LOCSIN vs. HIZON

  

ENRIQUETA M. LOCSIN, petitioner, vs. BERNARDO HIZON, CARLOS HIZON, SPS. JOSE MANUEL & LOURDES GUEVARA, respondents.

G.R. No. 204369 |  September 17, 2014

FACTS:

Petitioner Enriqueta M. Locsin (Locsin) was the registered owner of a 760-sq.m. lot covered by TCT No. 235094, located at 49 Don Vicente St., Don Antonio Heights Subdivision, Brgy. Holy Spirit, Capitol, Quezon City. In 1992, she filed an ejectment case against one Billy Aceron (Aceron) before the Metropolitan Trial Court, Branch 38 in Quezon City (MTC) to recover possession over the land in issue.

Eventually, the two entered into a compromise agreement, which the MTC approved on August 6, 1993. Locsin later went to the United States without knowing whether Aceron has complied with his part of the bargain under the compromise agreement. In spite of her absence, however, she continued to pay the real property taxes on the subject lot.

In 1994, after discovering that her copy of TCT No. 235094 was missing, Locsin filed a petition for administrative reconstruction in order to secure a new one, TCT No. RT-97467. Sometime in early 2002, she then requested her counsel to check the status of the subject lot. It was then that they discovered that:

One Marylou Bolos (Bolos) had TCT No. RT-97467 cancelled on February 11, 1999, and then secured a new one, TCT No. N-200074, in her favor by registering a Deed of Absolute Sale dated November 3, 1979 allegedly executed by Locsin with the Registry of Deeds;

Bolos later sold the subject lot to Bernardo Hizon (Bernardo) for PhP 1.5 million, but it was titled under Carlos Hizon's (Carlos') name on August 12, 1999. Carlos is Bernardo's son. On October 1, 1999, Bernardo, claiming to be the owner of the property, filed a Motion for Issuance of Writ of Execution for the enforcement of the court-approved compromise agreement. The property was already occupied and was, in fact, up for sale.

On May 9, 2002, Locsin, through counsel, sent Carlos a letter requesting the return of the property since her signature in the purported deed of sale in favor of Bolos was a forgery. In a letter-reply dated May 20, 2002, Carlos denied Locsin's request, claiming that he was unaware of any defect or flaw in Bolos' title and he is, thus, an innocent purchaser for value and good faith.

On June 13, 2002, Bernardo met with Locsin's counsel and discussed the possibility of a compromise. He ended the meeting with a promise to come up with a win-win situation for his son and Locsin, a promise which turned out to be deceitful for Locsin learned that Carlos had already sold the property for PhP 1.5 million to his sister and her husband, herein respondents Lourdes and Jose Manuel Guevara (spouses Guevara), respectively, who, as early as May 24, 2002, had a new certificate of title, TCT No. N-237083, issued in their names. The spouses Guevara then immediately mortgaged the said property to secure a PhP 2.5 million loan/credit facility with Damar Credit Corporation (DCC).

Locsin filed an action for reconveyance, annulment of TCT No. N-237083, the cancellation of the mortgage lien annotated thereon, and damages, against Bolos, Bernardo, Carlos, the Sps. Guevara, DCC, and the Register of Deeds, Quezon City,

The RTC dismissed the complaint. The CA affirmed the RTC's finding that herein respondents are innocent purchasers for value; ruled that Locsin can no longer recover the subject lot.

Locsin insists that Bernardo was well aware, at the time he purchased the subject property, of a possible defect in Bolos' title since he knew that another person, Aceron, was then occupying the lot in issue. As a matter of fact, Bernardo even moved for the execution of the compromise agreement between Locsin and Aceron in order to enforce to oust Aceron of his possession over the property. Locsin maintains that Bernardo, knowing as he did the incidents involving the subject property, should have acted as a reasonably diligent buyer in verifying the authenticity of Bolos' title instead of closing his eyes to the possibility of a defect therein. Essentially, petitioner argues that Bernardo's stubborn refusal to make an inquiry beyond the face of Bolos' title is indicative of his lack of prudence in protecting himself from possible defects or flaws therein, and consequently bars him from interposing the protection accorded to an innocent purchaser for value.

