G.R. No. 222031 November 22, 2017
EMILIO CALMA, Petitioner vs. ATTY. JOSE M. LACHICA, JR., Respondent

FACTS

Respondent Atty. Jose Lachica, Jr. claimed ownership of a parcel of land he allegedly purchased from Ceferino Tolentino in 1974, with a second deed executed in 1979 after the first was lost. He entrusted the title and documents to the Tolentino family to facilitate the transfer, but they failed to do so. Lachica annotated an adverse claim on the title in 1981. Years later, he discovered that the property had been sold by Ceferino to his son, Ricardo Tolentino, and subsequently by Ricardo to petitioner Emilio Calma in 1998. The titles were accordingly cancelled and reissued. Lachica filed a complaint for annulment of the deeds of sale and titles, and for reconveyance, arguing the sales were fraudulent and that Calma, being an alien, was ineligible to own land and was a buyer in bad faith.
The Regional Trial Court (RTC) dismissed the complaint, upholding Calma’s status as a purchaser in good faith and for value. The Court of Appeals (CA) reversed the RTC, declaring the sale between Ceferino and Ricardo void for being simulated and fraudulent. The CA ordered the reconveyance of the property to Lachica, ruling that Calma was not a buyer in good faith because the adverse claim annotation on the title constituted constructive notice of Lachica’s interest.

ISSUE

Whether the Court of Appeals erred in ruling that petitioner Emilio Calma was not a purchaser in good faith and for value, and in ordering the reconveyance of the property to respondent Atty. Jose Lachica, Jr.

RULING

Yes, the Supreme Court reversed the CA and reinstated the RTC decision. The Court held that Calma was an innocent purchaser for value. The legal logic rests on the principle of indefeasibility of a Torrens title and the rules on double sales under Article 1544 of the Civil Code. For a prior buyer to prevail over a subsequent buyer, the prior buyer must have registered the sale in good faith before the subsequent registration. Here, Lachica failed to register his 1979 deed of sale; only his adverse claim was annotated. Crucially, at the time of Calma’s purchase in 1998, the certificate of title in the name of his vendor, Ricardo, already indicated that Lachica’s adverse claim had been cancelled as of April 1994. Calma had the right to rely on the face of the title, which showed no existing encumbrance. The Court found no evidence that Calma was aware of any flaw in his vendor’s title or of Lachica’s claim at the time of the sale. Furthermore, Lachica’s allegations of fraud against the Tolentinos were not proven with the required particularity and did not implicate Calma, who was a stranger to that transaction. Therefore, Calma’s registered title, acquired in good faith and for valuable consideration, must be protected.