FIRST DIVISION
MACTAN-CEBU
INTERNATIONAL G.R. No. 171535
AIRPORT AUTHORITY,
Petitioner,
Present:
- versus - CARPIO,
CORONA,
SPOUSES EDITO and MERIAN
and MIRANDA NGO,
Respondents. June 5, 2009
x - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
D E C I S I O N
PUNO, C.J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of
the 1997 Rules of Civil Procedure seeking to reverse, annul and set aside (i)
the May 27, 2005 Decision[1]
of the Court of Appeals in CA–G.R. CV No. 72867 entitled “Spouses Edito and
Merian Tirol, et al. v. Mactan-Cebu International Airport Authority,” and (ii)
its February 17, 2006 Resolution[2]
denying petitioner’s motion for reconsideration.
The instant case finds its genesis in a complaint for quieting of title
filed on August 8, 1996 by respondents, Spouses Edito and Merian Tirol and Spouses
Alejandro and Miranda Ngo, against petitioner Mactan-Cebu International Airport
Authority (MCIAA). The facts were aptly summarized by the Court of Appeals as
follows:
The instant appeal
revolves around a certain parcel of land, Lot No. 4763-D, over which the
parties to the above-entitled case assert ownership and possession.
xxx xxx xxx
Plaintiffs-appellees
and business partners, Edito P. Tirol and Alejandro Y. Ngo, along with their
respective spouses, claim to have purchased a 2,000 square meter parcel of
land, Lot No. 4763-D, from a certain Mrs. Elma S. Jenkins, a Filipino citizen
married to a certain Mr. Scott Edward Jenkins, an American citizen, per Deed of
Absolute Sale dated September 15, 1993. Plaintiffs-appellees bought the said
property on the strength of the apparent clean title of vendor Jenkins as
evidenced by the Tax Declaration and Transfer Certificate of Title No. 18216, all
under Mrs. Elma Jenkins’ name, which bear no annotation of liens, encumbrances,
lis pendens or any adverse claim
whatsoever. After the sale wherein plaintiffs-appellees were purportedly
purchasers for value and in good faith, they succeeded in titling the said lot
under their names per Transfer Certificate of Title No. 27044 on September 20,
1993, and further proceeded to pay realty taxes thereon. It was only in January
1996 that plaintiffs-appellees discovered a cloud on their title when their
request for a Height Clearance with the Department of Transportation and
Communications was referred to the defendant-appellant Mactan[-]Cebu
International Airport Authority (MCIAA, for brevity), on account of the
latter’s ownership of the said lot by way of purchase thereof dating far back
to 1958.
At this point, it
becomes imperative to trace the chain of ownership over Lot No. 4763-D. It is
undisputed that the original owners of said property were the spouses Julian
Cuison and Marcosa Cosef, who owned the entire Lot No. 4763, of which Lot No.
4763-D is a portion of (sic).
Unfortunately for herein parties, this is where the similarity of facts end (sic), and the instant controversy
begins.
According to plaintiffs-appellees:
Originally, the entire
According to the
defendant-appellant: On March 23, 1986[3],
the original owners, spouses Julian Cuison and Marcosa Cosef sold Lot No. 4763
to the government, through the [then] Civil Aeronautics Administration (CAA,
for brevity). In a Certificate dated March 19, 1959, vendor Julian Cuison
confirmed that he was the possessor and actual owner of Lot No. 4763 which was
located within the “Mactan Alternate International Airport” and that the
duplicate copy of the certificate of title was lost or destroyed during the
last war without him or his predecessor(s)-in-interest having received a copy
thereof. Since then, the government, through defendant-appellant MCIAA, has been
in open, continuous, exclusive and adverse possession of the property in the
concept of owner. Said lot allegedly became part of the Clear Zone of Runway 22
for purposes of required clearance for take-off and landing. Moreover,
defendant-appellant asserts that plaintiffs-appellees are nothing more than
trustees of Lot No. 4763-D in favor of defendant-appellant MCIAA, being merely
successors-in-interest of the original owners, spouses Julian Cuison and
Marcosa Cosef, who undertook in paragraph 4 of the Deed of Absolute Sale, to
assist in the reconstitution of title so that the land may be registered in the
name of vendee government, through defendant-appellant MCIAA. In paragraph 5 of
the same Deed of Absolute Sale, the parties also agreed that the property be
registered under Act 3344 pending the reconstitution and issuance of title.
