Jared Land Ti - 3rd Set

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G.R. No. 108525 September 13, 1994

SPOUSES RICARDO AND MILAGROS HUANG, petitioners,

vs.

COURT OF APPELAS, JUDGE, PEDRO N. LAGGUI, Presiding Judge, RTC, Makati, Br. 60, and SPOUSES DOLORES AND ANICETO

SANDOVAL, respondents.

Sometime in 1965 respondent Dolores Sandoval wanted to buy two (2) lots in Dasmariñas Village, Makati, but was advised

by petitioner Milagros Huang, wife of her brother, petitioner Ricardo Huang, that the policy of the subdivision owner

forbade the acquisition of two (2) lots by a single individual.

Consequently, Dolores purchased Lot 21 and registered it in her name. She also purchased the adjacent lot, Lot 20, but

heading the advice of Milagros, the deed of sale was placed in the name of Ricardo and Registered in his name under TCT

No. 204783.

On 19 March 1968, to protect her rights and interests as the lawful owner of Lot 20 and its improvements, Dolores

requested the Huangs to execute in her favor a deed of absolute sale with assumption of mortgage over the property. The

latter obliged.

On 15 March 1980, the Huang spouses leased the house to Deltron-Sprague Electronics Corporation for its various

executives as official quarters without first securing the permission of Dolores. Dolores tolerated the lease of the property

as she did not need it at that time. But, after sometime, the lessees started prohibiting the Sandoval family from using the

swimming pool and the Huangs then began challenging the Sandovals' ownership of the property.

On the basis of the evidence presented, the trial court found that it was indeed Dolores who brought Lot 20 but had it

registered in the name of Ricardo; and, it was she who built the house and swimming pool thereon and the fence enclosing

Lots 20 and 21. As regards the deed of sale with assumption of mortgage, the trial court found that it was signed voluntarily

by the Huang spouses so much so that their claim that they were misled into signing it was unbelievable.

ISSUE: Whether or Not there is an implied trust and W/N Dolores’ action has already prescribed?

HELD:

Petitioners assert that the finding of the Court of Appeals of a resulting or implied trust between them and Dolores is not

supported by evidence. On the contrary, the deed of sale with assumption of mortgage has all the elements of an equitablemortgage. Granting arguendo that a resulting or implied trust exists between the parties, its enforcement is already barred

by prescription.

Petitioners argue that when the suit in the trial court was filed by Dolores on 19 February 1981 more than ten (10) years

had already lapsed since TCT No. 204783 was issued on 11 October 1967. They also contend that jurisprudence has

established the rule that the prescriptive period for an action for reconveyance based on fraud is ten (10) years, and that a

resulting or implied trust is totally incompatible with the deed of sale with assumption of mortgage, hence, the existence of

said deed cannot be vaguelly dismissed as a mere security.

On the part of Dolores, she was able to prove by overwhelming evidence that she purchased Lot 20 with her own funds.

As a whole, spouses Huang's evidence failed to help them in their bid to establish ownership over Lot 20 and itsimprovements. They should know the Chinese proverb that "one simply cannot attain his purpose of chewing food well if

he were to do it by means of loose teeth."

Ricardo's version of the circumstances under which he signed the deed of question is incredible. Human experience argues

against the claim that a highly educated and mature man like Ricardo would sign a deed of sale without reading or knowing

its contents.

On the contrary, the testimony of Dolores is more in accord with reason and clearly disproves Ricardo's gratuitous

allegations. She testified that she asked Ricardo and Milagros to sign the deed of sale for her and her children's protection

because time would come when they would want the property for themselves



In the present case, Dolores provided the money for the purchase of Lot 20 but the corresponding deed of sale and transfe

certificate of title were placed in the name of Ricardo Huang because she was advised that the subdivision owner

prohibited the acquisition of two (2) lots by a single individual. Guided by the foregoing definitions, we are in conformity

with the common finding of the trial court and respondent court that a resulting trust was created. Ricardo became the

trustee of Lot 20 and its improvements for the benefit of Dolores as owner.

Petitioners raise the issue of prescription. But the action to compel the trustee to convey the property registered in his

name for the benefits of the cestui que trust does not prescribe.28

If at all, it is only when the trustee repudiates the trust

that the period of prescription commences to run.29

The prescriptive period is ten (10) years from the repudiation of the trust.

