LUCIA EMBRADO AND ORESTE TORREGIANI, PETITIONERS, VS. COURT OF APPEALS, PACIFICO CIMAFRANCA, MARCOS SALIMBAGAT, EDA JIMENEZ AND SANTIAGO JIMENEZ, RESPONDENTS.

LUCIA EMBRADO and ORESTE TORREGIANI, spouses, filed this petition
for review on certiorari from the decision of respondent Court of
Appeals^[1]
upholding the validity of the Deed of Sale over Lot No. 564 executed by
petitioner Lucia Embrado in favor of private respondent Eda Jimenez.

Lot No. 564 is a
366-square meter lot situated in Dipolog City originally owned by Juan, Pastor
and Matias Carpitanos. On 2 July
1946, a Venta Definitiva, a notarized document written
entirely in Spanish, was executed by the Carpitanos whereby they sold Lot No.
564 to “Srta. LUCIA C. EMBRADO x x x soltera,
con residencia y direccion postal Municipio de Dipolog, Provincia de
Zamboanga.”^[2]
The document provided that even though the deed was prepared and signed on 2
July 1946, the effects of the document would retroact to the 15th day of April
1941, the date the lot and its improvements were actually sold to Lucia C.
Embrado.

The sale was registered and Transfer Certificate of Title No.
T-99^[3]
was issued on 13 February 1948 in the name of Lucia Embrado alone, who was by then already married to petitioner
Oreste Torregiani since 1943. However,
by virtue of a court order in Misc. Sp. Proc. No. 2330 of the then Court of
First Instance of Zamboanga del Norte, the word “single” appearing in TCT No.
T-99 was canceled and replaced on 19 October 1970 by the phrase “married to
Oreste Torregiani.” The Torregianis then made their conjugal abode on the lot
and in 1958 constructed a residential/commercial building thereon.^[4]

As appearing from a document entitled Absolute Deed of Sale
dated 1 May 1971^[5],
Lucia Embrado Torregiani sold Lot No. 564, described as her “own paraphernal
property,” to her adopted daughter, herein private respondent Eda Jimenez, for
the sum of P1,000.00. Transfer
Certificate of Title No. T-99 was canceled to give way to TCT No. T-17103^[6]
in the name of Eda Jimenez, married to Santiago Jimenez.

On 6 March 1972, Eda Jimenez sold sixty-five (65) square meters
of Lot 564 to Marcos Salimbagat^[7]for
P6,500.00, and on 1 August 1972, conveyed 301 square meters of the same lot to
Pacifico Cimafranca^[8]
for P30,000. Both sales were duly
annotated on TCT No. T-­17103.

On 25 September 1972, the Torregianis instituted in the Court of
First Instance, now Regional Trial Court, of Zamboanga del Norte an action for
declaration of nullity of contract, annulment of sales, reconveyance and
damages^[9]
against the spouses Santiago and Eda Jimenez, Marcos Salimbagat and Pacifico
Cimafranca alleging that the sale of Lot 564 by Lucia Embrado to Eda Jimenez
was void not only for lack of consideration but also because Oreste Torregiani
did not consent to the sale, which consent was necessary because Lot 564 was
conjugal property. In addition, the
petitioners claim that Lucia was misled into signing the deed of sale marked as
Exh. “D” on the belief that Lot 564 was merely intended as security for a loan
that the Jimenez spouses were then negotiating with the First Insular Bank of
Cebu. Since the Jimenez spouses did not
acquire valid title to the land, the subsequent sales in favor of Salimbagat
and Cimafranca were without legal effect.

The Torregianis were sustained by the CFI of Zamboanga del Norte^[10]
which held that the sale of Lot 564 to Eda Jimenez and its subsequent transfers
to Marcos Salimbagat and Pacifico Cimafranca, who were declared buyers in bad
faith, were void and of no effect. More
specifically, the judgment (a) declared Exhs. “D,” “G” and “H” as well as TCT
No. 17103 null and void and of no force and effect; (b) ordered defendants
jointly and severally to pay plaintiffs the sum of P2,000.00 as actual damages
and P1,500.00 for attorney’s fees; (c) ordered the Register of Deeds of Dipolog
City to cancel TCT No. 17103 in the name of Eda Jimenez and issue another one
in favor of plaintiff Lucia Embrado, married to Oreste Torregiani, and to
cancel all the annotations thereon emanating from the void transfers in favor
of Marcos Salimbagat and Pacifico Cimafranca; (d) ordered defendants Eda and
Santiago Jimenez to return to defendant Pacifico Cimafranca the sum of
P30,000.00 paid by him for the 301 square meters and the house in question, and
to defendant Marcos Salimbagat the P6,500.00 paid by him for the 65 square
meters occupied by Comendador Clinic with legal interest of six percent (6%)
until fully paid; and, (e) ordered defendant Cimafranca to pay plaintiffs all
the rents he has been collecting from the lessees of the first floor of the
house with legal interest thereon from the time he started collecting them
until fully paid, with costs against defendants.^[11]

