Case Summary (G.R. No. 246096)
Factual Background
Loreto Urdas was the registered owner of a 1,249-square meter parcel designated as Lot No. 1559 in Gonzaga, Cagayan, under Original Certificate of Title No. O-1061; he died intestate on August 6, 1963 without issue. Upon Loreto’s death, his siblings Fausto Urdas, Sr., Chita Urdas, Maria Urdas Baclig, and Isabel Urdas Racho became his heirs. Sometime before the complaint, the property was shown as subdivided into Lot Nos. 1559-A and 1559-B, and new titles, TCT Nos. T-156992 and 032-2012004566, were issued in favor of petitioners purportedly through deeds dated September 1, 2006 and June 19, 2012 executed by Loreto; Isabel challenged those papers as forgeries and filed a complaint for reivindicacion and damages.
Petitioners’ Claim of Title and Possession
Petitioners asserted that in 1993 they negotiated to buy one-half of Lot No. 1559 from members of the Urdas family and that on September 13, 1993 Fausto, Chita, Maria, and Allan executed an Extra-Judicial Settlement with Sale (EJSS) which (a) allegedly subdivided Lot No. 1559 into two equal halves, Lot Nos. 1559-A and 1559-B; (b) adjudicated Lot No. 1559-A to Fausto, Chita, and Maria who sold it to petitioners for P25,000.00; and (c) adjudicated Lot No. 1559-B to Allan. Petitioners averred that they built and occupied a house on 1559-A since 1993 and later purchased 1559-B from Allan and Leoncia via a Deed of Sale dated September 26, 2011.
RTC Proceedings and Ruling
The Regional Trial Court of Aparri, Cagayan, Branch 8, in a Decision dated July 8, 2015, declared null and void the EJSS dated September 13, 1993, the Deed of Sale dated September 26, 2011, and the two deeds dated September 1, 2006 and June 19, 2012, found the latter two to be forgeries, and ordered petitioners to reconvey 312.25 square meters to Isabel and to pay P5,646.00 as actual damages, P30,000.00 as attorney’s fees, and costs of suit. The RTC nonetheless found petitioners to be purchasers in good faith and limited their reconveyance to satisfy Isabel’s share of the intestate estate.
Court of Appeals Proceedings and Ruling
The Court of Appeals affirmed the RTC decision with modifications in its Decision dated September 13, 2018. The CA declared the EJSS void for excluding Isabel, held Allan’s adjudication and subsequent conveyance void under nemo dat quod non habet, and ruled that the sale of Lot No. 1559-A to petitioners was valid only insofar as it covered the respective undivided aliquot shares of Fausto, Chita, and Maria. The CA found petitioners were not innocent purchasers for value because they failed to inquire into the authority of their sellers and the registered title in another name, deleted the award of actual damages to Isabel for lack of proof, and upheld attorney’s fees and costs.
Issue before the Supreme Court
The dispositive issue presented to the Court was whether the CA correctly ruled that the conveyance of Lot No. 1559 to petitioners is null and void except insofar as the portion of Lot No. 1559-A attributable to Fausto, Chita, and Maria is concerned.
Supreme Court Disposition
The Court denied the petition and affirmed with modifications the CA Decision and Resolution. The Court declared the subdivision of Lot No. 1559 into Lot Nos. 1559-A and 1559-B null and void and reconveyed ownership of Lot No. 1559 to Loreto’s intestate estate. The Court recognized and quantified the parties’ inchoate interests over Lot No. 1559 as follows: petitioners to three-eighths (3/8), Isabel Urdas Racho to one-quarter (1/4), and Fausto, Chita, and Maria to one-eighth (1/8) each. The remainder of the CA ruling was left standing.
Court’s Legal Reasoning on Forged Documents and the EJSS
The Court held that the deeds dated 2006 and 2012 purportedly executed by Loreto were forgeries and therefore void, conveying no title, because Loreto died in 1963 and could not have executed those instruments. The Court sustained the CA’s invalidation of the EJSS on the ground that an extrajudicial partition executed to the total exclusion of a legal heir who had no knowledge of or consent to it is fraudulent and void, citing precedent that such deeds produce no legal effect either for or against anyone.
