SECOND DIVISION
G.R. No. 219500, August 09, 2017
MAMERTO DY, Petitioner, v. MARIA LOURDES ROSELL ALDEA, Respondent.
D E C I S I O N
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the January 30, 2015 Decision1 and July 1, 2015 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 03974, which nullified the November 18, 2009 Decision3 of the Regional Trial Court, Branch 23, Cebu City (RTC) in Civil Case No. CEB-31689.
The Antecedents
Petitioner Mamerto Dy (Mamerto) is the owner of Lot 5158 located in Vito, Minglanilla, Cebu, with an area of 6,738 square meters, and covered by Transfer Certificate of Title (TCT) No. T-24849.
In June 2005, Mamerto agreed to sell the subject land to his brothers Nelson Dy (Nelson) and Sancho Dy, Jr. (Sancho). He asked them to secure copies of the tax declarations covering the subject land from the Municipal Assessor's Office. Nelson found out that the subject land had gone through a series of anomalous transactions. The owner's duplicate copy of TCT No.T-24849 was declared lost. As a result, a new owner's duplicate copy of the same TCT was issued and the subject land was subsequently mortgaged.
On August 17, 2005, Mamerto, through his lawyer, sent a letter to the Register of Deeds of Cebu informing the said office that his owner's duplicate copy of TCT No. T-24849 was never lost and that he never mortgaged his property to anyone.4
When Mamerto discovered that the subject land was being fenced upon the instruction of respondent Maria Lourdes Rosell Aldea (Lourdes), he immediately filed a complaint against the latter before the barangay office of Minglanilla. Lourdes, however, failed to attend the hearing. A certificate to file action was subsequently issued.
On September 16, 2005, Atty. Manolo D. Rubi, Deputy Register of Deeds, informed Nelson that TCT No. T-134753 covering the subject land was issued in Lourdes' name.5 Mamerto insisted that he never executed any deed of sale in favor of Lourdes and that the signature appearing on the purported deed of sale was not his authentic signature.6
For her part, Lourdes countered that in 2004, a certain Mila Labang (Mila) was introduced to her by her aunt Luz Aldea (Luz). Mila told her that several parcels of land in Minglanilla, including the subject land, were purportedly for sale.7
After she visited the lots in Minglanilla, Lourdes signified her intention to buy the subject land. Mila informed Lourdes that the subject land was mortgaged to a certain Atty. Lim and further told her that she should pay the loan secured by the mortgage. Thereafter, Mila introduced her to Fatima Nadela (Fatima), who allegedly knew the owner of the subject land and promised Lourdes that she would prepare the deed of sale.8
On June 20, 2004, Lourdes met with the person impersonating Mamerto (the impostor) at a hotel in Cebu City. She gave the impostor P1,010,700.00 as payment for the 3,369 square meter-portion of the subject land. Thereafter, they signed the Deed of Sale9 in the presence of Mila, Fatima and Zenon Aldea (Zenon), Lourdes' uncle. Afterwards, Lourdes, Fatima and the impostor went to the office of Atty. Lim to pay the mortgage loan.10
A few weeks thereafter, the impostor called Lourdes and insisted that she should buy the entire land for it would be difficult and expensive to subdivide the same. Lourdes agreed and paid an additional P673,800.00. Lourdes and the impostor signed a second deed of sale. For the 6,738 square meter-property, Lourdes paid an aggregate sum of P1,684,500.00.11
After weeks of waiting, Lourdes was informed by Fatima that the impostor was dead and he had not given any money to process the transfer of the subject land. Lourdes went to the Office of the Provincial Assessor to process the payment of capital gains tax and the transfer of title in her name. Eventually, the Register of Deeds issued TCT No. T-134753 under her name.12 Consequently, Mamerto filed a complaint for declaration of nullity of deed of sale and TCT No. T-134753, and recovery of real property with injunction and damages.
The RTC Ruling
In its November 18, 2009 Decision, the RTC ruled that Mamerto had a better right over the subject land and was the rightful and lawful owner thereof. It found that Mamerto's owner's duplicate copy was never lost, and so ruled that the reconstituted title issued in favor of the impostor was null and void. Hence, the RTC nullified Lourdes' title as it was based on a void reconstituted title. It further opined that the contract of sale between Lourdes and the impostor was null and void because the latter did not have the right to transfer ownership of the subject land at the time it was delivered to Lourdes.
