G.R. No. L-42805. August 31, 1987
THE TREASURER OF THE PHILIPPINES, PETITIONER, VS. THE COURT OF APPEALS AND SPOUSES EDUARDO OCSON AND NORA E. OCSON, RESPONDENTS.
CRUZ, J.:
The petitioner asks us to reverse a decision of the respondent
court affirming that of the trial court holding the Assurance Fund subsidiarily
liable for damages sustained by the private respondents under the following
established facts.
Sometime in 1965, a person identifying himself as Lawaan Lopez
offered to sell to the private respondents a parcel of land located in Quezon
City and consisting of 1,316.8 square meters, which he claimed as his
property. His asking price was P85.00
per square meter but after a month’s haggling the parties agreed on the reduced
price of P76.00 per square meter. The
sale was deferred, however, because the prospective vendor said his
certificate of title had been burned in
his house in Divisoria, and he would have to file a petition with the court of
first instance of Quezon City for a duplicate certificate of title. He did so and the petition was granted after
hearing without any opposition.
Following the issuance of the new duplicate certificate of title, the
said person executed a deed of sale in favor of the private respondents, who
paid him the stipulated purchase price of P98,700.00 in full. The corresponding transfer certificate of
title was subsequently issued to them after cancellation of the duplicate
certificate in the name of Lawaan Lopez.[1]
Trouble began two years
later when another person, this time a woman, appeared and, claiming to be the
real Lawaan Lopez, filed a petition in the court of first instance of Quezon
City to declare as null and void the transfer of her land in favor of the
private respondents, on the ground that it had been made by an impostor.[2] After trial, the questioned deed of sale was
annulled, (together with the duplicate certificate of title issued to the impostor
and the transfer certificate of title in the name of the private respondents)
and the real owner’s duplicate certificate of title was revalidated.[3] Neither the Solicitor General nor the
private respondents appealed the decision, but Lawaan Lopez did so, claiming
that the defendants should have been required to pay damages to her and the
costs. The appeal was dismissed, with
the finding by Justices Jose Leuterio, Magno Gatmaitan and Luis B. Reyes of the
Court of Appeals that there was no collusion between the private respondents
and the impostor.[4]
Subsequently, the private
respondents filed a complaint against the impostor Lawaan Lopez and the
Treasurer of the Philippines as custodian of the Assurance Fund for damages
sustained by the plaintiffs as above narrated.
Both the trial court* and the respondent court** ruled in
their favor; holding the Assurance Fund subsidiarily liable for the sum of
P138,264.00 with legal interest from the date of filing of the complaint, in
case the judgment could not be enforced against the other defendant who had
been defaulted and could not be located.[5] The petitioner, disclaiming liability, is
now before us and prays for relief against the decision of the respondent court
which he says is not in accord with law and jurisprudence.
The applicable law is
Section 101 of Act No. 496 (before its revision by P.D. No. 1529) providing as
follows:
“Sec. 101. Any person
who without negligence on his part sustains loss or damage through any
omission, mistake or misfeasance of the clerk, or register of deeds, or of any
examiner of titles, or of any deputy or clerk or of the register of deeds in
the performance of their respective duties under the provisions of this Act,
and any person who is wrongfully deprived of any land or any interest therein,
without negligence on his part, through the bringing of the same under the
provisions of this Act or by the registration of any other person as owner of
such land, or by any mistake, omission, or misdescription in any certificate
or owner’s duplicate, or in any entry or memorandum in the register or other
official book, or by any cancellation and who by the provisions of this Act is
barred or in any way precluded from bringing
an action for the recovery of such land or interest therein, or claim
upon the same, may bring in any court or competent jurisdiction an action
against the Treasurer of the Philippine Archipelago for the recovery of damages
to be paid out of the Assurance Fund.”
Commenting on this provision, Commissioner Antonio H. Noblejas,
in his book on Land Titles and Deeds,[6]
notes that recovery from the Assurance Fund could be demanded by:
“1) Any person who sustains loss or damage under the following
conditions:
‘a) that there was
no negligence on his part; and
‘b) that the loss or
damage was sustained through any omission, mistake, or misfeasance of the clerk
of court, or the register of deeds, his deputy or clerk, in the performance of
their respective duties under the provisions of the Land Registration Act; ‘
or
“2) Any person who has
been deprived of any land or any interest therein under the following
conditions:
‘a) that there was
no negligence on his part;
‘b) that he was
deprived as a consequence of the bringing of his land or interest therein
under the provisions of the Property Registration Decree; or by the
registration by any other persons as owner of such land; or by mistake, omission or misdescription in
any certificate or owner’s duplicate, or in any entry or memorandum in
the register or other official book, or by any cancellation; and
‘c) that he is barred or in any way precluded from
bringing an action for the recovery of such land or interest therein, or claim
upon the same.'”
A careful reading of the
above provision will readily show that the private respondents do not come under
either of the two situations
above mentioned.
The first situation is
clearly inapplicable as we are not dealing here with any omission,
mistake or malfeasance of the clerk of court or of the register of deeds or his
personnel in the performance of their duties.
