G.R. No. 55134 December 4, 1995
Pedro Pilapil and Teodorica Penaranda, petitioners, vs. Honorable Court of Appeals, Spouses Carmen Otadora and Luis Masias, Vitaliana Otadora, Spouses Macario Bensig and Marcela Aligway, Spouses Dionisio Bensig and Juanita Arsenal, Spouses Sinforoso Andrin and Visitacion Otadora, and H. Serafica & Sons Corporation, respondents.

FACTS

Felix Otadora died in 1940, leaving a parcel of land. His heirs executed an extrajudicial partition on March 21, 1962, dividing the remaining lot among them. On the same day, two heirs, Vitaliana and Agaton, sold an undivided 18,626-square meter portion of their share to petitioners Pedro Pilapil and Teodorica Penaranda. This sale was annotated on the title on March 29, 1962. Subsequently, the other heirs and successors-in-interest of Vitaliana and Agaton engaged in a series of transactions, selling portions of the same lot to other parties, culminating in the issuance of separate Transfer Certificates of Title (TCTs) to these subsequent buyers, effectively subdividing the property. Petitioners, discovering they could not get full possession of the area they bought, filed a complaint to quiet title and recover ownership.

ISSUE

The primary issue is whether the sale from Vitaliana and Agaton to the petitioners is valid and binding against the subsequent buyers, despite the petitioners’ failure to present the owner’s duplicate certificate of title for annotation as required by Section 55 of the Land Registration Act.

RULING

The Supreme Court ruled in favor of the petitioners, reversing the lower courts. The legal logic centers on the nature of the property sold and the effect of registration. The sale in 1962 involved an undivided share of co-owners in a parcel of land held in common. The Court held that the requirement under Section 55 of the Land Registration Act for the presentation of the owner’s duplicate certificate to effect registration applies to voluntary dealings with registered land. However, the sale of an undivided interest by a co-owner is valid and binding between the parties even without such registration. The annotation of the sale, though made without the duplicate title, constituted constructive notice to the world of petitioners’ rights. More critically, the subsequent sales by Agaton and Vitaliana of their already sold shares were made in bad faith. The successors-in-interest, being privies and relatives within the same family, were deemed to have knowledge of the prior sale, especially since petitioners had taken possession of a portion of the land. Therefore, the subsequent titles issued were declared null and void as they originated from fraudulent transactions. The Court ordered partition, directing that petitioners’ 18,626-square meter portion be taken from the shares of Agaton and Vitaliana or their successors-in-interest.