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G.R. NO. 118114, 7 December 1995, FIRST DIVISION (Padilla, J.)


Teodoro Acap has been a tenant of a portion of a parcel of land owned by Felixberto Vasquez
which the latter inherited from his parents. Vasquez thereafter executed a duly notarized document
entitled “Declaration of Heirship and Deed of Absolute Sale” in favor of Cosme Pido. Upon transfer of
the property, Acap continued to be the registered tenant thereof and religiously paid his rentals to Pido
and upon the latter’s death, to his widow.

Cosme Pido died intestate, leaving his wife and 4 children to adjudicate onto themselves the
parcel of land in question in equal shares. Afterwards, the heirs executed a duly notarized document
denominated as “Declaration of Heirship and Waiver of Rights of Lot No. 1130 Hinigaran Cadastre” to
waive and quitclaim all their rights, interests and participation in favor of Edy de los Reyes. The latter
then informed Acap that he has become the new owner and Acap agreed to pay him 10 cavans of palay
per annum as lease rental. At first Acap complied with the obligation. However, he later refused to pay
alleging that he still recognized Cosme Pido as the owner and denied having any knowledge that there
was a transfer of ownership and even if the said lot was indeed sold to de los Reyes, RA 3844 grants him
the right to redeem the same at a reasonable price.

De Los Reyes filed a complaint for recovery of possession and damages after 4 years of failing to
comply and the lower court decided in his favor and the Court of Appeals affirmed its decision.

ISSUE: Whether or not there was a deed of sale transferring ownership to de los Reyes.


No. While the transaction between Pido’s heirs and private respondent may be binding on both
parties, the right of petitioner as a registered tenant to the land cannot be perfunctorily forfeited on a mere
allegation of private respondent’s ownership without the corresponding proof thereof. There was no
unjustified or deliberate refusal by petitioner to pay the lease rentals or amortizations to the landowner
because private respondent failed to establish a clear and convincing evidence that he is the owner. In fact
petitioner even secured a certificate from the Ministry of Agrarian Reform that he continued to be a
tenant of Cosme Pido and not of private respondent. This is because private respondent never registered
the Declaration of Heirship and Waiver of Rights with the Register of Deeds or with the MAR.

Consequently, the sanction of forfeiture of his preferred right to be issued a Certificate of Land
Transfer under PD 27 and to the possession of his farmholdings should not be applied against petitioner
since private respondent has not established a cause of action for recovery of possession against

*notes on the full text

G.R. NO. 114172, 25 August 2003, FIRST DIVISION (Carpio, J.)


On January 4, 1982, Spouses Virgilio and Adorita Benitez obtained a loan of P243,000 from Juanita Pineda and Leila
Sayoc and mortgaged a house and lot in their favor. The Pineda and Sayoc did not register the mortgage but the spuoses delivered
a duplicate of the TCT to Pineda.

On November 9, 1983, the spouses sold the house to Olivia Mojica with Pineda’s consent. On the same date, Mojica
filed a petition for the issuance of a second owners duplicate alleging that she purchased the parcel of land and the owners
duplicate copy was lost. The petition was granted by the trial court and a second owners duplicate was issued in the name of the
Spouses Benitez. Eventually, the spouses sold the lot to Mojica cancelling the old TCT and issuing a new one in Mojica’s name.

On February 22, 1985, Mojica obtained a loan from Teresita Gonzales, executing a promissory note and a deed of
mortgage which Gonzales registered with the Register of Deeds.

Meanwhile, on May 8, 1985, Pineda and Sayoc filed a complaint to cancel the second owners duplicate against the
Spouses and Mojica. The Spouses admitted to selling the house and lot to Mojica but denied having knowledge of the petition for
the issuance of the second owners duplicate. On the other hand, Mojica denied conspiring with the Spouses and committing
fraud. The trial court declared the second owners duplicate to be null and void. The CA affirmed the trial court’s decision.

