THIRD DIVISION

LYDIA L. ROA, G.R. No. 161137

Petitioner,

Present:

CORONA, J., Chairperson,

- v e r s u s - VELASCO, JR.,

NACHURA,

PERALTA and

MENDOZA, JJ.

HEIRS OF SANTIAGO EBORA:

JOSEFA EBORA PACARDO,

PACITA EBORA PACARDO,

BARTOLOME EBORA,

RAYMUNDA EBORA,

BERNARDINO DEJULO EBORA,

MERCEDES EBORA PABUSLAN,

ALEJANDRO EBORA,

SABINA EBORA GALASINO and

POLICARPIO EBORA,

WILSON GAW (CHIN CHIONG),

SAMUEL SONNIE LIM,

ALFONSO GOKING,

ELEAZAR ED. ESPINO,

D’ORO LAND REALTY AND

DEVELOPMENT CORPORATION,

NATIONAL HOUSING AUTHORITY,

CONSTANCIO S. MANZANO,

PRESCO C. KWONG and

ORO CAM ENTERPRISES, INC.,

Respondents. Promulgated:

March 15, 2010

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D E C I S I O N

CORONA, J.:

This case stemmed from a conflict of ownership (resulting from multiple transactions) over Lot 18026-A, comprising 43,792 sq. m. and covered by Original Certificate of Title (OCT) No. P-47. Although it was continuously, openly and adversely possessed by Santiago Ebora, the property, located in Cagayan de Oro City, was mistakenly included by Chacon Enterprises in its application for original registration. As a result, litigation arose between respondents (the heirs of Ebora) and Chacon Enterprises. This continued until it reached the Supreme Court in G.R. Nos. L-46418-19 entitled Chacon Enterprises v. The Court of Appeals (Now Intermediate Apellate Court), Florentino Galasino, Francisco Gallardo, Porferio Cabacungan, Bernardino Bajulo, et. al.[1]

On June 3, 1977, during the pendency of G.R. Nos. L-46418-19, the heirs of Ebora sold the entire Lot 18026-A to their co-heir Josefa Ebora Pacardo (Josefa) and her husband Rosalio Pacardo for P300,000.[2] On the same day, the spouses Pacardo assigned the property to Digno Roa, married to petitioner Lydia Roa.[3] The corresponding deeds of absolute sale and assignment were inscribed on original certificate of title (OCT) No. P-47 on July 5, 1977 under Entry Nos. 55548 and 55549, respectively. On August 11, 1977, transfer certificate of title (TCT) No. T-24488 was issued in the name of Digno Roa. The issuance of TCT No. T-24488 was annotated in OCT P-47 on the same day under Entry No. 56244.

Subsequently, the heirs of Ebora, including Josefa, executed an extrajudicial settlement of the estate with confirmation of sale, assignment and waiver of rights,[4] recognizing the conveyance of Lot 18026-A to Josefa and eventually to Digno Roa.

On September 29, 1983, G.R. Nos L-46418-19 was resolved against Chacon Enterprises and in favor of the heirs of Ebora. By reason of this decision, TCT No. T-48097 was issued in the name of the heirs of Ebora.[5]

Thereafter, or on October 8, 1987, the heirs of Ebora again adjudicated Lot 18026-A among themselves, pro indiviso. The adjudication was inscribed in TCT No. T-48097 on December 29, 1987 under Entry No. 126545. That same day, a deed of confirmation of a prior conveyance[6] by Josefa to respondent Samuel Sonnie Lim of a 4,500 sq. m. portion was likewise inscribed on TCT No. T-48097.[7] The issuance of new TCTs in the name of Alejandro Ebora was likewise inscribed in TCT No. T-48097 on December 29, 1987.[8] The lots were thereafter sold to various respondents which resulted in the issuance of the following new TCTs in the names of the respective vendees.[9]

All these transactions occurred without petitioner’s knowledge and consent.

In view of the death of her husband, Digno Roa, petitioner filed a petition for annulment and cancellation of TCT No. 48097 and its derivative titles in the RTC of Misamis Oriental, Cagayan de Oro City, Branch 23, against respondents. The case was docketed as Civil Case No. 93492.

