Aguirre v. Bombaes
REITERATIONFacts
The Antecedents: Respondent Cristina B. Bombaes mortgaged a parcel of land (Lot No. 782) to Vicente Atlas Catalan (Catalan) to secure a loan. Upon default, respondent and Catalan executed a Deed of Absolute Sale over the lot in Catalan's favor, and title was transferred to Catalan's name. Petitioner Ma. Kristel B. Aguirre later offered to purchase the lot from Catalan, executing a Deed of Conditional Sale and subsequently a Deed of Absolute Sale after full payment. The title was then transferred to petitioner's name. Procedural History: Respondent filed a complaint for quieting of title against Catalan and petitioner, alleging that the Deed of Absolute Sale between her and Catalan was simulated, intended only for Catalan to mortgage the property and use the proceeds to pay her loan. She claimed they executed a deed of assignment to guarantee her right to redeem the property, but Catalan instead sold it to petitioner. The Regional Trial Court (RTC) dismissed the complaint and awarded damages to Catalan. The Court of Appeals (CA) initially affirmed the RTC decision but deleted the damages. However, upon respondent's motion for reconsideration, the CA reversed its ruling, declaring the Deed of Absolute Sale between respondent and Catalan void for being simulated and ruling that petitioner was not a buyer in good faith because an adverse claim was annotated on the title after the Deed of Absolute Sale but before Catalan registered the sale. The Petition: Petitioner assails the CA's Amended Decision and Resolution, raising issues on the timeliness of respondent's motion for reconsideration and whether petitioner was an innocent purchaser in good faith and for value.
Issue(s)
Whether respondent's Motion for Reconsideration of the CA Decision dated May 31, 2016, was belatedly filed. Whether petitioner was an innocent purchaser in good faith and for value; and the recourse available to the respondent.
Ruling
The petition is GRANTED. The Amended Decision dated January 20, 2017, and the Resolution dated June 30, 2017, of the Court of Appeals are REVERSED and SET ASIDE. Accordingly, the Decision dated May 31, 2016, of the Court of Appeals is hereby REINSTATED.
Ratio Decidendi
On the timeliness of the Motion for Reconsideration: The Court ruled that respondent's Motion for Reconsideration was timely filed. Section 3, Rule 13 of the Rules of Court states that the date of mailing is considered the date of filing. Respondent received the CA Decision on July 8, 2016, giving her until July 25, 2016, to file her motion. The records showed that she filed her motion via registered mail on July 25, 2016, which was within the reglementary period, as the last day of the 15-day period fell on a Saturday. On whether petitioner was an innocent purchaser in good faith and for value; and the recourse for the respondent: The Court found that the CA committed a serious error in ruling that petitioner was not an innocent purchaser in good faith and for value. An innocent purchaser for value buys property without notice of any other person's right or interest and pays a full price. Generally, one dealing with registered land may rely on the correctness of the certificate of title. The Court noted that the title to the subject lot was already transferred to Catalan's name prior to the sale to petitioner, and at the time of the sale, the certificate of title bore no annotation of any lien or encumbrance. The adverse claim was annotated only on May 12, 2010, eight days after the Deed of Absolute Sale between Catalan and petitioner dated May 4, 2010. The CA also failed to present sufficient proof that petitioner had actual knowledge of respondent's ownership or possession. Therefore, petitioner, having relied on a clean title, was under no legal obligation to go beyond the certificate and inquire further. The Court clarified that while petitioner holds an indefeasible title, respondent is not without recourse. Public policy mandates that those unjustly deprived of their rights over real property due to registration laws must be afforded legal remedies. Respondent may file an action for compensation from the Assurance Fund under Section 95 of Presidential Decree No. 1529, given that the property was registered in the name of an innocent purchaser in good faith and for value, rendering the loss compensable.
Main Doctrine
A buyer of registered land who relies on a clean certificate of title, without notice of any defect or adverse claim, is considered an innocent purchaser in good faith and for value, and holds an indefeasible title. The remedy for the original owner who is unjustly deprived of property due to registration laws is an action for compensation from the Assurance Fund.