother Nonito (1992 DAS).
• May 30, 1997 – Purported sale by Nonito to Moriel Urdas.
• October 29, 1997 – Purported sale by Tranquilino directly to Lupa Realty (1997 DAS) and by Moriel to Lupa Realty.
• October 11, 1999 – Filing of Complaint for Reivindicacion, Cancellation of Title and Document with Damages by Tranquilino.
• June 15, 2009 – RTC decision nullifying TCT No. T-109129 and reinstating OCT No. P-46041.
• September 14, 2011 – CA decision reversing the RTC and dismissing all claims.
• March 9, 2012 – Denial of motion for reconsideration by the CA.
• June 10, 2019 – Supreme Court resolution granting the Petition for Review under Rule 45.
Applicable Law
• 1987 Philippine Constitution (decision post-1990).
• Presidential Decree No. 1529 (Property Registration Decree), especially Sec. 53 on void registrations.
• Civil Code: Articles 1346 (simulation), 1409(2) (absolutely simulated contracts).
• Rules of Court: Rule 45 (Certiorari), Rule 129 Sec. 4 (judicial admissions), Rule 132 Sec. 19(b) (public documents).
Factual Background
Tranquilino discovered in April 1999 that Lupa Realty was listed as owner in the Sta. Ana tax rolls and that TCT No. T-109129 had been issued under a Deed of Absolute Sale dated October 29, 1997, bearing his alleged signature. He denied executing or receiving payment under that deed and asserted forgery. Lupa Realty countered that it acquired the land through a valid chain: from Tranquilino to Nonito (1992 DAS), from Nonito to Moriel (1997 DAS), and from Moriel to Lupa Realty (October 29, 1997). It invoked innocent purchaser in good faith. Lupa Realty impleaded Moriel to enforce warranty, while Moriel impleaded Nonito, alleging Lupa Realty’s staff registered the deed. Nonito claimed undue pressure and ignorance that the document was not a loan mortgage but a sale.
RTC Decision
The RTC found by preponderance that both the 1992 and 1997 deeds executed in Tranquilino’s name were falsified; it also ruled that Lupa Realty was not an innocent purchaser. It cancelled TCT No. T-109129, reinstated OCT No. P-46041, and ordered indemnity among parties for attorney’s fees and damages.
CA Decision
The Court of Appeals reversed, holding that Tranquilino failed to prove forgery of the 1992 DAS or overcome the presumption of regularity. It deemed the mere existence of the 1997 DAS insufficient to invalidate Lupa Realty’s Torrens title and characterized the attack as collateral, thus impermissible. It also credited Lupa Realty as an innocent purchaser.
Issues on Appeal
- Whether the CA erred in reversing the RTC’s declaration of nullity of TCT No. T-109129.
- Whether Tranquilino’s action constituted a collateral, not direct, attack on a Torrens title.
- Whether Lupa Realty qualified as an innocent purchaser for value.
Supreme Court Ruling – Conflict in Factual Findings
Recognizing a direct conflict between the RTC and CA on material facts, the Supreme Court exercised its discretion under Rule 45 to review both law and fact. The RTC found both deeds falsified; the CA validated the 1992 DAS and did not resolve the 1997 DAS or Lupa Realty’s good faith.
Supreme Court Ruling – 1997 Deed of Absolute Sale
The Court identified multiple indicia of simulation in the 1997 DAS:
• Identical notarial details (Doc. No., Page, Book, Series) with the Moriel-to-Lupa Realty deed, despite different parties.
• Reference to an unrelated OCT No. P-26619 and homestead patent, not Tranquilino’s OCT No. P-46041 and free patent.
• Inclusion of Lupa Realty’s president as party and CTC details without his signature.
• Exact same date of execution as Moriel’s deed.
• Suppression of the 1997 DAS by Lupa Realty in its evidence list.
These defects establish absolute simulation (Art. 1409(2), 1346) and, under PD 1529 Sec. 53, render the registration void.
Supreme Court Ruling – 1992 Deed of A
Case Syllabus (G.R. No. 201193)
Facts and Antecedent Proceedings
- Subject property: 91,899-sqm land in Barrio Sinungan, Sta. Ana, Cagayan, originally under OCT No. P-46041 (Free Patent No. 587747, June 7, 1979) in petitioner’s name.
- October 11, 1999: Tranquilino, residing in the U.S., filed a Complaint for Reivindicacion, Cancellation of Title and Documents with Damages against respondent Lupa Realty, alleging forgery of a Deed of Absolute Sale dated October 29, 1997 (1997 DAS) purportedly conveying his land for ₱425,500.
- Verification at Municipal Treasurer and Registry of Deeds revealed registration of TCT No. T-109129 in Lupa Realty’s name based on the alleged 1997 DAS.
- Tranquilino denied execution and signature forgery, seeking cancellation of TCT No. T-109129 and reinstatement of OCT No. P-46041.
Parties’ Claims and Defenses
- Lupa Realty’s Answer: asserted it purchased the property from Moriel Urdas via a notarized Deed of Absolute Sale, October 29, 1997, in good faith and for value, claiming innocent purchaser status.
- Lupa Realty’s third-party complaint against Moriel: enforcement of warranty of title and peaceful possession.
- Moriel’s answer and fourth-party complaint against Nonito Agbayani: denied involvement in false registration, blamed Nonito’s possession of original title, sought indemnity if liability found.
- Nonito’s answer to fourth-party complaint: admitted signing a sale deed to Moriel under alleged duress, sought nullification of that deed.
Trial Evidence and Testimony
- Tranquilino presented nephew Vernold and tenants Felino Rizaldo and Florante Ruiz to establish possession and lack of disturbance.
- Lupa Realty presented former employee Demetria Balisi, who admitted deeds used for registration were processed by Moriel’s mother and that deeds were not duly used in the transfer by Lupa Realty itself.
- Moriel produced agent Onorio Rumbaoa to attest to the sale chain from Nonito to Moriel, corroborated by Moriel; Nonito then denied sale, claiming a loan transaction without specifying collateral.
Trial Court Decision (RTC, June 15, 2009)
- Declared the 1992 DAS (Tranquilino to Nonito) and the 1997 DAS (Tranquilino to Lupa Realty) falsified.