THIRD DIVISION
|
SPOUSES EXEQUIEL LOPEZ and
EUSEBIA LOPEZ, Petitioners, - versus - SPOUSES EDUARDO LOPEZ and MARCELINA
R. LOPEZ, Respondents. |
G.R.
No. 161925
Present: Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated: November
25, 2009 |
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DECISION
NACHURA, J.:
This is a petition for review on certiorari of the Court of Appeals (CA) Decision[1]
dated January 26, 2004, which ordered the cancellation of Transfer Certificate
of Title (TCT) No. T-5066 in the name of petitioners.
Respondents, spouses Eduardo and
Marcelina Lopez, are the owners and occupants of an 80-square-meter residential
lot situated in San Pascual, Hagonoy, Bulacan. They acquired the property by
donation inter vivos from Maria
Alvarado and Agatona Caparas, in whose names the lot was previously declared
for taxation purposes. Respondents have occupied the lot since 1977.[2]
In November 1992, respondents
discovered that Victor Villadares was granted a free patent over an 885-sq-m
land, which included respondents’ lot, and was subsequently issued Original
Certificate of Title (OCT) No. RP-253 (P-8511) on March 8, 1978. Thereafter,
Villadares subdivided the entire parcel of land into 3 lots, namely: Lot 9954-A,
Respondents filed an action for
reconveyance, declaration of nullity of a deed of absolute sale, cancellation
of titles, and damages against Villadares and petitioners. The action was filed
only against the two parties because respondents’ property is situated between
their properties, Lots 9954-A and 9954-B.
In their Answer, petitioners averred
that respondents had no personality to institute the action, that the free
patent in favor of Villadares was issued pursuant to law, that they were
innocent purchasers for value, and that their certificate of title was already
incontrovertible.[3]
During trial, Pedro Manansala, a
witness for respondents, testified that petitioners’ lot consisted of 168 sq m
only, which they bought from him for P20,000.00 sometime after Martial
Law.[4]
Petitioner Eusebia Lopez refuted this
by stating that she bought a 273-sq-m lot from Pedro Manansala.[5] She admitted that she filed a protest against
Villadares’ application for registration but claimed that Villadares later
agreed to sell the property to her for P30,000.00.[6] Villadares corroborated her testimony, saying
that when petitioners showed him proof that they owned a portion of the lot
registered in his name, he agreed to transfer the title of the said portion to
their names.[7]
The Regional Trial Court ruled in
favor of respondents. According to the trial court, the declaration of the
subject property for taxation purposes in the name of respondents, coupled with
their actual possession thereof, strongly indicated that they owned the same. It
held that petitioners were not buyers in good faith because it appeared that
the execution of the deed of sale was only an afterthought. The dispositive portion of the trial court’s
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against herein defendants:
1. that the deed of absolute sale, dated May 8, 1990 is hereby declared null and void;
2. that defendants reconvey to the plaintiffs the subject 80-square meter lot;
3. the Register of Deeds of Tabang, Guiguinto, Bulacan is hereby ordered to cancel TCT Nos. T-5065 in the name of defendant Victor Villadares and T-5066 in the name of defendants/Spouses Exequiel and Eusebia Lopez;
4. that
defendants jointly and severally pay the plaintiffs the sum of: P10,000.00
for moral damages; P10,000.00 for exemplary damages and P10,000.00
for attorney’s fees and cost of suit.
SO ORDERED.[8]
Subsequently, the case was elevated
to the CA on appeal, through petitioners’ and Villadares’ respective notices of
appeal.
Based on the doctrine that land
registration proceedings cannot shield fraud or permit the enrichment of a
person at the expense of another, the CA affirmed the trial court’s decision. In
so ruling, the appellate court considered the following: (a) respondents’ ownership of the 80-sq-m lot
was admitted by petitioners during pre-trial; (b) petitioners were not innocent
purchasers for value; (c) respondents were in possession of the subject
property and paid the real property taxes thereon; and (d) the conveyance of
the 273-sq-m lot from Villadares to petitioners was simulated.[9]
Only Villadares filed a motion for
reconsideration with the CA; petitioners elevated the case immediately to this
Court. In a Resolution[10]
dated April 28, 2004, the CA resolved to hold in abeyance the resolution of Villadares’
motion and to consider it abandoned if the present petition would be given due
course by this Court.
In this petition, petitioners ascribe
the following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS FAILED TO
RECOGNIZE THE ACTUAL POSSESSION OF PETITIONERS AND THEIR
PREDECESSORS-IN-INTEREST ON (sic) THE PROPERTY NOW COVERED BY TCT NO. T-5066 OF
THE REGISTRY OF DEEDS FOR THE
II.
THE HONORABLE COURT OF APPEALS FAILED TO
RECOGNIZE THAT PETITIONERS EXEQUIEL LOPEZ AND EUSEBIA LOPEZ HAVE BEEN PAYING
REAL ESTATE TAXES ON THE SUBJECT PROPERTY AFTER THEY HAVE BOUGHT IT FROM PEDRO
MANANSALA AND MIGUELA AYUSON MANANSALA ON AUGUST 2, 1974.