The foregoing judgment was reversed by the Court of Appeals which
held that since Lucia Embrado actually agreed with Juan, Pastor and Matias
Carpitanos, the original owners, to the purchase of Lot 564 on 15 April 1941^[12]
when she was not yet married, then the lot was her paraphernal property since a
sale is considered perfected the moment the parties agree on the object and
cause of the contract. In addition, the
respondent court declared Salimbagat and Cimafranca buyers in good faith since
the contrary was not proved. Consequently, the complaint in the trial court was ordered dismissed by
respondent Court of Appeals.

Three (3) issues are herein involved: (a) whether Lot 564 was paraphernal property of Lucia Embrado or
conjugal with her husband Oreste Torregiani; (b) whether the sale in favor of
Eda Jimenez was valid; and, (c) whether vendees Marcos Salimbagat and Pacifico
Cimafranca were buyers in good faith so that the sale to them was valid, hence,
would bar reconveyance.

We sustain petitioners. While we agree with respondent court that Lot 564 was originally the
paraphernal property of Lucia, we cannot adopt its conclusion that because
Lucia and the original owners agreed in 1941 for its purchase and sale,
ownership was already acquired by Lucia at that moment. Under Art. 1496 of the Civil Code,
“ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in articles 1497 to 1501, or in
any other manner signifying an agreement that the possession is transferred
from the vendor to the vendee,” and under Art. 1498, “(w)hen the sale is made
through a public instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred.”

In the case at bar, the Venta Definitiva over Lot 564 in
favor of Lucia Embrado was executed by the Carpitanoses on 2 July 1946 when her
marriage to petitioner Oreste Torregiani was already subsisting. Although ownership was acquired during the
marriage and hence presumed conjugal, the presumption of conjugality^[13]
was successfully overcome by the terms of the Venta Definitiva which
contains a positive assertion of exclusive ownership, which was duly supported
by the testimony of Matias Carpitanos, one of the original sellers of the lot.^[14]

However, a decisive fact appears which prevents us from
ultimately affirming the validity of her sale of Lot 564 to private respondent
Eda Jimenez. The trial court found as a
fact the construction in 1958 of a residential/commercial building^[15]
on said lot a part of which was leased to third persons and another part
serving as the Torregianis’ conjugal dwelling.

Although no evidence was presented on the source of funds used in
the construction to determine whether the same was conjugal or paraphernal,
other than the testimony of Torregiani,^[16] petitioners nevertheless enjoy in
their favor the presumption that the funds used were conjugal.^[17]

The second paragraph of Art. 158 of the Civil Code provides that
“[b]uildings constructed, at the expense of the partnership, during the
marriage on land belonging to one of the spouses, also pertain to the
partnership, but the value of the land shall be reimbursed to the spouse who owns
the same.” Under this article, the land becomes conjugal upon the construction
of the building without awaiting reimbursement before or at the liquidation of
the partnership upon the concurrence of two conditions, to wit: (a) the construction of the building at the
expense of the partnership; and, (b) the ownership of the land by one of the
spouses.^[18]
The conditions have been fully met in the case at bench. Thus, even if Lot 564 was originally the
paraphernal property of Lucia as evident from the “Venta Definitiva”, the same became conjugal upon the construction
of the residential/commercial building in 1958.

Lucia claims that she was misled by her daughter and son-in-law
into signing a deed of absolute sale in their favor thinking that she would be
helping them obtain a loan from a bank if they could mortgage the property as
security for their loan; that although she signed the deed of sale, she did not
consent to the sale nor did she intend to convey or transfer her title to Eda
Jimenez; and, that she never received the alleged amount of P1,000.00 as
consideration for the sale of the property.

