THIRD DIVISION
G.R. No. 210845, January 22, 2020
SPOUSES DANILO AND CLARITA GERMAN, PETITIONERS, v. SPOUSES BENJAMIN AND EDITHA SANTUYO AND HELEN S. MARIANO, DECEASED, SUBSTITUTED BY HER HEIRS, NAMELY, JOSE MARIO S. MARIANO, MA. CATALINA SAFIRA S. MARIANO, MA. LEONOR M. HUELGAS, MARY THERESA IRENE S. MARIANO AND MACARIO S. MARIANO, RESPONDENTS.
LEONEN, J.:
When circumstances are present that should prompt a potential buyer of registered real property to be on guard, it is expected that they inquire first into the status of the property and not merely rely on the face of the certificate of title.
This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing the Decision2 and Resolution3 of the Court of Appeals, Manila, in CA-G.R. CV. No. 93628. The Court of Appeals reversed and set aside a Decision4 rendered by the Regional Trial Court of Naga City, Branch 61 in Civil Case No. 2001-0200, and held that Spouses Benjamin and Editha Santuyo were purchasers in good faith of a 400-square meter parcel of land in Naga City.
Francisco and Basilisa Bautista (the Bautista Spouses) were the registered owners of a 400-square meter parcel of land in Barangay Balatas, Naga City, under Transfer Certificate of Title No. 11867.5
Allegedly, since 1985, Danilo and Clarita German (the German Spouses) had been occupying the property as the lessees of Soledad Salapare, the caretaker for Jose and Helen Mariano (the Mariano Spouses). On April 22, 1986, the Bautista Spouses sold the property to the Mariano Spouses. On the same day, the Mariano Spouses sold the property to the German Spouses on the condition that Helen Mariano would sign the Deed of Sale upon the the German Spouses' payment of the full purchase price.6
On July 28, 1992, Benjamin and Editha Santuyo (the Santuyo Spouses) filed a case for Recovery of Ownership and Damages against the German Spouses before the Naga City Regional Trial Court, docketed as Civil Case No. RTC-92-2620. There, the Santuyo Spouses alleged that they and the Bautista Spouses entered into a sale of the property on December 27, 1991, and that they became the registered owners of the property under Transfer Certificate of Title No. 22931 as of April 28, 1992.7
The case was dismissed, but afterwards, the Santuyo Spouses filed a case for Unlawful Detainer and Damages against the German Spouses with the Naga City Metropolitan Trial Court, docketed as Civil Case No. 10575. While the Metropolitan Trial Court and the Regional Trial Court both dismissed the unlawful detainer case for lack of jurisdiction, in 2000, the Court of Appeals in ruled that the first-level courts had jurisdiction and held that the Santuyo Spouses had the right to possess the property as they were its registered owners. The Court of Appeals' Decision became final and executory on August 13, 2000.8
On January 12, 2001, the German Spouses filed a case for Declaration of Nullity of Sale, Recovery of Ownership, Reconveyance with Damages against the Santuyo Spouses and Helen Mariano before the Naga City Regional Trial Court. The case was docketed as Civil Case No. 2001-0200.9
The German Spouses claimed that, despite their payment of the full purchase price in 1988, the Mariano Spouses failed to execute the final Deed of Sale. Instead, the property was sold to Helen Mariano's sister, Editha Santuyo, and Editha's husband.10
The Regional Trial Court ruled in favor of the German Spouses. The dispositive pmiion of its January 30, 2009 Decision11 stated:
WHEREFORE, in the [sic] light of the foregoing considerations, judgment is hereby rendered:
1. Making permanent the preliminary injunction issued by this Court in its Order of February 21, 2001.
2. Declaring as null and void the deed of sale purportedly executed by Francisco Bautista in favor of Benjamin Santuyo over Lot 6, Block 6 of the Consolidation Subdivision [P]lan (LRC) Pcs-758, being a portion of the consolidation of Lot 3 , Pcs-4257 and Lot 5-A, (LRC) Psd-2672, LRC (GRRO Record No. 33067) situated in Naga City and covered by [Transfer Certificate of Title] No. 11867.
3. Ordering the cancellation of [Transfer Certificate of Title] No. 22931 issued in the name of Benjamin Santuyo by virtue of the deed of sale, and declaring the same to be without force and effect.
4. Declaring plaintiffs spouses Danilo and Clarita German as the rightful owners of the lot in question covered by [Transfer Certificate of Title] No. 11867.
5. Ordering defendants Heirs of Helen Mariano to execute in favor of plaintiffs spouses Danilo and Clarita German, a deed of absolute sale covering the lot in question covered by [Transfer Certificate of Title] No. 11867; and once accomplished to immediately deliver the said document of sale to plaintiffs Germans.No pronouncement as to costs.
SO ORDERED.12
ARTICLE 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession there o f in good faith, if it should be movable property.For A11icle 1544 to apply , the following requisites must concur:
Should it be immovable property , the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. ·
Should there be no inscription , the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.
. . . This provision connotes that the following circumstances must concur:The rule on double sales applies when the same thing is sold to multiple buyers by one seller, but not to sales of the same thing by multiple sellers.31
"(a) The two (or more) sales transactions in the issue must pertain to exactly the same subject matter, and must be valid sales transactions.
