Republic of the
Supreme Court
THIRD DIVISION
|
CECILIA AMODIA VDA. DE
MELENCION, VENERANDA AMODIA, FELIPE AMODIA, EUTIQUIO AMODIA and GO KIM CHUAN,
Petitioners, - versus - HONORABLE COURT OF APPEALS and AZNAR BROTHERS REALTY COMPANY,
Respondents. |
G.R. No. 148846 Present: YNARES-SANTIAGO, J.,
Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ. Promulgated: |
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DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1]
under Rule 45 of the Rules of Civil Procedure seeking the reversal of the Court
of Appeals (CA) Decision[2]
dated
The Facts
The subject property is a 30,351 square
meter parcel of land (subject property) particularly denominated as Lot No.
3368, located at Suba-basbas, Marigondon, Lapu-Lapu City, Cebu, and part of a total area of 30,777
square meters covered by Transfer Certificate of Title (TCT) No. 20626[4]
(entire property) in the name of the late petitioner Go Kim Chuan (Go Kim
Chuan).[5]
The entire property was originally
owned by Esteban Bonghanoy[6]
who had only one child, Juana Bonghanoy-Amodia,[7]
mother of the late Leoncia Amodia and petitioners Cecilia Amodia Vda. de
Melencion, Veneranda Amodia, Felipe Amodia, and Eutiquio Amodia[8]
(the Amodias). The entire property was brought under the operation of the
Torrens System.[9]
However, the title thereto was lost during the Second World War.
On P10,200.00. On
City
(Register of Deeds). Thereafter, AZNAR made some improvements and constructed a
beach house thereon.
On P70,000.00.
The lost title covering the subject property was reconstituted pursuant to Republic
Act (RA) No. 26.[14] A
reconstituted title particularly designated as Original Certificate of Title
(OCT) No. RO-2899 was issued in the name of Esteban Bonghanoy[15]
and, subsequently, a derivative title (TCT No. 20626) was issued in the name of
Go Kim Chuan on
On
The RTC's Decision
On
Aggrieved, AZNAR appealed the RTC
Decision to the CA.[20]
The CA's
Decision
On March 30, 2001, the CA rendered a Decision
holding that the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale executed by the Amodias in favor of AZNAR was registered ahead of the Deed of Extra-Judicial Settlement with Absolute
Sale in favor of Go Kim Chuan, thus, pursuant to Article 1544 of the New Civil Code, the former deed
should be given preference over the latter; that AZNAR's adverse claim was
annotated earlier than the execution of the Deed of Extra-Judicial Settlement
with Absolute Sale in favor of Go Kim Chuan; hence, the latter should have
respected said adverse claim and should have made inquiries as to possible
defects that may exist in the title over the subject property; and that in the
absence of a final determination by a court of proper jurisdiction on the alleged forged signatures
of the Amodias in the Extra-Judicial Partition of
Real Estate with Deed of Absolute Sale, the finding of the document examiner
was insufficient for the RTC to rule in favor of the petitioners.
The CA disposed of the case in this
wise:
WHEREFORE, premises considered, the assailed decision dated February 18, 1993 of the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No. 2254-L is hereby REVERSED and SET ASIDE and a new one is hereby entered as follows:
(1) Declaring plaintiff-appellant Aznar Brothers Realty Company as the real owner of the land in question;
(2) Declaring
both the Deed of Extra-judicial Settlement with Absolute Sale dated
(3) Ordering Go Kim Chuan to deliver to the aforesaid plaintiff-appellant the possession of the land in question and to execute a registrable deed of conveyance of the subject property to the said plaintiff-appellant.
No costs.
SO ORDERED.[21]
Petitioners filed a Motion for
Reconsideration[22]
which the CA denied in its Resolution[23]
dated
Hence, this Petition based on the
following grounds:
I
II
Even assuming arguendo that the lot in question was duly registered under Act
3344 as an unregistered land, it is without prejudice to better rights and the
provision of Article 1544 of the New Civil Code would be inapplicable;
III
The Honorable Court of Appeals erred in
holding that an adverse claim was already existing at the time the subject land
was sold to petitioner Go Kim Chuan; on the contrary, the latter had purchased
the said land in good faith and for value, without notice of any fact that
would reasonably impel a closer inquiry as to the possibility of a defect in
the vendor's title; and
IV
The Court of Appeals has misapplied the case
of Heirs of Severa Gregorio v. CA, 300
SCRA 565, cited in support of its ruling that the court a quo committed error in appreciating the testimony of an expert
witness as to the forgery of the first Deed of Sale.[24]
In its Comment[25]
dated September 18, 2001, AZNAR argued,
among others, that the Petition is dismissible because the Verification and
Certification of Non-forum Shopping were not signed by all the petitioners,
invoking this Court's Decision in the case of Loquias v. Office of the Ombudsman,[26] and that
the same were signed only by one April Socorro Go, daughter of the late Go Kim
Chuan, who did not even appear to be authorized to file the instant case in
behalf of the other petitioners.
