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ENRIQUETA M. LOCSIN v. BERNARDO HIZON

FACTS:

Petitioner Enriqueta M. Locsin was the registered owner of a 760-sq.m. lot covered by Transfer Certificate of Title (TCT) No. 235094. She filed an ejectment case against one Billy Aceron to recover possession over the land, resulting in a compromise agreement approved by the court. Locsin later discovered that her copy of TCT No. 235094 was missing and filed a petition for administrative reconstruction. It was discovered that Marylou Bolos had cancelled Locsin's TCT and secured a new one in her favor. Bolos eventually sold the lot to Bernardo Hizon, who then transferred it to his son Carlos. Carlos later sold the property to the spouses Guevara. Locsin, through counsel, requested the return of the property, claiming that her signature in the deed of sale to Bolos was forged. Locsin filed an action for reconveyance, annulment of TCT No. N-237083, cancellation of the mortgage lien, and damages against Bolos, Bernardo, Carlos, the spouses Guevara, DCC, and the Register of Deeds. The RTC dismissed the complaint, ruling that Locsin failed to prove forgery and that the transfers of title were valid. The CA affirmed the RTC's finding of forgery but held that the spouses Guevara are innocent purchasers for value. Locsin appealed to the Supreme Court, arguing that Bernardo was aware of the possible defect in Bolos' title and that the transfer to the spouses Guevara was merely simulated. The issue before the Supreme Court is whether or not the spouses Guevara are innocent purchasers for value.

ISSUES:

  1. Whether the Court can reexamine the findings of fact made by the Court of Appeals.

  2. Whether an innocent purchaser for value is entitled to protection under the law.

  3. Whether the mirror doctrine applies in this case.

  4. Whether the transfer of the property from Locsin to Bolos is valid.

  5. Whether the transfer of the property from Carlos to the spouses Guevara is valid.

  6. Whether the spouses Guevara are innocent purchasers for value.

  7. Whether petitioner Locsin is entitled to nominal damages.

  8. Whether the petitioner is entitled to moral damages.

  9. Whether the petitioner is entitled to exemplary damages.

RULING:

  1. The Court can reexamine the findings of fact made by the Court of Appeals when the inference made on the evidence is mistaken.

  2. An innocent purchaser for value is entitled to protection under the law if they bought the property without notice of another person's claim and paid a full and fair price in good faith.

  3. The mirror doctrine does not apply in this case since the buyers failed to exercise the necessary level of caution and failed to investigate the title and history of the property.

  4. The transfer of the property from Locsin to Bolos is not valid. Locsin, as the registered owner of the property, cannot enter into a compromise agreement and seek recovery of possession against Aceron if she had already transferred ownership to Bolos. Entering into a compromise agreement is an act of strict dominion, and it should have been Bolos who entered into the compromise agreement with Aceron if she already acquired ownership of the property.

  5. The transfer of the property from Carlos to the spouses Guevara is not valid. There is a lack of evidence supporting the spouses Guevara's claim that the sale was a bona fide transaction. The only evidence presented were the deeds of sale and transfer certificates of title, which were insufficient to prove the validity of the sale. Furthermore, the timing of the transfer, which was only fifteen days after Locsin demanded the surrender of the property from Carlos, raises suspicion.

  6. The spouses Guevara are not innocent purchasers for value. Their lack of interest in protecting their claim over the property, their appointment of Bernardo (Carlos' father) as their attorney-in-fact, and their failure to acquaint themselves with the developments in the case indicate that they did not intend to be bona fide buyers in good faith.

  7. Petitioner Locsin is entitled to nominal damages. While she did not specifically pray for moral damages, she may still be awarded nominal damages.

  8. The Court refrained from awarding moral damages to the petitioner. The petitioner did not invoke any of the grounds that would warrant the award of moral damages. Moreover, the petitioner did not provide any claim of physical suffering, mental anguish, or any similar circumstance.

  9. The Court held that the petitioner is not entitled to exemplary damages. Exemplary damages can only be awarded in addition to moral damages. Since the petitioner failed to establish her clear right to moral damages, her claim for exemplary damages is unavailing.

PRINCIPLES:

  • Only questions of law may be raised in a petition for review on certiorari.

  • An innocent purchaser for value is entitled to protection if they bought the property without notice of another person's claim and paid a full and fair price in good faith.

  • The mirror doctrine allows persons dealing with registered land to rely on the correctness of the certificate of title and is not obliged to go beyond the certificate to determine the condition of the property, except in certain exceptions.

  • Prospective parties to a contract involving titled lands should exercise diligence in ensuring the legality of the title and accuracy of the metes and bounds of the lot.

  • The principal is chargeable and bound by the knowledge of, or notice to, his agent received in that capacity.

  • Entering into a compromise agreement is an act of strict dominion.

  • Bare and self-serving allegations, unsubstantiated by evidence, are not equivalent to proof.

  • Innocent purchasers for value are protected under the law.

  • Nominal damages may be awarded even without a specific prayer for moral damages.

  • Nominal damages are recoverable in cases where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or actual damages are shown.

  • A violation of the plaintiff's right, even if only technical, is sufficient to support an award of nominal damages.

  • The amount of nominal damages to be awarded is addressed to the sound discretion of the court, taking into account the relevant circumstances.