Purportedly, in gross and evident bad faith and in open violation of their Deed
of Absolute Sale, the spouses Julian Cuison and Marcosa Cosef again sold the
same property to spouses Moises Cuizon and Beatriz Patalinghug, who in turn
sold the lot to Mrs. Elma Jenkins, who eventually sold the same to herein
plaintiffs-appellees. Defendant-appellant MCIAA further imputes bad faith to
plaintiffs-appellees under the rationale that because their title came from a
reconstituted one and that Lot No. 4763 was within the Clear Zone of Runway 22
of the airport, plaintiffs-appellees should have exerted effort in researching
the history of ownership and cannot possibly claim to be innocent of MCIAA’s
ownership and possession thereof.[4]
In its December 4, 2000 Decision,[5]
the trial court ruled in favor of petitioner MCIAA in this wise:
WHEREFORE, premises considered, the Court rules in favor of defendant and
thus DISMISSES the complaint of plaintiffs for want of merit.
The Republic of the
The Deed of Absolute Sale involving
Transfer Certificate of Title No. 27044 for
The Register of Deeds is directed to issue to the defendant MCIAA a
transfer certificate of title covering the whole
The counterclaim of defendant, however, is denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.
The trial court held that there was a valid transfer of title from Spouses
Julian Cuison and Marcosa Cosef to the Civil Aeronautics Administration (CAA), and accordingly, the respondents did not buy Lot No. 4763-D from a
person who could validly dispose of it. It likewise ruled that the government
(through the CAA, and now respondent MCIAA) has been in possession of the
disputed land since it bought the same in 1958, when a public deed of absolute
sale was executed in its favor. Lastly, respondents were considered as having
bought Lot No. 4763-D in bad faith since they ignored circumstances that should
have made them curious enough to investigate beyond the four corners of the
Transfer Certificate of Title. In the trial court’s view, the facts that Lot
No. 4763-D (i) is only about 320 meters from the center of the runway and
therefore part of the clear zone and (ii) has been vacant for several decades
should have alerted the respondents to the possibility that the lot could be
part of the airport complex and therefore owned by petitioner.
Respondents filed their Motion for Reconsideration[6]
on January 23, 2001, and a Supplemental (sic)
to Motion for Reconsideration[7]
on May 17, 2001. Petitioner duly filed its Opposition[8]
to the said Motions on April 10, 2001 and June 13, 2001, respectively.
In an Order[9]
dated August 9, 2001, the trial court did a complete volte face and reversed its Decision. Holding that Article 1544[10]
of the New Civil Code – which set forth the rule on double sales – finds
application to the instant case, the trial court ratiocinated:
In the words of the Supreme Court in Cruz
vs. Cabana, this Court finds that in the case of [a] double sale of real
property[,] Article 1544 of the New Civil Code applies. Defendant was certainly
the first buyer and the plaintiffs [were] the subsequent buyers, to be exact
fourth (sic).
But who among the parties herein has a better right to Lot No. 4763-D? To
answer this question, it is necessary to determine first the issue [of] whether
or not the plaintiffs were buyers in good faith.
xxx xxx xxx
The Court is not convinced that indeed the
plaintiffs were buyers in bad faith. xxx The registration of the deed of
absolute sale by the defendant at the Registry of Deeds under Act No. 3344
sometime in 1959 is not the registration being contemplated under the law. “Registration under Act No. 3344 differs
materially from registration under the Spanish Mortgage Law and under the Land
Registration Act. In the Spanish Mortgage Law[,] there is [an] express
provision (Article 17) to the effect that titles recorded thereunder cannot be
annulled or invalidated by prior unrecorded rights, while the Land Registration
Act (No. 496) contains a special disposition that only transactions noted on
the certificate of title and entered in the registry books can bind the land.