On June 27, 2003, the Regional Trial Court (RTC) declared respondents as innocent purchasers for value whose titles to their respective lots should be respected, and ordered the cancellation of petitioner’s title, TCT No. T-24488.[10]

Hence, this petition for review on certiorari.[11] Petitioner imputes error to the RTC which declared TCT No. T-48097 as void but upheld the validity of its derivative titles.[12]

Essentially, what petitioner seeks is that respondents be declared as not innocent purchasers for value and that the subject properties be adjudicated in her favor.

We agree with the RTC that respondents are innocent purchasers for value.[13]

Nonetheless, without undermining the reason behind this doctrine (of protecting innocent purchasers for value), we hold that petitioner is entitled to the property following Sanchez v. Quinio.[14] In Sanchez, a 300 sq. m. parcel of land, registered under the name of one Celia P. Santiago and covered by TCT No. 391688, was sold by Santiago herself to therein respondents Rodolfo M. Quinio and Ismael M. Quinio. Respondents thereafter duly registered the deed of sale resulting in the issuance of TCT No. S-89991, in their (Quinios’) names, on July 13, 1979.

Thirteen years later, TCT No. 70372 was issued in the name of one Renato Sanding after the land was sold to him by Santiago. Sanding thereafter sold the subject land to Romeo Abel resulting in the issuance of TCT No. 72406. Abel thereafter sold the property to Renato Sanchez, the petitioner in this case. The sale by Abel to Sanchez was registered and on May 17, 1994, TCT No. 81125 was issued in Sanchez’s name.

In view of the multiple transactions concerning the subject lot, the Quinios filed a complaint for quieting of title and cancellation of titles against Sanchez and Abel.[15] The RTC held that Sanchez was an innocent purchaser for value, and therefore had a better right to the property over the Quinios.

The CA reversed the RTC decision and ordered the cancellation of Abel’s title and all titles and deeds derived therefrom, including Sanchez’s title.

On Sanchez’s appeal to this Court, we affirmed the CA decision:

It cannot be over-emphasized that Santiago sold the subject land in July 1979 to respondents, who lost no time in registering the conveying deed of sale and securing title in their names. From that time on, ownership and other rights flowing therefrom over the land in question pertained to respondents. In other words, Santiago was no longer possessed of transmissible rights over such property when she executed on 22 February 1993 a deed of sale in favor of Renato Sanding. The aforesaid deed, in fine, could not have conveyed valid title over the land.

xxx

It may be held that one dealing with property brought under the Torrens system of land registration may rely, as petitioner did with respect to the land in question, on what appears on the face of the covering certificate without inquiring further as to the title of the seller or mortgagor. But the guarantee generally accorded a Torrens title holder to be secured in his ownership as long as he has not voluntarily disposed of any right over the covered property admits of a couple of exceptions. C.N. Hodges v. Dy Buncio & Co., Inc., deals with one of them, thus:

The claim of indefeasibility of the petitioner’s title under the Torrens land title system would be correct if previous valid title to the same parcel of land did not exist. The respondent had a valid title xxx It never parted with it; it never handed or delivered to anyone its owner’s duplicate of the transfer certificate of title; it could not be charged with negligence in the keeping of its duplicate certificate of title or with any act which could have brought about the issuance of another certificate upon which a purchaser in good faith and for value could rely. If the petitioner’s contention as to indefeasibility of his title should be upheld, then registered owners without the least fault on their part could be divested of their title and deprived of their property. Such disastrous results which would shake and destroy the stability of land titles had not been foreseen by those who had endowed with indefeasibility land titles issued under the Torrens system. (emphasis in the original)

At bottom then, the present petition basically features an instance where two (2) different persons acquired by purchase at different time from the same owner (Santiago), the same piece of registered land. And although the records do not provide clear answer on how the second vendee, Renato Sanding, in this case, was able to secure a certificate of title despite the existence of an outstanding valid certificate of title in the hands and name of the first vendee, herein respondents, who appear to have never relinquished the document, the stubborn reality is that such a second title was issued and whence two (2) other titles eventually descended.

