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PURITA PAHUD v. CA

FACTS:

This case involves a dispute over a parcel of land in Barangay Anos, Los Baños, Laguna. Spouses Pedro San Agustin and Agatona Genil acquired the said land, which was covered by Original Certificate of Title (OCT) No. O-(1655) 0-15. After the death of Pedro San Agustin and Agatona Genil, their eight children, respondents in this case, inherited the land. In 1992, three of the siblings executed a Deed of Absolute Sale of Undivided Shares, selling their respective shares to the petitioners for P525,000.00. However, the sale was not notarized and one of the siblings signed without apparent written authority from the other siblings. The Pahuds, the petitioners in this case, made payments to the siblings and obtained the release of mortgage from the bank. The Pahuds also intended to use the remaining balance for taxes and title transfer expenses. However, one of the siblings refused to sign an extra-judicial settlement of estate to facilitate the transfer of the title. A complaint for judicial partition was filed, and a Compromise Agreement was signed, but not approved by the court due to the knowledge of the previous sale made to the Pahuds. Subsequently, the siblings received payment from one of the siblings who then sold the property to the Belarminos. The Pahuds confronted one of the siblings who confirmed the sale to the Belarminos. The Pahuds filed a complaint in intervention. The Regional Trial Court ruled in favor of the Pahuds, but the Court of Appeals reversed the decision. Petitioners filed a petition for review on certiorari with the Supreme Court.

ISSUES:

  1. Whether the respondents spouses Belarminos are in good faith when they bought the subject property from respondent Virgilio San Agustin.

  2. Whether the respondents spouses Belarminos have superior rights over the property in question than the petitioners.

  3. Whether Zenaida, Milagros, and Minerva are estopped from impugning the validity of the sale made by Eufemia.

  4. Whether the subsequent sale made by the other co-heirs to Virgilio was void.

  5. Whether Virgilio could still alienate his share to the Belarminos.

  6. Whether the Belarminos can claim to be purchasers in good faith.

RULING:

  1. The Court of Appeals committed grave and reversible error in holding that the respondents spouses Belarminos are in good faith when they bought the subject property from respondent Virgilio San Agustin despite the findings of fact by the trial court that they were in bad faith.

  2. The Court of Appeals committed grave and reversible error in holding that the respondents spouses Belarminos have superior rights over the property in question than the petitioners, despite the fact that the latter were prior in possession.

  3. Zenaida, Milagros, and Minerva are estopped from impugning the validity of the sale made by Eufemia. By their continued silence, they led the Pahuds to believe that they authorized Eufemia to transact on their behalf.

  4. The subsequent sale made by the other co-heirs to Virgilio was void since they no longer had any interest in the property at the time of the second transaction.

  5. Virgilio could still alienate his 1/8 undivided share to the Belarminos.

  6. The Belarminos cannot claim to be purchasers in good faith since they were aware that the property was not registered in Virgilio's name and was subject to partition proceedings. They are deemed buyers in bad faith and are bound by any judgment or decree rendered for or against Virgilio.

PRINCIPLES:

  • The absence of a written authority to sell a piece of land renders the sale void, as provided in Article 1874 of the Civil Code.

  • A special power of attorney is necessary for an agent to enter into a contract by which the ownership of an immovable property is transmitted or acquired, either gratuitously or for a valuable consideration, as stated in Article 1878 of the Civil Code.

  • Estoppel can render an admission or representation conclusive upon the person making it, and it cannot be denied or disproved as against the person relying thereon, in accordance with Article 1431 of the Civil Code.

  • Silence and passivity of co-heirs on the issue of the validity of a sale of their respective shares may bar them from making a contrary claim, and can be considered as implied authorization or acquiescence.

  • Estoppel - Zenaida, Milagros, and Minerva are estopped from impugning the validity of the sale due to their continued silence, leading the Pahuds to believe that they authorized Eufemia to transact on their behalf.

  • Nemo dat quod non habet - The subsequent sale made by the other co-heirs to Virgilio was void since they no longer had any interest in the property at the time of the second transaction.

  • Good faith purchaser - The Belarminos cannot claim to be purchasers in good faith since they were aware of the defects in the title and the ongoing partition proceedings. A purchaser cannot close his eyes to facts that should put a reasonable person on guard.