On the other hand, transactions registered under Act No. 3344 cannot defeat a
third person with a better right. Of course[,] the law does not define exactly
what may be considered a better right, leaving the matter of its construction
to the courts. The main reason for the difference in the operation of Act No.
3344 compared with the other systems of registration lies obviously in the fact
that recordings under said Act No. 3344 are not preceded by any investigation,
judicial or administrative, as to the validity or efficacy of the title sought
to be recorded.” It is undisputed that Lot No. 4763 was a registered land,
only that at the time of registering defendant’s document of sale there was no
copy of the certificate of title because the same was not available due to the
after effect of the last global war.
Hence, the Court agrees with the plaintiffs when they contended that “even at the time when OCT No. RO-2754 was
issued[,] there was no document allegedly proving its (defendant) ownership
being annotated on the certificate of title.” At the time when Transfer
Certificates of Title Nos. 16735, 18216 and 27044 were issued to the plaintiffs
and their predecessors-in-interest, there were no annotations of the alleged
claim of the defendant. Thus, the plaintiffs have all the good reasons to rely
on the validity of the titles. xxx
xxx xxx xxx
xxx The fact that Lot No. 4763-D was within 320 meters from the center of
the runway and within airport premises, was part of the clear zone, and had
long been vacant are not enough warning to third persons dealing [with] such
land. It was undisputed that the lot in controversy is outside the perimeter
fence of the defendant. The fact that the said lot was part of the clear zone
is not sufficient justification to warn the plaintiffs in (sic) buying it. Such fact was merely for the purpose of
construction of buildings, not for realty ownership.[11] (italics
in the original)
Aggrieved, petitioner then
appealed to the Court of Appeals which rendered a Decision[12]
on May 27, 2005, the dispositive portion of which states:
WHEREFORE, premises considered, the appeal is hereby DENIED. Accordingly,
the assailed Order dated August 9, 2001 is AFFIRMED.
SO ORDERED.
On
June 21, 2005, petitioner seasonably moved for its reconsideration but the
Court of Appeals denied the same in its February 17, 2006 Resolution.[13]
Hence this appeal under
Rule 45 of the 1997 Rules of Civil Procedure, where petitioner argues that:
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW WHEN IT AFFIRMED
THE AUGUST 9, 2001 ORDER OF THE TRIAL COURT EVEN IF THE SAME IS NOT SUPPORTED
BY THE EVIDENCE ON RECORD.[14]
Simply stated, the issue may be synthesized as follows: Between
respondents Spouses Tirol and Spouses Ngo, on the one hand, and petitioner
MCIAA, on the other, who has the superior right to the subject property?
We rule in favor of the respondents, but on grounds different than those
relied upon by the Court of Appeals and the trial court.
Preliminarily, reliance on Article 1544 of the New Civil Code is misplaced.
In Cheng v. Genato, et al.,[15]
we enumerated the requisites that must concur for Article 1544 to apply, viz.:
(a)
The two (or more) sales
transactions must constitute valid sales;
(b)
The two (or more) sales
transactions must pertain to exactly the same subject matter;
(c)
The two (or more) buyers
at odds over the rightful ownership of the subject matter must each represent
conflicting interests; and
(d)
The two (or more) buyers
at odds over the rightful ownership of the subject matter must each have
bought from the very same seller.
Obviously, said provision has no application in cases where the sales
involved were initiated not by just one vendor but by several successive
vendors.[16]
In the instant case, respondents and petitioner had acquired the subject
property from different transferors. Petitioner, through its
predecessor-in-interest (CAA), acquired the entire Lot No. 4763 from its
original owners, spouses Julian Cuison and Marcosa Cosef, on March 23, 1958. On
the other hand, respondents acquired the subject parcel of land, a portion of
Lot No. 4763, from Mrs. Elma Jenkins, another transferee, some thirty-five
years later. The immediate transferors of Elma Jenkins were the spouses Moises
Cuizon and Beatriz Patalinghug who, in turn, obtained the subject property from
spouses Julian Cuison and Marcosa Cosef. Therefore, the instant controversy
cannot be governed by Article 1544 since petitioner and respondents do not have
the same immediate seller.
