Samonte v. Court of Appeals
REITERATIONFacts
The Antecedents: This case concerns a parcel of land, Lot No. 216, originally covered by Original Certificate of Title No. RO-238(555) in the names of Apolonia Abao and Irenea Tolero. The respondents, heirs of Apolonia Abao and Irenea Tolero, claim ownership of the entire lot based on inheritance. The dispute arose from a series of alleged fraudulent cancellations of title and subsequent sales, leading to the issuance of various transfer certificates of title to different parties, including petitioner Tiburcio Samonte and the Jadol spouses. Procedural History: Two separate cases, Civil Case No. 1672 and Civil Case No. 1816, were filed in the Regional Trial Court (RTC) of Nasipit, Agusan del Norte, concerning portions and the entirety of Lot 216, respectively. These cases were consolidated and jointly tried. The RTC rendered decisions in favor of the plaintiffs (respondents herein), declaring them co-owners, ordering the reinstatement of the original title, cancellation of subsequent titles, and directing defendants to vacate and pay damages. The defendants, including petitioner Samonte, appealed to the Court of Appeals (CA). The CA consolidated the appeals and affirmed the RTC's decisions. Petitioner Samonte then filed the present petition for review on certiorari with the Supreme Court. The Petition: Petitioner Tiburcio Samonte seeks reversal of the Court of Appeals' decision and resolution. He argues that the CA erred in law by departing from the doctrine that the discovery of fraud is deemed to have occurred at the time of registration. Furthermore, he contends that the CA erred in not holding him to be a buyer in good faith for value, and thus protected by law. The petition specifically assails the CA's affirmation of the RTC's findings that the titles were fraudulently obtained and that Samonte was not a buyer in good faith.
Issue(s)
Whether the respondents' action for reconveyance had prescribed. Whether the petitioner was a buyer in good faith for value.
Ruling
The petition is denied for lack of merit. The Decision of the Court of Appeals affirming the trial court's decision is affirmed in toto.
Ratio Decidendi
On the issue of prescription: The Court held that the general rule that the discovery of fraud is deemed to have taken place upon the registration of real property, serving as constructive notice, does not apply in cases of fraudulent registration. Article 1456 of the Civil Code establishes that property acquired through fraud is held in trust. An action based on an implied or constructive trust prescribes in ten (10) years from its creation or upon the fraudulent registration. However, citing Adille vs. Court of Appeals, the Court ruled that the prescriptive period should be reckoned from the time the aggrieved party actually discovered the fraudulent act. In this case, the CA correctly reckoned the prescriptive period from the time respondents actually discovered the fraudulent act of Atupan, which was during the trial of Civil Case No. 1672. Therefore, the respondents' action for reconveyance had not prescribed. On the issue of whether the petitioner was a buyer in good faith: The Court found the petitioner not to be a purchaser in good faith. Regarding the portion bought on July 20, 1957, from the Jadol spouses, the petitioner had actual knowledge that the respondents were the only surviving heirs of Irenea Tolero, and the property was still registered under OCT No. RO-238(555) in the names of Abao and Tolero. One who buys from a person not the registered owner is not a purchaser in good faith. With respect to the other portion bought from Jacobo Tagorda, the CA established that the petitioner was also in bad faith. Although the property was registered under TCT No. RT-555 in Tagorda's name, the petitioner was previously aware that Jadol lacked the capacity to transmit title over any part of the property, including the portion sold to Tagorda. The inscription in the registry must be made in good faith, and the defense of indefeasibility of a Torrens Title does not extend to a transferee who takes the certificate of title with notice of a flaw. A holder in bad faith is not entitled to the protection of the law.
Main Doctrine
An action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the time of its creation or upon the alleged fraudulent registration of the property. However, the prescriptive period does not commence from the date of registration if the registration was effected through fraudulent means, and the prescriptive period should be reckoned from the time the aggrieved party actually discovered the fraud.