Co-ownership, Sale of Definite Portions, and Effect of the EJSS Nullity
Applying Article 1078 and the principle that prior to partition each heir holds an undivided interest, the Court reiterated the rule from Cabrera v. Ysaac that a co-owner may not sell a definite portion of common property without the consent of all co-owners; such a co-owner may only convey his undivided aliquot interest. Because the EJSS subdivided Lot No. 1559 and conveyed definite halves without Isabel’s consent, those acts were invalid. The Court nevertheless recognized that Fausto, Chita, and Maria validly intended and actually sold one-half of their inchoate aggregate rights by ordinary contract, and the Court gave effect to that sale as an alienation of an undivided, inchoate interest. Consequently, petitioners acquired a valid three-eighths (3/8) inchoate interest in Lot No. 1559 representing one-half of the three-fourths (3/4) aggregate interest of the three siblings.
Donation, Formalities, and Allan’s Acquisitions
The Court held that the purported gratuitous adjudication to Allan in the EJSS amounted to a donation of immovable property and required compliance with the formal requisites for donations, including a public instrument and acceptance in the same or a separate public instrument; because the EJSS is void, the donation to Allan failed and Allan had no title to convey. Under nemo dat quod non habet, Allan’s subsequent sale to petitioners was likewise void.
Good Faith, Innocent Purchaser Doctrine, and Laches
The Court found petitioners were not innocent purchasers for value because they k
...continue readingCase Syllabus (G.R. No. 246096)
Parties and Procedural Posture
- Spouses Benny and Normita Rol were the petitioners before the Supreme Court and the purchasers of portions of Lot No. 1559.
- Isabel Urdas Racho was the respondent and heir of Loreto Urdas who filed the action for reivindicacion and damages.
- The complaint was filed in the Regional Trial Court (RTC), Aparri, Cagayan, Branch 8, which rendered a Decision dated July 8, 2015 and a Resolution dated September 3, 2015.
- The RTC decision was appealed to the Court of Appeals (CA) in CA-G.R. CV No. 105722, which issued a Decision dated September 13, 2018 and a Resolution dated February 13, 2019.
- The petitioners filed a petition for review on certiorari with the Supreme Court assailing the CA Decision and Resolution.
Key Factual Allegations
- Loreto Urdas was the registered owner of Lot No. 1559 as shown in Original Certificate of Title No. O-1061 and died on August 6, 1963 without issue.
- Loreto’s heirs were his siblings Fausto Urdas, Sr., Chita Urdas, Maria Urdas Baclig, and Isabel Urdas Racho, who succeeded to Lot No. 1559 by intestacy.
- Records showed Lot No. 1559 had been subdivided into Lot Nos. 1559-A and 1559-B of 624.50-sq. m. each and Transfer Certificates of Title Nos. T-156992 and 032-2012004566 were issued in favor of petitioners.
- Respondent alleged that the transfers purporting to have been executed by Loreto were the Deed of Absolute Sale of Portion of Registered Land dated September 1, 2006 and the Deed of Sale of a Portion of Land dated June 19, 2012, which were impossible because Loreto died in 1963.
- Petitioners claimed acquisition by an Extrajudicial Settlement with Sale (EJSS) dated September 13, 1993 whereby Lot No. 1559-A was adjudicated to Fausto, Chita, and Maria and sold to petitioners for P25,000.00, and Lot No. 1559-B was adjudicated to Allan; and by a Deed of Sale dated September 26, 2011 from Allan and Leoncia for Lot No. 1559-B.
- Petitioners asserted open, continuous, and peaceful possession of Lot No. 1559-A since 1993 and of Lot No. 1559-B since 2010 until the filing of the complaint in June 2013.
Lower Court Rulings
- The RTC in its Decision dated July 8, 2015 declared the EJSS dated September 13, 1993, the Deed dated September 26, 2011, the Deed dated September 1, 2006, and the Deed dated June 19, 2012 null and void and ordered petitioners to reconvey 312.25-sq. m. to respondent and to pay P5,646.00 actual damages, P30,000.00 attorney’s fees, and costs.
- The RTC found the 2006 and 2012 deeds to be forgeries and held petitioners were purchasers in good faith entitled to limited reconveyance only to satisfy Isabel’s share.
- The CA in its Decision dated September 13, 2018 affirmed the RTC with modification by declaring the EJSS void, holding Allan’s adjudication void, and ruling that the sale of Lot No. 1559-A to petitioners was valid only as to the aliquot shares of Fausto, Chita, and Maria; the CA also deleted the award of actual damages but upheld attorney’s fees and costs.
- The CA declared petitioners to be buyers in bad faith for failing to inquire into the sellers’ authority and knowledge of the registered owner.
- The CA denied reconsideration in a Resolution dated February 13, 2019.
Issues Presented
- The core issue was whether the CA correctly ruled that the conveyances of Lot No. 1559 to petitioners are null and void except as to the portion in Lot No. 1559-A corresponding to the inchoate shares of Fausto, Chita, and Maria.