GR 143027; (October, 2005) (Digest)
G.R. No. 143027 October 11, 2005
Encarnacion L. Cuizon and Salvador Cuizon, Petitioners, vs. Mercedes C. Remoto, Leonida R. Meynard, Celerina R. Rosales and Remedios C. Remoto, Respondents.
FACTS
The petitioners, spouses Cuizon, base their claim on Transfer Certificate of Title (TCT) No. RT-3121 issued in 1984. This title originated from an Extra-Judicial Settlement with Sale executed in 1983 by the heirs of Placida Tabada-Lambo, who sold Placida’s one-fourth share to petitioner Encarnacion Cuizon. The property is part of a larger parcel originally covered by TCT No. RT-183 in the names of Placida and others.
The respondents, heirs of Angel Remoto, anchor their claim on a prior, notarized Deed of Sale dated September 19, 1968, executed by Placida in favor of Angel Remoto covering the specific 4,300-square-meter lot in dispute. This 1968 deed was never registered. Respondents filed an action for reconveyance against the petitioners after the issuance of the Cuizons’ title. The trial court ruled in favor of the respondents, ordering reconveyance, a decision affirmed by the Court of Appeals.
ISSUE
Whether the petitioners, as registered owners under the Torrens system, hold a superior right over the respondents, who hold a prior but unregistered deed of sale.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ rulings. The legal logic centers on the principle that registration does not vest title but merely confirms it, and it cannot be used to shield a buyer in bad faith. The Court found the petitioners to be purchasers in bad faith. The evidence established that the petitioners had actual knowledge of the 1968 Deed of Sale and the respondents’ open, continuous, and adverse possession of the land for over fourteen years before the petitioners caused the execution of the 1983 Extra-Judicial Settlement in their favor. With such knowledge, the petitioners cannot claim the status of innocent purchasers for value protected by the Torrens system.
Consequently, the prior unregistered sale in favor of the respondents’ predecessor prevails over the subsequent registered sale to the petitioners. The Torrens system cannot be used to perpetrate fraud. The action for reconveyance, filed within a short period after the petitioners obtained their title, was timely and not barred by laches. The respondents, as the defrauded parties, have a valid equitable right to seek the transfer of the property’s title from the bad-faith registered owners.