Following the lessons imparted by Margolles, Baltazar, Torres and C.N. Hodges, supra, however, whatever right Renato Sanding may have acquired over the disputed property cannot prevail over, but must yield to, the superior right thereon of respondents, as the appellate court rightfully held. And inasmuch as his title is traceable to that of Romeo S. Abel, who in turn derived his right and title from Renato Sanding, petitioner cannot plausibly have better rights than either Romeo S. Abel or Renato Sanding, since no one can acquire a right greater than what the transferor himself has.

In this case, as in Sanchez, petitioner’s title was validly issued and had been undisturbed for 10 years before the title of respondents’ predecessor (the Ebora heirs) was issued. Petitioner never relinquished her title to respondents or to anybody else. She therefore possessed a superior right over those of respondents, notwithstanding the fact that respondents were innocent purchasers for value.

Moreover, the heirs of Ebora sold and conveyed their rights to and interests in Lot 18026-A to the spouses Pacardo who assigned the property to the husband of petitioner as early as June 3, 1977. From then on, the heirs of Ebora lost all their rights and interest over the property. Indeed, the heirs of Ebora even confirmed the sale to Josefa and the assignment and waiver of rights in favor of petitioner’s husband in an instrument dated January 31, 1983.

Thus, the heirs of Ebora had nothing to adjudicate among themselves on October 8, 1987. Neither did they have anything to transfer to the vendees or successors-in-interest. As such, the transferees of the heirs of Ebora acquired no better right than that of the transferors. The spring cannot rise higher than its source.

WHEREFORE, the petition is hereby GRANTED. The decision of the Regional Trial Court dated June 27, 2003 is hereby REVERSED. The derivative titles of TCT No. T-48097, namely, TCT Nos. T-48695, T-48559, T-48562, T-48563, T-48571, T-48694, T-48380, T-49381, T-49934, T-49935, T-50160, T-50161, T-50442 and T-68769 are hereby ordered CANCELLED. TCT No. T-24488 is hereby declared VALID.

SO ORDERED.

RENATO C. CORONA

Associate Justice

Chairperson

WE CONCUR:

PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

DIOSDADO M. PERALTA JOSE CATRAL MENDOZA

Associate Justice Associate Justice

A T T E S T A T I O N

I attest 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.

RENATO C. CORONA

Associate Justice

Chairperson

C E R T I F I C A T I O N

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

Chief Justice

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[1] Chacon Enterprises was granted a free patent to a stretch of public land located in Lapasan, Cagayan de Oro City. The area was 191,011 sq. m. This property was designated as Lot 18026 and issued Original Certificate of Title (OCT) No. P-47. However, Chacon Enterprises mistakenly included Lot 18026-A which was actually the property of respondent Santiago Ebora. Chacon Enterprises filed a complaint for recovery of possession of Lot 18026-A while the Ebora heirs filed their own complaint for reconveyance of the same parcel of land against Chacon, docketed as Civil Case No. 3171 and Civil Case No. 3218, respectively. The cases were consolidated and tried jointly. The RTC ruled in favor of Chacon Enterprises but the CA reversed the RTC decision and ruled in favor of the Ebora heirs. The cases were finally resolved in favor of the Ebora heirs when G.R. Nos. L-46418-19 was decided by the Supreme Court on September 29, 1983. Rollo, p. 7.

[2] Deed of Absolute Sale, Annex “E.” Id., pp. 77-79.

[3] Deed of Assignment, Annex “F.” Id., pp. 80-81.

[4] Dated January 31, 1983, Annex “H.” Id., pp. 84-86.

[5] Annex “O.” Id., pp. 119-123.

[6] Dated November 23, 1987. Id., p. 121.

[7] Under Entry No. 126546.

