CASE #1

Spouses Domingo vs Lilia Roces and children

Facts:
Spouses Cesar and Lilia Roces were the owners of two parcels of land located in
Mandaluyong. In 1962, the GSIS causes the annotation of an affidavit of adverse
claim on the titles of such lands alleging that the spouses have mortgaged them to
it. Subsequently, the GSIS was able to cancel the titles of the spouses and new titles
were issued in its name. As Cesar died intestate in 1980, he was survived by his
wife and 5 children. In 1992, Reynaldo Montinola, a nephew of Lilia Roces, executed
an affidavit of self adjudication over the subject lots. He alleged that that both
spouses are dead and that they left no heirs except his father, who was Lilias
brother; that neither spouses left no will and that he was the sole heir of the
spouses.
In 1993, Montinola filed a petition against GSIS for the cancellation of the titles in its
name. As GSIS failed to produce any evidence of the alleged real estate mortgage
by the Roces of the properties, the court decided in Montinolas favor and declared
the titles in GSIS name as null and void and the new titles were issued in
Montinolas name. Later, he executed a deed of absolute sale of the property in
favor of petitioner spouses Domingo wherein the spouses were able to secure titles
in their names. When respondent learned if the sale of the property to petitioners,
they filed a complaint against Montinola charging that the self-adjudication was
fraudulent because he was not an heir of the Roces spouses and so both the self-
adjudication and the sale were null and void.

Issue:
Whether or not the sale is valid as the spouses Domingo are purchasers in good
faith and for value?

Held:
No. It is true that one who deals with property registered under the Torrens system
need not go beyond the same, but only has to rely on the title. However, this
principle does not apply when the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make such inquiry or
knowledge of a defect or the lack of title of his vendor. One who falls within the
exception can neither be considered as an innocent purchaser for value nor a
purchaser in good faith.
As the title of the land had an annotation at the back, it was sufficient notice to
petitioners of the limitation on Monitonlas right to dispose of the property.
Purchasers of registered land are bound by the annotations found at the back of the
certificate of title. Hence petitioners cannot be considered buyers in good faith and
cannot now avoid the consequences brought about by respondents.
CASE #2
Felisima Pino vs Court of Appeals, Demetria Gaffud, Romualdo Gaffud,
Adolfo Gaffud, Raymundo Gaffud
Facts:
Lot 6, which is a land situated in Isabela, was acquired by spouses Juan Gaffud and
Rafaela Donato in 1924. Juan died in 1936 and so in 1938, the lot was registered in
the names of Rafaela Donato and Raymundo and Cicero Gaffud, the sons of the
spouses. However, through a Deed of Transfer, the title to the land was issued in the
name of Rafaela Donato alone. In 1967, Rafaela sold a portion of Lot6 to Fortunato
Pascua. In 1970, Rafaela sold to petitioner Felisima Pino the remaining portion of
Lot6. Both buyers were issued their corresponding Transfer Certificate of Titles. In
1980, Cicero Gaffud died and was survived by his wife Demetria and sons Romualdo
and Adolfo who are the private respondents herein. Respondents filed a complaint
for the nullity of the sale to petitioner Felisima but the sale to Fortunato was not
assailed. However, petitioner claims that the sale is valid as she was a purchaser for
value and that the action by respondents was barred by prescription.
Issue:
Whether or not the sale of the portion of Lot6 to Felisima is valid?
Held:
Yes. Where the certificate of title is in the name of the vendor when the land is sold,
the vendee for value has the right to rely on what appears on the said certificate of
title. In the absence of anything to arouse suspicion, the said vendee is under no
obligation to look beyond the certificate and investigate the title of the vendor
appearing on the face of the certificate.
In the case at bar, the evidence on record discloses that when petitioner purchased
the subject property, the title thereto was in the name of the vendor Rafaela Donato
alone. Even so, the defense of the respondents that there was no evidence of extra-
judicial partition indicating that the conjugal property has been adjudicated to
Rafaela and so it prevails over the claim of Felisima as innocent purchase for value,
has no bearing on whether or not there was fraud in the transfer of the property to
Rafaela. It was the Deed of Transfer that transferred the property from the original
owners to Rafaela.
Thus, where innocent third persons relying on the correctness of the certificate of
title issued, acquired rights over the property, the court cannot disregard such
rights and order the total cancellation of the certificate that would impair public
confidence in the certificate of title. In short, innocent purchaser for vale relying on
the Torrens title issued is protected. Moreover, the action for reconveyance has
already prescribed because it was filed more than 10 years after either the issuance
of the certificate of title to Rafael or the deed of absolute sale to petitioner Felisima.