SPOUSES MARIO ONG AND MARIA CARMELITA ONG and DEMETRIO VERZANO v. SPOUSES ERGELIA OLASIMAN and LEONARDO OLASIMAN
485 SCRA 464 (2006)
The issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered land and the purchaser is buying the same from the registered owner whose title to the land is clean in such case the purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value.
Paula Verzano sold an unregistered parcel of land covered by Tax Declaration No. 18-270-A 1 in her name to her niece Bernandita Verzano-Matugas (Bernandita). Bernandita subsequently sold the same to Spouses Ergelia nd Leonardo Olasiman. Paula thereafter died without an issue and was survived by her sibling Demetrio Verzano, Victoria Verzano, and the children of her deceased brother Isebero Verzano, namely Isebero Verzano, Jr. Epifanio Verzano, Bernandita and Estrella Verzano.
Demetrio executed a document entitled ―Extrajudicial Settlement by Sole Heir and Sale‖ where he adjudicated to himself the subject property. He likewise sold the same to Spouses Carmelita Ong and Mario Ong.
Spouses Olasiman filed a Complaint against Spouses Ong and Demetrio for annulment of the ―Extrajudicial Settlement by Sole Heir and Sale,‖ quiet of title and damages before the Regional Trial Court of Dumaguete City.
The Regional Trial Court dismissed the complaint. On appeal, the Court of Appeals reversed the dismissal and ruled that the ―Extrajudicial Settlement by Sole Heir and Sale‖ as null and void. Consequently, it likewise declared that the sale in favor of Spouses Ong is null and void.
ISSUE:
Whether or not the ownership over the parcel of land, by virtue of the ―Extrajudicial Settlement by Sole Heir and Sale‖, is transferred to Spouses Ong
HELD:
When Paula sold to Bernandita by Deed of Absolute Sale dated June 1, 1992 the parcel of land of which the questioned lot formed part, ownership thereof was transferred to the latter in accordance with Article 1496 of the Civil Code which provides that the 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.
The Deed of Absolute Sale in favor of Bernandita contains nothing contrary to an intent to transfer ownership.
When Paula died on November 26, 1992, she no longer owned the questioned lot and, therefore, her brother Demetrio could not have inherited it. The ―Extrajudicial Settlement by Sole Heir and Sale‖ did not thus confer upon Demetrio ownership of the questioned lot; hence, he could not have conveyed it to Spouses Ong.
The issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered land and the purchaser is buying the same from the registered owner whose title to the land is clean in such case the purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value. Since the properties in question are unregistered lands, Spouses Ong as subsequent buyers thereof did so at their peril. Their claim of having bought the land in good faith, i.e., without notice that some other person has a right to or interest in the property, would not protect them if it turns out, as it actually did in this case, that their seller did not own the property at the time of the sale.