In their Reply[27]
dated
On
Per directive of the Court,[30]
AZNAR filed its Comment[31]
on the said motion wherein AZNAR manifested that it had no serious objection to
the admission of the Amended Petition if the same was intended merely to
implead the Heirs of Go Kim Chuan as petitioners. However, AZNAR interposed
strong opposition to the Amended Petition's admission since the names of the
petitioners Amodias were deleted without their written consent.
In their Reply,[32]
the Heirs of Go Kim Chuan, through counsel,
claimed that petitioners Amodias were excluded from the Amended Petition
because they can no longer be located despite diligent efforts exerted by
counsel. The counsel claims that after the rendition of the assailed CA
Decision, he sent several letters to
petitioners Amodias but they did not reply; hence, the Heirs of Go Kim Chuan, left with no
choice, filed the instant case before this Court on their own.
The Court issued a Resolution[33]
dated
In their Memorandum,[34]
petitioners Heirs of Go Kim Chuan reiterate the same issues raised in the
Original Petition and the Amended Petition. They argue that Act 3344 only
refers to transactions affecting lands or interests therein not previously
registered under the Spanish Mortgage Law or under the Torrens system; that if
AZNAR could not have registered the sale in 1964 under Act 496 because the title
over the subject property was lost, AZNAR should have availed itself of the
remedy of reconstitution; that registration under Act 3344 is without legal
effect and could not operate as constructive notice to petitioners and third
persons, hence, may not be used as basis for the application of Art. 1544 of
the New Civil Code; that the Notice of Adverse Claim of AZNAR was annotated on
TCT No. 20626 only on February 14, 1990 after the execution of the Deed of
Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan on
February 18, 1989, hence, the CA erred when it held that Go Kim Chuan was not a
buyer in good faith for supposedly having knowledge of such adverse claim; and
that the doctrine laid down in Heirs of
Severa Gregorio v. CA[35]
is inapplicable since it referred to a case wherein the original copy of
the document under review was not produced in evidence while in the instant case, the original copy of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed by
the Amodias in favor of AZNAR was presented before the trial court judge.
On the other hand, in its Memorandum,[36]
AZNAR maintains that the Original Petition is dismissible because the
Verification and Certification of Non-Forum Shopping thereof were not signed by all the
petitioners. AZNAR further claims that the Amended Petition was filed in
order to cure a fatal defect which should not be countenanced by this Court.
AZNAR also contends that Go Kim Chuan was a buyer in bad faith as he had prior
constructive notice that the subject property was sold to AZNAR because the
sale was registered with the Register of Deeds under Act 3344; that the 1964
sale was registered under Act 3344 because the subject property was not
actually covered by a Torrens title at the time; that there was no other mode
of registration except under Act 3344; that
Go Kim Chuan had to wait for the reconstitution of the lost title, hence, it could not
be said that he examined any certificate of title and could feign ignorance
of the sale in favor of AZNAR; that the second sale did not transfer the
subject property to Go Kim Chuan since it was no longer within the vendors'
power to convey; that with respect to the issue of forgery, the finding of the
document examiner is not conclusive; and that such issue was belied by
petitioner Veneranda Amodia herself when
she declared that the negotiated sale in 1964 between AZNAR and the Amodias was
not consummated because the latter did not receive the full consideration for
the subject property.
Before resolving the main issues
raised, the Court shall first deal with an apparent procedural lapse in this
case.
Counsel for petitioners filed a Motion
for Leave to Admit Amended Petition for
Review on Certiorari in order to
implead the Heirs of the late Go Kim Chuan as the new petitioners and to delete
the names of petitioners Amodias because
they could no longer be located. Said petitioners sought the relaxation of the
rules so that in the interest of justice, the case can be decided on the
merits. AZNAR opposes the Amended
Petition because it was allegedly filed to cure a fatal defect in the original
petition ─ non-compliance with the rules on Verification and
Certification of Non-Forum Shopping.
In this regard, the case of Iglesia ni Cristo v. Ponferrada[37]
is instructive, viz.:
The purpose of verification is simply to secure an assurance that the allegations of the petition (or complaint) have been made in good faith; or are true and correct, not merely speculative. This requirement is simply a condition affecting the form of pleadings, and noncompliance therewith does not necessarily render it fatally defective. Indeed, verification is only a formal, not a jurisdictional requirement.
