PATROCENIO RIZO, REPRESENTED BY GEORGE SAMMONS, PETITIONER, V. PEPITO VELASCO SUBSTITUTED BY MERDONIA V. VELASCO, ZANDY VELASCO, GENE VELASCO, JOY VELASCO AND VITA VELASCO, RESP…

Rizo versus Velasco

The Case

This is Rizo versus Velasco, a petition for review brought by Patrocenio Rizo, represented by his attorney-in-fact George Sammons, against Pepito Velasco, later substituted by his heirs. Rizo sued for forcible entry with preliminary injunction and damages over a portion of agricultural land in Aroroy, Masbate, claiming that Velasco took about eight hundred square meters of it by force and intimidation. Velasco answered that it was Rizo who encroached, and counterclaimed for ejectment from a larger titled area of his own. The case matters because it shows how a court in a forcible entry suit may provisionally resolve ownership when possession cannot be decided without it, and how the rule on double sale applies to registered land.

Procedural History

The complaint was filed with the Municipal Circuit Trial Court of Aroroy-Baleno, Masbate. That court dismissed the complaint, declared Velasco the owner of the disputed portion known as Lot B, and ordered Rizo to surrender possession of it. Rizo appealed to the Regional Trial Court of Masbate City, Branch 47, which denied the appeal and affirmed the trial court in full. Rizo then went up to the Supreme Court by petition for review, raising the same contentions he had raised below.

Facts

The land originally belonged to the spouses Rosalio Oliver and Benita Cabarles, covered by a transfer certificate of title in their names. Rizo claims he bought a portion of it from Jose Cabarles Oliver, one of the heirs, on April 8, 1977, first evidenced by a certification of even date and later by a deed of sale dated August 19, 2002. He says he possessed the land as owner from 1977 onward.

On the other side, Velasco bought from another set of heirs, after an extrajudicial settlement with sale dated September 25, 1992, and registered his purchase on December 17, 2002, resulting in a transfer certificate of title in his name. Rizo admits that Velasco registered first, but insists the registration was in bad faith because Velasco knew of Rizo's prior possession.

Rizo says his possession was interrupted on November 13, 2005, when Velasco, with hired laborers, allegedly deprived him of about eight hundred square meters by force and intimidation. A court-commissioned survey by the municipal engineer pinpointed the contested area as Lot B, containing 2,013 square meters, inside the areas claimed by both sides. A separate civil case assailing the sale to Velasco was still pending in the Regional Trial Court and was not considered by the lower courts.

Issues

• Whether or not the Regional Trial Court correctly affirmed the finding that Velasco, not Rizo, is entitled to the possession of Lot B.
• Whether or not Velasco's registration of his purchase was made in bad faith, so as to defeat his right under the rule on double sale.
• Whether or not Rizo's claim of prior possession entitles him to possession of the disputed portion.

Applicable Provisions

Article 1544 of the Civil Code governs the double sale of immovable property:

Article 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

This provision decides the case, because the same portion was sold by different heirs to two different buyers, and the buyer who first recorded in good faith prevails.

Section 7 of Rule 70 of the Rules of Court limits the effect of an ejectment judgment:

Section 7. Judgment how executed. The judgment rendered in an action for forcible entry or unlawful detainer shall be effective with respect to the possession only and in no wise bind the title or affect the ownership of the land or building.

This provision explains why the Court's ruling on ownership is only provisional and binds no one on the question of title.

Ruling

On the first issue, the Court denied the petition. The findings of fact of the trial court are entitled to great weight and respect on appeal, and none of the recognized exceptions appeared. The petition raised only factual questions, namely bad faith in Velasco's registration and Rizo's alleged prior possession.

On the second issue, the Court held that Rizo offered only a bare assertion of bad faith and no evidence that Velasco knew of the earlier sale or of Rizo's possession. Velasco bought relying on his vendors' clean title. The Court also noted that Rizo did not challenge the findings that the 1977 sale could not have identified the property because the estate had not yet been partitioned, and that the 2002 deed was not executed in accordance with the 1992 partition and so could not bind the shares of the other heirs who sold to Velasco.

On the third issue, the Court held that between the two, Velasco produced a valid certificate of title covering Lot B, and although the sale to Rizo was earlier in date, the sale to Velasco was first registered, resulting in the issuance of a title in his name. The Court applied the second paragraph of Article 1544, which gives ownership of immovable property to the buyer in good faith who first recorded it in the Registry of Property. The Court stressed, however, that its finding on ownership is only provisional, made solely to determine possession, and does not foreclose any action to quiet title or annul the other's title.

Doctrine

In an ejectment suit, the only issue is possession de facto, or physical and material possession, not possession de jure. But when the question of ownership is raised as an incident and the resolution of possession hinges on the validity or interpretation of a document of title or contract, the inferior court is conditionally vested with adjudicatory power over ownership, but only for the purpose of determining possession. The judgment binds only on possession and does not affect title.

Under Article 1544 of the Civil Code, where the same immovable property is sold to different vendees, ownership belongs to the buyer who in good faith first recorded the sale in the Registry of Property. Good faith is presumed, and the party alleging bad faith must prove it with evidence, not with a bare assertion.

Disposition

The petition was denied, and the decision of the Regional Trial Court of Masbate City, Branch 47, was affirmed, leaving Velasco and his heirs entitled to the possession of Lot B.

Remember This

Memorize this line: in ejectment, ownership may be resolved provisionally only to settle possession, and under Article 1544 the buyer in good faith who first registers prevails. Examiners use this case to test the conditional adjudicatory power of inferior courts over title and the application of the double sale rule to registered land.