SEVERINO CAÑGAS AND ADELA BASCO, PLAINTIFFS AND APPELLEES VS. TAN CHUAN LEONG, ET AL., DEFENDANTS AND APPELLANT.

Plaintifffs-appellees instituted this action in the Court of First Instance
of Quezon to recover title to a certain parcel of land in Unisan, Tayabas
covered by Original Certificate of Title No. 4219 in the name of Juan Basco
married to Rufilna Juadilla, dated December 19, 1936. By virtue of a deed of
sale executed by Juan Basco in favor yof Modesto Alpay, said certificate of
title was cancelled, and a transfer certificate of title issued in the name of
the latter on August 5, 1943. The property was in turn sold by Modesto Alpay to
defendant-appellant Tan Chuan Leong, a naturalized Filipino citizen on August
30, 1943, as a result of which, sale, the transfer certificate of title in the
name of Alpay was cancelled and another one issued in the name of Tan Chuan
Leong. From the judgment declaring the property in question to be one of
undivided ownership, belonging to the plaintiffs on one hand and the defendant
Tan Chuan Leong on the other, in undivided equal shares, Tan Chuan Leong has
prosecuted the appeal directly to Us.

The record discloses that original certificate of title in the name of Juan
Basco married to Rufina Juadilla, was issued on December 10 1936, in lieu of
Homestead Patent No. 40634; that plaintiff Severino Cañgas is the child of
Rufina Juadilla by her first husband, while Adela Basco is her child by her
second husband Juan Basco; that the property was acquired by Juan Basco during
his marriage with Rufina Juadilla. In the amended complaint, it is alleged that
the sale executed by Juan Basco in favor of Modesto Alpay affected only the
undivided half belonging to Juan Based but not the other half pertaining to
Rufina Juadilla or to her heirs, so that when Alpay executed a deed of sale in
favor of defendant Tan Chuan Leong on August 30, 1943, Alpay transmitted to Tan
Chuan Leong only the undivided half pertaining originally to Juan Basco. There
is no allegation, in the complaint that defendant Tan Chuan Leong had knowledge,
in fact, that Juan Basco owned only an undivided one-half of the property. But
the court below, nevertheless, decided that Modesto Alpay and Tan Choan Leong
may not be considered as purchasers in good faith because Juan Basco held the
property merely as administrator and the purchasers should have known that the
original certificate of title was in the name of Juan Basco married to Rufina
Juadilla; that the purchasers were bound by the original certificate of title,
insofar as it declares that the owner thereof is Juan Basco married to Rufina
Juadilla.

Defendant Tan Chuan Leong in his answer alleges that he acquired the property
by purchase from Modesto Alpay, in good faith and for valuable consideration,
relying on the transfer certificate of the vendor, which did not contain any
flaw or defect; that the person from whom he purchased the property also relied
on the fact that the original certificate of title was in the name of Juan
Basco, from which it was assumed that the phrase “married to Rufina Juadilla”
was merely a description of the owner Juan Basco. The court states in its
decision that Modesto Alpay testified ia court that he and Tan Chuan Leong were
purchasers in good faith, he having been assured at the time of the sale that
the land belonged exclusively to Juan Basco. Witness for the defendants also
testified that he made inquiries before Tan Chuan Leong bought the property and
tfiat he found that the title thereof was free from any encumbrance.

Notwithstanding the above declarations, however, the court declared that the
defense of good faith cannot be sustained for the reason that the purchasers
should have taken notice of the” fact that the original certificate of title
states that Juan Basco was married to Rufina Juadilla.

The question before Us to decide, therefore, is whether or not the second
purchaser, defendant-appellant Tan Chuan Leong, should have examined the
original certificate of title from: which, he could have known that the property
is held by the registered owner jointly with his wife Rufina Juadilla. We hold
that the decision of the trial judge on this issue is incorrect. As we have
already held, a person dealing with registered land is not required to go to the
original registry to determine the condition of the property but is only charged
with notice of the burdens on the property which are noted on the face of the
register or the certificate of title.

“Whatever might have been generally or unqualifiedly stated in the case
heretofore decided by this court, it is held that under the Torrens system
registration is the operative act that gives validity to the transfer or creates
a lien upon the land (Sees. 50 and 51,and Registration Act). A person dealing
with registered land is required to go behind the register to determine the
condition of the property. He is only charged with notice of the burdens on the
party which are noted on the face of the register or the certificate of title.
To require him to do more is to defeat one of the primary objects of the Torrens
system. A bona fide purchaser for value of such property at an auction sale
acquires good; title as against a prior transferee of the same property if such
transfer was unrecorded at the time of the auction sale. The existence or
absence of good faith will, of course, have to be determined upon the facts and
the legal environment of each particular case.” (Anderson & Co.,
vs. Garcia, 64 Phil. 509) (See also Quimson vs. Suarez, 45
Phil. 906-907; Reynes, et al., vs. Barrera, et al., 68 Phil. 656-657;
Del Castillo, etc. vs. Sian et al., 105 Phil., 622; 56 Off. Gaz, [26]
4328).

In accordance with our recent decisions, in order that a purchaser may be
considered as a purchaser in good faith, it is enough that he examines the
latest certificate of title which, in this case, is that issued in the name of
Modesto Alpay. (Hernandez vs. Vda. de Salas, 69 Phil. 774; Flores, et
al. vs. Plasma, et al., 94 Phil., 327; 50 Qff. Qaz., [8] 1078; Revilla,
et al., vs. Galindez, 107 Phil., 480). The purchaser is not bound by
the original certificate of title but only by the certificate of title of the
person from whom he purchased the property.

Good faith is presumed (Article 527, Civil Code). In the case at bar
defendants-appellants specifically allege acquisition of the property in good
faith. At the time of the trial witnesses testified for the defendants as to the
absence of knowledge or notice that persons, other than the registered owner,
are interested in the property.

Under the circumstances of the case, there being evidence that the
defendant-appellant Tan Chuan Leong obtained the property in good faith, and
none to the contrary, the court below should have found that defendant Tan Chuan
Leong at least was a purchaser of the property in good faith and for value, and
should have been protected from the claims of the heirs of the wife of the
originally registered owner Juan Basco.

Wherefore, judgment is hereby rendered, reversing the decision appealed from
and dismissing the complaint. Without costs.

Paras, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L.,
Barrera, Gutierrez David, Paredes and Dizon, JJ., concur.

Judgment reversed.