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David Vs Malay Property Art 476

1. Andres Adona applied for a homestead patent over land and after he died, Maria Espiritu obtained title to the land claiming to be his widow. Maria Espiritu's children and Andres Adona's children by his first marriage both claimed ownership of the land. 2. The court found that Maria Espiritu committed fraud in obtaining the land title by concealing Andres Adona's first marriage, creating an implied trust for the true owners. 3. The court ruled that while land titles are normally indefeasible, fraud allows a claim for reconveyance if the land has not been transferred to an innocent purchaser. It found the current owners were not innocent purchas

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99 views2 pages

David Vs Malay Property Art 476

1. Andres Adona applied for a homestead patent over land and after he died, Maria Espiritu obtained title to the land claiming to be his widow. Maria Espiritu's children and Andres Adona's children by his first marriage both claimed ownership of the land. 2. The court found that Maria Espiritu committed fraud in obtaining the land title by concealing Andres Adona's first marriage, creating an implied trust for the true owners. 3. The court ruled that while land titles are normally indefeasible, fraud allows a claim for reconveyance if the land has not been transferred to an innocent purchaser. It found the current owners were not innocent purchas

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demsanpedro
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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DAVID vs.

MALAY
November 19, 1999
GR No. 132644

FATCS:
Andres Adona, married to Leoncia Abad, applied for a homestead patent over a parcel of agricultural
land. When Leoncia died, he cohabited with Maria Espiritu without the benefit of marriage. When Andres died
Maria Espiritu succeeded in obtaining title over the land in her name. After Maria Espiritu died, her children as
well as descendants of Andres Adona by his marriage with Leoncia Abad, continued to be in peaceful and quiet
possession of the subject land. The petitioners executed a deed of extrajudicial settlement with sale over the
property to Mrs Ungson. Respondents protested contending they are the true owners of the land. The sale was
however rescinded because Mrs Ungson failed to pay in full the amount agreed upon. Subsequently, the
petitioners executed another deed of Extrajudicial Settlement with Sale, dividing equally among themselves the
land and sold their respective shares to their co-petitioner Ubago et al. where an Original Certificate of Title
was issued in their favour on Nov. 27, 1992. Respondents filed a complaint for annulment of sale with
restraining order, injunction and damages against the petitioners contending that the Original Cert. of Title was
obtained by Maria Espiritu by false representation as the widow of Andres Adona.
The Lower Court dismissed the complaint for lack of cause of action and on ground of prescription. The
action, being an annulment of sale based on fraudulent titling of the property constitutes a cause of action of a
collateral attack on the Torrens Title. Even if the action was treated as one of conveyance, the suit will still fail
because the action for reconveyance could be brought within 10 years from the date of issuance of certificate
of title and the action has already prescribed.
The CA however, set aside the dismissal of lower court and ordered the cancellation of Transfer
Certificate of Title in the name of the Ubagos and reconveyance of the property of the estate of Andres Adona.
There was evidence that Maria Espiritu concealed the existence of Adonas first marriage to Leoncia from her
executed affidavit filed with the Director of Lands. The attending fraud created an implied or constructive trust
in favour of the plaintiffs notwithstanding the irrevocability of the Torrens Title issued in favour of Maria
Espiritu. They can still be compelled to reconvey the title of the property to the real owners. The Torrens system
was not designed to shield and protect one who had committed fraud or misrepresentation and thus holds title
in bad faith.
ISSUE:
1. Whether or not a certificate of title issued under an administrative proceeding pursuant to a homestead
patent under covering a disposable land within the Public Land Law is as indefeasible as a certificate of
title issued under a judicial registration proceeding?
2. Whether or not the De Ubagos is considered as Innocent Purchaser for Value?
RULING:
The issuance of a certificate of title of disposable public land and certificate of title issued under a
judicial registration proceeding is deemed indefeasible. Under the Land Registration Act, a Torrens title
becomes indefeasible after 1 year from the date of the decree of registration. The decree becomes
incontrovertible and binding on all persons whether notified or not being an in rem proceeding. The Original
Certificated of Title of Maria Espiritu was issued in December 1933 and becomes indefeasible a year after the
decree. However, the attendance of fraud created an implied trust in favour of the respondents that gave them
the right of action to seek the remedy of reconveyance of a property wrongfully obtained if the property has
not yet been passed to an innocent purchaser for value. If the property has been passed into the hands of an
innocent purchaser for value, the remedy would be an action for damages.
The CA did not err to treat the action for annulment of sale with damages as one for reconveyance. If
the person who claims to be the owner of the property is in actual possession thereof, the right to re- convey
does not prescribe. An action for reconveyance based on implied trust prescribes in 10 years. However, the
person who is in actual possession of a piece of land under claim of ownership may wait until his possession
is disturbed or his title is attacked before taking steps to vindicate his right. His undisturbed possession gives
him continued right to seek the aid of court to ascertain the nature of the adverse claim of a third party on
his title. The prescription of 10 years on reconveyance based on implied trust is applied only to persons who
are not in actual possession of the property.
The Ubagos are not buyers in good faith. An innocent purchaser for value is one who buys property of
another without knowledge that other persons may have right or interest to the property and pays a full
consideration of the same before he has notice of the claim or interest of others to the property. He buys the
property with the belief that the person from whom he receives the thing was the owner and could convey title
to the property. It is true that a person dealing with a registered land has the right to rely on the face of a
Torrens title and may dispense with the need to make further inquiry. An exception would be when the party
has actual knowledge of facts and circumstances attending to the title that would impel a reasonably prudent
man to make an inquiry or he has some knowledge as to the defect on the title or lack of right of the vendor.
The court finds out that in the Register of Deeds their Transfer of Certificate of Title has entry that
provides that their ownership over the land is subject to prospective claims by any possible heirs and creditors
who might have been deprived of their lawful participation in the estate. Rule 74, section 4 of the Rules of
Court provides for 2 years after the settlement and distribution of an estate for any person or heirs who may
have been unlawfully deprived of their participation in the distribution of an estate to bring action to compel
the settlement of the estate in the courts in the manner provided for the purpose of satisfying such lawful
participation. The Extrajudicial Settlement of Estate with Sale was executed on December 15, 1990 while the
plaintiffs complaint for Reconveyance was filed on December 7, 1992. Hence, the two-year period has not yet
elapsed.

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