FACTS:

In August 2003, Shigekane Suzuki met with Helen Soneja to inquire about a condominium unit and parking slot owned by Yung Sam Kang. Soneja informed Suzuki that the properties were for sale for P3,000,000.00, which was later reduced to P2,800,000.00. Suzuki issued Kang a check as a reservation fee and another check for the remaining balance. Suzuki and Kang executed a Deed of Absolute Sale covering the properties. Suzuki took possession of the properties and began renovating the condominium unit. However, Kang failed to deliver the titles and Suzuki found out that Kang had left the country. Suzuki discovered that there were no annotations in the title of the parking slot, but Cityland Pioneer certified that Kang fully paid for the properties. The title of the condominium unit had an annotation that any conveyance or encumbrance shall be subject to approval by the Philippine Retirement Authority. Suzuki executed an Affidavit of Adverse Claim and demanded the delivery of the titles, but Orion, through Alexander Perez, refused to surrender the titles. Orion claimed that Kang obtained a loan from them and executed a Dacion en Pago in their favor, but the Dacion en Pago was not registered. Suzuki filed a complaint for specific performance and damages against Kang and Orion, seeking the delivery of the titles. The RTC ruled in favor of Suzuki and ordered Orion to deliver the titles to Suzuki. Orion appealed the decision, and the CA partially granted the appeal by upholding Suzuki's right over the properties but deleting the award for damages. Orion filed a petition for review on certiorari with the Supreme Court.

ISSUES:

1. • Whether the Court can inquire into conclusions of fact when the inference made is manifestly mistaken
2. • Whether the Court can consider belated arguments raised on appeal
3. • Whether Philippine Law governs the transfer of real property
4. • Whether the party invoking a foreign law has the burden of proving it
5. • Whether the failure to prove foreign law results in the application of Philippine Law

6. Whether the conveyance of the property from Kang to Suzuki is valid despite the lack of spousal consent.

7. Whether the ownership of the property belongs to Suzuki or Orion.

8. Whether the Dacion en Pago is valid and enforceable.

9. Whether the PRA restriction affects the conveyance to Suzuki.

10. Whether Orion Savings Bank may impugn the validity of the conveyance in favor of Suzuki based on the restriction imposed by the Philippine Retirement Authority (PRA) without violating the principle of estoppel.

11. Whether the rules on double sale under Article 1544 of the New Civil Code are applicable in this case.

RULING:

1. • The Court has the authority to inquire into conclusions of fact when the inference made is manifestly mistaken.
2. • Belated arguments raised on appeal cannot be considered by the Court.
3. • Philippine Law governs the transfer of real property.
4. • The party invoking a foreign law has the burden of proving it.
5. • Failure to prove foreign law results in the application of Philippine Law through the doctrine of presumed-identity approach or processual presumption.

6. The conveyance of the property from Kang to Suzuki is valid despite the lack of spousal consent. While registration of property in the name of only one spouse does not negate the possibility of it being conjugal or community property, the court sees no reason to declare the conveyance as invalid in this case as there is no proof that the property is conjugal or community property.

7. The ownership of the property belongs to Suzuki. Under Article 1544 of the New Civil Code, the ownership of immovable property belongs to the person who first recorded it in the Registry of Property in good faith. In this case, Suzuki was the first to record the property and there was no proof of the existence and due execution of the Dacion en Pago in favor of Orion.

8. The Dacion en Pago is not valid and enforceable. The Supreme Court found that there were several inconsistencies and gaps surrounding the execution and implementation of the Dacion en Pago. Despite being mentioned in the document itself, no evidence was presented to prove the existence of the real estate mortgage. The Dacion en Pago was first mentioned two months after the demand for delivery of the titles, and even then, it contained material inconsistencies. Moreover, the fact that Kang remained in possession of the condominium unit and was able to transfer possession to Suzuki strengthens the notion that the Dacion en Pago was fictitious. The presumption of regularity of notarized documents was rebutted by the questionable circumstances surrounding the execution of the Dacion en Pago.

9. The PRA restriction does not affect the conveyance to Suzuki. The Supreme Court ruled that the PRA restriction in the Certificate of Title merely serves as a warning and does not affect the conveyance. The restriction is meant to inform the owner who holds a Special Resident Retiree's Visa that disposing of the property may cause them to lose their visa. The restriction does not invalidate the conveyance to Suzuki as a purchaser in good faith.

10. Orion Savings Bank is estopped from impugning the validity of the conveyance in favor of Suzuki based on the PRA restriction. Orion knew of the restriction and even accommodated Kang's request to cancel the mortgage annotation to circumvent the PRA restriction. Therefore, Orion cannot successfully assail the good faith of Suzuki on the basis of the restriction ignored and attempted to be circumvented by Orion.

11. The rules on double sale under Article 1544 of the New Civil Code are not applicable in this case. The court found that Orion failed to prove the authenticity of the Dacion en Pago. Suzuki, on the other hand, provided sufficient evidence to establish the validity of the conveyance in his favor.

PRINCIPLES:

• The Court may inquire into conclusions of fact when the inference made is manifestly mistaken.

• Points of law, theories, issues, and arguments not raised before the trial court cannot be raised for the first time on appeal.

• Real or immovable property is exclusively subject to the laws of the country or state where it is located.

• Matters concerning the title and disposition of real property are determined by the lex loci rei sitae (law of the place where the property is situated).

• Property relations between spouses are governed by the national law of the spouses.

• The party invoking a foreign law has the burden of proving it.

• Proof of foreign law must comply with the requirements of Rule 132 of the Revised Rules of Court.

• Failure to prove foreign law results in the application of Philippine Law through the doctrine of presumed-identity approach or processual presumption.

• Registration of property in the name of only one spouse does not negate the possibility of it being conjugal or community property, but there must be proof of such.

• Article 1544 of the New Civil Code applies when there are two or more duly executed contracts of sale for the same property.

• Execution of a notarized deed of sale and actual transfer of possession amounts to delivery and transfer of ownership.

• The presumption of regularity of notarized documents may be rebutted by clear and convincing evidence to the contrary.

• The complete absence of an attempt by the vendee to assert rights of ownership over the property is a prominent index of simulation.

• Public instruments are evidence of the facts that gave rise to their execution and are considered to contain all the terms of the agreement. However, the fact that a deed is notarized is not a guarantee of the validity of its contents.

• A PRA restriction in a Certificate of Title is a warning to the owner with a Special Resident Retiree's Visa and does not affect the conveyance of the property.

• Estoppel: Orion Savings Bank is estopped from impugning the validity of the conveyance in favor of Suzuki based on the PRA restriction due to its own actions and knowledge of the restriction.

• Double Sale: The rules on double sale under Article 1544 of the New Civil Code are not applicable when one party fails to prove the authenticity of the sale and the other party provides sufficient evidence to establish the validity of the conveyance in their favor.