LEONG vs. SEE

  

FLORENTINO LEONG AND ELENA LEONG ET AL. v. EDNA SEE

G.R. No. 194077 | December 3, 2014

 

FACTS

The petition originated from 2 civil complaints involving the sale of a parcel of land in favor of respondent Edna See. Petitioners pray for the reversal of the CA as well as trial court’s decision.

The spouses Florentino Leong and Carmelita Leong used to own the property located at De Guzman Street, Quiapo, Manila. Petitioner Elena Leong is Florentino’s sister in law. She had stayed with her in-laws on the property rental-free for over 2 decades until building they lived in was razed by fire. They then constructed makeshift houses, and the rental-free arrangement continued.

Florentino and Carmelita immigrated to the US and eventually had their marriage dissolved in Illinois. A provision in their marital settlement agreement states that "Florentino shall convey and quitclaim all of his right, title and interest in and to 540 De Guzman Street, Manila, Philippines . . . to Carmelita."

CA found that “apparently intercalated in the lower margin of p 12 of the instrument was a long hand scribbling of a proviso, purporting to be a footnote remark":

On Nov 14, 1996, Carmelita sold the land to Edna See. In lieu of Florentino's signature of conformity in the deed of absolute sale, Carmelita presented to Edna and her father, witness Ernesto See, a waiver of interest notarized on March 11, 1996 in Illinois. In this waiver, Florentino reiterated his quitclaim over his right, title, and interest to the land. Consequently, the land's title, covered by TCT No. 231105, was transferred to Edna's name.

Edna was aware of the Leong relatives staying in the makeshift houses on the land. Carmelita assured her that her nieces and nephews would move out, but demands to vacate were unheeded.

On April 1, 1997, Edna filed a complaint for recovery of possession against Elena and the other relatives of the Leong ex-spouses. The complaint alleged that in 1995 after the fire had razed the building on the land, Elena erected makeshift houses on the land without Carmelita's knowledge or consent.

In response, Elena alleged the title's legal infirmity for lack of Florentino's conformity to its sale. She argued that Carmelita's non-compliance with the proviso in the property agreement — that the Quiapo property "may not be alienated without Florentino first obtaining a clean title over the Malabon property" — annulled the transfer to Edna.

On Apr 23, 1997, Florentino filed a complaint for declaration of nullity of contract, title, and damages against Carmelita, Edna See, and the Manila ROD, alleging that the sale was without his consent. The 2 cases were consolidated.

The RTC ruled in favor of Edna See and this was affirmed by the CA.

Petitioners contend that the principle of indefeasibility of Torrens titles does not apply when fraud exists, and respondent was a buyer in bad faith. Respondent knew at the time of the purchase that Elena had actual possession of the property, thus, she should have made inquiries on their right to the property.

Petitioners argue the conjugal nature of the property, evidenced by the title in the names of Florentino and Carmelita Leong, and the waiver relied upon by respondent. They cite Art 3 and 15 of the Civil Code, and Art 87 and 134 of the Family Code, to support their contention that respondent should have demanded Florentino’s consent to the sale. Petitioners submit that Florentino’s waiver is void since donations between spouses are void.

Petitioners argue that respondent should bear the loss of her negligence in purchasing the property without Florentino's consent. They cite at length Aggabao v Parulan, Jr. to support their argument that respondent failed to exercise the required due diligence in the purchase of the property. Consequently, petitioners submit that the lower courts erred in ruling that respondent was entitled to possession of the property.

On the other hand, respondent counters that only questions of law can be raised in a petition for review on certiorari, and petitioners raise purely factual questions.

 Respondent counters that good faith is presumed, and that petitioners did not substantiate their bold allegation of fraud. Second, respondent did not rely on the clean title alone precisely because of the possession by third parties, thus, she also relied on Florentino's waiver of interest. Respondent even verified the authenticity of the title at the Manila Register of Deeds with her father and Carmelita. These further inquiries prove respondent's good faith.

ISSUE: Whether or not respondent Edna C. See is a buyer in good faith and for value.

RULING

Yes, Edna C. See is a buyer in good faith and for value.

 

 The Torrens system was adopted to "obviate possible conflicts of title by giving the public the right to rely upon the face of the Torrens certificate and to dispense, as a rule, with the necessity of inquiring further." One need not inquire beyond the four corners of the certificate of title when dealing with registered property.

Section 44 of PD 1529 known as the Property Registration Decree recognizes innocent purchasers in good faith for value and their right to rely on a clean title

 An innocent purchaser for value refers to someone who "buys the property of another without notice that some other person has a right to or interest in it, and who pays a full and fair price at the time of the purchase or before receiving any notice of another person's claim."

 Both lower courts found respondent to be an innocent purchaser in good faith for value. A determination of whether a party is an innocent purchaser in good faith and for value involves a factual issue beyond the ambit of a petition for review on certiorari.

In any event, respondent exerted due diligence when she ascertained the authenticity of the documents attached to the deed of sale such as the marital settlement agreement with Florentino's waiver of interest over the property. She did not rely solely on the title. She even went to the Registry of Deeds to verify the authenticity of the title. These further inquiries were considered by the lower courts in finding respondent to be an innocent purchaser in good faith and for value.

 

WHEREFORE, premises considered, the Court of Appeals' decision in CA-G.R. CV No. 92289 is AFFIRMED.