Case Summary (G.R. No. 171008)
Factual Background
In July 1992 respondent investigated nine titled lots owned by the Tecsons and thereafter entered into a Deed of Conditional Sale on 6 November 1992 and a Deed of Absolute Sale on 30 August 1993 for those lots, including the subject parcel. The deeds were registered with the Register of Deeds on 6 November 1992 and 4 October 1993, but actual annotation and issuance of titles were delayed by a notice of attachment arising from Civil Case No. 3399. The attachment was later cancelled through a compromise brokered by respondent. Titles were ultimately issued for six of the nine lots; titles for three lots (including the subject) were not issued because original owner’s copies were unaccounted for.
Petitioner’s Claim and Register of Deeds Entry
On 23 January 1995 petitioner presented an owner’s copy of title and a deed of sale dated 19 December 1986, purportedly executed by the Tecsons in her favor, for registration. The Register of Deeds registered petitioner’s deed and issued a new title in her name. Respondent protested the registration the following day and subsequently filed suit on 5 May 1995 for quieting of title, cancellation of title, recovery of ownership, and damages in the Regional Trial Court (RTC) of Tagbilaran City.
Intervention and Proof of Forgery
On 26 June 1995 Asuncion Tecson filed a complaint-in-intervention asserting she never signed the 1986 deed and alleging forgery of her signature; she testified via oral deposition. Petitioner maintained she bought the property in 1986 for P20,000, received the owner’s copy on 26 December 1986, and was prevented earlier from registering due to attachment.
Trial Court Decision
On 31 October 2001 the RTC rendered judgment: (i) quieting ownership in favor of respondent; (ii) declaring petitioner’s deed of sale invalid due to forgery; (iii) ordering registration in favor of respondent; (iv) dismissing respondent’s damages claim against the Register of Deeds for insufficiency of evidence; (v) dismissing Asuncion’s damages claim against petitioner for lack of factual basis; and (vi) dismissing petitioner’s counterclaim for lack of preponderant evidence. The RTC credited Asuncion’s unrebutted testimony and found the purported Asuncion signature forged, rendering the sale void for lack of required marital consent.
Court of Appeals Ruling
The Court of Appeals affirmed. It held there was no double sale because the prior instrument (petitioner’s 1986 deed) was null and void due to forgery. The appellate court noted petitioner failed to rebut Asuncion’s testimony despite opportunities (failure to attend deposition, to propound written interrogatories). The CA further held that even if double sale were assumed, respondent prevailed because it registered in good faith, had made inquiries before purchase, and was informed only of an attachment, not a prior valid sale.
Supreme Court Analysis — Forgery, Marital Consent and Findings of Fact
The Supreme Court affirmed the factual findings of both lower courts. It emphasized that a forged deed is void ab initio and conveys no title; here the RTC’s visual comparison and Asuncion’s unrebutted deposition established forgery. The Court underscored the importance of spousal consent for disposition of conjugal property under then-applicable Civil Code Article 166 (husband cannot alienate conjugal real property without wife’s consent) and Article 173 (wife’s right within ten years to seek annulment of such contracts). Asuncion intervened within the statutory period and while the marriage subsisted; thus the purported sale lacking her consent was void.
Supreme Court Analysis — Registration, Good Faith and Applicable Law
The Court explained that registration is a ministerial act under P.D. No. 1529 and that registration of an otherwise void instrument does not validate it as between the parties. It applied the primus tempore, potior jure principle embodied in Civil Code Art. 1544 and interpreted in Torrens jurisprudence to hold that a bona fide purchaser who first records under the Torrens system may prevail over an earlier unregistered transferee. The Court found respondent to be a buyer in good faith: respondent registered its Conditional Sale in November 1992 and Absolute Sale in October 1993, while petitioner only presented her deed and owner’s duplicate in January 1995—approximately nine years after her alleged purchase—without credible explanation for the delay. Respondent had inquired and learned only of an atta
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Procedural History
- Petition to the Supreme Court seeks nullification of the Court of Appeals Decision dated 28 April 2005 and Resolution dated 11 January 2006 in C.A. G.R. CV No. 73025.
- Case reached the Court of Appeals after trial in the Regional Trial Court, Branch 4, 7th Judicial Region, Tagbilaran City, docketed as Civil Case No. 5781, Cattleya Land, Inc. v. Carmelita Fudot and Atty. Narciso dela Serna.
- Trial court rendered judgment on 31 October 2001.
- Court of Appeals rendered its Decision on 28 April 2005 and denied reconsideration by Resolution dated 11 January 2006.
- Supreme Court, G.R. No. 171008, issued its Decision on 13 September 2007, authored by Justice Tinga, J., with Justices Quisumbing (Chairperson), Carpio, Carpio-Morales, and Velasco, Jr., JJ., concurring.
