Title
Collado vs. Court of Appeals
Case
G.R. No. L-14698
Decision Date
Mar 30, 1963
Spouses sold lots to buyers aware of third-party claims; registration decree and titles declared void due to fraud, upheld by Supreme Court.
A

Case Summary (G.R. No. L-14698)

Initial Transaction and Title Issuance

Originally, the two lots in question were owned by spouses Aventura and Galan, who were issued Original Certificate of Title No. C-153 following a cadastral ruling. The title was later cancelled as a result of a sale, directed by Atty. Elias Recto and facilitated by Adriano Coronado, whereby Collado and Provido purchased the properties for P4,000. Collado examined the title and believed it was free of encumbrances and liens. However, upon purchasing the land, Collado discovered claims to ownership by others only three months after the sale.

Judicial Proceedings

Following these discoveries, Collado and Provido filed a case in the Court of First Instance of Iloilo, seeking ownership and possession of the properties and demanding damages. The lower court initially ruled in favor of the petitioners, ordering the respondents to vacate the lots.

Court of Appeals Reversal

The Court of Appeals reversed this ruling, declaring the decree of registration from the cadastral case and the certificates of title null and void. They asserted that the petitioners acted in bad faith, citing evidence that suggested Collado was aware of existing claims to the property prior to purchasing it, undermining his assertion of good faith.

Examination of Good Faith

The Court of Appeals cited several findings to support its conclusion that the petitioners were aware of potential ownership claims by the respondents before completing their purchase. They noted that Collado, accompanied by police, visited the property and interacted with individuals cultivating it, later confirming that these individuals were claiming ownership.

Cadastral Proceedings and Nullification of Titles

The appellate court addressed the issue of the nullification of the decree of registration and the subsequent titles issued to the petitioners. The respondents filed their petitions for review within the legally mandated one-year period, which allowed for such actions without constituting a collateral attack. The appellate court emphasized that th

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