This notwithstanding, we find that respondents have a better right to Lot
No. 4763-D.
Petitioner does not contest that Lot No. 4763, of which the property
subject of this case is a part, was registered under Act No. 496 (the Land
Registration Act) even before the Second World War. Paragraph 4 of the Deed of
Absolute Sale[17]
between petitioner and Spouses Julian Cuison and Marcosa Cosef stipulates, in
relevant part:
That since the Original/Transfer Certificate
of Title of the aforementioned property has been lost and/or destroyed, or
since the said lot is covered by Cadastral Case No. 20 and a decree issued on
July 29, 1930, xxx the VENDEE hereby binds
itself to reconstitute said title at its own expense and that the VENDOR,
his heirs, successors and assigns bind themselves to help in the reconstitution
of title so that the said lot may be registered in the name of the VENDEE in
accordance with law. (italics supplied)
Additionally, in his Certification[18]
dated March 19, 1959, Julian Cuison stated that “the duplicate copy of the
certificate of title for [Lot No. 4763] was lost or destroyed during the last
war without having been received by [him] or [his] predecessor-in-interest.”
In this regard, well-settled is the rule that registration of instruments
must be done in the proper registry in order to effect and bind the land.[19]
Prior to the Property Registration Decree of 1978, Act No. 496 (or the Land
Registration Act) governed the recording of transactions involving registered land, i.e., land with a
Consequently, the fact that petitioner MCIAA was able to register its
Deed of Absolute Sale under Act No. 3344 is of no moment, as the property
subject of the sale is indisputably registered land. Section 50 of Act No. 496 in
fact categorically states that it is the act of registration that shall operate
to convey and affect the land; absent any such registration, the instrument
executed by the parties remains only as a contract between them and as evidence
of authority to the clerk or register of deeds to make registration, viz.:
SECTION 50. An owner of registered
land may convey, mortgage, lease, charge, or otherwise deal with the same as
fully as if it had not been registered. He may use forms of deeds, mortgages,
leases, or other voluntary instruments like those now in use and sufficient in
law for the purpose intended. But no
deed, mortgage, lease, or other voluntary instrument, except a will, purporting
to convey or affect registered land, shall take effect as a conveyance or bind
the land, but shall operate only as a contract between the parties and as
evidence of authority to the clerk or register of deeds to make registration.
The act of registration shall be the operative act to convey and affect the
land, and in all cases under this Act the registration shall be made in the
office of register of deeds for the province or provinces or city where the
land lies. (italics supplied)
Hence, respondents may
not be characterized as buyers in bad faith for having bought the property
notwithstanding the registration of the first Deed of Absolute Sale under Act
No. 3344. An improper registration is no registration at all. Likewise, a sale that
is not correctly registered is binding only between the seller and the buyer,
but it does not affect innocent third persons.[23]
Petitioner, however, is of the impression that registration under Act No.
3344 is permissible because the duplicate copy of the certificate of title
covering Lot No. 4763-D had been lost or destroyed. This argument does not
persuade. Our pronouncement in Amodia Vda. de Melencion, et al. v.
Court of Appeals, et al.[24] is apropos:
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.
xxx xxx xxx
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. 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
In the instant case,
petitioner MCIAA did not bother to have the lost title covering Lot No. 4763-D reconstituted
at any time, notwithstanding the fact that the Deed of Absolute Sale was
executed in 1958, or more than fifty years ago. Vigilantibus, non dormientibus, jura subveniunt. Laws must come to
the assistance of the vigilant, not of the sleepy.[26]
As a matter of fact, this entire controversy may very well have been avoided
had it not been for petitioner’s negligence.