The second situation is also inapplicable. The strongest obstacle to recovery thereunder
is that the private respondents acquired no land or any interest therein as a
result of the invalid sale made to
them by the spurious Lawaan
Lopez.
The petition correctly
points out that such sale conveyed no title or any interest at all to them for
the simple reason that the supposed vendor had no title or interest to
transfer. He was not the owner of the
land. He had no right thereto he could convey. Manifestly, the deception imposed upon them
by the impostor deprived the private respondents of the money they delivered to him as consideration for the sale. But there is no question that the subsequent
cancellation of the sale did not deprive them of the land subject
thereof, or of any interest therein, for they never acquired ownership
over it in the first place.
The private respondents
argue that from the time the new transfer certificate of title was issued in
their name on January 28, 1965,
until it was canceled on October 12, 1967, they were the true and
exclusive owners of the disputed property.
Hence, the cancellation of their title on the latter date had the
effect of depriving them of the said land and so entitles them now to proceed
against the Assurance Fund.
The flaw in this posture
is that the real Lawaan Lopez had her own genuine certificate of title all the time and
it remained valid despite the issuance of the new certificate of title in the
name of the private respondents. That
new certificate, as the trial court correctly declared, was null and void ab initio, which means that it
had no legal effect whatsoever and at any time.
The private respondents were not for a single moment the owner of
the property in question and so cannot claim to have been unlawfully deprived
thereof when their certificate of title was found and declared to be a total
nullity.
Additionally, the Court
observes that the private respondents were not exactly diligent in verifying
the creddentials of the impostor whom they had never met before he came to
them with his bogus offer. The fact
alone that he claimed to have lost his duplicate certificate of title in a
fire, not to mention the amount of the consideration involved, would
have put them on their guard and warned them to make a more thorough
investigation of the seller’s identity.
They did not. Oddly, they seemed
to be satisfied that he had an Ilongo accent to establish his claim to be the
Visayan owner of the property in question.
They were apparently not concerned over the curious fact that for his
residence certificate B the supposed owner had paid only P1.00 although the
property he was selling was worth to him no less than P98,700.00.[7]
Moreover, his address in that certificate was Mandaluyong, Rizal, whereas the
address indicated in the records of the Register of Deeds of the owner of the
land in question was Fara-on, Fabrica, Negros Occidental.[8]
As for the proceedings for the issuance of a duplicate
certificate of title, the private respondents themselves state in their
complaint that the evidence of the petitioner therein was received by the
clerk of court only, without any opposition, and his report was thereafter
accepted by the trial judge who thereupon granted the relief sought by the
impostor.[9]
It is not likely, given the summary nature of these proceedings, that the
necessary care was taken by the court to establish the real identity of the
person who claimed to be the owner of the property in question.
While we may agree
that there was no collusion between the private respondents and the vanished
vendor, we are not prepared to rule under the circumstances of this case that
they are entitled to even claim the status of innocent purchasers of the
land. On the contrary, we find that for
failure to exercise the necessary diligence in ascertaining the credentials and bona fides of the false
Lawaan Lopez, and as a result of his deception, they never acquired any title
to the said land or any interest therein covered by Section 101 of Act No. 496.
As this Court held in La Urbana v. Bernardo[10]
“it is a condition sine qua non that the person who brings an
action for damages against the Assurance Fund be the registered owner and as
the holders of transfer certificates of title, that they be innocent purchasers
in good faith and for value.” Being neither the registered owners nor innocent
purchasers, the private respondents are not entitled to recover from the
Assurance Fund.
They are, of course, not entirely without recourse, for they may
still proceed against the impostor in a civil action for recovery and damages
or prosecute him under the Revised Penal Code, assuming he can be located and
arrested. The problem is that he has
completely disappeared. That difficulty
alone, however, should not make the Assurance Fund liable to the private
respondents for the serious wrong they have sustained from the false Lawaan
Lopez. The Government – like all
governments, and for obvious reasons – is not an insurer of the unwary
citizen’s property against the chicanery of scoundrels.
WHEREFORE, the petition is GRANTED. The decision of the respondent court dated
January 26, 1976 is set aside, and Civil Case No. 12426 of the then Court of
First Instance of Rizal is dismissed. No
costs
SO ORDERED.
Teehankee, C.J., Narvasa, and
Paras, JJ., concur.
Gancayco, J., no part.
[1]
Rollo, pp. 25-26.
[2]
Record on Appeal, pp, 18-20.
[3]
Ibid.
[4]
Ibid., p. 29.
* Judge
Walfrido de los Angeles.
** Justices Emilio A. Gancayco, ponente,
and Justices Mama Busran and Samuel F. Reyes.
[5]
Id., p. 27, 34.
[6]
1955 Edition, p. 105.
[7]
Rollo, pp. 17-18.
[8]
Rec. on Appeal, pp. 37-38.
[9]
Ibid., pp. 106-116.
[10]
62 Phil. 790.