Reyes v. Montemayor
REITERATIONFacts
The Antecedents: Petitioners, spouses Emma Ver Reyes and Ramon Reyes, claim ownership of a parcel of land in Paliparan, Dasmariñas, Cavite, which they purchased from Marciano Cuevas via a Deed of Absolute Sale dated October 8, 1976. They paid the taxes associated with this sale and were given the owner's duplicate copy of Transfer Certificate of Title (TCT) No. T-58459. However, they were unable to register the sale in their names. In 1993, when attempting to pay real estate taxes, they discovered that the property had allegedly been sold by Marciano Cuevas to Irene Montemayor on November 10, 1992, and a new title, TCT No. T-369793, was issued in Montemayor's name on January 4, 1993. The Reyeses contend that this second sale was based on a simulated and forged Deed of Absolute Sale. Procedural History: The Reyeses filed a Complaint for Reconveyance against Irene Montemayor and the Register of Deeds of Cavite before the Regional Trial Court (RTC), Branch 21, of Imus, Cavite, docketed as Civil Case No. 878-94. The RTC dismissed their complaint, ruling that the case involved a double sale and that Montemayor, as an innocent purchaser for value who first registered the property, had a better title. The Reyeses appealed this decision to the Court of Appeals (CA), which affirmed the RTC's ruling. During the appeal, it was revealed that Montemayor had executed a Waiver and Quitclaim, acknowledging the dubiousness of her title and recognizing the title of Engracia Isip's heirs, leading to the cancellation of her title and the issuance of a new one in the heirs' names. Despite this, the CA denied the Reyeses' appeal, upholding the RTC's decision. The Reyeses then filed a Motion for Reconsideration, which was also denied. The Petition: This case is before the Supreme Court on a Petition for Review on Certiorari under Rule 45 of the Rules of Court, filed by the Reyeses. They assail the Court of Appeals' decision affirming the RTC's dismissal of their complaint. The Reyeses argue that the appellate court committed serious errors by disregarding clear evidence and jurisprudence, sustaining the RTC's order despite contradictory records, and ignoring evidence demonstrating their ownership. They contend that the Deed of Absolute Sale to Montemayor was forged, that Marciano Cuevas's testimony was not self-serving, and that the NBI's findings, particularly regarding Virginia Cuevas's signature, established forgery. They also highlight the suspicious circumstances surrounding the alleged second sale and Montemayor's subsequent admission of bad faith in a Waiver and Quitclaim, arguing that the property should be reconveyed to them as the rightful owners.
Issue(s)
Whether the Supreme Court can review the factual findings of the Court of Appeals. Whether there was a valid double sale of the subject property. Whether the Deed of Absolute Sale dated November 10, 1992, in favor of respondent Irene Montemayor is valid. Whether petitioners are entitled to reconveyance of the subject property. Whether petitioners are entitled to nominal damages and attorney's fees.
Ruling
The Petition is GRANTED. The assailed Decision of the Court of Appeals is REVERSED and SET ASIDE. TCT No. T-784707 is ORDERED CANCELLED, and a new certificate of title is ORDERED ISSUED in the name of petitioners. Respondent Irene Montemayor is ORDERED to pay petitioners nominal damages of ₱50,000.00 and attorney's fees of ₱100,000.00.
Ratio Decidendi
On the review of factual findings: The Supreme Court held that while Rule 45 generally limits review to questions of law, it may delve into factual findings in specific instances, including when the findings are grounded on speculations, manifestly mistaken, involve grave abuse of discretion, misappreciation of facts, conflicting findings, or are contrary to the evidence on record. In this case, the Court found sufficient basis to deviate from the rule as the evidence and prevailing law supported a finding different from the lower courts' conclusions. On the existence of a double sale: The Court found that there was no valid double sale. The evidence on record revealed that the spouses Cuevas did not sell the subject property to private respondent Montemayor. Marciano Cuevas's sworn testimony that he did not sell the property to anyone other than the petitioners and that the signatures on the deed to Montemayor were not theirs was not refuted. The Court found the RTC's conclusion that Marciano's testimony was self-serving to be baseless, as he stood to gain nothing and risked perjury charges by testifying falsely. On the validity of the Deed of Absolute Sale dated November 10, 1992: The Court ruled that the Deed of Absolute Sale dated November 10, 1992, was a forged deed and thus a nullity, conveying no title. While the NBI report did not definitively conclude on Marciano's signature, it unequivocally stated that Virginia Cuevas's signature on the deed was not hers, establishing forgery. This, coupled with Marciano's testimony, strongly militated against the existence of a second sale to Montemayor. The circumstances surrounding the alleged second sale were also deemed sketchy, with key witnesses not having met the alleged vendors. On the entitlement to reconveyance: The Court held that petitioners, as the rightful owners, are entitled to reconveyance. Registration procured by fraud does not vest title in the fraudulent registrant; they hold it as a mere trustee. The indefeasibility of a Torrens title cannot be used to perpetrate fraud. The Court emphasized that reconveyance is available as long as the property has not passed to an innocent purchaser for value. The Court also noted that Montemayor's own Waiver and Quitclaim admitted the dubiousness of her title and her bad faith. On the entitlement to damages and attorney's fees: The Court granted nominal damages of ₱50,000.00 under Article 2221 of the Civil Code, as petitioners' right to peaceful possession was violated by Montemayor's fraudulent registration. Attorney's fees of ₱100,000.00 were also awarded due to Montemayor's gross and evident bad faith in refusing a plainly valid claim, considering the prolonged duration of the case and the services rendered.
Main Doctrine
A forged deed of sale is a nullity and conveys no title. Registration procured by fraud does not vest title in the fraudulent registrant, who holds the property as a mere trustee for the rightful owner. An action for reconveyance is available as long as the property has not passed to an innocent purchaser for value.