Dela Cruz v. Dela Cruz
REITERATIONFacts
The Antecedents: Paciencia dela Cruz, the registered owner of a parcel of land with a flea market, allegedly executed a Deed of Sale in favor of her son, Fortunato dela Cruz, for P21,000. Fortunato subsequently obtained a new title in his name and declared the property for taxation. He later mortgaged the property three times and then executed a Deed of Sale in favor of Clark and Divina Gutierrez for P600,000, who then obtained a new title in their names and took possession of the property, collecting stall rentals. Paciencia instituted an action for reconveyance, alleging that the sale to Fortunato was simulated, that he held the property in trust for her, and that she continued to collect rentals until she fell ill. She further alleged that Fortunato fraudulently offered the property for sale and that the sale to the Gutierrezes was void. Procedural History: Paciencia dela Cruz filed Civil Case No. 37-M-89 for reconveyance against Fortunato dela Cruz and the spouses Claudio and Adoracion Gutierrez, later amending the complaint to implead Clark and Divina Gutierrez. The Regional Trial Court (RTC) of Malolos, Bulacan, dismissed the complaint, declaring Clark and Divina Gutierrez as lawful owners. Paciencia moved for reconsideration, which was denied. After Paciencia's death, her children substituted her and appealed to the Court of Appeals (CA). The CA affirmed the RTC's decision. The petitioners then moved for reconsideration, which was also denied, leading to the present petition. The Petition: The petitioners, as successors-in-interest of Paciencia dela Cruz, seek to annul the decision of the Court of Appeals. They argue that the CA erred in ruling that Paciencia voluntarily executed the Deed of Absolute Sale in favor of Fortunato, contending that the deed was in English, a language Paciencia did not understand, and that its terms were not fully explained, violating Articles 1330 and 1332 of the Civil Code. They also argue that the respondents Gutierrezes are not buyers in good faith, as their father, the actual buyer, was aware of the defect in Fortunato's title. The petitioners are seeking a review of the CA's decision under Rule 45 of the Rules of Court.
Issue(s)
Whether the Deed of Absolute Sale executed by Paciencia dela Cruz in favor of Fortunato dela Cruz was voluntarily executed. Whether respondents Clark and Divina Gutierrez are buyers in good faith. Whether the evidence on record supports the decision of the Court of Appeals.
Ruling
The petition is denied for lack of merit. The assailed decision of the Court of Appeals, which sustained the Regional Trial Court's decision, is affirmed.
Ratio Decidendi
On the issue of voluntary execution of the Deed of Absolute Sale: The Court found that petitioners failed to prove that Paciencia dela Cruz did not understand English or that the Deed of Sale was not explained to her. The Deed was notarized, carrying a presumption of regularity and due execution. Furthermore, Fortunato's actions, such as declaring the property for taxation, paying realty taxes, and mortgaging the property three times without protest from Paciencia or the petitioners, were strong indicia of ownership and contradicted the claim that the sale was simulated. The Court noted that Paciencia only took action to forestall the transfer to the Gutierrezes when she learned of its impending sale, which was a belated attempt to assert ownership. On the issue of whether the Gutierrezes are buyers in good faith: The Court held that the Gutierrezes were purchasers in good faith and for value. At the time of the sale to them, the certificate of title was in Fortunato's name, and there were no annotations indicating any adverse claim or defect in his title, other than two cautionary entries related to Rule 74 of the Rules of Court. The Gutierrezes relied on the certificate of title and even engaged legal counsel to verify the title with the Registry of Deeds. After being assured that everything was in order, they finalized the purchase. The law protects innocent purchasers for value who rely on a clean certificate of title. On whether the evidence supports the Court of Appeals' decision: The Court found that the petitioners failed to present credible evidence to support their claims that the Deed of Sale was simulated or that the Gutierrezes were not buyers in good faith. The evidence on record, including the notarized Deed of Sale, tax declarations, tax payments, and Fortunato's actions regarding the property, supported the findings of the lower courts. Therefore, the Court of Appeals did not err in affirming the trial court's decision.
Main Doctrine
A deed of sale is considered absolutely simulated and void if the parties never intended to be bound by it. However, if a false cause is stated to conceal the real agreement, the contract is relatively simulated and the real agreement may be held binding. Tax declarations and realty tax payments are strong indicia of ownership. A buyer dealing with registered land may rely on the certificate of title, and is considered an innocent purchaser for value if they buy without notice of any defect in the seller's title and pay the full price.