On December 7, 1987, Mojica defaulted in paying her obligation prompting Gonzales to foreclose the same. When
Mojica failed to redeem the property within the redemption period, Gonzales consolidated the title to the property, executing the
corresponding affidavit of consolidation.

On motion of Pineda and Sayoc, the trial court issued a writ of execution to enforce its judgement. However, it could
not be enforced because a new TCT was registered in the Gonzales’ name. Subsequently, the trial court reinstated the old TCT in
Benitez’s name. The CA, upon Gonzales’s appeal revered the decision and issued a permanent prohibitory injunction.

ISSUE: Whether or not Gonzales is an innocent purchaser for value making her title to the property indefeasible and


Yes. The rule is that a mortgage annotated on a void title is valid if the mortgagee registered the mortgage in good
faith. Gonzales registered her mortgage in good faith because she had no actual notice of the prior unregistered mortgage in favor
of Pineda and Sayoc. To bind third parties to an unregistered encumbrance, the law requires actual notice.

The nullity of TCT 13138 did not affect the validity of the title or ownership of Mojica or Gonzales as subsequent
transferees of the property. What is void is the certificate of title, not the title or ownership itself of Mojica or Gonzales. The
notice of lis pendens could not defeat Gonzales’ rights over the property for two reasons. First, Gonzales registered in good faith
her mortgage before the notation of lis pendens, making the registration of her mortgage valid despite the invalidity of TCT
13138. Second, since Gonzales’ mortgage was valid, the auction sale retroacted to the date of registration of her mortgage,
making the auction sale prior in time to the notice of lis pendens. Thus, TCT 16084, issued to Gonzales as a result of the
forbearance sale is valid.

Wherefore, the petition is DENIED.

G.R. NO. L-22487, 21 May 1969, EN BANC (Makalintal, J.)


Eulogio Atilano I purchased a parcel of land which he dived into 5 parts. He then sold to
his brother Eulogio Atilano II 1/5 of the lot identified as 535-E. He sold the other portions 535-
B, 535-C and 535-D to other persons, retaining only 535-A. When Eulogio Atilano I died, his lot
passed to Ladislao Atilano.

Eulogio Atilano II became a co-owner of the lot 535-E with his children upon his wife’s
death. Desiring to put an end to the co-ownership, they had the land resurveyed so that it could
properly be subdivided. It was then discovered that what they were occupying was lot 535-A and
not 535-E, as referred to in the deed. Since 535-E was in Ladislao’s possession, they offered to
exchange the lots. However, the latter refused alleging that the reference to lot 535-E in the deed
of sale was an involuntary error and that the intention of the parties was to convey the lots
correctly identified as lot 535-A. Proof thereof was Eulogio I’s occupation of 535-E and
increasing the area of the same by purchasing a portion of the adjoining lot. In addition, Eulogio
II also occupied the 535-A, establishing his residence therein.

The trial court rendered decided in favor of the plaintiffs.

ISSUE: Whether or not the lot referred to in the Deed of Sale should be followed.


No. When one sells or buys real property, one sells or buys the property as he sees it, in
its actual setting and by its physical metes and bonds, and not by the mere lot number assigned to
it in the certificate of title. The brothers continued in possession of the respective portions the
rest of their lives, obviously ignorant of the initial mistake in the designation of the lot subject of
the 1920 until 1959, when the mistake was discovered for the first time.

The real issue here is not adverse possession but the real intention of the parties to that
sale. The designation was a simple mistake in the drafting of the document. It did not vitiate the
consent of the parties, or affect the validity and binding effect of the contract between them.

WHEREFORE, judgment appealed from is reversed.

G.R. NO. 74470, 8 March 1989, THIRD DIVISION (Medialdea, J.)


Leon Soriano offered to sell palay grains to the NFA through William Cabal, submitting
the documents required by the NFA for pre-qualifying as a seller. He was then given a quota of
2,640 cavans of palay as the maximum amount that he can sell.

