G.R. No. L-58530 December 26, 1984
Concordia Astorga, Francisco Astorga and Lucila Dableo, petitioners, vs. Court of Appeals and Froilan, Adelfa, Godofredo, Galo, Gil, Gabriel, and Aristoteles, all surnamed Montaño, respondents.

FACTS

The dispute involves Cadastral Lot No. 1540 in Tacloban City. The lot was originally covered by OCT No. 20585 issued in 1937 to spouses Canuto Virginesa and Pascuala Nombre. After their deaths, Elias Nombre adjudicated the lot to himself and sold it to spouses Lucila Dableo and Vicente Esperas in 1955, with the deed annotated on the OCT. Private respondents, the Montaños, claim ownership through a 1956 deed of sale allegedly executed by Dableo and Esperas in favor of Froilan Montaño. This deed was registered only in 1968, leading to the issuance of TCT No. T-3917 based on a reconstituted OCT, despite the original OCT never being lost from the Registry of Deeds.
Petitioners, the Astorga spouses, purchased the same lot from Lucila Dableo in 1972. After a court order for the issuance of a new owner’s duplicate of OCT No. 20585 due to the reported loss of the previous duplicate, the Astorgas registered their sale. TCT No. T-8488 was issued to them, and this issuance was duly annotated on the original OCT, which was then cancelled. The Astorgas took possession, while Montaño never did. Montaño filed a forcible entry case, which escalated through the courts, with the Court of Appeals ultimately ruling in his favor.

ISSUE

Which title, Montaño’s TCT No. T-3917 (1968) or the Astorgas’ TCT No. T-8488 (1972), should prevail over the same parcel of land?

RULING

The Supreme Court reversed the Court of Appeals and ruled in favor of the Astorga spouses. The legal logic is anchored on Article 1544 of the Civil Code, which governs double sales of the same immovable property. The Court found that the Astorgas were the first to register their sale in good faith. Their registration in 1972 was valid and effective, as it was based on a court-authorized reconstitution of the owner’s duplicate title and resulted in the proper cancellation of the original OCT. In contrast, Montaño’s title was vitiated by fatal anomalies. His TCT was issued based on an unnecessary administrative reconstitution of the OCT, which was not lost, and its issuance was never annotated on the original OCT. The Court deemed Montaño’s title spurious, noting the unexplained eleven-year delay in registering the 1956 deed and the seller Lucila Dableo’s testimony that the deed was a “manufactured document.” Therefore, under the principle that registration in good faith confers priority, the Astorgas’ later-registered but first-in-good-faith title prevails. They were declared the rightful owners and entitled to possession.