FACTS:

This case involves a dispute over a parcel of land located in Pangasinan. The petitioners claim ownership based on a donation propter nuptias executed in their favor by Feliza Baun in 1962. On the other hand, the respondents claim ownership based on a Deed of Absolute Sale executed by Feliza in their favor in 1982, which was registered on the Original Certificate of Title (OCT) covering the property.

The respondents filed a complaint for ejectment against the petitioners, alleging that they immediately took possession of the land after the sale and allowed the petitioners to occupy it because they were blood relatives. The petitioners denied the allegations and claimed ownership based on the donation propter nuptias and their continuous possession of the land. The Municipal Trial Court in Cities (MTCC) dismissed the complaint, citing laches and the presence of improvements made by the petitioners.

The Regional Trial Court (RTC) initially affirmed the MTCC's decision but later reversed it, ruling in favor of the respondents. The RTC found that the donation propter nuptias was not proven and that the Deed of Absolute Sale carried more weight. The Court of Appeals affirmed the RTC's ruling, stating that the respondents were the rightful owners based on the invalidity of the donation propter nuptias executed by Feliza in favor of the petitioners.

The Supreme Court denied the petitions filed by the petitioners and affirmed the Court of Appeals' finding that the respondents were the rightful owners of the property. The Court explained that donations propter nuptias made prior to the enactment of the Family Code are not required to have express acceptance, but they need to be registered to be binding on third persons. In this case, the donation was not registered, and the respondents, who purchased the property, were considered innocent purchasers for value.

ISSUES:

1. Whether or not the respondents can be considered innocent purchasers for value.

2. Whether or not the petitioners sufficiently established their prior possession of the land.

3. Whether the determinations of the Court of Appeals (CA) and the Regional Trial Court (RTC) as to the party in possession of the property and the structures standing on the land are supported by evidence.

4. Whether the respondents are innocent purchasers for value and are entitled to ownership of the land.

5. Whether the petitioners' claim of ownership through open, continuous, adverse, and exclusive possession for more than 60 years is valid.

6. Whether the assertion that registered land cannot be acquired by prescription or adverse possession applies to the subject property.

7. Whether the respondents are entitled to possession of the land.

8. Whether the issue of tolerance raised by the petitioners is material.

9. Whether the CA committed reversible error in declaring respondents as the rightful owners of the land and ordering petitioners to vacate the property.

RULING:

1. No, the respondents cannot be considered innocent purchasers for value. The Court held that the protection granted by law to innocent purchasers for value is not absolute. Exceptions to the protection apply when the purchaser has actual knowledge of facts and circumstances that would compel a reasonably cautious person to inquire into the status of the property. In this case, the Court found that the respondents should have been aware of the petitioners' prior possession of the land and should have investigated further before acquiring it. Therefore, the respondents cannot be considered innocent purchasers for value.

2. No, the petitioners failed to sufficiently establish their prior possession of the land. The Court noted that the trial courts in both the ejectment and quieting of title cases found that the respondents were in possession of the land as tenants prior to and at the time of the sale in 1982. The petitioners' assertion of prior possession was not supported by sufficient evidence and was contradicted by the findings of the trial courts. Therefore, the petitioners did not sufficiently establish their prior possession of the land.

3. The determinations made by the CA and the RTC as to the party in possession of the property and the structures standing on the land are supported by evidence and entitled to deference.

4. The respondents are innocent purchasers for value and are entitled to ownership of the land.

5. The petitioners' claim of ownership through open, continuous, adverse, and exclusive possession for more than 60 years is untenable.

6. The assertion that registered land cannot be acquired by prescription or adverse possession applies to the subject property.

7. The respondents are entitled to possession of the land.

8. The issue of tolerance raised by the petitioners is immaterial.

9. The CA did not commit reversible error in declaring respondents as the rightful owners of the land and ordering petitioners to vacate the property.

PRINCIPLES:

• Persons dealing with registered land have the right to rely on the Torrens title issued over the property and are not required to go beyond what the certificate of title indicates on its face, provided the acquisition of the land is made in good faith, without notice of another person's right or interest in the property.

• Exceptions to the protection granted to innocent purchasers for value include the presence of anything that excites or arouses suspicion, which should prompt the buyer to investigate beyond the certificate of title.

• A buyer of land that is in the actual possession of persons other than the seller must be wary and should investigate the rights of those in possession. Without such inquiry, the buyer cannot be regarded as a buyer in good faith.

• The determinations of the lower courts as to factual matters are entitled to deference and should only be disturbed if unsupported by evidence.

• Acquisitive prescription does not apply to registered land.

• Registered land cannot be acquired by prescription or adverse possession.

• Innocent purchasers for value are entitled to ownership of registered land.

• Tolerance is irrelevant when the registered owner defeats the supposed title of the possessor.