G.R. No. 109410 - Balatbat vs. Court of Appeals

Case Summary (G.R. No. 109410)

Factual Background

In March 1979 the Court of First Instance of Manila rendered judgment in Civil Case No. 109032 ordering partition of a house and lot covered originally by Transfer Certificate of Title No. 51330 and directing distribution of shares among Aurelio A. Roque and the heirs of his deceased spouse; the corresponding title was reissued as T.C.T. No. 135671 on October 5, 1979 reflecting proportions including a 6/10 share in the name of Aurelio A. Roque. On April 1, 1980 Aurelio Roque executed a Deed of Absolute Sale conveying his 6/10 share to spouses Jose Repuyan and Aurora Tuazon-Repuyan for PHP 50,000 with a down payment of PHP 5,000 and a balance of PHP 45,000 payable after partition and titling. The respondents caused the annotation of an adverse claim on T.C.T. No. 135671 on July 21, 1980. Aurelio Roque subsequently filed a complaint for rescission of the April 1, 1980 sale on August 20, 1980, which the trial court dismissed on April 15, 1986 and declared the April 1, 1980 sale valid and enforceable. No appeal was taken from that decision.

Subsequent Transactions and Possession

Pursuant to an order under Section 10, Rule 39, Rules of Court the parcel was sold on February 4, 1982 by Aurelio Roque and the other co-owners through a deed of absolute sale to Clara Balatbat, wife of Alejandro Balatbat, in effect effectuating partition and sale of the property. Thereafter the trial court issued a writ of possession in favor of Clara Balatbat on September 20, 1982, the writ being subject to valid rights and interests of third persons. Petitioner later filed a notice of lis pendens on March 3, 1987. In December 1988 petitioner and her husband filed suit for delivery of the owner’s duplicate copy of T.C.T. No. 135671 against the Repuyans.

Procedural History

Petitioners’ complaint for delivery was filed in Civil Case No. 88-47176 before Branch 24 of the Regional Trial Court of Manila. The respondents answered and asserted a compulsory counterclaim. On August 2, 1990 the RTC dismissed petitioners’ complaint and granted the counterclaim, awarding attorneys’ fees and costs to the respondents. The Court of Appeals, in CA-G.R. CV No. 29994, rendered a decision dated August 12, 1992 affirming the RTC judgment but deleting the awards of PHP 10,000 for attorneys’ fees and PHP 5,000 as costs of litigation. The Court of Appeals denied petitioners’ motion for reconsideration on March 22, 1993. Petitioners then filed the present petition for review under Rule 45, Rules of Court before the Supreme Court.

Issues Presented

Petitioner framed four principal issues: whether the April 1, 1980 sale in favor of the respondents was merely executory and not consummated; whether there was a double sale within the meaning of Article 1544, New Civil Code; whether petitioner purchased in good faith and for value; and whether the Court of Appeals erred in giving weight to evidence allegedly not formally offered by the respondents.

Petitioner’s Contentions

Petitioner contended that the April 1, 1980 sale to the Repuyans remained executory because the balance of the purchase price had not been paid and because there was no delivery of possession; that no double sale existed; that petitioner was a purchaser in good faith for value when she acquired her portion in February 1982; and that the Court of Appeals improperly relied upon evidence that respondents did not formally offer during trial.

Respondents’ Contentions and Trial-Court Findings

Respondents relied upon the April 1, 1980 public deed of sale, the annotation of an adverse claim on T.C.T. No. 135671 on July 21, 1980, and the final judgment in Civil Case No. 134131 that upheld the validity and enforceability of their deed of sale. The trial court in the rescission action found the deed valid and ordered partition and titling to respondents with payment of the balance only after such titling. The RTC in the delivery action found petitioners unentitled to the owner’s duplicate and awarded respondents on their counterclaim. The Court of Appeals accepted that the April 1, 1980 sale was consummated and that respondents had a superior right by reason of their earlier annotation in the Register of Deeds.

Court of Appeals Ruling

The Court of Appeals affirmed the RTC’s dismissal of petitioners’ complaint and its recognition of respondents’ superior right to the title and possession, but it modified the award by deleting the PHP 10,000 attorneys’ fees and PHP 5,000 costs of litigation. The Court of Appeals grounded its decision on the finality of the April 15, 1986 judgment in the rescission case, on principles of constructive delivery through public instrument under Article 1498, New Civil Code, and on the rule in Article 1544, New Civil Code governing double sales and the superior right of the first to register or annotate in good faith.

