The spouses Florentino and Carmelita
used to own the property located at Quiapo, Manila. They immigrated to the
United States and eventually had their marriage dissolved in Illinois. A
provision in their marital settlement agreement states that "Florentino
shall convey and quitclaim all of his right, title and interest in and to 540
De Guzman Street, Manila, Philippines . . . to Carmelita."
Carmelita sold the land to Edna. In
lieu of Florentino's signature of conformity in the deed of absolute sale,
Carmelita presented a waiver of interest notarized in Illinois. In this waiver,
Florentino reiterated his quitclaim over his right, title, and interest to the
land. Consequently, the land’s title was transferred to Edna's name. Edna was
aware of the Leong relatives staying in the makeshift houses on the land.
Carmelita assured her that her nieces and nephews would move out, but demands
to vacate were unheeded. Edna then filed
a complaint for recovery of possession against Elena Leong and other relatives
of the Leong ex-spouses.
In response, Elena alleged the
title’s legal infirmity for lack of Florentino's conformity to its sale. She
argued that Carmelita's noncompliance with the proviso in the property
agreement — that the Quiapo property "may not be alienated without
Florentino first obtaining a clean title over the Malabon property" — annulled
the transfer to Edna.
Florentino filed a complaint for
declaration of nullity of contract, title, and damages against Carmelita Leong,
Edna C. See, and the Manila Register of Deeds, alleging that the sale was
without his consent. The two cases were consolidated.
The Regional Trial Court ruled in
favor of Edna. The trial court discussed:
By her overt acts, Edna See with her
father verified the authenticity of Carmelita’s land title at the Registry of
Deeds of Manila. There was no annotation on the same thus deemed a clean. Also,
she relied on the duly executed and notarized Certificate of Authority issued
by the State of Illinois and Certificate of Authentication issued by the Consul
of the Republic of the Philippines for Illinois in support to the Waiver of
Interest incorporated in the Deed of Absolute Sale presented to her by
Carmelita. The assailed Certificate of Authority is a notarized document and
therefore, presumed to be valid and duly executed. Thus, Edna See’s reliance on
the notarial acknowledgment found in the duly notarized Certificate of
Authority presented by Carmelita is sufficient evidence of good faith.
When appealed, the Court of Appeals
affirmed in toto the trial court’s decision.
Q: Are the decisions of RTC and CA correct in finding
respondent Edna C. as an innocent buyer in good faith and for value?
Yes, the decisions of RTC and CA are correct in finding respondent Edna C. See as an innocent buyer in good faith and for value.
Section 44 of Presidential
Decree No. 1529 known as the Property Registration Decree recognizes innocent
purchasers in good faith for value and their right to rely on a clean title.
Under Section 44. Statutory liens affecting title, it states that every
registered owner receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land taking a
certificate of title for value and in good faith, shall hold the same free from
all encumbrances except those noted in said certificate and any of the enumerated
encumbrances therein which may be subsisting.
An innocent purchaser for
value refers to someone 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." One claiming to be an innocent purchaser for
value has the burden of proving such status. In this case, Edna demonstrated
through her overt acts that she is an innocent purchaser. She showed evidences that
sufficiently proved she is a buyer in good faith.
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