Soriano delivered 630 cavans of palay to NFA’s warehouse. Upon demand of payment
for the palay, Soriano was informed that its payment will be held in abeyance since Cabal was
still investigating information he received that Soriano was not a bona fide farmer. Thereafter,
Cabal wrote to Soriano advising him to withdraw from the NFA warehouse the 630 cavans of
palay stating that NFA cannot legally accept the said delivery on the basis of the subsequent
certification of the BAEX technician that Soriano is not a bona fide farmer.

Instead of withdrawing the palay, Soriano filed a complaint for specific performance with
damages. Petitioners contend that there was no contract of sale because the delivery was a mere
offer to sell and acceptance will be considered complete only after the preparation of the
warehouse stock receipt. The trial court rendered judgment in favor of Soriano and the Appellate
Court affirmed its decision.

ISSUE: Whether or not there was a contract of sale.


Yes. Soriano initially offered to sell palay grains and NFA accepted, giving the former a
quota of 2,640 cavans as the maximum amount of palay that he can sell. From the foregoing,
there was a presence of the meeting of minds between parties, thus, a perfected contract of sale.
There is perfection when there is consent upon the subject matter and price, even if neither is
delivered. The acceptance referred to which determines consent is the acceptance of offer of one
party by the other and not of the goods delivered as contended by petitioners.

The fact that the quantity is not determinable shall not be an obstacle to the existence of
the contract, provided that it is possible to determine the same, without the need of a new
contract between the parties. In this case, there was no need for the NFA and Soriano to enter
into a new contract to determine the exact number of cavans of palay to be sold. Soriano can
deliver so much of his produce as long as it does not exceed 2,640 cavans.

ACCORDINGLY, the instant petition for review is DISMISSED. The assailed decision
of the Court of Appeals is affirmed.
G.R. NO. 149750, 16 June 2003, THIRD DIVISION (Panganiban, J.)


Hermoso de Leon inherited a parcel of land from his father so he engaged the services of
Atty. Florentino Juan to take care of the documents of the properties of his parents. The latter
then let them sign voluminous documents. After Atty. Juan’s death, the documents surfaced,
revealing the conveyance of properties by sale or quitclaim of Hermoso’s brothers and sister to
Atty. Juan and his sister, when in truth and in fact, they were not. Furthermore, his signature in
the Deed of Extra-judicial Partition and Quitclaim made in favor of Rodolfo de Leon was forged.
They also discovered that Rodolfo sold the land in question to Aurora Alcantara. After which
they demanded the annulment of the document and reconveyance but the defendants refused.

The RTC ruled in favor of petitioner ruling that respondent was barred by laches. CA
reversed the decision of the RTC.

ISSUE: Whether or not there was a perfected contract of sale between Rodolfo and Aurora.


No. Rodolfo was not the owner of the land he delivered. Thus, the consummation of the
contract and the consequent transfer of ownership would depend on whether he subsequently
acquired ownership of the land. A comparison of the genuine signatures of Hermoso de Leon
with his purported signature on the Deed of Extrajudicial Partition with Quitclaim will readily
reveal that the latter is a forgery. Therefore, Rodolfo never acquired the land in question, even at
the time of the sale, so, he could not transfer any land rights to petitioner.

No title to registered land in derogation of that of the registered owner shall be acquired
by prescription or adverse possession. Neither can prescription be allowed against hereditary
successors of the registered owners because they merely stem into toe shoes of the decedent and
are merely the continuation of the personality of their predecessor in interest. Consequently,
since a certificate cannot be acquired by prescription regardless of petitioners good faith.

Laches are based upon equity and the public policy of discouraging stale claims. Since
laches is an equitable doctrine, its application is controlled by equitable considerations. It cannot
be used to defeat justice or to perpetuate fraud and injustice.