While it is true that a notarized document is admissible in
evidence without proof of its due execution and is conclusive as to the
truthfulness of its contents, this rule is not absolute and may be rebutted by
evidence to the contrary.^[19] In
this case, it was clearly shown that Eda and Santiago Jimenez had no sufficient
means of livelihood and that they were totally dependent on their mother Lucia
for the support of their family. This
fact strengthens the claim of Lucia that the price of the property was
fictitious and that Eda Jimenez could not have paid the price of the property
as she was financially incapable to do so. In fact, Eda Jimenez did not prove as to how she obtained the money to
pay for the property she supposedly bought from Lucia. When the source of the purchase price is
“intriguing” and is not convincingly shown to have been given by the “buyer” to
the “seller,” the claim of the latter that she signed the deed of sale without
her consent may be upheld.^[20]

Even assuming in
gratia argumenti that
Lucia signed the document knowing that it was a deed of sale of the property,
the sale thereof by Lucia to Eda Jimenez without her husband’s conformity
should be considered void ab initio being contrary to law.^[21]
Since “(t)he wife cannot bind the conjugal partnership without the husband’s
consent, except in cases provided by law,”^[22] it
follows that Lucia Embrado Torregiani could not, by herself, validly dispose of
Lot 564 without her husband’s consent. Consequently, Eda Jimenez likewise could not have acquired ownership
over the land. The issuance of a
certificate of title in favor of Eda Jimenez did not vest upon her ownership
over the property. Neither did it validate
the alleged purchase thereof which is null and void. Registration does not vest title. It is merely evidence of such title. Our land registration laws do not give the holder any better
title than what he actually has.^[23]
Being null and void, the sale to Eda Jimenez and the transfer of the property
she made to Salimbagat and Cimafranca produced no legal effects
whatsoever. Quod nullum est, nullum
producit effectum. There being no
valid title to the land that Eda Jimenez acquired from Lucia, it follows that
no title to the same land could be conveyed by the former to Salimbagat and
Cimafranca.^[24]

It is worthy to note that Salimbagat and Cimafranca, as buyers of
Eda Jimenez, have not proved their status as purchasers in good faith and for
value of the land which, in the first place, Eda Jimenez had no right to
sell. The burden of proving the status
of a purchaser in good faith and for value lies upon him who asserts that
status. In discharging the burden, it
is not enough to invoke the ordinary presumption of good faith, i.e., that
everyone is presumed to act in good faith. The good faith that is here essential is integral with the very status
which must be proved.^[25]

We agree with the
trial court when it found that Salimbagat and Cimafranca purchased the disputed
lot from Eda and Santiago Jimenez with knowledge of facts and circumstances
which should have put them upon such inquiry and investigation as might be
necessary to acquaint them with the defects in the title of their vendor. A purchaser cannot close his eyes to facts
which should put a reasonable man on his guard and then claim that he acted in
good faith under the belief that there was no defect in the title of the
vendor. His mere refusal to believe that
such defect exists, or his willful closing of his eyes to the possibility of
the existence of a defect in the vendor’s title will not make him an innocent
purchaser for value if afterwards it develops that the title is in fact
defective, and it appears that he had such notice of the defect as would have
led to its discovery had he acted with the measure of precaution which may
reasonably be required of a prudent man in like situation.^[26]

Cimafranca is a close relative of Santiago Jimenez and at the
same time godfather to one of his children. As such, there can be no doubt that Cimafranca was aware of the personal
circumstances and financial standing of the Jimenez spouses, including their
financial ability to acquire any property. It would be impossible for Cimafranca not to know that Santiago Jimenez
was only twenty-two years old, a working student earning six pesos per day^[27]
with a wife and three children to support.^[28] With
these facts, there is every reason for him to inquire further as to how Eda
Jimenez came up with the sum of P1,000.00 to buy the property. When there is a clear showing that Eda
Jimenez, being the transferee of a registered property, is not gainfully
employed or did not have an independent source of income or is financially
incapable of paying the price of the property she bought, this is sufficient to
engender doubt as to whether Eda validly bought the property from Lucia.^[29]