We agree with the trial court that the action filed by Dolores has not prescribed. Firstly, Ricardo has not performed any

unequivocal act of repudiation amounting to an ouster of Dolores. The only acts which may be considered as indicative of

his intention not to respect the trust anymore were his leasing the house without the prior knowledge of Dolores; his

refusal to carry out the demand of Dolores that he must ask the lessees to vacate the house; and, his refusal to give the

necessary papers to Dolores to enable her to get the title from the SSS. Secondly, the foregoing acts are not positive acts of

repudiation; and, thirdly, the evidence on such acts is unclear and inconclusive. But even if the foregoing acts were manifest

acts of repudiation made known to Dolores, the fact remains that they were done at the earliest only on 15 March 1980

when Ricardo leased Lot 20 and its improvements to Deltron. Dolores' complaint before the trial court was filed on 19

February 1981, or within the 10-year prescriptive period.

Petitioners are of the mistaken notion that the 10-year prescriptive period is counted from the date of issuance of the

Torrens certificate of title. This rule applies only to the remedy of reconveyance which has its basis on Sec. 53,

par. 3, P.D. No. 1529, otherwise known as the Property Registration Decree,34

and Art. 1456 of the Civi

Code.35

Reconveyance is available in case of registration of property procured by fraud thereby creating a constructivetrus

between the parties, a situation which does not obtain in this case.

WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals dated 28 September 1992 and its

resolution dated 8 January 1993, both sustaining the decision of the Regional Trial Court, are AFFIRMED, with costs against

petitioners.

SO ORDERED

G.R. No. L-17951 February 28, 1963

CONRADO C. FULE and LOURDES F. ARAGON, petitioners,

vs.

EMILIA E. DE LEGARE and COURT OF APPEALS, respondents.

It appears in evidence that the plaintiff, Emilia E. de Legare, was the owner of a parcel of land, together with aresidential house erected thereon, situated at No. 146 Sta. Mesa Boulevard Extension, San Juan, Rizal, her

ownership being evidenced by Transfer Certificate of Title No. 21253, issued by the Office of the Register of Deeds

of the province of Rizal.

She was living in that house together with defendant John W. Legare, her adopted son, and a maid named Purita

Tarrosa. On September 26, 1951, the plaintiff, thru a public deed, constituted on the above mentioned house and

lot a first class mortgage in favor of defendant Tomas Q. Soriano to guarantee the payment of a loan in the amount

of P8,000.00. This deed of mortgage was on the same date recorded in the Office of the Register of Deeds of the

province of Rizal and annotated in the memorandum of encumbrances of transfer certificate of title No. 21253.

At about 9:00 o'clock in the evening of March 29, 1953, while the plaintiff, John W. Legare, and Purita Tarrosa were

seated in the drawing room of the house above referred to, an unknown man intruded into the room, approached



the plaintiff, covered her mouth, and, pressing a knife on her side, demanded that she give him P10,000.00 if she

did not like to be killed. The plaintiff replied that she did not have that amount.

After the intruder was gone John W. Legare approached the plaintiff, and exhibiting to her a paper told her to sign

it as with the same he could secure from the U.S. Veterans Administration the amount which they needed to

deliver to that intruder. The plaintiff, who did not know how to read nor write, although she could sign her name,

asked John W. Legare what that paper was. The latter answered that it was an application for payment of

compensation. As plaintiff had confidence in John W. Legare and prior to that occasion she had received from the

U.S. Veterans Administration a letter concerning some compensation she was to receive, she signed that paper.

After the paper was signed by the plaintiff, John W. Legare had Purita Tarrosa sign it as a witness, without

however, allowing the latter to read it. After that paper was thus signed, John W. Legare told the plaintiff and Purita Tarrosa to pack up their things as

they were leaving the house to hide in a hotel, adding that the men who came earlier that evening were Huks.

On May 7, 1953, however, John W. Legare came to the hotel, gave the plaintiff a five-peso bill, and told her that

she could use the amount for transportation expenses if she wanted to leave the hotel. On the following morning

the plaintiff and Purita Tarrosa left the hotel and went direct to her house at Sta. Mesa Boulevard Extension. When

they arrived at the house, however, they found that it was occupied by strangers, and that all her furniture and

personal belongings had disappeared. Inquiring from those strangers how they happened to occupy the house, the

latter told her that John W. Legare had sold the house to them and that it was no longer hers.