III.
THE HONORABLE COURT OF APPEALS ERRED IN
CONSIDERING THE POSSESSION OF RESPONDENTS ON (sic) THE SUBJECT PROPERTY FOR
LESS THAN THIRTY (30) YEARS.
IV.
THE HONORABLE COURT OF APPEALS FAILED TO
RECOGNIZE THAT THE DEED OF ABSOLUTE SALE OF PORTION OF PARCEL OF LAND EXECUTED
BY DEFENDANT VICTOR VILLADARES IN FAVOR OF PETITIONERS, EXEQUIEL LOPEZ AND
EUSEBIA LOPEZ, WAS MERELY TO SETTLE THEIR CONFLICT OF OWNERSHIP ON THE SUBJECT
PROPERTY AND TO EXPEDITE THE TRANSFER THEREOF TO THE PETITIONERS.
V.
THE HONORABLE COURT OF APPEALS ERRED IN
AFFIRMING THE RULING OF THE
The petition is partly meritorious.
An action for reconveyance is a legal
and equitable remedy granted to the rightful owner of a land which has been
wrongfully or erroneously registered in the name of another for the purpose of compelling the latter
to transfer or reconvey the land to him.[12]
The action does not seek to reopen the registration proceedings and to set
aside the decree of registration but only purports to show that the person who
secured the registration of the property in controversy is not the real owner
thereof.[13]
Initially, we affirm the CA’s
findings of fact that respondents are the rightful owners of the subject property,
an 80-sq-m portion of land, wrongfully included in either or in both of the certificates
of title of petitioners or Villadares, and that petitioners were not innocent
purchasers for value. As neighbors of respondents, petitioners certainly would
have known that respondents actually occupied the subject property. Thus, Villadares, not being the owner of the
subject property, could not have transferred ownership of the subject 80-sq-m
portion of land to petitioners.
As a logical consequence, petitioners
did not become the owners of the subject property even after a TCT had been
issued in their names. After all, registration does not vest title.
Certificates of title merely confirm or record title already existing and vested. They cannot be used to protect a usurper from
the true owner, nor can they be used as a shield for the commission of fraud,
or to permit one to enrich oneself at the expense of others.[14] Hence, reconveyance of the subject property is
warranted.
It is well to remember that in an action
for reconveyance, the decree of registration is highly regarded as
incontrovertible. What is sought is the transfer of the property or its title, which
has been wrongfully or erroneously registered in another person’s name, to its
rightful owner or to one who has a better right.[15] The present action for reconveyance only entails
the segregation of the portion wrongfully included in the certificate of title.
The decree of registration is to be respected, but the certificate of title will
be cancelled for the purpose of amending it in order to exclude the portion
wrongfully included therein. A new certificate covering the portion reconveyed shall
then be subsequently issued in the name of the real owner.
However, the CA went beyond this and
declared the entire deed of sale, covering 273 sq m, void for being simulated. As such, the CA decision would result not only
in the amendment of petitioners’ certificate of title, but in the absolute
revocation of petitioners’ title itself. The property would then revert to its
previous owner, subject to the right of respondents over the portion of the lot
which they claim as their own.
Understandably, petitioners anxiously
insist that their TCT should not be cancelled even if the deed of sale is
declared void. They maintain that they own
the entire
However, petitioners are barred from
raising this issue as it constitutes a collateral attack on the decree of
registration. The record shows that petitioners had participated in the land
registration proceeding by filing their opposition to Villadares’ application
for registration. Petitioners’ alleged
possession of the property prior to Villadares’ filing of the application for
registration was, in fact, the meat of their opposition in the land
registration proceeding. And in a proceeding for land registration, whether
with or without opposition, the final judgment of the court confirming the
title of the applicant or oppositor, as the case may be, and ordering its
registration in his name constitutes res judicata against the whole
world.[17]
Thus, the Court is compelled to exercise
its authority to review the validity of the Deed of Absolute Sale of Portions
of a Parcel of Land, though not specifically assigned as error in this petition,
because its resolution is necessary to arrive at a just decision and complete disposition
of the case.[18]
In finding that the contract of sale
was simulated, the CA held that petitioner’s opposition to Villadares’
application for registration, together with Pedro Manansala’s testimony that
petitioners actually bought the property from him, evinces the falsity of the
claim that petitioners purchased the property from Villadares.
We are not convinced. The primary consideration in determining the true
nature of a contract is the intention of the parties. Such intention is
determined not only from the express terms of their agreement, but also from
the contemporaneous and subsequent acts of
the parties.[19]
Simulation takes place
when the parties do not really want the contract they have executed to produce
the legal effects expressed by its wordings.[20]
This Court’s pronouncement in Valerio v. Refresca[21] is instructive —
Article 1345 of the Civil Code provides that the simulation
of a contract may either be absolute or relative. In absolute simulation, there is a colorable contract but it
has no substance as the parties have no intention to be bound by it. The main characteristic of an absolute simulation
is that the apparent contract is not really desired or intended to produce
legal effect or in any way alter the juridical situation of the parties.
