FIRST DIVISION
G.R. No. 215038, October 17, 2016
NORMA C. MAGSANO, ISIDRO C. MAGSANO, RICARDO C. MAGSANO, ROQUE C. MAGSANO, JR., NIDA M. CAGUIAT, PERLITA MAGSANO, AND SALVADOR C. MAGSANO, Petitioners, v. PANGASINAN SAVINGS AND LOAN BANK, INC. AND SPOUSES EDDIE V. MANUEL AND MILAGROS C. BALLESTEROS, SUBSTITUTED BY HER HEIRS: GEMMA C. MANUELPEREZ, ANGELO JOHNDREW MANUEL, AND RESSY C. MANUEL, Respondents.
D E C I S I O N
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari1 assailing the Decision2 dated February 14, 2014 and the Resolution3 dated October 2, 2014 of the Court of Appeals (CA) in CA-G.R. CV No. 99519, which affirmed the Decision4 dated April 27, 2012 of the Regional Trial Court of Dagupan City, Branch 41 (RTC) dismissing the complaint for annulment of real estate mortgage, certificate of sale, sheriffs final sale, deed of sale, and Transfer Certificate of Title (TCT) No. 487545 filed by herein petitioners Norma, Isidro, Ricardo, Roque, Jr., Perlita, arid Salvador, all surnamed Magsano, and Nida M. Caguiat (petitioners) against herein respondent Pangasinan Savings and Loan Bank, Inc.6 (respondent bank), respondents spouses Eddie V. Manuel and Milagros C. Ballesteros (Sps. Manuel), and Sheriff Reynaldo C. Daroy (Sheriff Daroy), but deleted the awards of exemplary damages, attorney's fees, appearance fee, and litigation expenses in the latter's favor.
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. (Emphasis supplied)Thus, although Susana is a co-owner with her children with respect to Roque's share in the conjugal partnership, she could not yet assert or claim title to any specific portion thereof without an actual partition of the property being first done either by agreement or by judicial decree.57 While she herself as co-owner had the right to mortgage or even sell her undivided interest in the subject property, she could not mortgage or otherwise dispose of the same in its entirety without the consent of the other co-owners. Consequently, the validity of the subject Real Estate Mortgage and the subsequent foreclosure proceedings therefor conducted in favor of respondent bank should be limited only to the portion which may be allotted to it, as Susana's successor-in-interest, in the event of partition, thereby making it a co-owner58 with petitioners pending partition. Thus, in Rural & Bank of Cabadbaran, Inc. v. Melecio-Yap,59 the Court held:ChanRoblesVirtualawlibrary
While Erna, as herself a co-owner, by virtue of Article 493 of the Civil Code, had the right to mortgage or even sell her undivided interest in the said properties, she, could not, however, dispose of or mortgage the subject properties in their entirety without the consent of the other co-owners. Accordingly, the validity of the subject real estate mortgage and the subsequent foreclosure proceedings therefor conducted in favor of RBCI should be limited only to the portion which may be allotted to it (as the successor-in-interest of Erna) in the event of partition. In this relation, the CA's directive to remand the case to the RTC in order to determine the exact extent of the respective rights, interests, shares and participation of respondents and RBCI over the subject properties, and thereafter, effect a final division, adjudication and partition in accordance with law remains in order. Meanwhile, the writ of possession issued in favor of RBCI, and all proceedings relative thereto should be set aside considering that the latter's specific possessory rights to the said properties remain undetermined.60 (Emphasis and underscoring supplied)Moreover, although the Court concurs with the CA's finding that respondent bank was a mortgagee in bad faith for having failed to exercise greater care and due diligence in verifying the ownership of the subject property,61 contrary to the CA, the Court finds that Sps. Manuel are not innocent purchasers for value who can acquire title to the subject entire property.