Respondents maintain that they had the right to rely solely upon the face of Bolos' clean title, considering that it was free from any lien or encumbrance. They are not even required, so they claim, to check on the validity of the sale from which they derived their title. Respondents claim that their knowledge of Aceron's possession cannot be the basis for an allegation of bad faith, for the property was purchased on an "as-is where-is" basis.

ISSUE: Whether or not respondents are innocent purchasers for value.

RULING:

No, the respondents are not innocent purchasers for value.

An innocent purchaser for value is one 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. As such, a defective title — or one the procurement of which is tainted with fraud and misrepresentation — may be the source of a completely legal and valid title, provided that the buyer is an innocent third person who, in good faith, relied on the correctness of the certificate of title, or an innocent purchaser for value.

Complementing this is the mirror doctrine which echoes the doctrinal rule that every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and is in no way obliged to go beyond the certificate to determine the condition of the property.;

However, there are recognized exceptions to this rule: The presence of anything which excites or arouses suspicion should then prompt the vendee to look beyond the certificate and investigate the title of the vendor appearing on the face of said certificate. One who falls within the exception can neither be denominated an innocent purchaser for value nor a purchaser in good faith and, hence, does not merit the protection of the law.

In Domingo Realty, Inc. vs CA, the Court emphasized the need for prospective parties to undertake precautionary measures, such as:

·         Verifying the origin, history, authenticity, and validity of the title with the Office of the Register of Deeds and the Land Registration Authority;

·         Engaging the services of a competent and reliable geodetic engineer to verify the boundary, metes, and bounds of the lot subject of said title based on the technical description in the said title and the approved survey plan in the Land Management Bureau;

·         Conducting an actual ocular inspection of the lot;

·         Inquiring from the owners and possessors of adjoining lots with respect to the true and legal ownership of the lot in question;

·         Putting up of signs that said lot is being purchased, leased, or encumbered; and

·         Undertaking such other measures to make the general public aware that said lot will be subject to alienation, lease, or encumbrance by the parties.

In the case at bar, Bolos' certificate of title was concededly free from liens and encumbrances on its face. However, the failure of Carlos and the spouses Guevara to exercise the necessary level of caution in light of the factual milieu surrounding the sequence of transfers from Bolos to respondents bars the application of the mirror doctrine and inspires the Court's concurrence with petitioner's proposition.

Carlos is not an innocent purchaser for value.

Foremost, the Court is of the view that Bernardo negotiated with Bolos for the property as Carlos' agent. This is bolstered by the fact that he was the one who arranged for the sale and eventual registration of the property in Carlos' favor.

Consistent with the rule that the principal is chargeable and bound by the knowledge of, or notice to, his agent received in that capacity, any information available and known to Bernardo is deemed similarly available and known to Carlos.

Bernardo knew that Bolos, from whom he purchased the subject property, never acquired possession over the lot. As a matter of fact, in his March 11, 2009 direct testimony, Bernardo admitted having knowledge of Aceron's lot possession as well as the compromise agreement between petitioner and Aceron.

Bolos' purported Deed of Sale was executed on November 3, 1979 but the ejectment case commenced by Locsin against Aceron was in 1992, or thirteen (13) years after the property was supposedly transferred to Bolos.

The August 6, 1993 Judgment, issued by the MTC on the compromise agreement between Locsin and Aceron, clearly stated therein that "[o]n August 2, 1993, the parties [Aceron and Locsin] submitted to [the MTC] for approval a Compromise Agreement dated July 28, 1993." It further indicated that "[Aceron] acknowledges [Locsin's] right of possession to [the subject property], being the registered owner thereof."

Having knowledge of the foregoing facts, Bernardo and Carlos, to our mind, should have been impelled to investigate the reason behind the arrangement.

