Sanchez v. Mapalad Realty
REITERATIONFacts
The Antecedents: Respondent Mapalad Realty Corporation (Mapalad) was the registered owner of four parcels of land located along Roxas Boulevard. In March 1986, Jose Y. Campos executed an affidavit admitting that Mapalad was a company held in trust for former President Ferdinand E. Marcos, and he turned over its assets to the Aquino government. Subsequently, the Presidential Commission on Good Government (PCGG) issued writs of sequestration for Mapalad and its properties. In August 1992, the PCGG appointed Rolando E. Josef as Vice President/Treasurer and General Manager of Mapalad, who discovered that the owner's duplicate titles to the four properties were missing. Josef learned that Felicito L. Manalili, Mapalad's former general manager, had taken the titles in July 1992 and never returned them. Procedural History: On November 16, 1992, Nordelak Development Corporation (Nordelak) filed a notice of adverse claim based on a deed of sale purportedly executed by Miguel Magsaysay, then president of Mapalad, selling the properties to Nordelak for P20,190,000.00. Josef notified the Register of Deeds (RD) of Parañaque not to entertain any transactions regarding these titles. On December 22, 1992, Mapalad filed a petition for cancellation of the adverse claim and a notice of loss of the owner's duplicate titles. Mapalad discovered on January 14, 1993, that its titles had been cancelled and new titles were issued to Nordelak based on another deed of sale dated November 2, 1989, but with a different purchase price of P7,268,400.00. Miguel Magsaysay denied signing either deed. Mapalad filed an action for annulment of deed of sale and reconveyance. While the case was pending, Nordelak sold the properties to petitioner Manuel Luis Sanchez. The Regional Trial Court (RTC) dismissed Mapalad's complaint, upholding the validity of the deed of sale. The Court of Appeals (CA) reversed the RTC's decision, declaring the deeds of sale null and void and ordering the cancellation of Nordelak's titles and the issuance of new titles in Mapalad's name. The CA also ruled that Sanchez, as a transferee pendente lite, was not a buyer in good faith. The Petition: Petitioner Manuel Luis Sanchez filed this petition for review on certiorari seeking to reverse the Court of Appeals' decision. He argues that the CA erred in ruling that there was fraud in obtaining the certificates of title and that the deed of sale was fictitious, contrary to the RTC's findings that the deed was genuine and valid, and that Nordelak was a buyer in good faith. The petition raises two main issues: (1) whether there was a valid sale between Mapalad and Nordelak, and (2) whether petitioner Sanchez acquired valid title as an innocent purchaser for value despite defects in Nordelak's title. The Court addresses a procedural issue raised by the Solicitor General regarding whether petitioner may raise questions of fact.
Issue(s)
Whether or not there was a valid sale between Mapalad and Nordelak. Whether or not petitioner Sanchez acquired valid title over the properties as an innocent purchaser for value despite a defect in Nordelak’s title. Whether or not petitioner may raise questions of fact in the present petition.
Ruling
The petition is denied, and the Court of Appeals decision is affirmed in toto. The sale between Mapalad and Nordelak is declared null and void, and consequently, the sale between Nordelak and petitioner Sanchez is also declared null and void. The Register of Deeds is ordered to cancel the TCTs in Nordelak's name and issue new titles in favor of Mapalad.
Ratio Decidendi
On whether there was a valid sale between Mapalad and Nordelak: The Court affirmed the CA's finding that there was no valid sale. The primary basis was the testimony of Miguel Magsaysay, who categorically denied signing the deeds of sale and stated he was no longer connected with Mapalad since 1982. This denial, coupled with the fact that he had divested all his interests in the corporation, rendered the purported sale invalid due to lack of consent. Furthermore, the Court found a lack of consideration, as Mapalad did not receive any payment for the alleged transaction, and Nordelak failed to present proof of payment, such as a cancelled check. The existence of two deeds of sale with the same date, parties, and notary but different considerations further indicated fraud and fictitiousness. The Court held that a contract of sale lacking valid consent and consideration is void ab initio. On whether petitioner Sanchez acquired valid title over the properties: The Court ruled that petitioner Sanchez did not acquire valid title. Nordelak, having acquired no valid title from Mapalad due to the void sale, had nothing to transfer to Sanchez. The principle of nemo dat quod non habet (no one can give what he does not have) applies. Moreover, Sanchez purchased the property during the pendency of the litigation, as evidenced by the annotation of a notice of lis pendens on Nordelak's titles. As a transferee pendente lite, Sanchez merely stepped into the shoes of Nordelak and was bound by any judgment rendered against Nordelak. Therefore, he could not claim to be an innocent purchaser for value and could not acquire any better right than his predecessor. On the issue of whether petitioner may raise questions of fact: The Court ruled that the case falls within the exceptions to the rule that factual issues may not be entertained in a petition for review on certiorari. Specifically, the factual findings of the Court of Appeals and the trial court were contradictory, and the CA's findings were not grounded entirely on speculation but on evidence presented, including the testimony of Miguel Magsaysay and the circumstances surrounding the deeds of sale. The Court found it necessary to re-examine the facts to resolve the conflicting conclusions of the lower courts.
Main Doctrine
A contract of sale is void ab initio for lack of consent and consideration if the purported seller had no authority to sell and no payment was made. A transferee pendente lite, having acquired the property during litigation and with notice of lis pendens, steps into the shoes of the transferor and cannot acquire a better right than what the transferor had.