Title
Spouses Badilla vs. Bragat
Case
G.R. No. 187013
Decision Date
Apr 22, 2015
Dispute over Lot No. 19986: Spouses Badilla claimed ownership of 152 sq. m. via 1970 purchase; SC ruled their possession valid, voided Bragat's title, and ordered new titles for both parties.

Case Summary (G.R. No. 187013)

Chronology of Material Transactions and Title Records

  • November 18, 1968: The Pastranos executed a Deed of Definite Sale of unregistered land conveying Lot No. 19986 to Ledesma.
  • 1970: Ledesma allegedly sold a 200 sq. m. portion (later described as Lot No. 19986-B) to the Badillas; possession was delivered to them and they built on the lot. The sale was not reduced to writing and was described as an installment sale.
  • April 18, 1978: The Bragats bought 991 sq. m. of the property from Ledesma by a Deed of Absolute Sale of Residential Lot. Tax declarations were issued designating Lot Nos. 19986-A (642 sq. m.) and 19986-B (349 sq. m.).
  • November 18, 1980: OCT No. P-2035, covering 1,015 sq. m., was issued in the name of Azur Pastrano.
  • May 5, 1984 and October 2, 1987: Deeds of Sale of Registered Land were executed by the Pastranos in favor of Fe Bragat. OCT No. P-2035 was canceled and TCT No. T-47759 was issued in the name of Fe Bragat. An affidavit of loss and a court-ordered issuance of a new owner’s duplicate of OCT No. P-2035 in 1987 also figure in the record.
  • March 7, 1991 onward: Parties exchanged demand letters; competing complaints were filed in June 1992: Bragat for recovery of possession and damages; Badillas for quieting of title, declaration of nullity of TCT No. T-47759, and damages.

Claims and Defenses Advanced by the Parties

Petitioners (Badillas) asserted that they acquired ownership of the 200 sq. m. portion in 1970 from Ledesma, took actual possession, received the owner’s duplicate copy of OCT No. P-2035 from Ledesma, and consequently Bragat’s later petition for a new duplicate and subsequent titles were tainted by fraud or irregularity. They also alleged that a 1987 deed bore a signature of Profitiza Pastrano although she had died in 1985. Respondent (Bragat) maintained that she held an existing title (TCT No. T-47759), claimed acquisition first from Ledesma in 1978 and later from Pastrano (1984, 1987), asserted purchase in good faith and for value, and characterized the 1987 deed as a re-execution of the 1984 sale to address tax issues.

Proceedings Below and Their Findings

The RTC consolidated the actions and found for Bragat: it concluded that the 152-sq.-m. portion occupied by the Badillas was within Bragat’s titled property and sustained Bragat’s title as valid based on purchase in good faith for value, while finding the Badillas failed to substantiate their claims. The trial court awarded ejectment, moral damages, monthly rentals with interest, attorney’s fees, and costs. The Court of Appeals affirmed the RTC in substance but modified the disposition: it determined that Ledesma sold only 991 sq. m. to Bragat in 1978, ordered appellants to vacate 128 sq. m. and reconveyance of 24 sq. m. to the Badillas, and removed the awards of damages and attorney’s fees; it remanded to determine the exact 24-sq.-m. parcel to reconvey.

Issues Presented to the Supreme Court

Primary legal issues: (1) Who owns the 152-sq.-m. portion (or roughly 200/152/128/24 sq. m. as variously claimed) of Lot No. 19986? (2) Whether the courts below erred in their factual findings and legal conclusions regarding delivery, transfer of ownership under a partially consummated verbal sale, applicability of the Statute of Frauds, good-faith acquisition, simulation of the 1987 deed, and the validity of TCT No. T-47759 issued to Bragat.

Standard of Review and Exception to Rule 45

Under Rule 45, ordinarily only questions of law are reviewable; factual findings of the Court of Appeals affirming the trial court are binding on the Supreme Court. However, the Court acknowledged recognized exceptions: when the appellate judgment is premised on misapprehension of facts, belied by the record, or fails to notice material facts that would justify a different conclusion. The Supreme Court concluded that this case falls within those exceptions and warranted re-examination of the facts and reversal of the lower courts’ conclusions.

Applicable Legal Principles Cited

  • Civil Code provisions on transfer of ownership upon delivery: Articles cited include 1477, 1478, 1496, and 1497 (ownership passes upon actual or constructive delivery; delivery occurs when the thing is placed in the control and possession of the vendee).
  • Statute of Frauds principle: an executory contract of sale of immovable property must be in writing; but where a sale is completed, executed or partially consummated (payment or delivery), oral evidence may prove the agreement and the Statute of Frauds does not bar enforcement.
  • Nemo dat quod non habet: a seller cannot convey better title than the seller owns; hence one cannot transfer what one does not have.
  • Article 1544 of the Civil Code (multiple sales): when the same immovable is sold to different vendees, preference generally belongs to the one who in good faith first registered; in absence of inscription, to the person who in good faith was first in possession; otherwise, to the person presenting the oldest title with good faith.

Supreme Court’s Findings on Ownership and Delivery

The Supreme Court found that the Pastranos sold Lot No. 19986 to Ledesma on November 18, 1968; therefore the Pastranos ceased to be owners as of that date. Ledesma’s 1970 sale to the Badillas, though apparently verbal and on installment terms, was a partially consummated sale: the Badillas paid an initial purchase price, Ledesma surrendered possession, and Ledesma even delivered the owner’s duplicate of OCT No. P-2035 to the Badillas. Under the Civil Code principles cited, actual delivery (traditio) transfers ownership regardless of outstanding unpaid installments; hence ownership of the disputed portion passed to the Badillas in 1970. Because the parties did not agree to reserve ownership until full payment, transfer was effective upon delivery.

Supreme Court’s Findings on the 1978 and Later Deeds to Bragat

The Court concluded that Bragat’s real basis for title is the April 18, 1978 deed from Ledesma to the Bragats, not the later deeds executed by Pastrano in 1984 and 1987. The 1984 and 1987 Deeds of Sale from Pastrano to Bragat were void insofar as they purported to convey portions already sold by Pastrano to Ledesma in 1968; a vendor cannot transfer what he does not own. The Court further found the October 2, 1987 deed to be simulated and void: the parties executing it knew of the vendor’s lack of ownership, Profitiza Pastrano was already deceased at the time of execution, and Bragat admitted knowledge of the Badillas’ occupation prior to her acquisition. Thus, Bragat could not claim good faith as to the 1987 transaction.

Application of Article 1544 and Resolution of Competing Claims

Given the series of multiple and overlapping sales, the Court applied Article 1544. It held that Bragat’s registration of the 1987 purchase could not be deemed in good faith because that sale was simulated and Bragat knew of competing interests. Therefore the pref

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