- Final disposition: petition denied; Court of Appeals decision and resolution affirmed; costs against petitioner.
Facts (as found from the record)
- In July 1992 respondent (Cattleya Land, Inc.) caused the titles of nine lots (including the subject land in Doljo, Panglao, Bohol) to be checked, intending to purchase them from spouses Troadio and Asuncion Tecson.
- Respondent purchased the nine lots by a Deed of Conditional Sale on 6 November 1992; subsequently, on 30 August 1993 respondent and the Tecsons executed a Deed of Absolute Sale.
- The Deed of Conditional Sale and the Deed of Absolute Sale were registered with the Register of Deeds on 06 November 1992 and 04 October 1993, respectively (Entry No. 83422 and Entry No. 87549 of the Register of Deeds of Bohol).
- The Register of Deeds, Atty. Narciso dela Serna, initially refused to annotate the deed(s) due to an existing notice of attachment in connection with Civil Case No. 3399 pending before the Regional Trial Court of Bohol.
- The attachment was cancelled pursuant to a compromise agreement between the Tecsons and their attaching creditor, brokered by respondent; titles to six of the nine lots were issued, but titles to three lots remained unaccounted for.
- On 23 January 1995 petitioner presented for registration the owner’s copy of the title of the subject property together with a deed of sale purportedly executed by the Tecsons in her favor on 19 December 1986.
- On 24 January 1995 respondent sent a letter of protest/opposition to petitioner’s registration application; nevertheless, the Register of Deeds had already registered the deed of sale in petitioner’s favor and issued a new title in her name.
- On 5 May 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 26 June 1995 Asuncion Tecson filed a complaint-in-intervention averring she never signed the deed of sale to petitioner, alleging that her signature on that deed was forged and seeking nullification; she also claimed she had only recently discovered an amorous relationship between her husband and petitioner.
- Petitioner alleged in her answer that the spouses Tecson sold the subject property to her for P20,000.00, delivered the owner’s copy of the title on 26 December 1986, and that the Register of Deeds had earlier refused registration because of attachment.
Trial Court Disposition (31 October 2001)
- Quieted title/ownership of the subject land in favor of respondent (Cattleya Land, Inc.).
- Declared the deed of sale between petitioner and spouses Tecson invalid.
- Ordered registration of the subject land in favor of respondent.
- Dismissed respondent’s claim for damages against the Register of Deeds for insufficiency of evidence.
- Dismissed Asuncion’s claim for damages against petitioner for lack of factual basis.
- Dismissed petitioner’s counterclaim for lack of the required preponderance of evidence.
- Trial court reasoned respondent recorded in good faith; Asuncion’s testimony was convincing and unrebutted; trial court visually compared signatures and concluded Asuncion’s signature on petitioner’s deed was forged.
Court of Appeals Ruling and Reasoning
- Dismissed petitioner’s appeal, holding there was no double sale because the alleged sale to petitioner was null and void due to forgery of Asuncion’s purported signature.
- Noted petitioner failed to rebut Asuncion’s testimony despite opportunities (failure to attend taking of oral deposition and to propound written interrogatories).
- Held that even if there were a double sale, respondent would prevail because:
- respondent registered its sale in good faith ahead of petitioner;
- respondent made inquiries before purchase and was informed titles were free of encumbrance except for the attachment; and
- respondent acted to remove the attachment by brokering a compromise.
- Denied petitioner’s motion for reconsideration for lack of merit (Resolution dated 11 January 2006).
Issues Presented to the Supreme Court (as raised by petitioner)
- I. Between two buyers of registered land, who has the better right — is it the first buyer who was given the owner’s duplicate TCT together with a deed of sale in 1986, or the second buyer in 1992 with only a deed of sale?
- II. Is a buyer of registered land who did not demand or require the delivery of the owner’s duplicate TCT a buyer in good faith?
- III. In subsequent registration of registered lands, as by sale, which law shall govern — Article 1544 of the Civil Code or P.D. 1529 (Torrens System)?
Petitioner’s Principal Arguments (as presented)
- Petitioner contends she was the first buyer in good faith and possessed the owner’s copy of the title, enabling her to register the deed of sale and obtain issuance of a new title in her name.
- She argues the presentation and surrender of the deed of sale and the owner’s copy carried the “conclusive authority of Asuncion Tecson” which, she claims, cannot be overturned by Asuncion’s oral deposition.
- Petitioner asserts respondent did not require or demand delivery of the owner’s duplicate TCT from the Tecsons, nor investigate why the title was absent, which she says should impute knowledge of a defect in the Tecsons’ title and negate respondent’s good faith.
- Petitioner insists P.D. No. 1529 (a special law on registration of registered lands and subsequent sales) should govern the case rather than Article 1544 of the Civil Code, which she asserts applies on