Hector Uy vs.

Virginia Fule

G.R. NO. 164961 (2014)

BUYER IN GOOD FAITH DOCTRINES

Generally, a buyer is not required to inquire beyond the title if the requisites of good faith concur.
However, absent one or two of the requisites, then the law itself puts the buyer on notice and obliges
the latter to exercise a higher degree of diligence by scrutinizing the certificate of title and examining all
factual circumstances in order to determine the seller’s title and capacity to transfer any interest in the
property.

FACTS:

Conrado Garcia (CG) owned a vast tract of land. Upon his death, his heirs entered an extrajudicial
settlement of his estate including the land and thereafter caused its registration under their names.
Meanwhile, DAR officials issued a joint certification that said land was an “untitled” property owned by
CG. As such, it was then included in the Operation Land Transfer program pursuant to PD No. 27. The
offices issued Emancipation Patents and Original Certificate of Titles to farmer-beneficiaries like Mariano
Ronda (MR). MR sold his portion to Chisan Uy then Chisan Uy’s heirs, sold the said land to Hector Uy. In
1997, the TCT of CG was cancelled and subsequently issued in the names of the heirs of Garcia under a
new TCT. In 1998, DAR Secretary issued the EPs to farmer-beneficiaries like MR. However, CG’s

TCT was already in the name of Hector Uy. Because of this, the heirs of CG filed a complaint assailing
the certificates of titles issued to purchasers Chisan and Hector Uy. RTC favored respondents. CA
affirmed. SC affirmed CA.

SUBSTANTIVE ISSUE:

WON Hector Uy, who got the land from the heirs of the farmer beneficiary Mariano Ronda, was an
innocent purchaser for value who had better rights than the heirs of Conrado Garcia over the disputed
land.

(NO. He did not exercise reasonable precaution by inquiring beyond the title. Third requisite was absent.
Hence, he cannot be awarded the disputed land.)

RATIO:

There is good faith when the following conditions concur:

(1)the seller is the registered owner of the land;

(2)the latter is in possession thereof; and

(3) at the time of the sale, the buyer was not aware of any claim or interest of some other person in the
property, or of any defect or restriction in the title of the seller or in his capacity to convey title to the
property.

Absent one or two of the foregoing conditions, then the law itself puts the buyer on notice and
obliges the latter to exercise a higher degree of diligence by scrutinizing the certificate of title and
examining all factual circumstances in order to determine the seller’s title and capacity to transfer any
interest in the property.

In this case, the deed of sale executed between the heirs of Ronda and the petitioner were
issued only on August 17, 1998 but the deed of sale was executed on July 31, 1998. His only basis were
the OCTs and such categorically stated that they were entered pursuant to an emancipation patent
pursuant to Operation Land Transfer.

At the time of the sale, the buyer was already aware of any restriction in the title of the seller or
in his capacity to convey title to the property. The absence of the third condition put the petitioner on
notice and obliged him to exercise a higher degree of diligence by scrutinizing the certificates of title and
examining all factual circumstances in order to determine the seller’s title and capacity to transfer any
interest in the lots.