The issue in the present case is not the lack of verification but the sufficiency of one executed by only one of plaintiffs. This Court held in Ateneo de Naga University v. Manalo, that the verification requirement is deemed substantially complied with when, as in the present case, only one of the heirs-plaintiffs, who has sufficient knowledge and belief to swear to the truth of the allegations in the petition (complaint), signed the verification attached to it. Such verification is deemed sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct, not merely speculative.
The same liberality should likewise be applied to the certification against forum shopping. The general rule is that the certification must be signed by all plaintiffs in a case and the signature of only one of them is insufficient. However, the Court has also stressed in a number of cases that the rules on forum shopping were designed to promote and facilitate the orderly administration of justice and thus should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. The rule of substantial compliance may be availed of with respect to the contents of the certification. This is because the requirement
of strict compliance with the provisions merely underscores its mandatory
nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded.
Thus, we
held in Iglesia ni Cristo that the
commonality of interest is material and crucial to relaxation of the Rules.
In the case at bench, the petitioners
in the Amended Petition are Heirs of the late Go Kim Chuan. They represent
their predecessor-in-interest in whose favor a title was issued covering the
subject property and said title is sought to be canceled by AZNAR. Clearly, there is presence of the commonality
of interest referred to in Iglesia ni
Cristo. Under the circumstances, the
rules may be reasonably and liberally
construed to avoid a patent denial of substantial justice, because it cannot be denied that the ends of
justice are better served when cases are determined on the merits — after all
parties are given full opportunity to ventilate their causes and defenses —
rather than on technicality or some procedural imperfections.[38]
The
Issues
We now proceed to the merits of the case. From the issues raised, there are ultimately
two questions that require resolution:
First,
did the CA misapply the doctrine in Heirs
of Severa Gregorio v. CA in ruling that the RTC committed an error in
appreciating the testimony of an expert witness as to the forgery of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale?
Second,
who between Go Kim Chuan and AZNAR has the better right over the subject
property?
We resolve the first question in the
negative.
Forgery cannot be presumed. It must be
proved by clear, positive and convincing evidence and the burden of proof rests
on the party alleging forgery. Handwriting
experts are usually helpful in the examination of forged documents because of
the technical procedure involved in analyzing them. But 1resort to these
experts is not mandatory or indispensable. A finding of forgery
does not depend entirely on the testimonies of handwriting experts, because the judge must conduct an independent examination of the questioned signature
in order to arrive at a reasonable conclusion as to its authenticity.[39]
The RTC's finding with respect to the
issue of forgery reads:
After a thorough study of the pleadings and evidence of the parties, the court finds that preponderance of evidence heavily tilts in favor of the defendants. The document relied upon by the plaintiff in its claim of ownership over the land in question, the extrajudicial partition and sale, has been found by the document examiner of the PC Crime Laboratory to be a forgery. Being a forgery, said document conveyed nothing in favor of the plaintiff. Hence, plaintiff's claim of ownership over the same has no more leg to stand on. x x x[40]
While it is true that the original
document was produced before the RTC, the finding of forgery relies wholly on
the testimony of the document examiner.
It falls short of the required independent examination to be conducted
by the trial court judge. Other than the statement of the document examiner, the
RTC decision contains no other basis to support its conclusion
of the existence of forgery. Accordingly,
the CA was correct in rejecting the RTC’s finding and in applying the doctrine
laid down in the case of Heirs of Severa
Gregorio v. CA.
However, we resolve the second question
in favor of Go Kim Chuan.
Without doubt, we have here a case of
double sale of registered land. Apropos
is Article 1544 of the New Civil Code which provides:
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.
We have already ruled that the
registration contemplated in this provision refers to registration under the
Torrens System, which considers the act
of registration as the operative act[41]
that gives validity to the transfer or creates a lien upon the land.[42]
This rule precisely applies to cases
involving conflicting rights over registered property and those of innocent
transferees who relied on the clean title of the properties.[43]
Thus, we held that registration must be
done in the proper registry in order to bind the same.[44]
In the case at bench, it is
uncontroverted that the subject property was under the operation of the Torrens
System even before the respective conveyances to AZNAR and Go Kim Chuan were
made. AZNAR knew of this, and admits this as fact. Yet, despite this knowledge,
AZNAR registered the sale in its favor under Act 3344 on the contention that at
the time of sale, there was no title on file. We are not persuaded by such a lame excuse.