Although it is a recognized principle that a person dealing [with] a registered land need not go beyond its certificate of title, it is also a firmly settled rule that where there are circumstances which would put a party on guard and prompt him to investigate or inspect the property being sold to him, such as the presence of occupants/tenants thereon, it is, of course, expected from the purchaser of a valued piece of land to inquire first into the status or nature of possession of the occupants, i.e., whether or not the occupants possess the land en concepto de dueño, in concept of owner. As is the common practice in the real estate industry, an ocular inspection of the premises involved is a safeguard a cautious and prudent purchaser usually takes. Should he find out that the land he intends to buy is occupied by anybody else other than the seller who, as in this case, is not in actual possession, it would then be incumbent upon the purchaser to verify the extent of the occupant's possessory rights. The failure of a prospective buyer to take such precautionary steps would mean negligence on his part and would thereby preclude him from claiming or invoking the rights of a "purchaser in good faith."64 (Emphases and underscoring supplied)Here, petitioners were in possession of the subject property when Sps. Manuel bought the same on February 19, 1997 (and even up to the filing of the amended complaint before the RTC on September 3, 2007).65 However, records do not show that Sps. Manuel inspected the property and inquired into the nature of petitioners' possession and/or the extent of their possessory rights as a measure of precaution which may reasonably be required of a prudent man in a similar situation, and thereby discover the irregularity in the acquisition of title by the respondent bank. Sps. Manuel, therefore, failed to exercise the diligence required in protecting their rights; as such, the Court cannot ascribe good faith to them.66chanrobleslaw
[A] co-owner does not lose his part ownership of a co-owned property when his share is mortgaged by another co-owner without the former's knowledge and consent as in the case at bar. It has likewise been ruled that the mortgage of the inherited property is not binding against co-heirs who never benefitted.In light of the foregoing, Sps. Manuel merely stepped into the shoes of respondent bank and acquired only the rights and obligations appertaining thereto. Thus, while they have been issued a certificate of title over the entire property, they shall: (a) only acquire what validly pertains to respondent bank as successor-in-interest of Susana in the event of partition; and (b) hold the shares therein pertaining to the co-owners who did not consent to the mortgage, i.e., petitioners, in trust for the latter74 pending partition.
x x x x
x x x [W]hen the subject property was mortgaged by Angel Custodio, he had no right to mortgage the entire property but only with respect to his 1/4 pro indiviso share as the property was subject to the successional rights of the other heirs of the late Esdras. Moreover, in case of foreclosure, a sale would result in the transmission of title to the buyer which is feasible only if the seller can be in a position to convey ownership of the things sold. And in one case, it was held that a foreclosure would be ineffective unless the mortgagor has title to the property to be foreclosed. Therefore, as regards the remaining 3/4 pro indiviso share, the same was held in trust for the party rightfully entitled thereto, who are the private respondents herein.
Pursuant to Article 1451 of the Civil Code, when land passes by succession to any person and he causes the legal title to be put in the name of another, a trust is established by implication of law for the benefit of the true owner. Likewise, under Article 1456 of the same Code, if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. In the case of Noel vs. [CA], this Court held that "a buyer of a parcel of land at a public auction to satisfy a judgment against a widow acquired only one-half interest on the land corresponding to the share of the widow and the other half belonging to the heirs of her husband became impressed with a constructive trust in behalf of said heirs."
Neither does the fact that DBP succeeded in consolidating ownership over the subject property in its name terminate the existing co ownership. Registration of property is not a means of acquiring ownership. When the subject property was sold to and consolidated in the name of DBP, it being the winning bidder in the public auction, DBP merely held the 3/4 portion in trust for the private respondents. When petitioner Nelson purchased the said property, he merely stepped into the shoes of DBP and acquired whatever rights and obligations appertain thereto.73 (Emphases supplied)
Endnotes:
1Rollo, pp. 8-18.
2 Id. at 24-37. Penned by Associate Justice Vicente S.E. Veloso with Associate Justices Jane Aurora C. Lantion and Nina G. Antonio-Valenzuela concurring.
3 Id. at 39.
4 Id. at 85-96. Penned by Judge Emma M. Torio.
5 Should be TCT No. 65394 and all derivative titles therefrom.
6 Formerly "Pangasinan Savings and Loan Association, Inc."
7 See rollo, pp. 41-42.
8 Id. at 46-47.
9 Not attached to the rollo.
10 See rollo, pp. 68 and 86.
11 See id.
12 Entitled "AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL ESTATE MORTGAGES" (March 6, 1924).
13 See rollo, pp. 94-95.
14 See Certificate of Sale dated April 5, 1994 signed by Sheriff IV Vinez A. Hortaleza for Clerk of Court & City Sheriff, Ex-Officio Alicia Bravo-Fabia; id. at 48, including dorsal portion.
15 See Sheriff's Final Sale dated February 12, 1996; id. at 49-50.
16 Id. at 51, including dorsal portion.
17 See id. at 86.
18 See Deed of Absolute Sale dated February 19, 1997; id. at 67, including dorsal portion.
19 Id. at 52, including dorsal portion.
20 See Ex-Parte Motion/Petition for Issuance of Writ of Possession dated June 6, 1997; id. at 53-56.
21 Not attached to the rollo.
22 See Order dated July 20, 2004 signed by Judge Silverio O. Castillo; rollo, p. 66.
23 See id. at 69 and 72.
24 Not attached to the rollo. See id. at 9.
25cralawred Should be TCT No. 65394 and all derivative titles therefrom.