As a result, an absolutely simulated or fictitious contract is void, and the
parties may recover from each other what they may have given under the
contract. However, if the parties state a
false cause in the contract to conceal their real agreement, the contract is
relatively simulated and the parties are still bound by their real agreement. Hence, where the essential requisites of a
contract are present and the simulation refers only to the content or terms of
the contract, the agreement is absolutely binding and enforceable between the
parties and their successors in interest.[22]
Based on the foregoing, the subject deed
of sale can hardly be considered simulated. There is no showing that the parties did not
intend to be bound by the contract and to comply with its terms. In fact, Villadares surrendered to petitioners
any right he had over the property. He
caused the titling of the property and the transfer of the tax declaration in
petitioners’ names, and thereafter, delivered the certificate of title and the tax
declaration to petitioners and accepted the purchase price from them. To recall, Villadares admitted that he was swayed
by petitioners’ claim that they had a right over the property and thus, he
agreed to sell it to them. Such motivation
for entering into the contract would not negate the efficacy of the contract. In the same way, petitioners’ opposition in
the land registration case does not necessarily mean that petitioners did not
really intend to purchase the property. Petitioners could have accepted or
acquiesced to Villadares’ title and entered into the agreement to finally
settle their claim over the property. The
following testimony of petitioner Eusebia Lopez is telling:
Q Then
after filing the protest, what did you do?
A
I talked with Victor Villadares and we agreed that he will sell the land in a
much lower price, sir.
Q Did
he comply with his promise?
A Yes,
sir.
Q So
how much was it sold [to] you[;] as you said it will be sold to you at a lower
price. How much was the selling price?
A P30,000.00,
sir.
Q Did
you pay the P30,000.00 to him?
A Yes,
sir.
Q When
did you pay it to defendant Victor Villadares?
A When
the title was given to me by him as well as the tax declaration and the
Bilihang Patuluyan, sir.[23]
We, therefore, uphold the validity of
the deed of sale subject to the reconveyance of respondents’ 80-sq-m portion of
the land.
WHEREFORE, premises considered,
the petition is PARTIALLY GRANTED. The Court of Appeals Decision dated
January 26, 2004 is AFFIRMED WITH
MODIFICATIONS. The Deed of Absolute
Sale of Portions of a Parcel of Land dated May 8, 1990 is declared VALID but subject to our disposition
hereunder. Petitioners and Victor
Villadares are directed to cause a SURVEY
of Lots 9954-A and 9954-B in order to determine the exact location of the
80-sq m portion pertaining to respondents. Thereafter, the Register of Deeds of Tabang,
Guiguinto, Bulacan is ordered to ISSUE
the corresponding transfer certificates of title in the names of petitioners, respondents
and Victor Villadares, in accordance with said survey.
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
RENATO C. CORONA
Associate
Justice
Chairperson
|
MINITA V. CHICO-NAZARIO Associate
Justice |
PRESBITERO J. VELASCO, JR. Associate
Justice |
DIOSDADO M. PERALTA
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.
RENATO
C. CORONA
Associate
Justice
Chairperson,
Third Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution
and the Division Chairperson's Attestation, 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
Chief
Justice
[1] Penned by Associate Justice Lucas P. Bersamin (now a member of this Court), with Associate Justices Godardo A. Jacinto and Elvi John S. Asuncion, concurring; rollo, pp. 7-13.
[2] TSN, February 1, 1994, p. 5.
[3] Records, pp. 23-24.
[4] TSN, June 30, 1994, pp. 6-7.
[5] TSN, September 6, 1994, p. 5.
[6]
[7] TSN, January 5, 1995, pp. 7-8.
[8] CA rollo, p. 46.
[9] Rollo, p. 12.
[10] CA rollo, pp. 207-208.
[11] Rollo, pp. 21-22.
[12] Hi-Tone Marketing Corporation v. Baikal Realty Corporation, G.R. No. 149992, August 20, 2004, 437 SCRA 121, 143.
[13] Barrera v. Court of Appeals, 423 Phil. 559, 566 (2001).
[14] Lim v. Chuatoco, G.R. No. 161861, March 11, 2005, 453 SCRA 308, 317.
[15] Aliño v. Heirs of Angelica A. Lorenzo, G.R. No. 159550, June 27, 2008, 556 SCRA 139, 152.
[16] Rollo, pp. 24-25.
[17] Ting
v. Heirs of Diego Lirio, G.R. No. 168913, March 14, 2007, 518 SCRA 334, 338.
[18] Buñing
v.
[19] Aliño v. Heirs of Angelica A. Lorenzo, supra note 15, at 148.
[20] Cruz v. Bancom Finance Corporation, 429 Phil. 225, 233 (2002).
[21] G.R. No. 163687, March 28, 2006, 485 SCRA 494.
[22]
[23] TSN, September 6, 1994, pp. 16-17.