The plaintiff thereupon sought the help of her attorney. It was then discovered that the paper which John W

Legare had the plaintiff and Purita Tarrosa sign in the evening of March 29, 1953 was a deed of sale of the lot and

house in question in favor of John W. Legare for the sum of P12,000.00, and that it was supposed to have been

executed on the 7th day of April, 1953, and acknowledged before a notary public on that date

ISSUE:

Were the herein petitioners purchasers in good faith and for value of the properties here contested?

HELD:

Guided by the facts found by the Court of Appeals, We hold the herein petitioners innocent purchasers for value of the

house and lot here disputed. In consequence, they are here adjudged the lawful owners thereof.

A purchaser in good faith is one who buys property of another, without notice that some other persons has a right to, or

interest in, such property and pays a full and fair price for the same, at the time of such purchase, or before he has notice of

the claim or interest of some other persons in the property. Good faith consists in an honest intention to abstain fromtaking any unconscientious advantage of another (Cui and Joven v. Henson, 51 Phil. 606). We have measured the conduct o

the petitioner spouses by this yardstick.

These facts were uncontroverted. The negotiation and transaction which eventually caused the certificate of title to be

transferred from the herein respondent to the petitioner spouses were conducted by a real estate broker licensed since

1938. Nothing in John W. Legare's person or behaviour suggested anything suspicious. He was the adopted son of the

herein respondent, and, to the time that he was contracting with the petitioner spouses, he had not been known to commit

crime or dishonesty. On the contrary, John has had previous dealings with the real estate broker during which he exhibited

the expected degree of trustworthiness..

It is true that at the time the herein petitioners purchased the properties from John W. Legare, he was not yet the

registered owner of the same. This fact alone, however, could not have caused the herein petitioners to lose their status as

innocent purchasers for value. It should be recalled that although the title was in the name of the respondent Emilia E. de

Legare, the certificate of title was in the possession of her adopted son, John. Under Section 55 of Act 496, as amended,

John's possession of the certificate and his subsequent production of it to the herein petitioners operated as a "conclusive

authority from the registered owner to the register of deeds to enter a new certificate."

Although the deed of sale in favor of John W. Legare was fraudulent, the fact remains that he was able to secure a

registered title to the house and lot. It was this title which he subsequently conveyed to the herein petitioners. We have

indeed ruled that a forged or fraudulent deed is a nullity and conveys no title (Director of Lands v. Addison, 49 Phil. 19).

However, We have also laid down the doctrine that there are instances when such a fraudulent document may become the

root of valid title. One such instance is where the certificate of title was already transferred from the name of the true

owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then,

the vendee had the right to rely upon what appeared in the certificate (Inquimboy vs. Cruz, G.R. No. L-13953, July 28, 1960).

We have been constrained to adopt the conclusion here set forth because under the Torrens system, "registration is the

operative act that gives validity to the transfer or creates a lien upon the land (Secs. 50 and 51, Land Registration Act)



Consequently, where there was nothing in the certificate of title to indicate any cloud or vice in the ownership of the

property, or any encumbrance thereon, the purchaser is not required to explore farther than what the Torrens title upon its

face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto.

This Court sympathizes with the respondent. It is aware of the treacherous, painful fraud committed on her by her adopted

son. But positive provisions of law and settled jurisprudence cannot be subordinated to that feeling.

Besides, the records of this case reveal that the herein respondent is herself not entirely free from blame. We note that

when John presented to her the document which turned out to be a bed of conveyance in his favor, she readily affixed her

signature thereto upon the simple representation of John that it was a document pertaining to her claim with the U.S

Veterans Administration. She could have asked her maid to read the contents of the same for her and yet she did not.

These, We believe, amount to a lack of prudence and precaution on the part of Mrs. Emilia de Legare. IN VIEW OF THE FOREGOING, the decision of the Court of Appeals is hereby reversed and set aside. A new one is here

entered dismissing the respondent's complaint and declaring the petitioners herein the lawful owners of the properties

here involved. Without pronouncement as to costs

G.R. No. 120122 November 6, 1997

GLORIA R. CRUZ, petitioner,

vs.

COURT OF APPEALS, ROMY V. SUZARA and MANUEL R. VIZCONDE, respondents.

