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L-68741 January 28, 1988 was the highest and successful bidder so that a Certificate of Sale was issued in its
favor on the same date by the Provincial Sheriff.
NATIONAL GRAINS AUTHORITY, plaintiff-appellee,
vs. On July 10, 1974, the petitioner in its capacity as attorney-in-fact of the mortgagor sold
INTERMEDIATE APPELLATE COURT, MELECIO MAGCAMIT, NENA COSICO and the subject real property in favor of itself. By virtue of the deed of absolute sale, TCT
EMELITA MAGCAMIT, defendants-appellants. No. T-75171 of the Register of Deeds for the Province of Laguna was issued in the
name of the petitioner on July 16, 1974. It was only in July 1974, that private
This is a petition for review of the decision of the then Intermediate Appellate respondents learned that a title in the name of the Vivas spouses had been issued
Court * (now Court of Appeals) dated January 31, 1984, reversing the decision of the covering the property in question and that the same property had been mortgaged in
Court of First Instance of Laguna and San Pablo City, 8th Judicial District, Branch III, favor of the petitioner. Private respondent Nena Magcamit offered to pay the petitioner
and of the resolution dated August 28, 1984 denying the motion for reconsideration filed NGA the amount of P40,000.00 which is the balance of the amount due the Vivas
thereof. spouses under the terms of the absolute deed of sale but the petitioner refused to
accept the payment. On July 31, 1974, counsel for private respondents made a formal
demand on the spouses Vivas and Lizardo to comply with their obligation under the
The undisputed facts of this case as found by the Trial Court and the Intermediate
terms of the absolute deed of sale; and soon after reiterated to the NGA, the offer to
Appellate Court are as follows:
pay the balance of P40,000.00 due under the absolute deed of sale. On August 13,
1974 petitioner in its reply informed counsel of private respondents that petitioner is
On December 2,1971, the spouses Paulino Vivas and Engracia Lizards, as owners of now the owner of the property in question and has no intention of disposing of the same.
a parcel of land situated in Bo. San Francisco, Victoria, Laguna, comprising more or
less 105,710 square meters, sold for P30,000.00 said property in favor of spouses The private respondents, who as previously stated, are in possession of subject
Melencio Magcamit and Nena Cosico, and Amelita Magcamit (herein private property were asked by petitioner to vacate it but the former refused. Petitioner filed a
respondents) as evidenced by "Kasulatan Ng Bilihang Mabiling Muli." This sale with suit for ejectment against private respondents in the Municipal Court of Victoria,
right to repurchase was recorded in the Office of the Register of Deeds of Laguna on Laguna, but the case was dismissed.
December 6,1971 under Act No. 3344. On January 31,1972 the sale was made
absolute by the spouses Vivas and Lizardo in favor of the private respondents for the
sum of P90,000.00; P50,000.00 of which was paid upon the execution of the instrument, On June 4, 1975, private respondents filed a complaint before the then Court of First
entitled "Kasulatan Ng Bilihan Tuluyan," after being credited with the P30,000.00 Instance of Laguna and San Pablo City, Branch III, San Pablo City, against the
consideration of the "Kasulatan Ng Mabibiling Muli," and the balance of P40,000.00 was petitioner and the spouses Vivas and Lizardo, praying, among others, that they be
to be paid the moment that the certificate of title is issued. From the execution of said declared the owners of the property in question and entitled to continue in possession
Kasulatan, private respondent have remained in peaceful, adverse and open of the same, and if the petitioner is declared the owner of the said property, then, to
possession of subject property. order it to reconvey or transfer the ownership to them under such terms and conditions
as the court may find just, fair and equitable under the premises. (Record on Appeal,
pp. 2-11).
On February 26, 1975, an Original Certificate of Title No. T-1728 covering the property
in question was issued to and in the name of the spouses Vivas and Lizardo without
the knowledge of the private respondents and on April 30, 1975, said Spouses executed In its answer to the complaint, the petitioner (defendant therein) maintained that it was
a Special Power of Attorney in favor of Irenea Ramirez authorizing the latter to mortgage never a privy to any transaction between the private respondents (plaintiffs therein) and
the property with the petitioner, National Grains Authority. the spouses Paulino Vivas and Engracia Lizardo that it is a purchaser in good faith and
for value of the property formerly covered by OCT No. 1728; and that the title is now
indefeasible, hence, private respondents' cause of action has' already prescribed.
