De Santos v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: The case involves Lot No. 5659 of the Opon Cadastre, originally registered in the names of two sets of spouses. The original certificate of title was lost during World War II. On May 3, 1962, one-half share was sold to Eleuteria Pino, who initiated a reconstitution of the title, resulting in OCT No. RO-0034. An oral division awarded the northern portion to Eleuteria Pino. Subsequently, an extrajudicial declaration of heirs for the original owners of the other half share was executed, and their share was sold to spouses Espiritu Bunagan and Felicidad de los Angeles. Espiritu Bunagan also initiated a reconstitution, leading to OCT No. RO-0769. This title was cancelled and replaced by TCT No. 1766 in the names of Bunagan and the heirs of the original owners. Lot No. 5659 was subdivided into Lot No. 5659-A (northern) and Lot No. 5659-B (southern). A partition agreement allocated Lot No. 5659-A to Bunagan and Lot No. 5659-B to the heirs of Serapio Aton and Eustaquia Arong. Bunagan then sold Lot No. 5659-A to petitioner Alicia de Santos, who obtained TCT No. 8433. Maximo Pino, attorney-in-fact of Eleuteria Pino, annotated an Affidavit of Adverse Claim on TCT No. 8433. Procedural History: Alicia de Santos filed a case for Quieting of Title and Damages against Maximo Pino. Peninsula Resort Corporation intervened based on an Exclusive Option to Purchase from Maximo Pino. The Regional Trial Court (RTC) dismissed the plaintiff's complaint, declared Eleuteria Pino the owner of Lot No. 5659-A, and declared Alicia de Santos the owner of Lot No. 5659-B. The RTC directed the cancellation of titles derived from OCT No. RO-0769 and the issuance of new titles. The Intermediate Appellate Court (IAC) affirmed the RTC decision in toto. Petitioner Alicia de Santos appealed to the Supreme Court. The Petition: Petitioner contends that she was a purchaser in good faith and for value, that the IAC erred in holding she had knowledge of a prior reconstituted title, in cancelling her title, in affirming the partition based on a supposed 1964 verbal partition, and in misapprehending the import of Maximo Pino's acceptance of the subdivision survey plan. She also argues that Peninsula Resort Corporation was a purchaser in bad faith and that she was in actual possession.
Issue(s)
Whether petitioner Alicia de Santos was a purchaser in good faith and for value of Lot No. 5659-A; Whether the IAC erred in holding that petitioner had knowledge of a prior reconstituted title; Whether the IAC erred in cancelling OCT No. RO-0769 and titles derived therefrom; Whether the IAC erred in holding that the evidence for the 1967 judicial reconstitution proceeding was false; and Whether Peninsula Resort Corporation was a purchaser in bad faith. Whether the IAC erred in affirming the 1964 verbal partition and subdivision of Lot No. 5659. Whether Maximo Pino's acceptance of the subdivision survey plan estopped him from questioning it. Whether petitioner was in actual, open, peaceful, and adverse possession of Lot No. 5659-A upon purchase.
Ruling
The petition is DENIED. The decision of the Intermediate Appellate Court affirming the Regional Trial Court's decision is upheld. Costs against the petitioner.
Ratio Decidendi
On the validity of titles, petitioner's status as a purchaser in good faith, cancellation of titles, and evidence of reconstitution: The Court held that there were two conflicting certificates of title for the same parcel of land, one of which must be void. Petitioner's TCT No. 8433 was derived from TCT No. 1766, which in turn originated from OCT No. RO-0769, a judicially reconstituted title issued in 1967. However, a prior reconstitution of the original certificate of title for the same lot, OCT No. RO-0034, was already issued in 1962. The Court ruled that a subsequent petition for reconstitution when a valid reconstituted title already exists is void and without legal effect. Consequently, all subsequent titles derived from this void reconstitution, including petitioner's TCT No. 8433, are also void. The principle that the spring cannot rise higher than its source was invoked. Furthermore, the Court found that petitioner could not be considered a purchaser in good faith and for value because she is deemed to have knowledge of public records, specifically the prior reconstituted title on file with the Registry of Deeds. The element of "without notice that some other person has a right to or interest in such property" was absent. Additionally, petitioner should have been aware that respondent Eleuteria Pino was in actual possession of the portion in question. The Court also addressed the issue of Peninsula Resort Corporation's status, finding the principles regarding good faith purchasers equally applicable. On the validity of the partition and subdivision: The Court found that the partition and subdivision conducted in 1977 by Espiritu Bunagan, which led to TCT No. 1766 and subsequently TCT No. 8433 for petitioner, were based on a flawed and void reconstituted title (OCT No. RO-0769). The earlier verbal partition and the subsequent tax declarations from 1964 established the rightful ownership and possession of Eleuteria Pino over the northern portion (Lot 5659-A) and the Casibans (predecessors of Bunagan) over the southern portion (Lot 5659-B). The Court also noted that Bunagan, being a geodetic engineer, could not feign ignorance of the portion he purchased, which was confirmed by the tax declarations he paid on. Therefore, the 1977 subdivision and partition, as well as the subsequent sale to petitioner, were invalid as they were derived from a void title and a misapprehension of the actual partition. This also addresses the IAC's alleged error in affirming the 1964 verbal partition and subdivision. On estoppel: The Court did not explicitly address whether Maximo Pino's acceptance estopped him. However, the Court's ruling on the validity of the partition and the rights of Eleuteria Pino implicitly rejects any claim of estoppel based on acceptance of the subdivision survey plan, as the plan itself was based on a flawed title. On the ownership and possession of Lot No. 5659-A and factual findings of the Court of Appeals: The Court affirmed the findings that from the time Eleuteria Pino purchased her share in 1962, she and her co-owners agreed that the northern portion of Lot 5659 would belong to her. Evidence showed she was in open, public, continuous, and uninterrupted possession of this northern portion. Tax declarations issued as early as 1964, one in the name of Eleuteria Pino for 13,596 square meters (the northern portion) and another in the name of her co-owner Silverio Casiban for the southern portion, supported this division. The boundaries described in these tax declarations, when considered with the sketch plan, clearly indicated that Eleuteria Pino occupied the northern portion. Even subsequent tax declarations in the name of Espiritu Bunagan consistently described the portion he acquired as the southern portion, reinforcing the claim of Eleuteria Pino and her successors-in-interest to the northern portion. The Court reiterated the general rule that findings of fact of the Court of Appeals are final and conclusive and cannot be reviewed by the Supreme Court, except in specific instances not present in this case. The petitioner's assigned errors primarily pertained to factual findings.
Main Doctrine
A subsequent petition for the reconstitution of a title is void and without force and effect if there is already a prior validly reconstituted title covering the same lot. All subsequent certificates of title derived from such void reconstitution are also void, as the spring cannot rise higher than its source. A purchaser is deemed to have knowledge of public records, including prior reconstituted titles, and cannot claim to be a purchaser in good faith if such records exist.