Gloria R. Cruz was the owner of Lot 10, BLK. 565, PSD-38911, with an area of 747.7 square meters, together with the

improvements thereon, situated at 22 Bituan St., Bgy. Doña Imelda, Quezon City, covered by TCT No. 242553 in her name;

in 1977 she and respondent Romeo V. Suzara lived together as husband and wife without benefit of marriage; in Septembe

1982, solely out of love and affection for Suzara, she executed a deed of absolute sale over Lot 10 in favor of Suzara withou

any monetary consideration; thereafter, Suzara registered the document in his favor and used the property as collateral for

a bank loan P350,000.00; he however failed to pay the loan so that after four (4) years the mortgage was foreclosed. She

paid the bank P40,638.88 to restructure the loan resulting in the extension of the redemption period to two (2) years.

However, without her knowledge and before the expiration of the extended period, Suzara redeemed the property. She

tried to talk to him but he avoided her. Finally, to protect her interest, she executed an Affidavit of Adverse Claim which she

filed with the Register the Deeds of Quezon City asserting that her sale in favor of Suzara was null and void for lack of

consideration and being contrary to law and public policy.

Denying petitioner's claim, respondent Suzara claimed that he was already the registered owner of the property asevidenced by TCT No. 295388, having acquired the same from petitioner through a notarized deed of absolute sale; the sale

was for a valuable consideration and not tainted with fraud nor executed under duress; and, petitioner was estopped from

impugning the validity of the sale and questioning his title over the property.

On 22 May 1990 the Register of Deeds filed a manifestation informing the trial court that the property had been sold by

respondent Suzara to his co-respondent Vizconde who was already the registered owner thereof and since Vizconde was

not impleaded in the case the notice of lis pendens could not be annotated on his title until the requirements of law were

met and the annotation of the notice judicially ordered. As stated in the immediately preceding paragraph, the motion to

admit amended complaint impleading respondent Vizconde was filed ex parteon 3 April 1990.1

On 24 September 1990, responding to the amended complaint, Vizconde answered that there was no privity of contract

between him and petitioner; he (Vizconde) was a purchaser for value in good faith; the sale between him and Suzara was

executed on 22 December 1989 or long before the execution of the Affidavit of Adverse Claim; and, the action was barred

by laches, estoppel and prescription.

On 24 May 1993 the trial court rendered a decision dismissing the complaint and the counterclaims as well as the cross

claim of respondent Vizconde. It ruled that the sale between petitioner and respondent Suzara was valid with "love

affection and accommodation" being the consideration for the sale. It also found Vizconde an innocent purchaser for value

because at the time he purchased the property he was unaware of the adverse claim of petitioner.2

ISSUE: Whether or Not the sale between petitioner and suzara was valid and whether Vizconde was an innocent purchaser

for value?

HELD:



We cannot sustain petitioner. Although under Art. 1490 the husband and wife cannot sell property to one another as a rule

which, for policy consideration and the dictates of morality require that the prohibition apply to common-law

relationships,4

petitioner can no longer seek reconveyance of the property to her as it has already been acquired by

respondent Vizconde in good faith and for value from her own transferee.

The real purpose of the Torrens system of registration is to quiet title to land and to put a stop to any question of legality of

the title except claims which have been recorded in the certificate of title at the time of registration or which may arise

subsequent thereto.5

Every registered owner and every subsequent purchaser for value in good faith holds the title to the

property free from all encumbrances except those noted in the certificate.

Where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the

property the court cannot disregard such rights and order the total cancellation of the certificate. 7 The effect of such anoutright cancellation would be to impair public confidence in the certificate of title, for everyone dealing with property

registered under the Torrens system would have to inquire in every instance whether the title has been regularly or

irregularly issued. This is contrary to the evident purpose of the law

Both lower courts found that at the time respondent Suzara executed the deed of absolute sale on 22 December 1989 in

favor of respondent Vizconde, which was acknowledged before a notary public, Suzara was the registered owner appearing

in the certificate of title. When the sale was executed, nothing was annotated in the certificate to indicate any adverse

claim of a third person or the fact that the property was the subject of a pending litigation. It was only on 22 January 1990

after the sale to respondent Vizconde, that petitioner filed her adverse claim with the Register of Deeds.

We cannot grant petitioner's prayer to have respondent Vizconde's certificate of title declared null and void. Neither can we

order the reconveyance of the property to petitioner. Vizconde being a purchaser of registered land for value in good faith

holds an indefeasible title to the land. This is without prejudice however to any appropriate remedy petitioner may take

against her erstwhile common-law husband, respondent Suzara. WHEREFORE, the petition is DENIED. The decision of the Court of Appeals affirming that of the trial court is AFFIRMED.

Costs against petitioner.

SO ORDERED.

Jared Land Ti - 3rd Set

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