Title
Jao vs. Court of Appeals
Case
G.R. No. 85157
Decision Date
Dec 26, 1990
Fraudulent title transfers led to voided ownership; BAIRAN's claim of good faith rejected due to prior knowledge of fraud, requiring property reconveyance to JAO's heirs.

Case Summary (G.R. No. 85157)

Background of the Case

The origin of the dispute dates back to July 30, 1956, when the Jao spouses executed a deed of absolute sale transferring ownership of the four hectares of land to spouses Zosimo H. Tan and Elizabeth O. Tan for a nominal price of P1.00, under the understanding that the property was to be utilized as a site for a Chinese Temple, with an obligation to return the property if the temple was not constructed within five years. However, after the specified period elapsed and with no temple erected, the Jao heirs sought reconveyance of the property.

The Issue of Title and Fraud

In 1964, a significant turn of events occurred when a certain Segundina Vda. de Tiongson, fraudulently representing herself as Elizabeth O. Tan, secured a new owner’s duplicate of the property title and subsequently executed a fictitious deed of sale, transferring ownership to herself. Tiongson sold the land to the Bairan spouses, who obtained a new title in good faith.

Previous Legal Proceedings

Three civil cases emerged from this situation:

  1. Civil Case No. 190 involved a lawsuit by the Tan spouses against Tiongson and the Bairans for nullifying the later title.
  2. Civil Case No. 390 was filed by the Jao heirs (original owners) against Tan and Tiongson for reconveyance.
  3. Finally, Civil Case No. C-10228 was initiated by the Jao heirs eighteen years later against the Bairans for annulment of title and reconveyance.

The Trial Court initially ruled in favor of the Jao heirs in Civil Case No. 390, declaring the sale to Tiongson as null and void. However, subsequent rulings from the Court of Appeals and the Supreme Court upheld this judgment.

Court of Appeals Ruling

Despite the prior judgments affirming the Jao family's rights, the Regional Trial Court of Caloocan City ultimately dismissed the complaint filed by the Jao heirs in Civil Case No. C-10228. The Court of Appeals later affirmed this dismissal, leading the petitioners to seek a review from the Supreme Court.

Central Legal Issues

The Supreme Court focused on whether the Bairan spouses could claim a valid title to the property, given that the title they held derived from Tiongson's fraudulent acquisition. The Court determined that knowledge of the earlier court decisions negated any claims of being innocent purchasers for value. The role of good faith was central to the Court's determination, especially given that Tiongson's title and subsequent actions to sell the

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