G.R. No. 141592 November 21, 2002
MARCELO CENTENO (Substituted as Plaintiff by his Heir Corazon Centeno Reyes), petitioner, vs. SPOUSES REYNALDO and ELIZABETH VIRAY, SPS. MANUEL and ERLINDA D. TANG and REGISTRY OF DEEDS OF MALOLOS, BULACAN, defendants, THE HONORABLE COURT OF APPEALS and ARTURO TANTOCO (INTERVENOR), respondents.

FACTS

Spouses Marcelo and Pacita Centeno were the registered owners of an agricultural land in Bulacan. Their niece, Elizabeth Centeno Viray, stole the Transfer Certificate of Title and forged their signatures in a Special Power of Attorney. Using this forged document, Elizabeth mortgaged the property to Manuel Dy Tang to secure a loan of P55,000. She executed a Real Estate Mortgage, a promissory note, and an affidavit of non-tenancy. Upon Elizabeth’s failure to redeem the property, Dy Tang requested the Sheriff to extrajudicially foreclose the mortgage. Marcelo Centeno was furnished a copy of this request and, hearing no opposition from him, the Sheriff proceeded with the public auction where Dy Tang was the highest bidder. A Certificate of Sale was executed in Dy Tang’s favor. Dy Tang then executed a Deed of Assignment and Transfer in favor of intervenor-respondent Arturo Tantoco. During the one-year redemption period, Marcelo Centeno filed a complaint for declaration of nullity of documents and recovery of ownership. Neither Marcelo nor Elizabeth redeemed the property, leading Tantoco to consolidate the title in his name. The Regional Trial Court dismissed the complaint against the Dy Tang spouses, declared the Sheriff’s Certificate of Sale and the Deed of Sale and Transfer to Tantoco valid, and ordered the Viray spouses to pay Marcelo Centeno P66,000 as the land’s value. The Court of Appeals affirmed this decision.

ISSUE

1. Is intervenor-respondent Arturo Tantoco a buyer in good faith and for value?
2. Has Tantoco divested his rights over the subject property?
3. Did the Court of Appeals err in not declaring the nullity of the documents which ultimately transferred the subject land to Jose Baltazar?

RULING

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals.
1. The Court held that the first two issues raised were factual in nature. Factual findings of the trial court, when adopted and confirmed by the Court of Appeals, are binding and conclusive and generally will not be reviewed on appeal. The petitioner did not show that this case fell under any exception to this rule.
2. On the third issue, the Court found Tantoco’s status as a purchaser in good faith to be settled. The Court of Appeals had defined a purchaser in good faith and for value as one who buys property without notice of another’s right or interest and pays a full and fair price. It declared that Dy Tang and Tantoco became owners in good faith, as they bought the property free from any lien, encumbrance, or notice of adverse claim. Dy Tang had no knowledge of the defect in the Special Power of Attorney when he agreed to the mortgage, and no opposition was heard from the registered owner during the foreclosure despite notice. Tantoco subsequently purchased the property and consolidated the title after the redemption period lapsed. The Court emphasized that it was Marcelo Centeno’s negligence that caused the transfer, and he should bear the consequences, not Tantoco.
3. The Court also noted that it was immaterial to determine the validity of the Special Power of Attorney and other documents, as this would not cause the property to revert to the petitioner, nor could the Court disregard Tantoco’s right as a purchaser in good faith and for value. Regarding Tantoco’s assignment of his right to Jose Baltazar, the Court of Appeals had held this did not divest Tantoco of his rights, as the assignment was a mere equitable mortgage where Tantoco reserved a right to repurchase.