G.R. No. 148846 ; September 25, 2007
CECILIA AMODIA VDA. DE MELENCION, VENERANDA AMODIA, FELIPE AMODIA, EUTIQUIO AMODIA and GO KIM CHUAN, Petitioners, vs. HONORABLE COURT OF APPEALS and AZNAR BROTHERS REALTY COMPANY, Respondents.

FACTS

The subject property, a parcel of land in Lapu-Lapu City, was originally owned by Esteban Bonghanoy and was registered under the Torrens system, but its title was lost during WWII. In 1964, petitioners Cecilia, Veneranda, Felipe, and Eutiquio Amodia (the Amodias) allegedly executed an Extra-Judicial Partition with Deed of Absolute Sale conveying the property to respondent Aznar Brothers Realty Company (AZNAR). This deed was registered under Act 3344, as no Torrens title was on file. AZNAR made improvements on the land.
In 1989, the Amodias executed a Deed of Extra-Judicial Settlement with Absolute Sale over the same property in favor of co-petitioner Go Kim Chuan. The lost Torrens title was reconstituted under RA 26, and a derivative Transfer Certificate of Title (TCT) was issued to Go Kim Chuan. AZNAR filed a complaint for annulment of the second sale, alleging it was the rightful owner. The Amodias denied executing the 1964 deed, claiming their signatures were forged.

ISSUE

The core issue is which party has a superior right to the subject property: AZNAR, by virtue of the earlier 1964 deed, or Go Kim Chuan, by virtue of the later 1989 deed and a Torrens title issued in his name.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the Regional Trial Court’s decision, declaring Go Kim Chuan as the rightful owner. The legal logic is anchored on the principle of indefeasibility of a Torrens title. The subject land was registered land under Act 496 (the Land Registration Act). The 1964 registration of the deed in favor of AZNAR under Act 3344 (the system for unregistered lands) was ineffectual and produced no legal effect because the law mandates that transactions concerning registered lands must be registered under the Torrens system to bind the land. Consequently, AZNAR acquired no valid title.
Furthermore, Article 1544 of the Civil Code on double sale was deemed inapplicable. This provision presupposes two valid sales. The first sale to AZNAR was invalid due to the forgery of the Amodias’ signatures, as conclusively established by the Philippine Constabulary Crime Laboratory. A forged deed is void and conveys no title. Therefore, the subsequent sale to Go Kim Chuan was the only valid conveyance. His title, having been issued under the Torrens system following reconstitution, is indefeasible and cannot be collaterally attacked. AZNAR’s adverse claim, annotated after Go Kim Chuan had already acquired his title, did not affect his rights as a registered owner in good faith.