GR 148516; (December, 2007) (Digest)
G.R. No. 148516; December 27, 2007
MANUEL LUIS SANCHEZ, Petitioner, vs. MAPALAD REALTY CORPORATION, Respondent.
FACTS
Respondent Mapalad Realty Corporation was the registered owner of four prime parcels of land along Roxas Boulevard. Following the 1986 EDSA Revolution, Jose Y. Campos executed an affidavit admitting he held Mapalad in trust for former President Ferdinand Marcos and surrendered its assets to the new government. The Presidential Commission on Good Government (PCGG) sequestered Mapalad. In 1992, the PCGG-appointed officer discovered the owner’s duplicate certificates of title were missing, taken by the former general manager. Subsequently, Nordelak Development Corporation filed an adverse claim based on a 1989 deed of sale purportedly executed by Miguel Magsaysay as Mapalad’s president.
Mapalad then discovered its titles had been cancelled and new ones issued to Nordelak based on another deed of sale bearing the same date and notarial details but stating a different purchase price. Investigation revealed Miguel Magsaysay had sold all his shares in Mapalad as early as 1982 and denied signing the 1989 deeds. Mapalad filed an action for annulment of sale and reconveyance. During the pendency of the case, Nordelak sold the properties to petitioner Manuel Luis Sanchez, who intervened in the appeal.
ISSUE
Whether the deeds of sale conveying Mapalad’s properties to Nordelak, and subsequently to Sanchez, are valid and effective to transfer ownership.
RULING
No. The Supreme Court affirmed the Court of Appeals’ decision annulling the deeds of sale and ordering the reconveyance of the properties to Mapalad. The purported 1989 sales were null and void for being absolutely simulated or fictitious. The existence of two deeds for the same transaction with identical notarial entries but starkly different considerations was a clear badge of fraud. Furthermore, Miguel Magsaysay, the purported signatory, had no authority to act for Mapalad in 1989 as he had divested all his interest in the corporation by 1982, and he categorically denied the signatures on the deeds.
Since the sale from Mapalad to Nordelak was void, Nordelak acquired no title to the properties. Consequently, Nordelak could not transmit any valid title to petitioner Sanchez, who was a buyer during the pendency of the litigation. The properties, being part of the sequestered assets alleged to be ill-gotten wealth, must be restored to the custody of the government through the PCGG until their true ownership is definitively settled. The Court emphasized that it would be odious to allow properties recovered with effort by the state to be lost through the manipulation of unscrupulous officials.