The trial court held that Lourdes could not be considered a buyer in good faith because she should have been suspicious of the transaction which occurred at a hotel room and without any lawyer present. It noted that Lourdes gave her money to the seller even if the owner's copy of the certificate of title was not handed to her; and that she decided to buy the remaining portion of the subject land when the price was reduced to P200.00 per square meter for the flimsy reason that it would be hard for the seller to subdivide the subject land.
Unconvinced, Lourdes elevated an appeal to the CA.
The CA Ruling
In its assailed January 30, 2015 Decision, the CA reversed and set aside the RTC ruling. It declared that Lourdes was an innocent purchaser for value. The appellate court ruled that a person dealing with registered land is only charged with notice of the burdens on the property which are noted on the face of the register or the certificate of title. It observed that the only annotation at the back of the title was that it was mortgaged to Audie C. Uy (Uy).
The CA added that Lourdes exercised ordinary prudence because during the signing of the deed of sale, she asked for an identification card and she was given a senior citizen's I.D., showing that the person she was dealing with was "Mamerto Dy." It stated that while it turned out that the I.D. exhibited by the seller was fake and that the person claiming to be the owner of the land was a fraud, Lourdes could not be blamed for believing that she was dealing with the real owner of the land. The appellate court held that the confirmation of Fatima; Engracia Mondrel and Rena Canio, the overseers of the subject land; and Uy, the named mortgagee lead Lourdes to believe that she was dealing with the rightful owner.
Aggrieved, Mamerto moved for reconsideration, but his motion was denied by the CA in its July 1, 2015 Resolution.
Hence, this petition.
ISSUES
(1)WHETHER THE RECONSTITUTED TITLE, FROM WHICH TCT NO. T-134753 IN THE NAME OF LOURDES WAS DERIVED, IS VALID.
(2)WHETHER LOURDES IS AN INNOCENT PURCHASER FOR VALUE WHO IS ENTITLED TO THE APPLICATION OF THE MIRROR DOCTRINE.
(3)WHETHER MAMERTO HAS BETTER RIGHT OVER THE SUBJECT LAND.
Section 15. If the court, after hearing, finds that the documents presented, as supported by parole evidence or otherwise, are sufficient and proper to warrant the reconstitution of the lost or destroyed certificate of title, and that petitioner is the registered owner of the property or has an interest therein, that the said certificate of title was in force at the time it was lost or destroyed, and that the description, area and boundaries of the property are substantially the same as those contained in the lost or destroyed certificate of title, an order of reconstitution shall be issued. The clerk of court shall forward to the register of deeds a certified copy of said order and all the documents which, pursuant to said order, are to be used as the basis of the reconstitution. If the court finds that there is no sufficient evidence or basis to justify the reconstitution, the petition shall be dismissed, but such dismissal shall not preclude the right of the party or parties entitled thereto to file an application for confirmation of his or their title under the provisions of the Land Registration Act. [Emphases supplied]
As early as the case of Strait Times, Inc. v. CA, the Court has held that when the owner's duplicate certificate of title has not been lost, but is, in fact, in the possession of another person, then the reconstituted certificate is void, because the court that rendered the decision had no jurisdiction. Reconstitution can be validly made only in case of loss of the original certificate. This rule was reiterated in the cases of Villamayor v. Arante, Rexlon Realty Group, Inc. v. [CA], Eastworld Motor Industries Corporation v. Skunac Corporation, Rodriguez v. Lim, Villanueva v. Viloria, and Camitan v. Fidelity Investment Corporation. Thus, with evidence that the original copy of the TCT was not lost during the conflagration that hit the Quezon City Hall and that the owner's duplicate copy of the title was actually in the possession of another, the RTC decision was null and void for lack of jurisdiction.xxx xxx xxx