It should have struck them as odd that it was Locsin, not Bolos, who sought the recovery of possession by commencing an ejectment case against Aceron, and even entered into a compromise agreement with the latter years after the purported sale in Bolos' favor. Instead, Bernardo and Carlos took inconsistent positions when they argued for the validity of the transfer of the property in favor of Bolos, but in the same breath prayed for the enforcement of the compromise agreement entered into by Locsin.

At this point it is well to emphasize that entering into a compromise agreement is an act of strict dominion. If Bolos already acquired ownership of the property as early as 1979, it should have been her who entered into a compromise agreement with Aceron in 1993, not her predecessor-in-interest, Locsin, who, theoretically, had already divested herself of ownership thereof.

The spouses Guevara are not an innocent purchaser for value.

As regards the transfer of the property from Carlos to the spouses Guevara, We find the existence of the sale highly suspicious. For one, there is a dearth of evidence to support the respondent spouses' position that the sale was a bona fide transaction. Even if we repeatedly sift through the evidence on record, still we cannot find any document, contract, or deed evidencing the sale in favor of the spouses Guevara.

To bridge the gap in their documentary evidence, respondents proffer their own testimonies explaining the circumstances surrounding the alleged sale. However, basic is the rule that bare and self-serving allegations, unsubstantiated by evidence, are not equivalent to proof under the Rules.

Furthermore, and noticeably enough, the transfer from Carlos to the spouses Guevara was effected only 15 days after Locsin demanded the surrender of the property from Carlos.

When Bernardo met with Locsin's counsel on June 13, 2002, and personally made a commitment to come up with a win-win situation for his son and Locsin, he knew fully well, too, that the property had already been purportedly transferred to his daughter and son-in-law, the spouses Guevara, for he, no less, facilitated the same. This, to us, is glaring evidence of bad faith and an apparent intention to mislead Locsin into believing that she could no longer recover the subject property.

Also, the fact that Lourdes Guevara and Carlos are siblings, and that Carlos' agent in his dealings concerning the property is his own father, renders incredible the argument that Lourdes had no knowledge whatsoever of Locsin's claim of ownership at the time of the purported sale.

There is also strong reason to believe that even the mortgage in favor of DCC was a mere ploy to make it appear that the Sps. Guevara exercised acts of dominion over the subject property. This is so considering the proximity between the property's registration in their names and its being subjected to the mortgage.

These circumstances, taken altogether, strongly indicate that Carlos and the spouses Guevara failed to exercise the necessary level of caution expected of a bona fide buyer and even performed acts that are highly suspect. Consequently, this Court could not give respondents the protection accorded to innocent purchasers in good faith and for value.

 

 

WHEREFORE, in light of the foregoing, the Petition is hereby GRANTED. The assailed Decision of the Court of Appeals dated June 6, 2012 in CA-G.R. CV No. 96659 affirming the Decision of the Regional Trial Court, Branch 77, Quezon City, in Civil Case No. Q-02-47925; as well as its Resolution dated October 30, 2012, denying reconsideration thereof, are hereby REVERSED and SET ASIDE. TCT No. N-200074 in the name of Marylou Bolos, and the titles descending therefrom, namely, TCT Nos. N-205332 and N-237083 in the name of Carlos Hizon, and the Spouses Jose Manuel & Lourdes Guevara, respectively, are hereby declared NULL and VOID. Respondents and all other persons acting under their authority are hereby DIRECTED to surrender possession of the subject property in favor of petitioner. Respondents Bernardo Hizon, Carlos Hizon, and the spouses Jose Manuel and Lourdes Guevara shall jointly and severally pay petitioner Php75,000 as nominal damages, PhP 75,000 as attorney's fees, and costs of suit.

The Register of Deeds of Quezon City is hereby ORDERED to (1) cancel TCT No. N-237083; (2) reinstate TCT No. RT-97467; and (3) reissue TCT No. RT-97467 in favor of petitioner, without requiring from petitioner payment for any and all expenses in performing the three acts.