On the part of Salimbagat, he has been a resident of Dipolog for
about thirty (30) years. He has a
daughter renting a portion of the building with her husband for more than a
year prior to the sale by Eda Jimenez to Salimbagat on 6 March 1972.^[30]
This means that the lease of the building by Salimbagat’s daughter already
commenced while Lucia Torregiani was still the registered owner and this was
prior to the alleged sale by Lucia Torregiani of the property to Eda Jimenez on
1 May 1971. There can be no doubt that
Salimbagat’s daughter was aware of the factual background of the property and
the personal circumstances of the owners thereof especially that they are all
occupying the same building. During the
time that Salimbagat was already interested in buying the property, it would
have been usual and part of ordinary human nature for him to inquire about the
property from his daughter who was living very near the supposed owners. Considering that the Torregiani and Jimenez
families are not total strangers to Salimbagat, it is safe to conclude that
Salimbagat had some knowledge of the financial status of the supposed vendors
which should have put him on guard before buying the property. Moreover, the records show that this would
not have escaped the notice of Salimbagat and Cimafranca that at the time of
the sale to them petitioners were in actual possession of the property with
Salimbagat’s daughter renting a portion thereof. For that matter, at the time of the sale to Salimbagat and
Cimafranca, petitioners had already been in continuous possession of the
property for fourteen (14) years, or since 1958. Santiago Jimenez admitted that after his marriage he and his wife
Eda lived and stayed with her parents, herein petitioners, and dependent on
them for support.^[31]

Before buying the property, Salimbagat and Cimafranca allegedly
inquired from the office of the Register of Deeds concerning the genuineness of
the certificate of title of Eda Jimenez, and from the Clerk of Court of the
Court of First Instance of Dipolog City as to whether the property was involved
in any litigation.^[32]
However, they failed to inquire from petitioners as to why they were the ones
in actual possession of the property.

The rule is settled that a buyer of real property which is in the
possession of persons other than the seller must be wary and should investigate
the rights of those in possession. Otherwise, without such inquiry, the buyer can hardly be regarded as a
buyer in good faith.^[33] When
a man proposes to buy or deal with realty, his first duty is to read the public
manuscript, i.e., to look and see who is there upon it, and what are his
rights. A want of caution and diligence
which an honest man of ordinary prudence is accustomed to exercise in making
purchases is, in contemplation of law, a want of good faith. The buyer who has failed to know or discover
that the land sold to him is in the adverse possession of another, is a buyer
in bad faith.^[34]

The fact that Lucia Embrado resides in the premises, coupled with
the relatively young age and meager financial standing of the Jimenez spouses,
should have been sufficient for Cimafranca to hesitate accepting Eda’s transfer
certificate of title at its face value. Cimafranca, after deliberately closing his eyes to such a vital
information, is now claiming good faith. For obvious reasons, we cannot accept his contention. We thus declare him, together with Marcos
Salimbagat, to be purchasers in bad faith hence not entitled to protection
under the Torrens system of registration.

Lot 564 is now registered in the name of Eda Jimenez “married to
Santiago Jimenez” under Transfer Certificate of Title No. T-17103 which was issued
pursuant to the “Absolute Deed of Sale” executed in her favor by petitioner
Lucia Embrado. We have already declared
said deed of sale as null and void since its object, Lot 564, is conjugal
property which was sold by Lucia Embrado without her husband’s conformity. The present vendees, Marcos Salimbagat and
Pacifico Cimafranca, who bought the property from Eda Jimenez have failed to
persuade us that they acquired the property in good faith.

WHEREFORE, the decision of respondent Court of Appeals
dated 26 April 1979 is REVERSED and SET ASIDE and the Decision of the then
Court of First Instance (now Regional Trial Court) of Zamboanga del Norte dated
14 June 1976 is REINSTATED and ADOPTED herein as the decision in this case.

SO ORDERED.

Cruz, (Chairman), Davide, Jr., Quiason, and Kapunan, JJ., concur.

^[1]
Decision penned by then Presiding Justice Andres Reyes, concurred in by
Associate Justices Samuel F. Reyes and Carlos L. Sundiam, promulgated 26 April
1979, Rollo, pp. 37-45.

^[2]
Exh. “1,” Folder of Exhibits, p. 33.

^[3]
Id., p. 3.

^[4]
TSN, 27 June 1973, p. 24.

^[5]
Folder of Exhibits, p. 7.

^[6]
Id., p. 23.

^[7]
See Exh. “G,” Folder of Exhibits, p. 10.

^[8]
See Exh. “H,” Folder of Exhibits, p. 11.

^[9]
Docketed as Civil Case No. 2314.

^[10]
Decision penned by Presiding Judge Dimalanes B. Buissan of the then Court of
First Instance of Zamboanga del Norte dated 14 June 1976, Rollo, pp.
22-36.