(b) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests; and
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have bought from the very same seller. "30 (Emphasis in the original)
Moreover , although it is a recognized principle that a person dealing on a registered land need not go beyond its certificate of title, it is also a firmly settled rule that where there a re 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 expected from the purchaser of a valued piece of land to inquire first into the status or nature of possession of the occupants. As in the common practice in the real estate industry, an ocular inspection of the premises involved is a safeguard that 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 preclude him from claiming or invoking the rights of a "purchaser in good faith. " It has been held that " the registration of a later sale must be done in good faith to entitle the registrant to priority in ownership over the vendee in an earlier sale."34 (Citations omitted)Here, as pointed out by the Regional Trial Court, petitioners had continuously possessed the land even prior to the 1986 sales:
Respondent Santuyo Spouses' claim that it is enough that the title is in the name of the seller is unavailing. To buy real property while having only a general idea of where it is and without knowing the actual condition and identity of the metes and bounds of the land to be bought, is negligent and careless. Failure to take such ordinary precautionary steps, which could not have been difficult to undertake for respondents Santuyo Spouses, as they were situated near where the property is located, precludes their defense of good faith in the purchase.
At the time of the sale between Jose Mariano and spouses German, the latter were already in possession of t h e land way back in 1985 and after the sale in 1986, with the permission of the spouses Mariano, plaintiffs German renovated their residential house therein which was completed in 1987. Since then they have been in actual physical possession of the land and residing therein. The plaintiffs ' possession thereof was known to the defendants Santuyo even before the execution of the deed of sale in their favor on December 27, 1991. The claim of defendants Santuyo cannot prevail upon the plaintiffs Germans who first acquired and possessed the property from spouses Mariano after the latter has bought the land from the Bautistas.
. . . .
This court is not convinced by what defendant Editha has declared that before she bought the land from the Bautistas , she had not yet seen the land but she knows that it is located inside Mariano Subdivision; that in 1986, she does not know where it is located. That even in 1990 when she was already employed by the Mariano spouses at the Sto. Niño Memorial park, she did not visit the land. And that before the land was sold to her in 1991, she did not investigate or determine what was the physical condition of the land[.]35
Despite the denial of defendants spouses Santuyo knowledge of the presence of the plaintiffs on the land in question and claim of ownership thereof, their evidence failed to show good faith in their purchase and registration of the land. Defendant Editha presented the alleged down payment receipt she made on October 2, 1986 (Exh. "4") for the lot in question she purchased from Francisco M. Bautista. The document however, which is quoted hereunder:
RECEIPT
Received from Mrs. Editha Santuyo, the amount of Twenty Thousand Pesos (P20,000.00) covered by PNB Check No. 0000038345 (Demand Draft) dated August 19, 1986, representing payment for a parcel of land located at
Naga City, sold to her by Jose Mariano.
Quezon City, October 2, 1986.
(SGD) FRANCISCO M BAUTISTA
"6. Answering defendants specifically deny the allegations of paragraph 15 of the complaint, the truth of matter being that they were tricked and deceived into signing the alluded Deed of Sale between them. Actually such deceitful machination and/or manipulation supervened when the plaintiff and their co-third party defendants Heirs of Jose Mariano prevailed upon them to sign the Deed of Absolute Sale referred to in paragraph 4 hereof This was accomplished through the joint effort of plaintiff Editha S. Santuyo and Third Party Defendant Helen S. Mariano, who are sisters, upon their representation that the letter has not sold or conveyed the subject parcel of land to any party. According to them if the sale would have to be made from the herein defendants to the plaintiffs, and not from the Marianas to the plaintiffs, there would be no assessment of penalty charges by Bureau of Internal Revenue for the registration of the sale. Relying on the foregoing representation of plaintiff Editha Santuyo and third party defendant Helen S. Mariano, the herein defendants acceeded [sic] to the former's request."36 (Emphasis in the original)
Endnotes:
Endnotes:
1 Rollo, pp. 10-40.
2 Id. at 54-73. The October 29, 2012 Decision was penned by Associate Justice Ramon A. Cruz, and concurred in by Associate Justices Noel G. Tijam (Chair and former Member of this Court) and Romeo F. Barza of the Seventh Division of the Court of Appeals, Manila.
3 Id. at 97-98. The December 18, 2013 Resolution was penned by Associate Justice Ramon A. Cruz, and concurred in by Associate Justices Noel G. Tijam (Chair and Former Member of this Court) and Romeo F. Barza of the Former Seventh Division of the Court of Appeals, Manila.
4 Id. at 41-52. The January 30, 2009 Decision was penned by Judge Maria Eden Huenda Altea.
5 Id. at 56.
6 Id.
7 Id. at 56-57.
8 Id.
9 Id. at 57.
10 Id. at 56.
11 Id. at 41-52.
12 Id.at 51-52.
13 Id. at 47.
14 Id. at 48.
15 Id. at 49-50.
16 Id. at 54-73.
17 Id. at 61-62.
18 Id. at 67-68.
19 Id. at 70.
20 Id.
21 Id. at 74-95.
22 Id. at 97-98.
23 Id. at 10-40.
24 Id. at 31.
25 Id. at 33.
26 Id. at 110-136.
27 Id. at 120.
28 Id. at 131.
29 Id. at. 133.
30 Cheng v. Genato, 360 Phil. 891 , 909 (1998) [Per J. Martinez, Second Division].
31 Manlan v. Beltran, G. R . No. 222530, October 16, 2019, <http:sc.judiciary.gov.ph="" 8952=""> [Per J. Inting , Third Division].
32 Rufloe v. Burgos, 597 Phil. 261 (2009) [Per J. Leonardo-De Castro, First Division].
33 709 Phil. 371 (2013) [Per J. Mendoza, Third Division].
34 Id . at 378.
35 Rollo, pp. 48-50.
36 Id. at 49-50.
37 Spouses Vallido v. Spouses Pono, 709 Phil. 371, 377 (2013) [Per J. Mendoza, Third Division] citing Spouses Limon v. Spouses Borras, 452 Phil. 178, 207 (2003) [Per J . Carpio, First Division].