FIRST DIVISION
JESSIE GASATAYA, G.R. No. 148147
Petitioner,
Present:
PUNO, C.J.,
Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
GARCIA, JJ.
EDITHA MABASA,
Respondent. Promulgated:
February
16, 2007
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D E C I S I O N
CORONA, J.:
Before us is an appeal by certiorari
under Rule 45 of the 1997 Rules of Civil Procedure assailing the decision[1] of the
Court of Appeals (CA) in CA-G.R. CV No. 55055 which, in turn, affirmed the
decision of the Regional Trial Court (RTC) of Lanao
del Norte, Branch 7.[2]
The
facts follow.
Respondent Editha
Mabasa’s father, Buenaventura Mabasa,
was granted a homestead patent on Lots 279, 272 and 972 located in Lala, Lanao del Norte.
Buenaventura Mabasa mortgaged these lots to secure a
loan from the Development Bank of the Philippines (DBP). Because of his failure
to pay his indebtedness, DBP foreclosed on the lots and sold them at public
auction where it emerged as the highest bidder. DBP then obtained titles to the
lots: Lot 279 under TCT No. T-2247 and consolidated Lots 272 and 972 under TCT
No. T-2448.
When Buenaventura Mabasa
died, respondent’s siblings authorized her to negotiate with DBP for the
repurchase of the lots. DBP allowed respondent to reacquire the foreclosed
properties through a deed of conditional sale for P25,875.[3]
Subsequently, respondent entered into
an agreement with petitioner’s father, Sabas Gasataya, for the latter to assume payment of her
obligation to DBP. They further agreed that Sabas Gasataya would take possession of the lots for 20 years and
develop them into a fishpond. As consideration thereof, respondent received P10,000
cash, in addition to the P25,000 that Sabas Gasataya had to pay DBP on her behalf.
Upon representation by Sabas Gasataya that respondent’s
obligation to DBP had already been settled, they entered into another agreement
denominated as “Deed of Sale of Fishpond Lands with Right to Repurchase.”
Eight
years after the execution of the above deed of sale with right to repurchase,
respondent discovered that Sabas Gasataya
had stopped paying DBP. As a result, DBP revoked her right to repurchase the
subject lots.
DBP
later on held a public auction of the properties where petitioner participated
and bid the highest price of P27,200. Eventually, he acquired titles to
the lots for which he was issued TCT No. T-11720 in lieu of TCT No. T-2447 (Lot
279) and TCT No. T-11721 for TCT No. T-2448 (Lots 272 and 972).
Respondent then filed a complaint in
the RTC for reconveyance of titles of lands with
damages[4] against
petitioner and Sabas Gasataya
(Gasatayas). She claimed that the latter deliberately
reneged on his commitment to pay DBP to: (1) revoke her right to repurchase the
lots under the deed of conditional sale and (2) subject the properties to
another public auction where petitioner could bid.
Petitioner and his father denied the
allegations saying that the deed of conditional sale assumed by the latter from
respondent was rendered ineffective by DBP’s refusal
to accept payments thereon.
The trial court ruled in favor of
respondent finding that the Gasatayas failed to
controvert her claim that they defrauded her just so petitioner could acquire
the lots at public auction.[5]
According to the trial court, the Gasatayas failed to
prove that DBP indeed rejected payments from Sabas Gasataya. The trial court ruled:
WHEREFORE,
judgment is hereby rendered in favor of the [respondent] and against [the Gasatayas] ordering [them] to wit:
a.
Ordering [petitioner] to reconvey
to [respondent] TCT. No.[T-11720] and TCT No. T-11721, both of the Registry of
Deeds for the Province of Lanao del Norte, upon
tender to and receipt by [petitioner] of the amount of P37,200.00
Philippine money;
b.
Ordering the Registrar of Deeds for the Province of Lanao del Norte to procure and cause the transfer and
registration of the aforesaid transfer certificates of title in favor and in
the name of herein [respondent] Editha S. Mabasa;
c.
Ordering [the Gasatayas] to
cede, transfer and reconvey to [respondent] the
physical possession and occupancy of Lot 279, 272 and Lot 972…as covered by the
aforesaid certificates of title;
d.
Ordering [the Gasatayas] to
pay [respondent] the sum of P5,000.00 for attorney’s fees; P5,000.00 as litigation expenses;
e.
Ordering [the Gasatayas] to
pay costs of this proceeding[s].
SO
ORDERED.[6]
Petitioner
and his father appealed to the CA which affirmed the RTC’s
decision and dismissed their appeal for lack of merit. The CA declared:
The contention of [respondent] that [the Gasatayas] deliberately chose not to pay DBP as agreed, in
order for them to acquire said properties in a fraudulent and treacherous
manner, was not fully controverted by [them]. [The Gasatayas]
failed to produce evidence to support their defenses.
xxx xxx xxx
Moreover, [the Gasatayas]
are in possession of said land[s] by virtue of a Deed of Sale with a Right to
Repurchase and not because the DBP granted it to them…[T]o facilitate their
acquisition of the land in question, [they] deliberately defaulted in the
payment of the assumed obligation to the damage and prejudice of [respondent].
