Carillo vs CA
Spouses Valdez vs CA
by Jan Louenn "JLL" Lumanta 

 

[ G.R. NO. 121165, September 26, 2006 ]

HON. DOMINADOR F. CARILLO et al VS. HON. COURT OF APPEALS, MARIA PAZ DABON AND ROSALINA DABON

FACTS:  Maria Gonzales alleged that on April 26, 1988, she paid P10,000 to Priscilla as downpayment on the P400,000 purchase price of the lot with improvements, since Priscilla had a special power of attorney from her son, Aristotle, the owner of the land. They also agreed that the balance would be paid within three months after the execution of the deed of sale. Yet, after the lapse of the period and despite repeated demands, Priscilla did not execute the deed of sale.  Since Priscilla failed to execute the Deed of Sale, Gonzales filed a case for specific performance and impleaded Priscilla (not Aristotle). The latter defaulted and judgment was rendered against her ordering the nullification of the OCT of Aristotle and the issuance of a new certificate of title in favor of Gonzales. The Dabons thereafter surfaced and sought to annul the judgment of the trial court asserting that they purchased the property from Aristotle himself and they were not impleaded as the real parties in interest.

ISSUE: Who has better title to the land, Gonzales or Dabon?

RULING:

DABON. The decision of the lower court in favor of Gonzales was void due to extrinsic fraud. There is extrinsic fraud when a party has been prevented by fraud or deception from presenting his case. Fraud is extrinsic where it prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured. The overriding consideration when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court.  Of the indices of fraud cited by the Court of Appeals, the failure to comply with the notification requirement in the petition for the cancellation of title amounts to extrinsic fraud. Under the Property Registration Decree, all parties in interest shall be given notice.  There is nothing in the records that show Gonzales notified the actual occupants or lessees of the property. Further, the records show that Gonzales had known of the sale of the land by Aristotle to the Dabons and despite her knowledge, the former did not include the Dabons in her petition for the annulment of title. Deliberately failing to notify a party entitled to notice also constitutes extrinsic fraud.  This fact is sufficient ground to annul the order allowing the cancellation of title in the name of Gonzales.  The court never acquired jurisdiction. It must be noted that the property was sold to Gonzales in 1988, while the same was sold to the Dabons in 1989; nonetheless, the requirements of double-sale are two-fold: acquisition in good faith and registration in good faith. 

SPOUSES PASTOR VALDEZ AND VIRGINIA VALDEZ, PETITIONERS, VS. HONORABLE COURT OF APPEALS AND FELICIDAD VIERNES, FRANCISCO ANTE, AND ANTONIO ANTE, RESPONDENTS.

Spouses Francisco Ante and Manuela Ante were the registered owners of a parcel of land located in  Quezon City.  Said spouses executed a special power of attorney in favor of their son, Antonio Ante, a lawyer, authorizing him to execute any document conveying by way of mortgage or sale a portion or the whole of said property, to receive payment and dispose of the same as he may deem fit and proper under the premises. Antonio Ante subdivided the Land into Lot A and B and offered to sell the lots to Eliseo Viernes, who was occupying the same with the permission of Ante.  Viernes, however, turned down the offer as he did not have money. Antonio Ante, as attorney in fact, executed a deed of sale of the lot in favor of spouses Pastor Valdez and Virginia Valdez.  The Valdez spouses demanded from Antonio Ante the delivery of the owner’s duplicate copy of TCT covering said lot.  Ante promised them that he will deliver the title to them in a few days.  In the meanwhile petitioners started fencing the whole lot with cement hollow blocks in the presence of spouses Eliseo and Felicidad Viernes.  On said occasion the Viernes spouses were informed by the Valdez spouses that they were fencing the same as they purchased the land from Antonio Ante.

The Valdez spouses registered the two deeds of sale dated June 15, 1980 and February 12, 1981 with the Register of Deeds of Quezon City by presenting the owner’s duplicate copy of the title.  They were, however, informed that the said owner’s duplicate certificate of title had been declared null and void per order of Judge Tutaan dated November 10, 1982.  They also found out that spouses Francisco and Manuela Ante earlier filed a petition for the issuance of a new owner’s duplicate certificate of title and to declare null and void the lost owner’s duplicate certificate of title.  The Valdez spouses also discovered that the Register of Deeds cancelled TCT. No. 141582 and in lieu thereof issued TCT No. 293889 in the name of Felicidad Viernes on the basis of a deed of assignment of the same property dated February 17, 1982 executed by Antonio Ante in her favor.

When Virginia Valdez inquired from Antonio Ante why he executed the said deed of assignment when he had previously sold the same lot to them, Ante replied that they could sue him in court.  Thus, the Valdezes filed their adverse claim over the lot covered by TCT No. 293889 in the name of Felicidad Viernes.  After trial on the merits before which the Antes were declared in default, a decision was rendered by the trial court on April 9, 1986.

Issue: 

1.      As between plaintiff-spouses Pastor and Virginia Valdez, petitioners in this case and defendant Felicidad Viernes, one of the private respondents, who is entitled to the subject lot?

Ruling:

The petition is impressed with merit.  Petitioner Spouses Pastor and Virginia Valdez are entitled to the subject lot.

Article 1544 of the Civil Code provides as follows:

"Art. 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 thereof in good faith, if it should be movable property.

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."

From the aforesaid provision of the law, should the subject of the sale be immovable property, the ownership shall vest in the person acquiring it who in good faith first recorded it in the registry of property.   From the foregoing set of facts there can be no question that the sale of the subject lot to petitioners was made long before the execution of the Deed of Assignment of said lot to respondent Viernes and that petitioners annotated their adverse claim as vendees of the property as early as September 6, 1982 with the Register of Deeds of Quezon City.  On the other hand the deed of Assignment in favor of Viernes of the said lot was registered with the Register of Deeds of Quezon City only on November 11, 1982 whereby a new title was issued in the name of Viernes as above stated.

The rule is clear that a prior right is accorded to the vendee who first recorded his right in good faith over an immovable property.  In this case, the petitioners acquired subject lot in good faith and for valuable consideration from the Antes and as such owners petitioners fenced the property taking possession thereof.  Thus, when petitioners annotated their adverse claim in the Register of Deeds of Quezon City they thereby established a superior right to the property in question as against respondent Viernes.

On the other hand, respondent Viernes cannot claim good faith in the purchase of the subject lot and the subsequent registration of the Deed of Assignment in her favor.  Even before the petitioners purchased the lot from the Antes respondent Viernes’ husband was first given the option to purchase the same by Antonio Ante but he declined because he had no money and so he was informed that it would be sold to petitioners.  After petitioners purchased the lot they immediately fenced the same with the knowledge and without objection of respondent Viernes and her husband and they were informed by the petitioners about their purchase of the same.  Moreover, when petitioners annotated their adverse claim as vendees of the property with the Register of Deeds of Quezon City, it was effectively a notice to the whole world including respondent Viernes.