VILLAMIL vs. VILLAROSA

 

SPS. JUANITO R. VILLAMIL and LYDIA M. VILLAMIL, represented herein by their Attorney-in-Fact/Son WINFRED M. VILLAMIL, petitioners, vs. LAZARO CRUZ VILLAROSA, respondent.

G.R. No. 177187 | April 7, 2009

FACTS

Spouses Juanito and Lydia Villamil (petitioners) represented by their son and attorney-in-fact, Winfred Villamil, filed a complaint for annulment of title, recovery of possession, reconveyance, damages, and injunction against the Spouses Mateo and Purificacion Tolentino (Spouses Tolentino), Lazaro Villarosa (Villarosa) and the Register of Deeds of Quezon City before the RTC of Quezon City.

The complaint alleged that petitioners were the registered owners of a parcel of land situated at Siska Subdivision, Tandang Sora, Quezon City, covered by Transfer Certificate of Title (TCT) No. 223611; that Juanito Villamil Jr. asked permission from his parents, petitioners herein, to construct a residential house on the subject lot in April 1986; that in the first week of May 1987, petitioners visited the lot and found that a residential house was being constructed by a certain Villarosa; that petitioners proceeded to the Office of the Register of Deeds to verify their title; that they discovered a Deed of Sale dated 16 July 1979 which they purportedly executed in favor of Cipriano Paterno (Paterno) as the vendee; that they later found out that the TCT in their names was cancelled and a new one, TCT No. 351553, was issued in the name of Paterno; that a Deed of Assignment was likewise executed by Paterno in favor of the Spouses Tolentino, and; that on the basis of said document, TCT No. 351553 was cancelled and in its place TCT No. 351673 was issued in the name of the Spouses Tolentino.

Spouses Villamil asserted that the Deed of Sale in favor of Paterno is a falsified document because they did not participate in its execution and notarization. They also assailed the Deed of Assignment in favor of the Spouses Tolentino as having been falsified because the alleged assignor is a fictitious person. Finally, they averred that the Deed of Sale between Spouses Tolentino and Villarosa is void considering that the former did not have any right to sell the subject property.

In their Answer, the Spouses Tolentino alleged that Paterno had offered the property for sale and presented to him TCT No. 351553 registered in his (Paterno's) name. Since they did not have sufficient funds then, the Spouses Tolentino negotiated with and obtained from Express Credit Financing a loan, the proceeds of which they used in paying the agreed consideration. They paid Paterno P180,000.00, but upon the latter's request, a deed of assignment was issued, instead of a deed of sale, to avoid payment of capital gains tax. Express Credit Financing held their title as security for the loan. The Spouses Tolentino thereafter decided to sell the property to Villarosa to pay their obligation to Express Credit Financing.

To establish that the deed of sale between the Spouses Villamil and Paterno is spurious, the Spouses Villamil proferred three points, namely: first, the residence certificate number of Juanito Villamil in the Deed of Sale was 510462 while in the income tax return he led in 1979, his residence certificate was numbered 4868818; second, the tax account numbers in these two documents are not the same, in the Deed of Sale, it was 9007-586-9 whereas in the income tax return he led in 1979 it was J 4545-30821-A-1; and third, the Spouses Villamil had paid the real estate taxes over the subject land from 1976-1987.

The trial court declared all the TCTs of Paterno, Spouses Tolentino and Villarosa null and void and ordered the cancellation of the latter's title and the issuance of a new one in the name of the Spouses Villamil. The trial court also found that the Deed of Absolute Sale executed by the Spouses Villamil in favor of Paterno is fake; that Paterno is a fictitious person; and that Spouses Tolentino and Villarosa are both buyers in bad faith. On 12 September 2006, the Court of Appeals reversed the trial court and declared void the title of the Spouses Tolentino and Paterno but upheld the validity of the title of Villarosa. The appellate court ruled that while the Spouses Tolentino's acquisition of the subject land does not "appear to be above board," the circumstances surrounding Villarosa's acquisition, on the other hand, indicate that he is a purchaser for value and in good faith.

ISSUE: Whether or not Villarosa is a buyer in good faith.

RULING:

Yes, Villarosa is a buyer in good faith.

The burden of proving the status of a purchaser in good faith lies upon one who asserts that status. 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 that same property, and who pays a full and fair price at the time of the purchase or before receiving any notice of another person's claim.

Indeed, we found that Villarosa had successfully discharged this burden. In the instant case, there were no traces of bad faith on Villarosa's part in acquiring the subject property by purchase. Villarosa merely responded to a newspaper advertisement for the sale of a parcel of land with an unfinished structure located in Tierra Pura, Tandang Sora, Quezon City. He contacted the number specified in the advertisement and was able to talk to a certain lady named Annabelle who introduced him to the owner, Mateo Tolentino. When he visited the site, he inquired from Mateo Tolentino about the unfinished structure and was informed that the latter allegedly ran out of money and eventually lost interest in pursuing the construction because of his old age. Villarosa was then given a copy of the title. He went to the Register of Deeds and was able to verify the authenticity of the title. He also found out that the property was mortgaged under the name of Mario Villamor, who turned out to be the employer of Tolentino. Upon reaching an agreement on the price of P276,000.00, Villarosa redeemed the title from Express Financing Company. Thereafter, the property was released from mortgage and a deed of sale was executed. Villarosa then secured the transfer of title in his name.

In finding bad faith on Villarosa, the trial court relied mainly on the alleged testimony of Mateo Tolentino that he told Villarosa at the time he offered the property for sale to him that the lot and the un nished structure belonged to Spouses Villamil. However, as observed by the appellate court to which the Court agrees, all that the transcript of the stenographic notes of the hearing concerned state is that Mateo Tolentino told Villarosa that the unfinished structure belonged to the previous owner without mention of the Spouses Villamil.

Petitioner also avers that since Paterno's transfer to Spouses Tolentino is spurious, the Spouses Tolentino could not also transfer any right to Villarosa on account of the principle that no one can transfer a greater right to another than he himself has. We do not agree.

A forged or fraudulent document may become the root of a valid title if the property has already been transferred from the name of the owner to that of the forger. This doctrine serves to emphasize that a person who deals with registered property in good faith will acquire good title from a forger and be absolutely protected by a Torrens title.

Having made the necessary inquiries and having found the title to be authentic, Villarosa need not go beyond the certificate of title. When dealing with land that is registered and titled, as in this case, buyers are not required by the law to inquire further than what the Torrens certificate of title indicates on its face. He examined the transferor's title, which was then under the name of Spouses Tolentino. He did not have to scrutinize each and every title and previous owners of the property preceding Tolentino. In sum, Villarosa was able to establish good faith when he bought the subject property. Therefore, TCT No. 354675 issued in his name is declared valid.

 

WHEREFORE, the Decision of the Court of Appeals dated 12 September 2006 is AFFIRMED. Costs against petitioners.