Cuizon v. Remoto
REITERATIONFacts
The Antecedents: The petitioners, spouses Encarnacion L. Cuizon and Salvador Cuizon, claim ownership over a 4,300 square meter parcel of land based on Transfer Certificate of Title (TCT) No. RT-3121, issued on March 15, 1984. This title originated from an Extra-Judicial Settlement with Sale dated August 3, 1983, executed by the heirs of Placida Tabada-Lambo, who adjudicated and sold Placida's one-fourth share to Encarnacion L. Cuizon. Conversely, the respondents assert their right to the same property through a Deed of Sale of Real Property dated September 19, 1968, executed by Placida Tabada in favor of Angel Remoto, the husband of respondent Mercedes C. Remoto and father of the other respondents. Procedural History: The respondents initiated a reconveyance action against the petitioners on August 13, 1984. The Regional Trial Court of Butuan City, Branch 3, ruled in favor of the respondents in a Decision dated March 9, 1990, ordering the reconveyance of the property. The petitioners appealed this decision to the Court of Appeals (CA), which affirmed the trial court's ruling in its Decision dated December 16, 1999. A subsequent motion for reconsideration filed by the petitioners was denied by the CA per its Resolution dated March 31, 2000. The Petition: The petitioners seek review of the CA's decision through a petition for review on certiorari under Rule 45 of the Rules of Court. They maintain their rightful ownership based on TCT No. RT-3121 and argue that the 1968 Deed of Sale is void, fictitious, and without legal effect. Their arguments include the principle that one dealing with registered land may rely on the correctness of the title, the lack of written notice to co-owners regarding the 1968 sale, the ineffectual nature of respondents' possession against a Torrens title, and that the action is barred by prescription and laches. The core issue presented is who holds a better right to the disputed property.
Issue(s)
Whether the 1968 Deed of Sale prevails over the 1983 Extra-Judicial Settlement with Sale. Whether petitioners are purchasers in good faith and for value. Whether the principle of indefeasibility of a Torrens title applies to petitioners. Whether the action for reconveyance is barred by prescription and laches. Whether the notice requirements for legal redemption under the Civil Code were met.
Ruling
The petition is DISMISSED. The Court of Appeals Decision dated December 16, 1999, and its Resolution dated March 31, 2000, are AFFIRMED.
Ratio Decidendi
On the prevailing right to the property: The Court affirmed the ruling that the 1968 Deed of Sale prevails over the 1983 Extra-Judicial Settlement with Sale, applying the principle of "prior tempore, potior jure" (he who is first in time is preferred in right). The sale by Placida to Angel Remoto in 1968 occurred before the 1983 settlement and sale, and at a time when Placida's heirs had not yet inherited the property. Angel Remoto immediately took possession of the portion he bought, establishing his superior right. On petitioners' status as purchasers in good faith: The Court found that petitioners were not purchasers in good faith. Both the RTC and CA found that petitioners had actual notice of the 1968 Deed of Sale. They were shown a copy of the document in 1982, a year before they executed the 1983 Extra-Judicial Settlement with Sale. This knowledge of a prior unregistered interest negates their claim of good faith and renders the defense of indefeasibility of the Torrens title inapplicable to them. On the effect of registration and Torrens title: The Court reiterated that registration is not a requirement for the validity of a contract between the parties; its primary purpose is to bind third persons. Petitioners, being heirs of Placida or spouses of an heir, are not considered third persons in this context. Furthermore, the principle of indefeasibility of a Torrens title does not extend to a transferee who acquires the title with notice of a flaw or defect, such as a prior unregistered sale. On prescription and laches: The Court ruled that prescription and laches do not apply. Respondents had been in continuous possession of the property since 1968. The right to seek reconveyance, which aims to quiet title, does not prescribe when the claimant is in actual possession. Furthermore, respondents filed their action for reconveyance promptly after the execution and registration of the adverse deed and title, indicating vigilance rather than inaction. On the notice for legal redemption: The Court clarified that the right of legal redemption under Articles 1620 and 1623 of the Civil Code pertains to co-owners or adjoining owners, not to the heirs of the vendor. The written notice must come from the vendor, Placida, which was not the case here. Moreover, the sale by Placida to Angel affected only her pro indiviso share, and the subsequent sale by her heirs was invalid as they could not transfer what Placida no longer owned (nemo dat quod non habet). The Court also noted that the 4,300 square meters sold was likely one-fourth of Placida's share, which would be 4,000 square meters.
Main Doctrine
A prior unregistered deed of sale, when the vendee has actual notice of its existence, prevails over a subsequent registered deed of extra-judicial settlement with sale, especially when the parties to the subsequent deed are not third persons and acted in bad faith.