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SPS. JUANITO R. VILLAMIL v. LAZARO CRUZ VILLAROSA

FACTS:

The Spouses Juanito and Lydia Villamil filed a complaint against the Spouses Mateo and Purificacion Tolentino, Lazaro Villarosa, and the Register of Deeds of Quezon City. They alleged that their title to a parcel of land was cancelled and a new one was issued in the name of Cipriano Paterno. They also claimed that the Deed of Assignment in favor of the Spouses Tolentino was falsified and Villarosa's purchase of the property from the Spouses Tolentino was void. The Spouses Tolentino and Villarosa, however, asserted that they were innocent buyers.

The trial court ruled that all the TCTs were null and void, cancelled Villarosa's title, and ordered the issuance of a new one in favor of the Spouses Villamil. It also found that the Deed of Absolute Sale between the Spouses Villamil and Paterno was fake, that Paterno was a fictitious person, and that the Spouses Tolentino and Villarosa were buyers in bad faith.

The Court of Appeals reversed the trial court's decision. It declared the title of the Spouses Tolentino and Paterno void but upheld the validity of Villarosa's title, reasoning that he was a purchaser for value and in good faith.

ISSUES:

  1. Whether Villarosa is a purchaser in good faith.

  2. Whether Villarosa had knowledge of circumstances that should have forewarned him to make further inquiry beyond the face of the title.

  3. Whether or not Villarosa is a purchaser in good faith and for value of the subject property.

RULING:

  1. The determination of whether Villarosa is a purchaser in good faith is a factual issue. However, there is a conflict between the findings of fact of the Court of Appeals and those of the trial court. The trial court held that Villarosa knew of the circumstances of Spouses Tolentino's acquisition of the subject property, thus making him a purchaser in bad faith. On the other hand, the Court of Appeals found that Villarosa is a purchaser in good faith. The burden of proving the status of a purchaser in good faith lies upon one who asserts that status.

  2. Villarosa is a purchaser in good faith. He went to the Register of Deeds of Quezon City to verify the authenticity of Spouses Tolentino's title and to the Express Credit Financing Corporation to check whether the property was mortgaged. He also inquired about the unfinished structure on the property and was given a copy of the title. Villarosa successfully discharged his burden of proving that he had no knowledge of circumstances that should have forewarned him to make further inquiry beyond the face of the title.

  3. Yes, Villarosa is a purchaser in good faith and for value of the subject property. The Court held that when dealing with registered and titled land, buyers are not required by law to inquire further than what the Torrens certificate of title indicates on its face. Villarosa made the necessary inquiries and found the title to be authentic. He examined the transferor's title, which was under the name of the Spouses Tolentino, and did not have to scrutinize each and every title and previous owners of the property preceding Tolentino. As such, TCT No. 354675 issued in Villarosa's name was declared valid.

PRINCIPLES:

  • The honesty of intention that constitutes good faith implies freedom from knowledge of circumstances that ought to put a prudent person on inquiry.

  • Good faith consists in the belief of the possessors that the persons from whom they received the thing are its rightful owners who could convey their title.

  • Every person dealing with a registered land may safely rely on the correctness of the certificate of title issued therefor, and the law will in no way oblige him to go beyond the certificate to determine the condition of the property.

  • If there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden defects or inchoate right that may subsequently defeat his right thereto.

  • A person who deals with registered property in good faith and acquires it from a forger will be absolutely protected by a Torrens title.

  • When dealing with land that is registered and titled, buyers are not required to inquire further than what the Torrens certificate of title indicates on its face.