SPOUSES BRAULIO NAVARRO AND CESARIA SINDAO, PETITIONERS, VS. PERLA RICO GO, RESPONDENT.

Navarro versus Go

The Case

This is a petition for review on certiorari brought by the spouses Braulio Navarro and Cesaria Sindao against Perla Rico Go. The respondent, Perla Rico Go, sued the petitioners to annul the documents and the free patent title by which the petitioners and their predecessors claimed a parcel of land in Lingayen, Pangasinan, a land that the respondent's mother had bought as early as 1937 and that the respondent had possessed in the concept of an owner. The case matters because it is the Supreme Court's clean statement on the limits of the Torrens system: a registered title is indefeasible, but it cannot be used as a shield to perpetuate fraud against the rightful owner, and a buyer who takes land that is visibly in the possession of someone other than his vendor cannot close his eyes and call himself a buyer in good faith.

Procedural History

The respondent filed a complaint for annulment of documents, namely the Deed of Extra-Judicial Partition with Sale, the Free Patent, the Original Certificate of Title, the tax declarations, and the declaration of ownership of real property, plus damages, before the Regional Trial Court of Lingayen, Pangasinan. Petitioner Braulio Navarro died during the pendency of the case and was substituted by his heirs. By its decision of April 1, 2003, Branch 38 of the Lingayen Regional Trial Court ruled for the respondent. It upheld her possession and that of her predecessors in the concept of an owner, and declared the free patent title issued in favor of the Samson heirs a nullity, because the land was beyond the jurisdiction of the Bureau of Lands to bestow. It also rejected the petitioners' claim of good faith, noting that they lived not more than 200 meters from the land, on which the respondent's mother had constructed noticeable improvements.

The petitioners appealed to the Court of Appeals. By its decision of December 12, 2008, the appellate court affirmed with modification. Instead of nullifying the patent and the titles, it ordered the petitioners to reconvey the title to the respondent, reasoning that an action for reconveyance falls within the general prayer that the defendants relinquish all claims to the property. The petitioners' motion for reconsideration was denied, and they came to the Supreme Court by petition for review on certiorari.

Facts

By a Deed of Sale of Real Property dated May 23, 1937, Emilia Samson conveyed to Josefa Parras, mother of the respondent, a parcel of land of 405 square meters situated in Domalandan West, Lingayen, Pangasinan. After the purchase, Josefa allowed one Rufino Palma, a nephew of petitioner Cesaria, to stay on the land. In 1984, Josefa donated the land to the respondent, who allowed Palma to remain until 1989. Through two documents entitled Paknaan, Palma recognized the respondent's ownership of the land, and photographs of the execution of those documents were taken. When Palma vacated, the respondent built fences of galvanized roofing sheets and wooden posts and posted a sign reading Private Property, No Trespass.

In December 1971, a free patent and an original certificate of title were issued in favor of the Heirs of Emilia's brother, Lorenzo Samson, covering the same land. The Samson heirs never asserted their rights over the property. On April 27, 1990, they transferred their rights to the land by a Deed of Extra-Judicial Partition with Sale in favor of the petitioners. Eleven years later, in May 2001, a transfer certificate of title was issued in the petitioners' name.

Petitioner Braulio then destroyed the respondent's fences and cut all the trees on the land, which drove the respondent to file her complaint for annulment. Before the trial court, the petitioners invoked good faith, claiming that no encumbrance appeared on the title on file with the Register of Deeds. The trial court found, however, that the petitioners lived within 200 meters of the land and could not have missed the improvements and the possession of the respondent.

Issues

• Whether or not the petitioners were buyers in good faith of the land, given that it was in the possession of a person other than their vendor.
• Whether or not the Court of Appeals erred in ordering reconveyance instead of nullifying the patent and the titles, even though reconveyance was not expressly prayed for in the complaint.

Applicable Provisions

The decision does not quote a statute; it applies the settled doctrine on registered land and good faith, which the Court states in its own words. On reliance on the certificate of title, the Court declares:

A person dealing with registered land may safely rely on the correctness of its certificate of title and the law will not oblige him to go beyond what appears on the face thereof to determine the condition of the property.

This is the rule the petitioners invoked, and the Court accepts it as a starting point but not as an absolute shield.

On the definition of an innocent purchaser for value, the Court states:

A person is considered an innocent purchaser in good faith when he buys the property of another, without notice that some other person has a right or an interest in such property, and pays a full price for the same at the time of such purchase, or before he has notice of the claims or interest of some other person in the property.

This definition controls the first issue, because good faith turns on notice, and notice may be actual or, as here, imputed from the visible possession of another.

On the duty of a buyer when the land is occupied by someone other than the seller, the Court lays down the rule:

Where the land subject of sale is in possession of a person other than the vendor, prudence dictates that the vendee should go beyond the certificate of title. Absent such investigation, good faith cannot be presumed.

This is the decisive rule of the case, and it is the line a reviewee should be able to recite.

Ruling

On the first issue, the Court held that the petitioners were not buyers in good faith. Good faith is a question of fact, and in a petition for review under Rule 45 the Court will not disturb the factual findings of the trial court as affirmed by the Court of Appeals, save for meritorious exceptions, none of which was present. The Court stressed that the indefeasibility of the Torrens title should not be used as a means to perpetuate fraud against the rightful owner of real property. Here, Palma, a relative of petitioner Cesaria, had acknowledged through two documents that he was allowed by Josefa, the respondent's mother, to occupy the land, so his testimony that he sought permission from the Samson heirs had to give way to the documentary evidence. The petitioners also lived in the vicinity of the land, which was fenced and planted to fruit bearing trees, and were thus put on notice that someone else possessed it. Applying its rule, the Court concluded that prudence dictated that they go beyond the certificate of title, and absent such investigation, good faith cannot be presumed.

On the second issue, the Court upheld the remedy of reconveyance. The Court of Appeals had reasoned that the respondent could not be denied the legal remedy proper to a proven cause of action even if it was not expressly prayed for in the complaint, and that an action for reconveyance falls within the general prayer that the defendants relinquish all claims to the property in favor of the plaintiff. The Supreme Court affirmed that disposition in full.

Doctrine

First, a person dealing with registered land may rely on the face of the certificate of title, but the indefeasibility of the Torrens title cannot be used to perpetuate fraud against the rightful owner.

Second, an innocent purchaser for value is one who buys without notice of another's right or interest and pays full price before such notice. Good faith is a question of fact, generally conclusive in a petition for review under Rule 45 absent the recognized exceptions.

Third, where the land sold is in the possession of a person other than the vendor, the vendee must go beyond the certificate of title and investigate the possession. Absent such investigation, good faith cannot be presumed.

Fourth, reconveyance may be granted even if not expressly prayed for, because it falls within the general prayer that the defendants relinquish all claims to the property in favor of the plaintiff.

Disposition

The petition was denied and the decision of the Court of Appeals of December 12, 2008 was affirmed, so the respondent won and the petitioners were ordered to reconvey the title to her.

Remember This

Memorize the line: where the land sold is in the possession of a person other than the vendor, prudence dictates that the vendee go beyond the certificate of title, and absent such investigation, good faith cannot be presumed. Examiners use this case to test the limits of the Torrens system and the good faith of a buyer who ignores the visible possession of another.