G.R. No. 236140 , April 19, 2023
Josefina C. Billote, Petitioner, vs. Spouses Victor and Remedios T. Badar, Adelaida C. Dalope and Imelda C. Solis, Respondents.

FACTS

The subject property is a parcel of land originally registered under TCT No. 15296 in the names of spouses Hilario and Dorotea Solis. Upon Hilario’s death, Dorotea married Segundo Billote, with whom she had two children, petitioner Josefina Billote and William Billote. On July 28, 2001, Dorotea executed a Deed of Absolute Sale conveying a one-half (1/2) portion (specifically described as the southwestern part, 3,447 square meters) of the property to her daughter Josefina for ₱20,000.00. Josefina entrusted the title and deed to her brother William for registration, but this was not accomplished. On July 13, 2002, Dorotea, together with her daughters from her first marriage, respondents Adelaida Dalope and Imelda Solis, executed a Deed of Extrajudicial Settlement of Estate with Quitclaim, wherein Dorotea renounced her rights to the entire property in favor of Adelaida and Imelda. Unable to locate the owner’s duplicate copy of TCT No. 15296, Imelda secured a court order for the issuance of a second owner’s duplicate copy. After obtaining it, they registered the Deed of Extrajudicial Settlement, resulting in the cancellation of TCT No. 15296 and the issuance of TCT No. 269811 in their names on April 4, 2003. On November 5, 2003, Adelaida and Imelda sold the entire property to respondent spouses Victor and Remedios Badar. TCT No. 269811 was cancelled and TCT No. 274696 was issued in the spouses Badar’s names. Josefina filed a complaint before the Regional Trial Court (RTC) for declaration of nullity of titles and documents, recovery of ownership, possession, and damages. The RTC dismissed the complaint against the spouses Badar, declaring them lawful owners and upholding the validity of their title, finding them to be purchasers in good faith. It ordered Adelaida and Imelda to pay Josefina damages. On appeal, the Court of Appeals (CA) upheld the RTC’s dismissal of the complaint and its finding that the spouses Badar were purchasers in good faith. The CA, however, increased the amount payable by Adelaida and Imelda to Josefina to ₱1,500,000.00, representing the value of her one-half share based on the proven selling price of the entire property (₱3,000,000.00). Josefina filed a Petition for Review before the Supreme Court.

ISSUE

Whether the Court of Appeals erred in upholding the dismissal of Josefina’s complaint and in recognizing the spouses Badar as purchasers in good faith entitled to protection under the law.

RULING

The Supreme Court denied the petition and affirmed the assailed CA Decision with modification. The Court held that the spouses Badar were purchasers in good faith and for value. They purchased the property from the registered owners, Adelaida and Imelda, who possessed a clean title (TCT No. 269811) issued by the Register of Deeds. There was no annotation or any lien or encumbrance on the title that would indicate Josefina’s prior sale. The spouses Badar had no knowledge, actual or constructive, of any defect in the sellers’ title or of Josefina’s claim. The Court emphasized that a person dealing with registered land may rely on the correctness of the certificate of title and is not obliged to go beyond it to investigate the title of the registered owner, in the absence of any suspicious circumstance. Consequently, the spouses Badar’s title, TCT No. 274696, remains valid and indefeasible. Josefina’s remedy is not against the innocent purchasers but against her sisters, Adelaida and Imelda, for damages. The Court affirmed the CA’s award of ₱1,500,000.00 to Josefina, representing the value of her one-half share in the property, to be paid jointly and severally by Adelaida and Imelda, with legal interest.