G.R. No. L-4340, L-4341, L-4342, L-4343, L-4344, L-4345, L-4346; May 28, 1952
REBECCA LEVIN, plaintiff-appellee, vs. JOAQUIN V. BASS, ET AL., defendants. EUGENIO MINTU, defendant-appellant. (L-4340)

JOAQUIN V. BASS, plaintiff-appellee, vs. JOSE C. ROBLES, ET AL., defendants. REBECCA LEVIN, ET AL., intervenors. EUGENIO MINTU, intervenor-appellant. (L-4341)
JOAQUIN V. BASS, plaintiff-appellee, vs. EUGENIO MINTU, defendant-appellant. (L-4342)
REBECCA LEVIN, plaintiff-appellee, vs. JOAQUIN V. BASS, defendant-appellant. (L-4343)
JOAQUIN V. BASS, plaintiff-appellant, vs. REBECCA LEVIN, defendant-appellee. (L-4344)
JOAQUIN V. BASS, plaintiff-appellant, vs. JOSE C. ROBLES and AMINTA T. DE ROBLES, defendants-appellees. (L-4345)
JOAQUIN V. BASS, plaintiff-appellant, vs. AMINTA T. DE ROBLES, defendant-appellee. (L-4346)

FACTS

These consolidated cases revolve around properties at 326 and 328 San Rafael Street, Manila, originally owned by Rebecca Levin, a 65-year-old illiterate widow. In late 1943/early 1944, Joaquin V. Bass, representing himself as a real estate broker, convinced Levin to sell her house and lot at No. 326 by falsely claiming a Japanese buyer was interested and that she could avoid confiscation and profit by purchasing a better property on Antonio Rivera Street. Relying on these representations, Levin signed documents which Bass presented as merely an “authority to sell.” These documents were actually a deed of sale (Exhibit A) conveying the property to Emiliano Eustaquio for P30,000, and later a deed of sale (Exhibit C) for the lot and house at No. 328 to Bass himself for P65,000. Bass took Levin’s title and P10,000, returning only P2,000 to pay off an existing mortgage. He subsequently sold the No. 326 property to himself (Exhibit B) and then, on November 8, 1944, sold it to Eugenio Mintu. Levin sought annulment of the sales and recovery of her properties. The trial court annulled the sales to Eustaquio and Bass, ordered the cancellation of Bass’s titles, and reinstated Levin as owner, subject to a mortgage in favor of Co Chin Leng. It also dismissed Bass’s various actions for detainer against the tenants and Mintu, and ordered Bass to account for and pay over collected rentals to Levin.

ISSUE

The central issue is whether the subsequent sale of the property at 326 San Rafael Street by Joaquin V. Bass to Eugenio Mintu, an innocent purchaser for value, can be upheld against the claim of the original owner, Rebecca Levin, whose consent to the initial sale was obtained through fraud.

RULING

The Supreme Court MODIFIED the trial court’s decision. It upheld the validity of the sale to Eugenio Mintu. The Court ruled that while Levin’s consent to the initial sale was vitiated by fraud, Mintu was an innocent purchaser for value who acquired the property after Bass had obtained a transfer certificate of title in his name. Under the Torrens system, a title issued under the circumstances (where the owner’s negligence or act made the fraud possible) can be the source of a valid transfer to an innocent purchaser. The Court applied the principle that “as between two innocent persons, the one who made it possible by his act of confidence must bear the loss.” Levin, by surrendering her owner’s duplicate certificate of title and signing the documents, enabled Bass to perpetrate the fraud and obtain a clean title. Therefore, Mintu is declared the rightful owner of the lot and house at No. 326 San Rafael Street since November 8, 1944, entitled to possession and the accrued rentals, subject to the registered mortgage in favor of Co Chin Leng. The rest of the trial court’s judgment, including the annulment of the sale of No. 328 to Bass and the dismissal of Bass’s detainer suits, was affirmed. The Court also directed the City Fiscal of Manila to investigate Bass and the notary public involved.