ELVIRA T. ARANGOTE, PETITIONER, VS. SPS. MARTIN MAGLUNOB AND LOURDES S. MAGLUNOB, AND ROMEO SALIDO, RESPONDENTS.

Arangote versus Maglunob

The Case

This is a petition for review on certiorari brought by Elvira Arangote against the spouses Martin and Lourdes Maglunob and Romeo Salido. Elvira claims ownership of a parcel of land in Maloco, Ibajay, Aklan, on the strength of a Torrens certificate issued in her name and a notarized affidavit of quitclaim executed in her favor by Esperanza Maglunob-Dailisan. The respondents claim the same land as co-heirs and co-owners, insisting that Esperanza owned only a one-third share and could not give away the whole. The case matters because it gathers in one decision three doctrines a bar candidate must command: the requisites of a donation of immovable property, the rule that a certificate of title cannot be collaterally attacked, and the principle that a counterclaim is itself a direct attack.

Procedural History

Elvira and her husband filed a complaint for quieting of title, declaration of ownership and possession, damages, and injunctive relief before the Municipal Circuit Trial Court of Ibajay-Nabas, Aklan. The trial court ruled for Elvira, declaring her and her husband the true and lawful owners and ordering the respondents to desist from asserting any right over the land, and to pay attorney's fees.

The respondents appealed to the Regional Trial Court of Kalibo, Aklan, which reversed the trial court. The Regional Trial Court declared the respondents and the other heirs of Martin Maglunob the lawful owners and possessors of the whole property, ordered Elvira and her husband to turn over possession, and awarded attorney's fees, litigation expenses, moral damages, and exemplary damages. Elvira's motion for new trial or reconsideration, grounded on a newly discovered deed of acceptance, was denied.

Elvira then filed a petition for review before the Court of Appeals, which affirmed the Regional Trial Court in a decision dated 27 October 2006 and denied her motion for reconsideration in a resolution dated 29 June 2007. She came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

The land originally formed part of a larger parcel of 7,176 square meters commonly owned in equal shares by the siblings Pantaleon Maglunob and Placida Maglunob-Sorrosa. Pantaleon died without issue, so his one-half share passed to his four siblings or their heirs: Placida, Luis, Martin Maglunob the father, and Victoria. A deed of extrajudicial settlement and partition was executed in July 1981, though it was never notarized. Martin the father had already died, and his heirs were represented in that deed by Esperanza, who affixed her thumbmark for herself and on behalf of the other heirs.

After the death of Victorino Sorrosa, Placida's husband, his heirs executed a notarized partition agreement on 29 April 1985. Under it, a portion of about 982 square meters was allocated to Esperanza. That portion was larger than the 897 square meters earlier allotted to the heirs of Martin the father, and the Court reasonably assumed the bigger parcel already included the smaller one.

On 9 June 1986, Esperanza executed a notarized affidavit renouncing, relinquishing, waiving, and quitclaiming all her rights, share, interest, and participation in the property in favor of Elvira and her husband. On that basis, the tax declaration in Esperanza's name was cancelled and a new one was issued in theirs. In 1989 they built a house on the land. On 26 March 1993, a certificate of title was issued in Elvira's name by the Secretary of Agrarian Reform. In June 1994, the respondents entered the property and built a hollow block wall that blocked the main door of the house, prompting the complaint.

Issues

• Whether or not the Regional Trial Court and the Court of Appeals erred in declaring the certificate of title in Elvira's name null and void, considering her claim that a Torrens title may be attacked only within one year and only by direct proceeding.
• Whether or not the Regional Trial Court and the Court of Appeals erred in declaring Esperanza's affidavit of quitclaim null and void.
• Whether or not Elvira and her husband may be considered possessors in good faith entitled to the rights under Article 448 and Article 546 of the Civil Code.

Applicable Provisions

Article 749 of the Civil Code provides:

Art. 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy. The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor. If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments.

This provision governs Esperanza's affidavit, which the Court characterized as a donation of an interest in real property, and supplies the requisites whose absence made the affidavit void.

Section 48 of Presidential Decree Number 1529 provides:

SEC. 48. Certificate not subject to collateral attack. - A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

This provision answers Elvira's argument that the certificate could not be nullified in the action below, because the respondents' counterclaim was itself a direct proceeding.

Ruling

On the first issue, the Court held that the certificate of title was properly declared void. The attack was direct, not collateral. The respondents' answer with counterclaim prayed that the certificate be declared null and void insofar as their two-thirds shares were concerned, and a counterclaim stands on the same footing as an independent action. Since all the essential facts were already before the court, requiring a separate cancellation proceeding would be pointlessly circuitous.

On the second issue, the Court held that Esperanza's affidavit was void. Although notarized and therefore a public instrument, it was in truth a pure donation, and it failed the second and third requisites of Article 749. There was no acceptance by the donees, either in the same affidavit or in a separate public instrument, and consequently no notice of acceptance given to the donor. The later deed of acceptance executed in September 2000 did not cure the defect. It was a mere afterthought, and in any event neither instrument bore the required annotation that Esperanza had received notice of the acceptance. The Court also found that Esperanza was never the exclusive owner, since the property was the share of the heirs of Martin the father, and her own affidavit spoke of her share and participation.

On the third issue, the claim of good faith necessarily fell. Esperanza's affidavit, the sole basis of Elvira's title, was void, and the Court found no ground to treat her as a possessor in good faith entitled to the rights under Article 448 and Article 546 of the Civil Code.

Doctrine

• A donation of immovable property is valid only if made in a public document, accepted by the donee in the same deed or in a separate public instrument during the donor's lifetime, and, where acceptance is separate, the donor is notified in authentic form and the fact is noted in both instruments. Absent acceptance and notice, the donation is null and void.
• A certificate of title cannot be altered, modified, or cancelled except in a direct proceeding. An attack is direct when the object of the action is to annul or set aside the proceeding, and a counterclaim is such a direct attack, standing on the same footing as an independent action.
• A person who derives title from a void donation cannot be a possessor in good faith as against the true co-owners.

Disposition

The petition was denied, and the decision of the Court of Appeals affirming the Regional Trial Court was sustained, so the respondents were declared the lawful owners and possessors of the property.

Remember This

Memorize this line: a donation of real property without acceptance and without notice of that acceptance to the donor is void, and a counterclaim that seeks to annul a Torrens title is a direct attack. Examiners use this case to test Article 749 of the Civil Code and the direct versus collateral attack distinction under Section 48 of Presidential Decree Number 1529.