Act 3344 provides for the system of recording of
transactions or claims over unregistered real estate[45]
without prejudice to a third party with a better
right.[46]
But if the land is registered under the
Land Registration Act (and therefore has a Torrens Title), and it is sold and the sale is registered not
under the Land Registration Act but under Act 3344, as amended, such sale is not considered registered, as the term
is used under Art. 1544 of the New Civil Code.[47]
In this case, since the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR was
registered under Act No. 3344 and not under Act No. 496, the said document is
deemed not registered.[48]
Rather, it was the sale in favor of Go
Kim Chuan which was registered under Act No. 496.
AZNAR insists
that since there was no
Although it is obvious that Go Kim
Chuan registered the sale in his favor under Act 496 while AZNAR did not, we
still cannot make an outright award of the subject property to the petitioners
solely on that basis. For the law is
clear: mere registration of title is not
enough. Good faith must accompany the registration.
Thus, to be able to enjoy priority
status, the second purchaser must be in good faith, i.e., he must have no
knowledge of the previous alienation of the property by the vendor to
another. Notably, what is important for
this purpose is not whether the second buyer is a buyer in good faith, but whether
he registers the second sale in good faith, meaning, he does so without
knowledge of any defect in the title over the property sold. [52]
To fully resolve the second question,
therefore, it is imperative that we determine whether Go Kim Chuan was a registrant
in good faith.
The CA found that AZNAR registered its
Notice of Adverse Claim ahead of the
Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim
Chuan. Because of this, the CA declared that Go Kim Chuan was
not a buyer in good faith, because he
should have respected such adverse claim or, at least, inquired into the
validity thereof.
We do not agree.
While factual issues are not within the
province of this Court, as it is not a trier of facts and is not required to examine
the oral and documentary evidence de novo,
this Court has the authority to review and, in proper cases, reverse the
factual findings of lower courts in the following instances: (a) when the
findings of fact of the trial court are in conflict with those of the appellate
court; (b) when the judgment of the appellate court is based on a
misapprehension of facts; and, (c) when the appellate court manifestly
overlooked certain relevant facts which, if properly considered, would justify a different conclusion.[53]
The instant case falls squarely within
the foregoing exceptions.
Concededly, inscription of an adverse
claim serves as a warning to third parties dealing with a piece of real
property that someone claims an interest therein or that there is a right
superior to that of the titled owner.[54]
However, as pointed out by petitioners and as admitted by AZNAR, the Notice of Adverse Claim was annotated on TCT No. 20626 only on
an adverse
claim which was not previously annotated on the lost title or on the new one, or be shackled
by a claim which he did not have any knowledge of.
Citing Santiago v. Court of Appeals,[55]
AZNAR contends that even if the adverse claim was annotated on TCT No. 20626
only on February 4, 1990, the prior registration of the sale in its favor under
Act 3344 served as constructive notice to Go Kim Chuan and thus negates the
latter's claim of good faith, since the Court held in that case, “Registration, however, by the first
buyer under Act 3344 can have the effect of constructive notice to the second
buyer that can defeat his right as such buyer in good faith.”
AZNAR's reliance on
Moreover, before buying the subject
property, Go Kim Chuan made verifications with the Office of the City Assessor
of Lapu-Lapu City and the Register of Deeds. He likewise visited the premises
of the subject property and found that nobody interposed any adverse claim
against the Amodias. After he decided to buy the subject property, he paid all
taxes in arrears, caused the publication of the Deed of Extra-Judicial
Settlement with Absolute Sale in a newspaper of general circulation, caused the reconstitution of the lost
certificate of title and caused the issuance of the assailed TCT in his name.[57]
Given these antecedents, good faith on
the part of Go Kim Chuan cannot be doubted.
We also note that AZNAR's complaint for
cancellation of title contains no allegation
that the (second) purchaser was aware of
defects in his title. In the absence of such an allegation and proof of bad
faith, it would be grossly inappropriate for this Court to render judgment
against the purchaser who had already acquired title not only because of lack
of evidence, but also because of the indefeasibility and conclusiveness of such
title.[58]
Finally, it is worth stressing that the
WHEREFORE,
the instant petition for review is GRANTED.
The Decision of the Court of Appeals in
CA-G.R. CV No. 51814 is REVERSED and
SET ASIDE. The Decision of the
SO
ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson
|
MA. ALICIA AUSTRIA-MARTINEZ Associate
Justice |
MINITA V. CHICO-NAZARIO Associate Justice |
RUBEN
T. REYES
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson, Third Division
C E R T I F I C A T I O N
Pursuant to Article VIII, Section 13 of the Constitution,
and the Division Chairperson's Attestation, I certify that the conclusions in
the above decision were reached in consultation before the case was assigned to
the writer of the opinion of the Court.