26 See Amended Complaint dated August 30, 2007; rollo, pp. 41-45.
27 See id. at 9.
28 See Certificate of Death; id. at 56A, including dorsal portion.
29 See id. at 43-44.
30 See id. at 43.
31 Except Milagros C. Ballesteros who is already dead at the time of the filing of defendants' answer. See Amended Answer with Counterclaim and Affirmative Defenses dated March 18, 2009; id. at 57-63.
32 Id. at 57.
33 Id. at 59.
34 See id. at 60.
35 See id. at 61.
36 See id. at 60.
37 Id. at 85-96.
38 Id. at 96.
39 Id. at 92.
40 Id. at 93-94.
41 See id. at 95.
42 Art. 1144. The following actions must be brought within ten y ars from the time the right of action accrues:
chanRoblesvirtualLawlibrary (1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
43 Art. 1149. All other actions whose periods are not fixed in this Code or in other laws must be brought within five years from the time the right of action accrues.
44 Art. 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought.
45 See rollo, p. 96.
46 See Brief for the Plaintiffs-Appellants dated February 4, 2013; id. at 74-84.
47 Id. at 24-37.
48 Id. at 35-37.
49 See id. at 33-35.
50 Not attached to the rollo.
51Rollo, p. 39.
52Almagro v. Sps. Amaya, Sr., 711 Phil. 493, 503 (2013).
53 Recognized exceptions to the rule are: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellee and the appellant; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or (11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. (See footnote 20 of Almagro v. Sps. Amaya, Sr., id. at 503-504; citations omitted.)
54 Art. 126. The conjugal partnership terminates:
chanRoblesvirtualLawlibrary(1) Upon the death of either spouse;
x x x x
55 In relation thereto, Article 105, Chapter 4 of the Family Code provides that "the provisions of this Chapter shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code x x x."
56 See Heirs of Protacio Go, Sr. and Marta Barola v. Servacio, 672 Phil. 447, 457 (2011).
57 See id.
58 See id. at 458.
59 G.R. No. l78451, July 30, 2014, 731 SCRA 244.
60 Id. at 257-259.
61 See rollo, pp. 34-35.
62 See Sia Tio v. Abayata, 578 Phil. 731, 746 (2008).
63 356 Phil. 870 (1998).
64 Id. at 892.
65 See rollo, pp. 41-43 and 67.
66 See Rufloe v. Burgos, 597 Phil. 261, 272 (2009).
67 See rollo, pp. 12-13.
68 See Pabalan v. Santarin, 441 Phil. 462, 473 (2002).
69 See rollo, p. 43.
70Spouses Mathay v. CA, supra note 63, at 891; citations omitted.
71 See Nufable v. Nufable, 369 Phil. 135, 148 (1999).
72 Id.
73 Id. at 146-148; citations omitted.
74 See id at 147-148.
CAGUIOA, J.:
ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.This article recognizes the absolute ownership by a co-owner of his aliquot or undivided share and his right to alienate, assign or mortgage and even substitute another person in its enjoyment. However, the co-owner's right to alienate is limited to only his undivided share and does not in any way affect any definite portion of the thing owned in common since before partition a co-owner will not know what portion of the property will actually belong to him.1chanrobleslaw
x x x The deed of sale to Estoque x x x clearly specifies the object sold as the southeastern third portion of Lot 802 of the Rosario Cadastre, with an area of 840 square meters, more or less. Granting that the seller, Crispina Perez Vda. de Aquitania could not have sold this particular portion of the lot owned in common by her and her two brothers, Lorenzo and Ricardo Perez, by no means does it follow that she intended to sell to appellant Estoque her 1/3 undivided interest in the lot aforementioned. There is nothing in the deed of sale to justify such inference. That the seller could have validly sold her one-third undivided interest to appellant is no proof that she did choose to sell the same. Ab posse ad actu non valet illatio.In Estoque, a specific portion of a co-owned property was sold, albeit a specific portion of a land that was owned in common. I believe that this is no different from the situation of Susana who sold the entire co-owned property, that is, a specific parcel of land when she only had an undivided interest therein. Stated differently, the rationale for not recognizing the effectivity of the disposition over a specific portion equally applies to the disposition by a co-owner of the entire co-owned or undivided property that is more than the undivided share rightfully pertaining to the disposing co-owner.
Endnotes:
1Ramirez v. Bautista, 14 Phil. 528 (1909).
2 133 Phil. 55, 58 (1968).
3Estoque v. Pajimula, id. at 58-59.
4 1987 CONSTITUTION, Article VIII, Section 4(3) states that "Cases or matters heard by a division shall be decided or resolved with the concurrence of a majority of the members who actually took part in the deliberations on the issues in the case and voted thereon, and in no case, without the concurrence of at least three of such members. When the required number is not obtained, the case shall be decided en banc: Provided, that no doctrine or principle of law laid down by the court in a decision rendered en banc or in division may be modified or reversed except by the court sitting en banc."