WHEREFORE, the petition is DENIED and the assailed decision AFFIRMED.

G.R. NO. 109355, 29 October 1999, THIRD DIVISION (Purisima, J.)


Ramon Chiang sold 3 properties to Serafin Modina evidenced by a Deed of Absolute Sale
and doing so in the theory that the said lots were sold to him by his wife, Merlinda. Modina
thereafter filed a complaint for Recovery of Possession with Damages against Hernesto
Hontarciego, Paul Figueroa and Teodoro Hipalla, tenants of the said lots. When Merlinda found
out, she presented a Complaint-in-intervention seeking the declaration of nullity of the Deed of
Sale between Modina and her husband alleging that the properties were not his to sell. Fraudalent
acts were allegedly employed by him to obtain a Torrens title in his favour. However, the lease
contracts with the private respondents were valid.

Modina contended that the spouses are in pari delicto since they are prohibited from
selling properties to each other, thereby keeping undisturbed that rights of third persons to whom
the lots were sold. She also claims to be a purchaser in good faith and for value, therefore, his
title should be respected.

The trial court decided in favor of Merlinda and the CA affirmed it in toto.

ISSUE: Whether or not there was a valid contract of sale between Merlinda and Ramon Chiang.


No. The principle of pari delicto non oritur actio denies all recovery to the guilty parties
inter se. It applies to cases where nullity arises from the illegality of the consideration or the
purpose of the contract. When two persons are equally at fault, the law does not relieve them.
The exception is when the principle is invoked with respect to inexistent contracts. In this case,
there is no sufficient evidence establishing fault on the part of Merlinda as there was no evidence
of the sale between her and Ramon. Therefore, the principle of pari delicto is inapplicable. In
effect, Merlinda can recover the properties from Modina who never acquired title thereover.

As a general rule, in a sale under the Torrens system, a void title cannot give rise to a
valid title. The exception is when the sale of a person with a void title is to a third person who
purchased it for value and in good faith. In this case, Modina cannot claim that he was a
purchaser in good faith as he was aware of the circumstances regarding the subject lots. In
addition, there is want of a consideration which makes the sale void.

WHEREFORE, petition is DENIED, and the decision of the CA is AFFIRMED.

G.R. NO. 158380, 16 May 2005, SECOND DIVISION (Puno, J.)


Candido Calluza was the registered owner of lots 23, 24 and 25. Upon is death, his second wife, Purificacion and
his daughter by his first wife, Corazon, executed a Deed of Extrajudicial Settlement, adjudicating between themselves
Candido’s properties. Lots 23, 24 and 25 were adjudicated to Corazon and Candido’s Bulacan property was adjudicated to

When Corazon went to Thailand, she entrusted the administration of the properties to Purificacion. However,
after acquiring new owners duplicates of TCTs, the latter sold the same to Catalina Remorin who later mortgaged lots 24
and 25 to L&R Lending Corporation for P200,000 and to Laurelia Caluza-Valenciano for P295,000. Upon learning of the
foregoing, Corazon filed a complaint for reconveyance with damages. The parties thereafter executed a Memorandum of
Agreement whereby Corazon will cede and grant ownership of a portion of the lots to Purificacion subject to the condition
that the latter will pay Catalina’s debt to Laurelia. However, before the agreement could be implemented, Purificacion died
without an heir. Consequently, a new agreement was approved in 1988 where the title of the subject lots shall be
transferred to Catalina to pay her mortgage to Laurelia after selling the same.

On May 24, 1989, Corazon sold the subject lot to Laurelia and on August 24, 1989, Catalina sold the same to
Mariquita Macapagal. Petitioner contends that the sale by Catalina should prevail since she was authorized to sell the
same. Respondents on the other hand argue that no authority was given to Catalina considering the connivance with
Purificacion in illegally transferring the lots in their names in the first place. What was provided in the agreement was that
Catalina shall pay off her mortgage obligation and incidental expenses from the proceeds of the sale to reassure Catalina
that her obligation would be paid in the event that Corazon sells the property.