REYNATO S. PUNO
Chief Justice
[1] Dated
[2] Particularly
docketed as CA-G.R. C.V. No. 51814, penned by Associate Justice B.A.
Adefuin-Dela Cruz (now retired), with Associate Justices Andres B. Reyes, Jr.
and Josefina Guevara-Salonga, concurring; id. at 34-42.
[3] Particularly
docketed as Civil Case No. 2254-L; id. at 82-87.
[4]
[5] Go
Kim Chuan died on
[6] Also
referred to as Esteban Bunghanoy in other pleadings and documents.
[7] Also
referred to as Juana Bunghanoy in other pleadings and documents.
[8] Also
referred to as Eustaquio Amodia in other pleadings and documents.
[9] Act
No. 496 (1903) or the Land Registration Act, now Presidential Decree No. 1529
(1978) or the Property Registration Decree.
[10] Rollo, p. 77.
[11] Act No. 3344 is the law amending Act No. 2837, which in
turn amended Section 194 of the Administrative Code, otherwise known as the
SYSTEM OF RECORDING FOR UNREGISTERED REAL ESTATE.
[12] Leoncia
Amodia, at the time of the execution of said Deed, already passed away. She
died single and without issue.
[13] Rollo, pp. 78-79.
[14] Entitled:
AN ACT PROVIDING A SPECIAL PROCEDURE FOR THE RECONSTITUTION OF TORRENS
CERTIFICATES OF TITLE LOST OR DESTROYED and approved on September 25, 1946.
[15] Supra note 3.
[16] CA rollo, p. 27.
[17] Particularly
denominated as Entry. No. 994-V-VIII-D.B. made by Ateniso Coronado, Assistant
Administrator of AZNAR, record, p. 8.
[18] Complaint
for Civil Case No. 2254-L, rollo, pp.
74-76.
[19] Answer
for Civil Case No. 2254-L, records, pp. 10-13.
[20] Notice
of Appeal, id. at 93.
[21] Rollo, p. 42.
[22]
[23]
[24]
[25]
[26] 392
Phil. 596 (2000)
[27] Rollo, pp. 107-114.
[28]
[29]
[30] Resolution
dated
[31] Rollo, pp. 203-206.
[32]
[33]
[34]
[35] G.R.
No. 117609,
[36]
[37] G.R. No. 168943,
[38]
[39] Jimenez v. Commission on Ecumenical Mission
and Relations of the United Presbyterian Church in the USA, 432 Phil. 895,
907 (2002), citing Heirs of Severa
Gregorio v. CA, supra note 35. (Emphasis supplied).
[40] Record,
pp. 90-91.
[41] Naval v. Court of Appeals, G.R. No. 167412,
[42] Naawan Community
Rural Bank Inc. v. Court of Appeals, 443 Phil. 56, 64 (2003).
[43] Aznar Brothers Realty Company v. Court of
Appeals, 384 Phil. 95, 113-114 (2000).
[44] Soriano v. Heirs
of Magali, 118 Phil. 505, 511 (1963), citing Secs. 50 and 51 of Act 496.
[45] Tapec v. Court of Appeals, G.R. No.
111952,
[46] Radiowealth
Finance Co. v. Palileo, 274 Phil.
516 (1991).
[47] Abrigo v. De Vera,
G.R. No. 154409,
[48] Aznar Brothers
Realty Company v. Aying, G.R. No. 144773, May 16, 2005, 458 SCRA 496, 501.
[49] Heirs of Clemente Ermac v. Heirs of Vicente
Ermac, 451 Phil. 368, 377 (2003).
[50] Supra note 48.
[51] Claverias
v. Quingco, G.R. No. 77744, March 6,
1992, 207 SCRA 66, 84.
[52] Blanco v. Rivera, G.R. No. 145878, April 25, 2006, 488 SCRA
148, 154, citing Bayoca v. Nogales,
340 SCRA 154 (2000).
[53] Tan v. Court of
Appeals, 421 Phil. 134, 141-142 (2001).
[54] Velasquez, Jr. v.
Court of Appeals, G.R. Nos. 138480 and 139449, March 25, 2004, 426 SCRA
309, 314.
[55] 317 Phil. 400, 414 (1995).
[56] Abrigo v. De Vera, supra note 47, at 557.
[57] Supra
note 19, at 11-12.
[58] Velasquez, Jr. v. Court of Appeals,
supra note 54, at 315, citing Chu, Sr. v.
Benelda Estate, 353 SCRA 424 (2001).
[59] Republic v. Guerrero, G.R. No. 133168,