Supreme Court’s Disposition

The Supreme Court dismissed the petition for review for lack of merit and affirmed the judgment of the Court of Appeals. The Supreme Court agreed with the lower courts that the April 1, 1980 sale to the Repuyans was consummated and enforceable, that the annotation of adverse claim on July 21, 1980 conferred notice and priority in registration, and that petitioners’ subsequent acquisition by partition sale on February 4, 1982 constituted a double sale under Article 1544, New Civil Code in which respondents had the better right.

Legal Basis and Reasoning

The Supreme Court reasoned that the trial court decision in the rescission suit declaring the April 1, 1980 deed valid became final and executory and that petitioner’s failure to file a complaint in intervention left her without a room to contest that determination. The Court explained that ownership of immovable property passes upon actual or constructive delivery; that Article 1498, New Civil Code provides that execution of a public instrument is equivalent to delivery when the deed does not show the contrary; and that possession of the owner’s duplicate or the public instrument confers the rights of ownership even without physical occupation of the entire land. The Court further explained that the stipulation as to payment deferred the vendor’s right to demand th

Case Syllabus (G.R. No. 109410)

Parties and Procedural Posture

Clara M. Balatbat filed a petition for review under Rule 45 of the Revised Rules of Court seeking to set aside the decision of the Court of Appeals in CA-G.R. CV No. 29994.
Spouses Jose Repuyan and Aurora Repuyan were the private respondents and defendants in the underlying civil actions.
The Regional Trial Court of Manila, Branch 24, rendered judgment dismissing petitioners' complaint and awarding defendants attorneys fees and costs, which the Court of Appeals affirmed with modification.
The Supreme Court, Second Division, adjudicated the present petition and dismissed it for lack of merit.

Key Facts

A partition action was filed on June 15, 1977 as Civil Case No. 109032 which resulted in a March 29, 1979 decision dividing the property covered by T.C.T. No. 51330 between Aurelio A. Roque and the heirs of his deceased wife.
The Register of Deeds of Manila issued T.C.T. No. 135671 on October 5, 1979 reflecting ownership interests including a 6/10 share in the name of Aurelio A. Roque.
Aurelio A. Roque executed a Deed of Absolute Sale on April 1, 1980 conveying his 6/10 share to spouses Jose and Aurora Repuyan.
Aurora Repuyan caused an adverse claim annotation on T.C.T. No. 135671 on July 21, 1980.
Aurelio Roque filed a complaint for rescission on August 20, 1980 alleging nonpayment of the P45,000.00 balance, and the Repuyans filed a counterclaim.
A court order dated February 2, 1982 directed the Deputy Clerk to sign a deed of sale under Sec. 10, Rule 39 to effect partition, and a deed of absolute sale was executed on February 4, 1982 conveying the property to Clara Balatbat and her husband.
Clara Balatbat secured a writ of possession issued September 20, 1982 which the trial court expressly made subject to the valid rights of third persons.
The trial court in Civil Case No. 134131 dismissed the rescission complaint on April 15, 1986 and declared the April 1, 1980 sale to the Repuyans valid and enforceable, and that decision became final.
Clara Balatbat filed a complaint for delivery of the owner’s duplicate of T.C.T. No. 135671 on December 9, 1988 which was dismissed by the RTC on August 2, 1990, and the Court of Appeals affirmed on August 12, 1992 with deletion of certain monetary awards.

Procedural History

The partition judgment of March 29, 1979 became final and executory on June 2, 1979.
The adverse claim by Aurora Repuyan was annotated on the title on July 21, 1980.
The rescission action filed by Aurelio Roque was dismissed on April 15, 1986, and no appeal was taken from that dismissal.
Clara Balatbat filed a notice of lis pendens on March 3, 1987 in Civil Case No. 109032.
The RTC, Branch 24, dismissed petitioners’ delivery action on August 2, 1990 and awarded defendants P10,000.00 for attorneys fees and P5,000.00 as costs.
The Court of Appeals affirmed on August 12, 1992 but deleted the awards of P10,000.00 and P5,000.00.
The Supreme Court denied relief and dismissed the petition on August 28, 1996.

Issues Presented

Whether the April 1, 1980 sale to the private respondents was merely executory and not a consummated transaction.
Whether there was a double sale as contemplated under Article 1544 of the New Civil Code.
Whether Clara Balatbat was a buyer in good