^[11]
Id., pp. 35-36.

^[12]
Testimony of Matias Carpitanos, TSN, 9 October 1975, pp. 38-40.

^[13]
Art. 160. All property of the marriage
is presumed to belong to the conjugal partnership, unless it is proved that it
pertains exclusively to the husband or to the wife.

^[14]
TSN, 10 July 1975, pp. 38-39; 58-59.

^[15]
Rollo, p. 23.

^[16]
TSN, 8 August 1974, p. 16.

^[17]
Vitug v. Montemayor, et al., 91 Phil. 286, 290-291 (1952).

^[18]
Vda. de Padilla v. Paterno, No. L-8748, 26 December 1961, 3 SCRA 678,
691; see also Vitug, J. C., Compendium of Civil Law and Jurisprudence, 1993
ed., p. 67; Tolentino, A., Commentaries and Jurisprudence on the Civil Code of
the Philippines, Vol. I, 1983 ed., pp. 423-424.

^[19]
Mendezona v. Phil. Sugar Estate Dev. Co., 41 Phil. 475 (1921).

^[20]
Baranda v. Baranda, G.R. No. 73275, 20 May 1987, 150 SCRA 59.

^[21]
Tolentino, Civil Code of the Philippines, Vol. I, 1983 ed., p. 453; see also La
Urbana v. Villasor, 59 Phil. 644
(1934); Paras, Civil Code of the Philippines, Vol. I, 1984 ed. p. 545.

^[22]
Art. 172, Civil Code of the Philippines; see also Tinitigan v. Tinitigan,
Sr., No. L-45418, 30 October 1980, 100 SCRA 619, 636.

^[23]
De Guzman v. Court of Appeals, No. L-46935, 21 December 1987, 156
SCRA 701; Cruz v. Cabana, G.R. No. 56232, 22 June 1984, 129 SCRA 656.

^[24]
Solid State Multi-Products Corporations v. Court of Appeals, G.R. No.
83383, 6 May 1991, 196 SCRA 631.

^[25]
Baltazar v. Court of Appeals, G.R. No. 78728, 8 December 1988, 168 SCRA
354.

^[26]
Francisco v. Court of Appeals, G.R. 30162, 31 August 1987, 156 SCRA 330; Cardente v. Intermediate Appellate
Court, G.R. No. 73651, 27 November 1987, 155 SCRA 685, 690-691; J.M. Tuason
& Co., Inc., v. Court of Appeals, No. L-41233, 21 November 1979, 94
SCRA 413, 422-423; Barrios v. Court of Appeals, No. L-32531, 31 August
1977, 78 SCRA 427, 435; Paylago v. Jarabe, No. L-20046, 27 March 1968,
22 SCRA 1247, 1252; Manacop, Jr. v. Cansino, No. L-13971, 27 February
1961, 1 SCRA 572, 576; Leung Yee v. Strong Machinery Company, 37 Phil.
645, 651 (1918).

^[27]
TSN, 9 October 1975, p. 81.

^[28]
TSN, 27 June 1973, p. 21.

^[29]
See Note 21.

^[30]
TSN, 7 August 1975, p. 8.

^[31]
TSN, 9 October 1975, pp. 78-79.

^[32]
TSN, 10 July 1975 p. 21; 7 August 1975, pp. 11-12.

^[33]
Cardente v. Intermediate Appellate Court, G.R. No. 73651, 27 November
1987, 155 SCRA 685, 690-691; J.M. Tuason & Co., Inc., v. Court of
Appeals, No. L-41233, 21 November 1979, 94 SCRA 413, 422-423; Barrios v.
Court of Appeals, No. L-32531, 31 August 1977, 78 SCRA 427, 435; Paylago
v. Jarabe, No. L-20046, 27 March 1968, 22 SCRA 1247, 1252; Manacop, Jr.
v. Cansino, No. L-13971, 27 February 1961, 1 SCRA 572, 576; Leung Yee v.
Strong Machinery Company, 37 Phil. 645, 651 (1918).

^[34]
J. M. Tuason & Co.,
Inc. v. Court of Appeals, No. L-­41233, 21 November 1979, 94 SCRA 413,
422-423; see also Angelo v. Pacheco, 56 Phil. 70 (1931); Andaya v.
Manansala, 107 Phil. 1151 (1960).