In reconstitution proceedings, the Court has repeatedly ruled that before jurisdiction over the case can be validly acquired, it is a condition sine qua non that the certificate of title has not been issued to another person. If a certificate of title has not been lost but is in fact in the possession of another person, the reconstituted title is void and the court rendering the decision has not acquired jurisdiction over the petition for issuance of new title. The courts simply have no jurisdiction over petitions by (such) third parties for reconstitution of allegedly lost or destroyed titles over lands that are already covered by duly issued subsisting titles in the names of their duly registered owners. The existence of a prior title ipso facto nullifies the reconstitution proceedings. The proper recourse is to assail directly in a proceeding before the regional trial court the validity of the Torrens title already issued to the other person.17 [Emphases supplied and citations omitted]
An innocent purchaser for value is one who buys the property of another, without notice that some other person has a right or interest in the property, for which a full and fair price is paid by the buyer at the time of the purchase or before receipt of any notice of claims or interest of some other person in the property. It is the party who claims to be an innocent purchaser for value who has the burden of proving such assertion, and it is not enough to invoke the ordinary presumption of good faith. To successfully invoke and be considered as a buyer in good faith, the presumption is that first and foremost, the "buyer in good faith" must have shown prudence and due diligence in the exercise of his/her rights. It presupposes that the buyer did everything that an ordinary person would do for the protection and defense of his/her rights and interests against prejudicial or injurious concerns when placed in such a situation. The prudence required of a buyer in good faith is not that of a person with training in law, but rather that of an average man who 'weighs facts and circumstances without resorting to the calibration of our technical rules of evidence of which his knowledge is nil.' A buyer in good faith does his homework and verifies that the particulars are in order — such as the title, the parties, the mode of transfer and the provisions in the deed/contract of sale, to name a few. To be more specific, such prudence can be shown by making an ocular inspection of the property, checking the title/ownership with the proper Register of Deeds alongside the payment of taxes therefor, or inquiring into the minutiae such as the parameters or lot area, the type of ownership, and the capacity of the seller to dispose of the property, which capacity necessarily includes an inquiry into the civil status of the seller to ensure that if married, marital consent is secured when necessary. In fine, for a purchaser of a property in the possession of another to be in good faith, he must exercise due diligence, conduct an investigation, and weigh the surrounding facts and circumstances like what any prudent man in a similar situation would do.23 [Emphases supplied and citations omitted]
Endnotes:
1 Penned by Associate Justice Pamela Ann Abella Maxino, with Associate Justice Gabriel T. Ingles and Associate Justice Renato C. Francisco, concurring; rollo, pp. 45-57.
2 Id. at 59-64.
3 Penned by Presiding Judge Generosa G. Labra; id. at 227-230.
4 Id. at 66-67.
5 Id. at 117.
6 Id. at 66-67.
7 Id. at 80.
8 Id. at 80-81.
9 Id. at 124.
10 Id. at 81.
11 Id. at 81-82.
12 Id. at 82.
13 Id. at 246-268.
14 Id. at 271-291.
15Sebastian v. Spouses Cruz, G.R. No. 220940, March 20, 2017.
16 725 Phil. 273 (2014).
17 Id. at 285-288.
18Republic v. Umali, 253Phil. 732, 738 (1989).
19Locsin v. Hizon, G.R. No. 204369, September 17, 2014, 735 SCRA 547, 557.
20Cruz v. Court of Appeals, 346 Phil. 506, 511 (1997).
21Locsin v. Hizon, supra note 19, at 556.
22Nobleza v. Nuega, G.R. No. 193038, March 11, 2015, 752 SCRA 602.
23 Id. at 610-611.
24 TSN, dated January 11, 2007; rollo, p. 194.
25 Id. at 197.
26 Id. at 196.
27 Id. at 202.
28Spouses Cusi v. Domingo, 705 Phil. 255, 268 (2013).
29 TSN, dated January 11, 1997; rollo, p. 205.
30Spouses Cusi v. Domingo, supra note 28, at 271.
31Bayoca v. Nogales, 394 Phil. 465, 481 (2000).
32Heirs of Teodoro de la Cruz v. Court of Appeals, 358 Phil. 652, 660 (1998).
33Development Bank of the Philippines v. Court of Appeals, 387 Phil. 283, 296 (2000).
34Spouses Reyes v. Montemayor, 614 Phil. 256, 275 (2009).