G.R. No. 194077, December 3, 2014
FLORENTINO W. LEONG AND ELENA LEONG, ET AL., Petitioners, vs. EDNA C. SEE, Respondent.

FACTS

The spouses Florentino and Carmelita Leong owned a parcel of land in Quiapo, Manila. Petitioner Elena Leong, Florentino’s sister-in-law, had lived on the property rent-free for over two decades. After the building on the land burned down, she and other relatives constructed makeshift houses and continued the rental-free arrangement. Florentino and Carmelita immigrated to the United States and obtained a divorce in Illinois. Their marital settlement agreement included a provision stating Florentino would quitclaim his interest in the Quiapo property to Carmelita. An intercalated handwritten proviso in the agreement stated that neither party shall evict relatives or convey title until it is established that Florentino has clear title to a Malabon property. On November 14, 1996, Carmelita sold the land to respondent Edna C. See. In lieu of Florentino’s signature on the deed of sale, Carmelita presented a waiver of interest notarized by Florentino in Illinois on March 11, 1996, reiterating his quitclaim. The title was transferred to Edna’s name (TCT No. 231105). Edna was aware of the Leong relatives occupying the land but was assured by Carmelita they would vacate. When demands to vacate were unheeded, Edna filed a complaint for recovery of possession against Elena and the other relatives on April 1, 1997. On April 23, 1997, Florentino filed a complaint for declaration of nullity of contract, title, and damages against Carmelita, Edna, and the Register of Deeds, alleging the sale was without his consent. The cases were consolidated. The Regional Trial Court ruled in favor of Edna, granting her possession and ownership, and ordered Carmelita to pay Florentino his one-half share of the proceeds with damages. The Court of Appeals affirmed the trial court’s decision in toto.

ISSUE

Whether respondent Edna C. See is a buyer in good faith and for value.

RULING

Yes, the Supreme Court affirmed the Court of Appeals’ ruling that Edna C. See is an innocent purchaser for value and in good faith. The Torrens system protects innocent purchasers who rely on the face of a clean certificate of title. Section 44 of the Property Registration Decree (Presidential Decree No. 1529) holds that a purchaser for value and in good faith holds the title free from all encumbrances except those noted on the certificate. The lower courts’ factual findings, which are generally conclusive, established that Edna exercised due diligence. She verified the authenticity of Carmelita’s title at the Registry of Deeds, found it clean with no annotations, and relied not only on the title but also on Florentino’s notarized waiver of interest. Her awareness of occupants did not equate to bad faith, as she made further inquiries. The Court also noted that petitioners’ arguments on the conjugal nature of the property and the validity of the waiver involved factual questions not proper in a petition for review, and that the waiver was a consequence of the foreign divorce and separation of properties, not a donation between spouses. Therefore, as a buyer in good faith and for value, Edna’s title is protected.