GR 83383; (May, 1991) (Digest)
G.R. No. 83383 ; May 6, 1991
SOLID STATE MULTI-PRODUCTS CORPORATION, petitioner, vs. THE COURT OF APPEALS and THE INTESTATE ESTATE OF ANTENOR S. VIRATA and the DEVELOPMENT BANK OF THE PHILIPPINES, respondents.
FACTS
Petitioner Solid State Multi-Products Corporation filed an action to quiet title over a parcel of land in Imus, Cavite. It claimed ownership based on a Torrens Title (TCT No. T-80889) derived from a valid sales contract between the government and Julian Peñaranda in 1969, followed by a subsequent deed of absolute sale to the corporation. Petitioner alleged that respondent Antenor Virata, during his lifetime, caused the issuance of a reconstituted title (TCT No. T-11520) over the same property in 1959 through fraud, creating a cloud on its title.
The respondents, representing Virata’s estate, asserted ownership tracing back to a 1943 public auction sale of the same friar land lot to Mabini Legaspi. The trial court and the Court of Appeals dismissed petitioner’s complaint, upholding Virata’s title. They found that the government’s 1969 sale to Peñaranda was void because the land was no longer part of the public domain, having been previously sold to Legaspi in 1943.
ISSUE
Whether the Court of Appeals erred in upholding the title of respondent Virata and dismissing the petitioner’s action for quieting of title.
RULING
The Supreme Court reversed the Court of Appeals and ruled in favor of the petitioner. The legal logic centered on the nullity of the original 1943 sale to Mabini Legaspi. The Court found that the sale violated Act No. 1120, or the Friar Lands Act, which required sales to be made at public auction to the highest bidder after proper publication. The 1943 sale lacked evidence of compliance with these mandatory requirements; there was no proof of publication of the auction notice. Consequently, the sale to Legaspi was void ab initio.
Since the sale to Legaspi was null and void, it produced no legal effects. Legaspi acquired no valid title that could be transmitted to Virata. Therefore, the land remained part of the public domain, making the subsequent 1969 sale by the Director of Lands to Julian Peñaranda valid and effective. Peñaranda’s title, later transferred to the petitioner, was thus upheld. The Court further ruled that an action to quiet title, where the plaintiff is in possession and the defendant’s claim is based on a void title, is imprescriptible. The petitioner’s Torrens title, derived from a valid source, must be preferred. The Court ordered the cancellation of Virata’s reconstituted title.