On May 2, 1974, the counsel for the petitioner wrote the Provincial Sheriff in Sta. Cruz, (Record on Appeal, pp. 16-22).
Laguna, requesting for the extrajudicial foreclosure of the mortgage executed by Irenea
Ramirez on May 18, 1975, covering, among others, the property involved in this case
covered by OCT No. T-1728, for unpaid indebtedness in the amount of P63,948.80 in After due hearing, the trial court ** rendered its decision on March 17, 1981, in favor of
favor of the petitioner. the petitioner, the dispositive portion of said judgment reading as follows:
On May 31, 1974, the Provincial Sheriff caused the issuance of the notice of sale of the WHEREFORE, judgment is hereby rendered as follows:
property in question, scheduling the public auction sale on June 28, 1974. The petitioner
(1) declaring defendant National Grains Authority the lawful owner of breach of trust sufficient to defeat the title and right acquired by petitioner NGA, an
the property in question by virtue of its indefeasible title to the same; innocent purchaser for value.
(2) ordering plaintiffs to turn over possession of the land to defendant It is undisputed that: (1) there are two deeds of sale of the same land in favor of private
National Grains Authority; respondents, namely: (a) the conditional sale with right to repurchase or the 'Kasulatan
Ng Bilihang Mabibiling Muli" which was registered under Act 3344 and (b) the deed of
(3) ordering defendants-spouses Paulino Vivas and Engracia Lizardo absolute sale or "Kasulatan ng Bilihang Tuluyan" which was not registered; (2) the
to pay plaintiffs the sum of P56,000.00 representing the amount paid condition that the Certificate of Title will be delivered to the buyers upon its issuance
pursuant to the Kasulatan Ng Bilihang Tuluyan marked Exhibit "3", and upon payment of the balance of P40,000.00 is contained in the deed of absolute
with legal interest thereon from January 31, 1972 until the amount is sale; and (3) the land in question at the time of the execution of both sales was not yet
paid, to pay an additional amount of P5,000.00 for and as attorney's covered by the Torrens System of registration.
fees, an additional amount of Pl0,000.00 as moral damages, another
amount of P5,000.00 by way of exemplary damages and to pay the It is axiomatic, that while the registration of the conditional sale with right of repurchase
costs of this suit. (Rollo, P. 35). may be binding on third persons, it is by provision of law "understood to be without
prejudice to third party who has better right" (Section 194 of the Administrative Code,
The private respondents interposed an appeal from the decision of the trial court to the as amended by Act No. 3344). In this case, it will be noted that the third party NGA, is
Intermediate Appellate Court. a registered owner under the Torrens System and has obviously a better right than
private respondents and that the deed of absolute sale with the suspensive condition is
not registered and is necessarily binding only on the spouses Vivas and Lizardo and
After proper proceedings, the appellate court rendered its decision on January 31, private respondents.
1984, reversing and setting aside the decision of the trial court as follows:
In their complaint at the Regional Trial Court, private respondents prayed among others,
WHEREFORE, the decision of the lower court is hereby reversed and
for two alternative reliefs, such as: (a) to be declared the owners of the property in
set aside and another one is rendered ordering the National Grains
question or (b) to order the declared owner to reconvey or transfer the ownership of the
Authority to execute a deed of reconveyance sufficient in law for property in their favor.
purposes of registration and cancellation of transfer Certificate of Title
No. T-75171 and the issuance of another title in the names of plaintiff-
appellants, and ordering defendants-appellees Paulino Vivas and Private respondents claim a better right to the property in question by virtue of the
Engracia Lizardo to pay the National Grains Authority the sum of Conditional Sale, later changed to a deed of Absolute Sale which although unregistered
P78,375.00 (Exh. 3) within thirty (30) days from the receipts of the writ under the Torrens System allegedly transferred to them the ownership and the
of execution. No damages and costs. (Rollo, p. 19). possession of the property in question. In fact, they argue that they have been and are
still in possession of the same openly, continuously, publicly under a claim of ownership
adverse to all other claims since the purchase on December 2, 1971 (Rollo, p. 165). It
The petitioner filed a motion for reconsideration of the said decision but the same was
is stressed that not until the month of July, 1974 did the plaintiff learn that a title had
denied. (Rollo, p. 26).
been issued covering the property in question (Rollo, p. 15).
SO ORDERED.