Furthermore, under the established principles of land registration, a
person dealing with registered land may generally rely on the correctness of a
certificate of title and the law will in no way oblige him to go beyond it to
determine the legal status of the property,[27]
except when the party concerned has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to make such inquiry.[28]
Applying this standard to the facts of this case, we rule that respondents
exercised the required diligence in ascertaining the legal condition of the
title to the subject property as to be considered innocent purchasers for value
and in good faith. We quote with favor the factual findings of the Court of
Appeals in this respect:
Defendant-appellant
MCIAA also asseverates that the close proximity of the property to the runway
of the airport (320 meters from the center line of the runway) and the fact
that it has been vacant for a considerable period should have caused [plaintiffs-appellees]
to be dubious of the title of the previous owners thereof. This was, in Our
opinion, satisfactorily explained by plaintiffs-appellees when witness Mr.
Edito Tirol testified in open court that he never thought it strange that the
land had always been vacant, and that besides, there were private houses beside
the vacant lot, suggesting that the property must be of private ownership and
not that of the airport. Furthermore, he testified that he undertook great care
in verifying the clean title of the said land, [e.g.,] deputizing an
employee to do the necessary research, personally copying pertinent documents
registered in the Registry of Property and even consulting legal advice on the
matter. These, for Us, are badges of good faith. Besides, being allegedly part
of the Clear Zone, ATO aviation rules proscribe merely the installation of
buildings and other physical structures, except landing facilities. Aviation
rules (which, although repeatedly invoked, interestingly were not presented
before the court by defendant-appellant MCIAA) do not prohibit realty
ownership.[29]
IN VIEW WHEREOF,
the Petition is hereby DENIED. The May 27, 2005 Decision and the February 17,
2006 Resolution of the Court of Appeals are AFFIRMED.
SO
ORDERED.
REYNATO S. PUNO
Chief
Justice
WE
CONCUR:
RENATO C. CORONA TERESITA J. LEONARDO-DE CASTRO
Associate Justice Associate Justice
LUCAS P. BERSAMIN
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.
REYNATO S.
PUNO
[1] Rollo, pp. 7-16.
[2]
[3] This should be March 23, 1958.
[4] Rollo, pp. 7-10.
[5] Records, pp. 222-230.
[6]
[7]
[8]
[9]
[10] This provision provides:
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.
[11] Records,
pp. 284-286.
[12] Supra note 1 at 16.
[13] Rollo, p.
18.
[14]
[15] 360 Phil. 891, 909 (1998).
[16] See also Spouses
Ong, et al. v. Spouses Olasiman, G.R. No. 162045, March 28, 2006, 485 SCRA
464.
[17] Records, pp. 162-165.
[18]
[19] Soriano, et al. v. The Heirs of Domingo
Magali, G.R. No. L-15133, July 31, 1953, 8 SCRA 489, 494-495; Spouses Abrigo v. De Vera, G.R. No.
154409, June 21, 2004, 432 SCRA 544, 552; Aznar
Brothers Realty Company v. Aying, et al., G.R. No. 144773, May 16, 2005,
458 SCRA 496, 511.
[20] Radiowealth Finance Co. v. Palileo, G.R. No. 83432, May 20, 1991, 197 SCRA 245, 249.
[21] Amodia Vda. de Melencion, et al. v. Court of
Appeals, et al., G.R. No. 148846,
September 25, 2007, 534 SCRA 62, 79 citing Spouses Abrigo v. De Vera, supra note 19.
[22] Republic of the
[23] Revilla, et al. v. Galindez, 107 Phil. 480,
484 (1960).
[24] Supra note 21.
[25]
[26] Claverias v. Quingco, G.R. No. 77744, March 6, 1992, 207 SCRA 66, 84.
[27] Naawan Community Rural Bank, Inc. v. Court of Appeals, et al., 443 Phil. 56, 59 (2003).
[28]
[29] Rollo, p.
14.