Case Summary (G.R. No. 104482)
Key Dates and Procedural Posture
- 1962: Notarized deed of sale by Lazaro to Ricardo and Teresita (purported sale of “one hectare of whatever share I shall have” — sale of future inheritance).
- 1978–1980: Private writings and statements by Matias (decedent) and Lazaro concerning allocation of Lazaro’s inheritance to Lazaro’s children.
- Dec. 29, 1980: Notarized deed of sale by Lazaro in favor of his ten children (petitioners) covering his allotted portion after extrajudicial settlement.
- Jan. 13, 1981: Notarized deed of sale by Lazaro in favor of Ricardo and Teresita conveying Lazaro’s undivided 1/12 share (private respondents).
- Feb. 1981–June 7, 1982: Deed of revocation by Lazaro (Mar. 12, 1981), other sworn statements, and registration of the Jan. 13, 1981 deed by private respondents on June 7, 1982.
- Civil action filed July 16, 1982: Petitioners sued for rescission and damages. Trial court ruled for private respondents; Court of Appeals affirmed; Supreme Court (decision dated Jan. 22, 1996) denied the petition for review under Rule 45 and affirmed the Court of Appeals.
Applicable Law and Constitutional Basis
Applicable constitution: 1987 Philippine Constitution (case decided in 1996).
Governing statutory provisions and principles relied upon in the decision: Article 1347, New Civil Code (no contract may be entered into upon a future inheritance except as expressly authorized by law); Article 1544, New Civil Code (rules on preference among vendees where the same thing is sold to different vendees; for immovables, preference belongs to the purchaser who in good faith first records in the Registry of Property). Rule 45, Rules of Court, frames the scope of the Supreme Court’s review (limited to errors of law, not reexamination of factual findings).
Facts Relevant to the Legal Questions
Lazaro executed multiple instruments: (a) a 1962 deed purporting to sell “one hectare of whatever share I shall have” — a disposition of future inheritance; (b) a Dec. 29, 1980 deed of sale conveying his allotted portion to his children (petitioners); and (c) a Jan. 13, 1981 deed of sale conveying his undivided 1/12 share in Lot No. 191 to private respondents (acknowledging receipt of P10,000). Private respondents registered the Jan. 13, 1981 deed on June 7, 1982. Petitioners did not register their Dec. 29, 1980 deed. The litigation produced conflicting documentary and testimonial evidence, including an affidavit of conformity (1980), a deed of revocation (Mar. 12, 1981), Lazaro’s sworn statements, and divergent witness testimonies about timing, knowledge and payment. Trial and appellate courts credited the testimony of private respondents and Lazaro’s later repudiating statements regarding earlier revocations; petitioners’ evidence was disbelieved.
Legal Questions Presented
- Whether a sale of a future inheritance is valid.
- Among competing deeds of sale of the same immovable property, which vendees has preference in ownership.
- The probative value of the lower courts’ finding of good faith in registration (and whether this Court may reexamine the courts’ factual findings on good faith and credibility of witnesses in a Rule 45 petition).
Court’s Ruling on Sale of Future Inheritance
The Supreme Court held categorically that a contract of sale of an anticipated future inheritance is null and void under Article 1347 of the Civil Code, except where law expressly authorizes such contracts. The 1962 deed conveying “whatever share I shall have” was therefore invalid and could not create rights or obligations; subsequent attempts (such as the 1980 affidavit of conformity) could not validate an inherently void contract. This disposes of any legal efficacy of the 1962 instrument as a source of title.
Court’s Ruling on Competing Post-Inheritance Deeds and Preference Under Article 1544
The court analyzed the Dec. 29, 1980 deed (in favor of petitioners) and the Jan. 13, 1981 deed (in favor of private respondents). Both were executed after the death of Matias and after the extrajudicial settlement that vested actual title in Lazaro; therefore, neither was afflicted with the infirmity that rendered the 1962 deed void. Article 1544 governs priority among vendees of the same immovable: for immovable property, ownership belongs to the purchaser who in good faith first records in the Registry of Property. Because private respondents registered the Jan. 13, 1981 deed on June 7, 1982 and petitioners never registered their deed, ownership vested in private respondents (assuming good faith). The Court emphasized that, as between two purchasers of an immovable, registration in good faith confers preference over actual possession by another purchaser who has not registered.
Court’s Ruling on Good Faith, Registration, Credibility and Scope of Review
Petitioners alleged bad faith by private respondents (foreknowledge, fraud, inadequate payment, undue influence over Lazaro). The Court of Appeals and trial court found private respondents and their testimony credible, and found no proof of bad faith sufficient to nullify the registration’s legal effect. The Supreme Court declined to disturb those factual findings. The Court reiterated the settled Rule under Rule 45 that the Supreme Court is not a trier of facts and will not reappraise testimonial credibility or reweigh evidence except in narrowly defined exceptional circumstances (e.g., findings based on mere conjecture, manifestly absurd inferences, grave abuse of discretion, misapprehension of facts). The petitioners failed to demonstrate any such exceptional ground; their contentions involved factual disputes and credibility determinations which both lower courts resolved against them. Consequently, the Court would not overturn the finding that private respondents registered in good faith.
Standard of Review Applied and Rationale for Affirmance
The Supreme Court applied the limited standard of review in Rule 45 petitions, confining itself to questions of law and clear abuses of discretion by the courts below. Because the prin
Case Syllabus (G.R. No. 104482)
Procedural History
- Petition for review on certiorari under Rule 45 of the Rules of Court filed to set aside and reverse the Decision of the Court of Appeals in CA-G.R. CV No. 24987 promulgated on September 26, 1991 affirming the Regional Trial Court, Branch 63, Third Judicial Region, Tarlac, Tarlac in Civil Case No. 6328, and its Resolution denying reconsideration promulgated on May 27, 1992.