[8] Under Entry Nos. 126548 to 12655. The following were the transfer certificates of title issued in the name of Alejandro Ebora:

a) T-48445 – for 4,500 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

b) T-48446 – for 1,927 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

c) T-48447 – for 1,924 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

d) T-48448 – for 1,924 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

e) T-48449 – for 1,391 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

f) T-48450 – for 12,356 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

g) T-48451 – for 4,756 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

h) T-48452 – for 12,373 sqm of Lot 1 (formerly part of Lot 18026-A of OCT No. 47)

[9] The new TCTs issued to respondents were:

a) T-48559 – to respondent Eleazar Ed. Espino, on January 15, 1988 (for 700 sq. m., transfer from T-48445)

b) T-48562 – to respondent Samuel Sonnie Lim, on January 19, 1988 (for 3,500 sq. m., transfer from T-48445)

c) T-48563 – to respondent Samuel Sonnie Lim, on January 19, 1988 (for 300 sq. m., transfer from T-48445)

d) T-48571 – to respondent D’Oro Land Realty & Development Corporation, on January 25, 1988 (for 700 sq. m., transfer from T-48559)

e) T-49380 – to respondent National Housing Authority, on March 30, 1988 (transfer from T-48450)

f) T-49381 – to respondent Constancio S. Manzano, on March 30, 1988 (transfer from T-48452)

g) T-49934 – to respondent Alfonso Goking, on May 16, 1988 (transfer from T-48451)

h) T-49935 – to respondent alfonso Goking, on May 16, 1988 (transfer from T-48449)

i) T-50160– to respondent Presco Kwong, on June 13, 1988 (for 1,000 sq. m., transfer from T-48604)

j) T-50161 – to respondent Luzmin Kwong, on June 3, 1988 (for 924 sq. m., transfer from T-48604)

k) T-50442 – to respondent Alfonso Goking, on July 22, 1988 (transfer from T-48448)

l) T-68769 – to respondent Oro Cam Enterprises, on August 3, 1992 (transfer from T-49381).

A 2,500 sq. m. portion of the lot, still covered by TCT No. T-48097, was sold to respondent Alfonso Goking. The sale was inscribed in TCT No. T-48097 under Entry No. 127109 on February 8, 1988. Id., pp. 124, 125, 127-128, 130-131, 149-150, 152-153.

[10] Annex “A.” Rollo, pp. 45-54. The dispositive portion of the decision read:

“PREMISES CONSIDERED, [t]his Court hereby declares VOID the TCT No. T-48097 as well as the transfer certificates of title including TCT Nos. T-48446, T-48447, T-48448, T-48449, T-48451 and T-48452 all of which were derived from TCT No. T-48097 issued in the name of respondent Heirs of Santiago Ebora. The TCT Nos. T-24773, T-24774, T-24787 and T-24788 all issued in the name of Wilson Gaw (Chin Chiong are likewise hereby declared VOID and are hereby ordered CANCELLED.

However, so as to fully significantly give effect to the rights of innocent purchasers for valid, TCT Nos. T-48695, T-48559, T-48562, T-48563, T-48571, T-48694, T-48380, T-49381, T-49934, T-49935, T-50160, T-50161, T-50442 and T-68769 are hereby declared VALID for all legal purposes, and TCT No. T-24488 is hereby ordered cancelled insofar as the areas and lots covered by the foregoing TCTs are concerned.

Costs de oficio.

SO ORDERED.”

[11] Filed under Rule 45 of the Rules of Court.

[12] TCT Nos. T-48695, T-48559, T-48562, T-48563, T-48571, T-48694, T-48380, T-49381, T-49934, T- 49935, T-50160, T-50161, T-50442 and T-68769.

[13] It is settled that a void title may be the root of a valid title. (Tan v. De la Vega, G.R. No. 168809, 10 March 2006, 484 SCRA 538, 552). That specially holds true where the transferee of the title is an innocent purchaser for value, one who buys the property from the registered owner by merely relying on the certificate of title, without notice that some other person 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 person in the property. (San Roque Realty and Development Corporation v. Republic of the Philippines, G.R. No. 163130, 7 September 2007, 532 SCRA 493, 511-512).

[14] G.R. No. 133545, 15 July 2005, 463 SCRA 471, 477-479.

[15] Docketed as Civil Case No. 94-1736 filed in the Regional Trial Court of Makati City, Branch 147.