ISSUE: Whether or not Catalina has the authority to sell the property?


No. Corazon has the right as she is the registered owner of the property. She has the right to enjoy and dispose of
the same. The compromise agreement cannot be taken as a waiver of Corazon’s authority to sell and grant thereof to
Catalina considering that the Agreement merely provided that Catalina pay off her mortgage obligation and incidental
charges from the proceeds of the sale. It was not expressly stated nor did it necessarily mean that Catalina herself be the
one to directly sell the property. The money may merely be handed over to her for such payment. The rule is that
reasonable doubt that the language used conveys authority to sell will yield such construction that no such authority has
been given. Authority to sell must be couched in clear and unmistakable language. A special power of attorney is
necessary for an agent to enter into any contract by which the ownership of an immovable property is transmitted are
acquired either gratuitously or for a valuable consideration. Catalina did not have such document.

The fact that the deed of sale between Corazon and Laurelia did not accurately reflect the true consideration
thereof is not cause for declaration of its nullity. When the parties intended to be bound by the contract except that it did
not reflect the actual purchase price of the property, there is only a relative simulation of the contract which remains valid
and enforceable. It cannot be declared null and void since it does not fall under the category of an absolutely simulated or
fictitious contract. The contract of sale is valid but subject to reformation.

INVIEW THEREOF, the petition is DENIED.

G.R. NO. 152168, 10 December 2004, THIRD DIVISION (Panganiban, J.)


Aurelio and Esperanza Balite owned a parcel of land with an area of 17,551sqm. When
Aurelio died, his wife and children inherited the said lot with the wife inheriting an undivided share
of 9,751sqm. In the meantime, Esperanza got sick and offered to sell her undivided share to Rodrigo
Lim for P1,000,000. Lim agreed and the parties executed a Deed of Absolute Sale reflecting the
amount of only P150,000 and a Joint Affidavit declaring that the real price of the property was
P1,000,000. The transaction was done with the knowledge of Antonio and Cristeta, two of
Esperanza’s eight children. Thereafter, a Rodrigo took actual possession of the same, introduced
improvements therein and paid Antonio the partial payments to the property.

When the other children found out, they filed a complaint for annulment of sale, quieting of
title, injunction and damages and had a notice of lis pendens annotated at the back of the title. They
contended that the Deed of Absolute Sale is null and void because the undervalued consideration
therein was intended for an unlawful purpose and the Joint Affidavit is not proof of a true and lawful
cause. Also even if it is valid it should only be deemed as a mortgage.

The trial court dismissed the complaint and ordered the removal of the lis pendens holding
that a co-owner has the right to sell his/her undivided share. The sale made by the co-owner is not
invalidated by the absence of consent of the other co-owners. Hence, the sale by Esperanza was
valid. The CA affirmed the trial court’s ruling.

ISSUE: Whether or not the Deed of Absolute Sale was valid.


Yes. We have before us an example of a relative simulated contract where the parties
intended to be bound by the contract even if it did not reflect the actual purchase price of the
property. This was revealed by the letter of Esperanza Balite to respondent and petitioners’ admission
that there was partial payment made on the basis of the Deed of Absolute Sale. There was an
intention to transfer ownership of over 10,000sqm of the property.

Since the Deed of Absolute Sale was merely relatively simulated, it remains valid and
enforceable. All essential requisites prescribed by law for the validity and perfection of contracts are
present. However, the parties shall be bound by their real agreement for a consideration of
P1,000,000 as reflected in their joint affidavit.

The records and the documentary evidence show that the contract is indeed one of absolute
sale. The voluntary, written and unconditional acceptance of contractual commitments negates the
theory of equitable mortgage.

WHEREFORE, petition is DENIED and the assailed decision is AFFIRMED.