GR 97929; (December, 1991) (Digest)
G.R. No. 97929 December 17, 1991
BENJAMIN DY, petitioner, vs. HON. COURT OF APPEALS, BIENVENIDO MANALO AND PARAMOUNT DEVELOPMENT BANK, respondents.
FACTS
Bienvenido Manalo purchased Lot 2 from Paramount Development Bank via a registered Deed of Absolute Sale and entered a Contract to Sell for Lot 3. Upon attempting to occupy the lots, he found them fenced and claimed by Benjamin Dy. Manalo sued Paramount for breach of warranty. Dy intervened, claiming prior ownership through a 1972 deed of sale from his father, who allegedly bought the lots from Doña Agripina Subdivision in 1964, supported only by receipts and the unregistered deed. The Regional Trial Court ruled for Manalo, ordering Dy to surrender the lots and compelling Paramount to execute a sale for Lot 3 upon full payment, and awarded damages. The Court of Appeals affirmed.
ISSUE
The core issues were whether the trial court had jurisdiction and whether Dy or Manalo had superior claim of ownership over the disputed lots.
RULING
The Supreme Court denied Dy’s petition. On jurisdiction, the Court held PD 957 and PD 1344, granting the HLURB exclusive jurisdiction over cases involving subdivision lot sales, did not apply because the controversy was essentially an ordinary action for specific performance and damages arising from breach of contract and warranty between Manalo and the bank, and an ownership dispute with Dy, not a regulatory case under the HLURB’s purview. On ownership, the Court upheld Manalo’s registered title to Lot 2. Under the Torrens system, registration is the operative act that binds the land concerning third persons, and a certificate of title issued in good faith confers ownership free from all unregistered encumbrances. Dy’s claim, based on unregistered and insufficiently authenticated private documents, failed to overcome this registered title. The Court also found Manalo was a purchaser in good faith, as he only learned of Dy’s claim after his purchase, a factual finding sustained by the trial court. For Lot 3, the Contract to Sell was valid, and Paramount’s obligation to deliver peaceful possession remained.