G.R. No. 168499; November 26, 2012
SPOUSES EROSTO SANTIAGO and NELSIE SANTIAGO, Petitioners, vs. MANCER VILLAMOR, CARLOS VILLAMOR, JOHN VILLAMOR and DOMINGO VILLAMOR, JR., Respondents.
FACTS
The subject property, a 4.5-hectare coconut land, was originally owned by spouses Domingo Villamor, Sr. and Trinidad Gutierrez Villamor. After mortgaging it to the Rural Bank of San Jacinto (the Bank) and failing to redeem it post-foreclosure, the Bank acquired title. The respondents (children and a grandchild of the spouses Villamor, Sr.), together with their sister Catalina, subsequently entered into an installment agreement with the Bank to purchase the property for P65,000.00, making payments from 1991 to 1994. However, the Bank, claiming the spouses Villamor, Sr. were the real buyers, executed a deed of sale in favor of Domingo Villamor, Sr. on July 19, 1994. Two days later, the spouses Villamor, Sr. sold the same property to the petitioners, spouses Santiago, for P150,000.00.
The respondents and Catalina filed a specific performance case against the Bank (Civil Case No. 200) to compel the execution of a deed of sale in their favor. Separately, the petitioners, after the respondents refused to vacate, filed this complaint for quieting of title and recovery of possession (Civil Case No. 201). The Regional Trial Court (RTC) ruled in favor of the petitioners, declaring them as absolute owners. The Court of Appeals (CA) reversed the RTC and dismissed the complaint.
ISSUE
Whether the petitioners have a valid cause of action for quieting of title against the respondents.
RULING
No. The Supreme Court denied the petition and affirmed the CA’s dismissal of the complaint for quieting of title. The Court held that an action for quieting of title requires the plaintiff to prove a legal or equitable title to, or interest in, the disputed property. The petitioners derived their claim from the July 21, 1994 deed of sale executed by the spouses Villamor, Sr. However, at the time of that sale, the spouses Villamor, Sr. no longer had any transmissible title to the property. The Bank had already acquired absolute ownership after the foreclosure and expiration of the redemption period. The subsequent deed the Bank issued to Domingo Villamor, Sr. was legally a new sale, not a redemption. Crucially, the Bank had already previously contracted to sell the property to the respondents and Catalina, who had made substantial installment payments starting in 1991. Therefore, the petitioners’ predecessor-in-interest had no valid title to convey. Furthermore, the petitioners could not be considered purchasers in good faith because they bought the property while the respondents were in open, continuous, and exclusive possession, which should have prompted a more diligent inquiry into the nature of that possession. The pending specific performance case (which was later decided by the CA in favor of the respondents and Catalina) further clouded any claim of good faith. Since the petitioners failed to establish a valid title in themselves, their action for quieting of title could not prosper.
