G.R. No. 176043 ; January 15, 2014
SPOUSES BERNADETTE and RODULFO VILBAR, Petitioners, vs. ANGELITO L. OPINION, Respondent.

FACTS

Petitioners Spouses Vilbar claimed ownership of two lots in Las Piñas. For Lot 20-B, they entered into a Contract to Sell with Dulos Realty in 1979, took possession, and fully paid the price in 1981, receiving a Deed of Absolute Sale and the owner’s duplicate certificate of title. They failed to register the deed due to Dulos Realty’s unfulfilled promise to subdivide the mother lot. For Lot 21, they also purchased from Dulos Realty, fully paid via a DBP loan, secured title in Bernadette’s name in 1981, and paid the loan in full by 1991. They possessed both lots openly.
Respondent Opinion claimed ownership through extra-judicial foreclosure. He alleged the lots were mortgaged to him by the Gorospes in 1995. Upon default, he foreclosed, bought the lots at auction, and secured new titles in his name in 1997 after the redemption period lapsed. When Opinion sought possession, the Spouses Vilbar resisted, prompting Opinion to file an accion reinvindicatoria to recover the properties and cancel the Vilbars’ claims.

ISSUE

Who has a better right of ownership over the subject lots?

RULING

The Supreme Court ruled in favor of the Spouses Vilbar, upholding their ownership. The legal logic centers on the principle that registration is the operative act that validates the transfer of title under the Torrens system. For Lot 21, the Vilbars presented Transfer Certificate of Title No. 36777/T-17725-A issued in Bernadette’s name in 1981. This registered title prevails over Opinion’s later-derived title from the 1997 auction sale. A title issued under the Torrens system is indefeasible and incontrovertible upon one year from issuance, shielding it from any adverse claim.
For the unregistered Lot 20-B, the Court applied the rules on double sale under Article 1544 of the Civil Code. Between two purchasers of the same immovable property, ownership belongs to the one who first registers the sale in good faith, or in the absence of registration, to the one who first took possession. The Vilbars, having purchased in 1979, taken possession in 1979, and held the owner’s duplicate title and deed of absolute sale since 1981, clearly had prior possession and a registrable right. Opinion’s claim, derived from a 1995 mortgage by the Gorospes, was inferior. The Gorospes had no valid title to mortgage, as the property had already been sold and title delivered to the Vilbars and their co-owner years prior. Therefore, the Vilbars’ prior and continuous possession, coupled with their registrable interest, established their superior right over both lots.