- By the Court’s Resolution dated October 25, 1995, the case (among others) was transferred from the First to the Third Division; after deliberation, the case was assigned to the ponente Justice Panganiban for the writing of the Supreme Court Decision.
- Supreme Court decision rendered by Justice Panganiban; petition denied and the Court of Appeals decision affirmed; no costs.
Facts — Principal Chronology and Transactions
- October 20, 1962: Lazardo Taredo executed a notarized deed of absolute sale in favor of his eldest brother Ricardo Taredo and Ricardo’s wife Teresita Barera, conveying “one hectare of whatever share I shall have over Lot No. 191 of the cadastral survey of Gerona, Province of Tarlac and covered by Title T-13829,” described as Lazardo’s “future inheritance,” for P1,500.00 (Exh. 1).
- February 28, 1980: Lazardo executed an “Affidavit of Conformity” to “re-affirm, respect, acknowledge and validate the sale I made in 1962” (Exh. 3).
- December 29, 1980: Lazardo purportedly executed an “Absolute Deed of Sale” in favor of his ten children (petitioners) conveying his allotted portion under an extrajudicial partition of the estate of Matias, which included Lot 191 (Exh. E).
- January 13, 1981: Lazardo executed a notarized deed of sale in favor of private respondents covering his undivided ONE TWELFTH (1/12) share of Lot No. 191 and acknowledged receipt of P10,000.00 (identified in the record as Exh. 4 and at another point referenced as Exh. 9).
- March 12, 1981: A “Deed of Revocation of a Deed of Sale” in favor of petitioners, dated March 12, 1981, was introduced by private respondents alleging the sale to petitioners was “simulated or fictitious - without any consideration whatsoever” (Exh. 6).
- Shortly after filing of the case, Lazardo executed a sworn statement (Exh. G) that effectively repudiated the contents of the Deed of Revocation (Exh. 6) and the Deed of Sale (Exh. 4) in favor of private respondents.
- June 7, 1982: Private respondents recorded the Deed of Sale in their favor in the Registry of Deeds and the corresponding entry was made in Transfer Certificate of Title No. 166451 (Exh. 5).
- July 16, 1982: Petitioners filed a complaint for rescission plus damages of the deeds of sale executed by Lazardo in favor of private respondents, claiming title via the December 29, 1980 deed in favor of Lazardo’s children (Exh. E).
- Trial court decided in favor of private respondents, holding petitioners failed to adduce a preponderance of evidence supporting their claim.
- Court of Appeals affirmed the trial court’s decision; the decision under review by the Supreme Court affirmed that the January 13, 1981 deed (and its registration) was valid and that registration in good faith vested title in private respondents.
Documentary and Testimonial Evidence Presented
- Exhibits relied upon by parties:
- Exh. 1: Deed of absolute sale (Oct. 20, 1962) conveying future inheritance for P1,500.00.
- Exh. 3: Affidavit of Conformity (Feb. 28, 1980) by Lazardo re-affirming the 1962 sale.
- Exh. 4 (also referenced as Exh. 9 in parts of the record): Deed of sale (Jan. 13, 1981) by Lazardo to private respondents, acknowledging receipt of P10,000.00.
- Exh. 5: Transfer Certificate of Title No. 166451 showing registration entry (June 7, 1982).
- Exh. 6: Deed of Revocation of a Deed of Sale (Mar. 12, 1981) revoking the sale in favor of petitioners.
- Exh. E: Deed of absolute sale dated Dec. 29, 1980 in favor of petitioners (ten children).
- Exh. A: Private writing purportedly by Matias dated Dec. 28, 1978 expressing his wish that whatever inheritance Lazardo would receive be given to Lazardo’s children.
- Exh. B: Typewritten document dated Mar. 10, 1979 signed by Lazardo in presence of witnesses confirming he would abide by Matias’s wish.
- Exh. C: Letter dated Jan. 1, 1980 from Lazardo to his daughter Carmela stating his share in the extrajudicial settlement was intended for his children.
- Exh. G: Lazardo’s sworn statement made shortly after the case was filed, repudiating the Deed of Revocation and the Deed of Sale in favor of private respondents.
- Testimony noted in the record:
- Lazardo testified that he sold the property to Ricardo and recounted that a lawyer induced him to execute a deed of sale in favor of his children after giving him five pesos (P5.00) to buy a “drink” (TSN September 18, 1985, pp. 204-205).
- Petitioners’ witness Belinda Taredo testified regarding a telephone call wherein defendant Ricardo allegedly informed her he was already the owner and that a contract of sale between their father and the children was already consummated (TSN Jan. 6, 1984).
- Ricardo Taredo testified that he learned for the first time of the deed of sale executed by Lazardo in favor of his children “about a month or sometime in February 1981” (TSN Nov. 28, 1984).
Issues Presented (as stated by petitioners and restated by the Court)
- Petitioners’ stated assignments of error (as presented to Court of Appeals and to the Supreme Court):
- Whether the trial court erred in concluding the 1962 Contract of Sale was merely voidable or annulable and not void ab initio under paragraph 2 of Article 1347 of the New Civil Code (sale of “future inheritance”).
- Whether the trial court erred in holding defendants-appellees acted in good faith in registering the Jan. 13, 1981 deed with the Register of Deeds and therefore ownership passed to them.
- Whether the trial court ignored testimonial and documentary evidence of petitioners establishing by preponderance of evidence that they are the lawful owners.
- Whether the decision is contrary to law and facts and that conclusions drawn are illogical a