GR 171535; (June, 2009) (Digest)
G.R. No. 171535 ; June 5, 2009
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY, Petitioner, vs. SPOUSES EDITO and MERIAN TIROL and SPOUSES ALEJANDRO and MIRANDA NGO, Respondents.
FACTS
The case involves a dispute over ownership of Lot No. 4763-D. Respondents Spouses Tirol and Ngo purchased the lot from Elma S. Jenkins in 1993, relying on her clean Transfer Certificate of Title (TCT No. 18216) and Tax Declaration, which bore no annotations of liens or encumbrances. They subsequently obtained TCT No. 27044 in their names. In 1996, they discovered a cloud on their title when the Department of Transportation and Communications referred their request for a Height Clearance to petitioner Mactan-Cebu International Airport Authority (MCIAA), which claimed ownership of the lot.
The chain of ownership presented by the respondents traces back to the original owners, Spouses Julian Cuison and Marcosa Cosef, who owned the entire Lot No. 4763. They sold it to Spouses Moises Cuizon and Beatriz Patalinghug in 1974. After a reconstitution of the Original Certificate of Title (OCT No. RO-2754) in 1986, TCT No. 16735 was issued to the Cuizon spouses. They then sold a portion, Lot No. 4763-D, to Elma Jenkins in 1987, who later sold it to the respondents.
Petitioner MCIAA claims that the original owners, Spouses Cuison and Cosef, sold the entire Lot No. 4763 to the government through the Civil Aeronautics Administration (CAA) in 1958. A Deed of Absolute Sale was executed, and the government has been in open, continuous, exclusive, and adverse possession since then. MCIAA asserts that the lot is part of the airport’s Clear Zone. It contends that the subsequent sales by the original owners to the Cuizon spouses and onwards were in bad faith and in violation of the 1958 deed, and that the respondents are merely trustees of the lot for MCIAA.
The trial court initially dismissed the respondents’ complaint for quieting of title, declaring the Republic (through MCIAA) the lawful owner and nullifying the respondents’ title. Upon reconsideration, the trial court reversed itself, applying Article 1544 on double sales and ruling in favor of the respondents as purchasers in good faith who first registered their title. The Court of Appeals affirmed the trial court’s reversal.
ISSUE
The core issue is whether the respondents, as subsequent purchasers of the registered land, are buyers in good faith who have a better right to the property than the petitioner, which claims under an earlier unregistered sale.
RULING
The Supreme Court DENIED the petition and AFFIRMED the Decision and Resolution of the Court of Appeals. The Court held that the respondents were purchasers in good faith and for value, and as such, their registered title prevails over the petitioner’s unregistered claim.
The Court ruled that under the Land Registration Act ( Act No. 496 ), the act of registration is the operative act that conveys and affects registered land. A purchaser in good faith and for value who registers his title acquires a perfect title that cannot be defeated by prior unregistered rights. The petitioner’s sale, though earlier, was not registered under the Torrens system. Its registration under Act No. 3344 (the system for unregistered lands) is not equivalent to registration under the Land Registration Act and cannot bind the registered land or defeat the right of a registered owner.
The Court found the respondents to be purchasers in good faith. They exercised due diligence by examining the vendor’s title, which was clean and bore no annotations of any adverse claim. The fact that the lot was within the airport’s “Clear Zone” and had been vacant did not constitute sufficient warning to impugn their good faith, as aviation rules proscribe structures but not realty ownership, and such rules were not even presented in evidence. The petitioner failed to prove any circumstance that should have aroused the respondents’ suspicion and prompted investigation beyond the certificate of title.
Consequently, the respondents, as first registrants in good faith, acquired a valid and indefeasible title to Lot No. 4763-D.