GR 244232; (November, 2020) (Digest)
G.R. No. 244232 , November 03, 2020
FELIPA BINASOY TAMAYAO AND THE HEIRS OF ROGELIO TAMAYAO REPRESENTED BY FELIPA BINASOY TAMAYAO, PETITIONERS, VS. FELIPA LACAMBRA, ET AL., RESPONDENTS.
FACTS
The case involves conflicting claims over Lot No. 2930, originally owned by Vicente Balubal. Upon Vicente’s death, his heirs, Tomasa and Jose Balubal, executed an Extrajudicial Settlement and Sale in 1962 (first sale) in favor of Juan Lacambra. This sale was notarized but was never registered; thus, the title remained in Vicente’s name, though the owner’s duplicate certificate was delivered to Juan. Upon Juan’s death, his heirs (the Lacambras) inherited the property. In 1980, some of the Lacambra heirs sold a 5/14 pro indiviso share of the lot to spouses Rogelio and Felipa Tamayao (second sale). Rogelio annotated an adverse claim on the title.
Subsequently, Pedro Balubal (son of Jose) and other Balubal heirs, claiming the 1962 sale to Juan was void, secured a new owner’s duplicate copy of the original title and executed an Extrajudicial Settlement of a Parcel of Land with Sale in 1981 (third sale) over the entire lot in favor of the Spouses Tamayao. This third sale led to the cancellation of the original title and the issuance of a new Transfer Certificate of Title (TCT) in Rogelio’s name. The Lacambra heirs then filed a complaint to annul this third sale and the resulting TCT.
ISSUE
Whether the third sale executed by the Balubal heirs in favor of the Spouses Tamayao and the subsequent issuance of TCT No. T-54668 are valid, considering the prior unregistered sale to Juan Lacambra.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ decisions annulling the third sale and the TCT. The Court held that the first sale in 1962 by the Balubal heirs to Juan Lacambra was valid and conveyed ownership, despite its non-registration. Registration is not a requirement for validity but merely a means to bind third parties. Juan and his heirs acquired a valid title, and their open, continuous possession since 1962 constituted constructive notice to the whole world of their rights. Consequently, the Balubal heirs no longer had any ownership rights to sell in 1981. The third sale was therefore void for having been executed by non-owners.
Furthermore, the Spouses Tamayao could not be considered innocent purchasers for value. They were already aware of the Lacambras’ claim, having previously bought a portion from them and having been confronted by the Balubals about the ownership dispute before the third sale. Their knowledge of the defect in the Balubals’ title precludes good faith. The Torrens system does not protect one who procures a title through fraud or with prior knowledge of an existing claim. The Court upheld the annulment of the third sale and the cancellation of TCT No. T-54668, thereby recognizing the Lacambra heirs as the rightful owners.