Consequently, the lands in question were subjected to public bidding wherein
[petitioner] participated and eventually won…[the Gasatayas]
committed a breach of trust amounting to fraud which would warrant an action
for reconveyance.[7]
Petitioner
alone came to us via this appeal by certiorari seeking the reversal of the CA
decision.
Before us, petitioner contests the CA
decision affirming the trial court’s order to reconvey
his titles on the disputed lots to respondent who, according to him, is not the
owner thereof.
We affirm the CA.
Reconveyance is available not only to the legal
owner of a property but also to the person with a better right than the
person under whose name said property was erroneously registered.[8] While
respondent is not the legal owner of the disputed lots, she has a better right
than petitioner to the contested lots on the following grounds: first,
the deed of conditional sale executed by DBP vested on her the right to
repurchase the lots and second, her right to repurchase them would have
subsisted had they (the Gasatayas) not defrauded her.
The trial court’s findings, as
affirmed by the CA, that petitioner and his father deceived respondent to
acquire the disputed lots bind us. Well-settled is the rule that factual
conclusions of the trial court deserve respect and become irrefutable
especially when affirmed by the CA.[9] Absent any evidence that the CA overlooked
salient matters that could justify a reversal of the outcome of this case, we decline
to disturb such factual conclusions.
Petitioner, however, insists that
respondent had no right to the disputed lots since the conditional sale
agreement where such right was based had long been cancelled by DBP. According
to petitioner, a void and inexistent deed cannot override his right as
registered owner of the lots.
We disagree.
Petitioner cannot discredit the deed
of conditional sale just so he can to keep his titles to the lots. Petitioner should
be reminded that DBP revoked respondent’s right to repurchase the lots under
said deed because of the deceitful maneuverings that he and his father
employed. If we were to sustain petitioner’s argument, then we would, in effect,
reward him for his misdeed.
Neither can this Court uphold
petitioner’s contention that his titles are unsullied on the mere fact that he
purchased the properties at public auction. Fraud overthrows the presumption
that the public sale was attended with regularity. The public sale did not vest
petitioner with any valid title to the properties since it was but the
consequence of his and his father’s fraudulent schemes.
The registration of the properties in
petitioner’s name did not obliterate the fact that fraud preceded and
facilitated such registration. Actual or positive fraud proceeds from an
intentional deception practiced by means of misrepresentation of material
facts,[10] which
in this case was the conscious representation by petitioner’s father (Sabas Gasataya) that respondent’s
obligation to DBP had already been settled. It is fraud to knowingly omit or
conceal a fact, upon which benefit is obtained, to the prejudice of another.[11]
Consequently, fraud is a ground for reconveyance.[12]
Moreover, the law only protects an
innocent purchaser for value and not one who has knowledge of and participation
in the employment of fraud. An innocent
purchaser for value is one who buys the property of another
without notice that some other person has a right to or interest in that same
property, and who pays a full and fair price at the time of the purchase or
before receiving any notice of another person’s claim.[13]
Obviously, petitioner was not an innocent purchaser for value.
As
a final point, the Court takes significant note of the fact that respondent’s
father originally acquired the subject lots through homestead grant.
Commonwealth Act 141 (Public Land Act) aims to confine and preserve to the
homesteader and his kin the homestead lots. We, therefore, agree with the CA’s
disquisition that courts should “lend a stout shoulder to help keep a homestead
in the homesteader’s family” for the stern reality cannot be belied that
“homesteaders and their families are generally in the lower stratum of life”
and most likely, when they alienate the homestead, it is “out of dire
necessity.”[14]
According to the CA, desperation does not allow much of a choice, hence
homesteaders and their kin should be given every opportunity to repurchase
their homestead.
WHEREFORE, the assailed decision of the Court
of Appeals in CA-G.R. CV No. 55055 is hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
Associate Justice
WE CONCUR:
Chief Justice
Chairperson
Associate Justice
Pursuant to Section 13, Article VIII of the Constitution, I
certify that the conclusions in the above decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
[1] Penned by Associate Justice Ramon Mabutas, Jr. (now retried) and concurred in by Associate Justices Roberto A. Barrios and Edgardo P. Cruz of the Fifteenth Division of the Court of Appeals; rollo, pp. 33-42.
[2] Decided by Judge Oscar E. Zerna, id., pp. 43-52.
[3] “Exhibit C,” id., p. 68.
[4] Civil Case No. 07-111, id., pp. 60-67.
[5] Id.,
p. 51.
[6] Supra
note 2.
[7] CA
Decision, rollo, pp. 33-42.
[8] De Guzman v. Court of Appeals, G.R. No. 120004, 27 December 2002, 394 SCRA 302; Aguila v. Court of Appeals, No. L-48335, 15 April 1998, 160 SCRA 352.
[9] Pleyto v. Lomboy, G.R. No. 148737, 16 June 2004, 432 SCRA 329.
[10] Mayor v. Belen, G.R. No. 151035, 3 June 2004, 430 SCRA 561; Heirs of Manuel Roxas v. Court of Appeals, 337 Phil. 41 (1997).
[11] Id.
[12] Abejaron
v. Nabasa, 411 Phil. 552 (2001).
[13] Domingo v. Reed, G.R. No. 157201, 9 December 2005, 477 SCRA 227.
[14] Supra.