CASE DIGEST: David v. Bandin (G.R. No. 48322. April 8, 1987)

FACTS OF THE CASE: HUSBAND and WIFE died without leaving a will but leaving two children, XXX and YYY.

XXX administered the property until her death on February 15, 1955. The children of YYY, were given their shares of the fruits of the property, though irregular and at times little, depending on the amount of the harvest. On April 23, 1963, the children of YYY sent a letter of demand to the heirs of XXX for partition, and on June 14, 1963, or within a period of approximately 8 years from X’s death, filed their complaint against X’s heirs.

ISSUE: Are the children of YYY barred by laches or prescription?

HELD BY THE SUPREME COURT: The children of YYY CANNOT be held guilty of laches, nor is their claim barred by prescription. They were NOT guilty of negligence nor did they sleep on their rights. Prescription generally does not run in favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-ownership. While implied or constructive trust prescribes in 10 years, the rule does not apply where a fiduciary relation exists and the trustee recognizes the trust.

OTHER PRINCIPLES LAID DOWN BY THE CASE:

PRESCRIPTION DOES NOT RUN AGAINST A CO-HEIR. Under Article 494 of the new Civil Code (Article 400 of the old Civil Code), prescription generally does not run in favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-ownership. While an implied or constructive trust prescribes in ten years, the rule does not apply where a fiduciary relation exists and the trustee recognizes the trust. In the case at bar, there is no showing that the rights of the plaintiffs as co-owners were repudiated by Candida Ramos in her lifetime; in fact, the evidence as found by the trial court show the contrary.

RES JUDICATA. Petitioners further invoke the doctrine of res judicata in that the decree of registration of the property in the name of Juanita Martin as owner by the land registration court was affirmed by the Court of Appeals in its decision dated July 16, 1969 in CA G.R. No. 35191-R, which had already become final and executory. Both the respondent Court of Appeals and the trial court correctly rejected the petitioners’ contention. There can be no res judicata since private respondents were not parties to the above.

REGISTRATION OF LAND DOES NOT VEST TITLE. Neither can it be claimed that the decree of registration vested ownership in Juanita Martin. The appellate court, citing jurisprudence established by this Court, held that the purpose of the Land Registration Act is not to create or vest title, but to confirm and register title already vested and existing in the applicant for a title.
EXCEPTION TO THE DOCTRINE OF INCONTROVERTIBILITY. In assailing the decision of the appellate court, petitioners invoke the doctrine of incontrovertibility of the decree of registration after one year from issuance, and the doctrine of conclusiveness and indivisibility of titles issued under the Torrens system. Petitioners might have stood on solid ground in invoking the above doctrines if they had purchased the property from the registered owner after the issuance of the decree of registration and the corresponding certificate of title in his name.

GOOD FAITH NOT A DEFENSE IN BUYING UNREGISTERED LAND. As the record shows, petitioners bought the property when it was still unregistered land. The defense of having purchased the property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith on the clear title of the registered owner. One who purchases an unregistered land does so at his peril. His claim of having bought the land in good faith, i.e. without notice that some other person has a right to, or interest in, the property, would not protect him if it turns out that the seller does not actually own the property. This is what happened in the case at bar.

PURCHASE IN GOOD FAITH. The appellate court held that Jose Ramirez and his father Sotero Ramirez were not purchasers in good faith, not having made diligent investigation of the true ownership of the properties they bought, but relied merely on the tax declaration shown to them by the seller, Rufino Miranda. We have no reason to disturb the foregoing findings of the respondent appellate court. Besides, as mentioned earlier, the issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered land and the purchaser is buying the same from the registered owner, whose title to the land is clean. In such case, the purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value. However, this is not the situation before us in the instant case. What petitioners bought were unregistered lands.

ACTUAL NOTICE OF DEFECT IN TITLE. The case of Magno de la Cruz stands on different footing from the other petitions. The property purchased by him from Victoria Martin and Maximina Martin were registered lands, covered by Torrens title. Being a purchaser in good faith for value, Magno de la Cruz is protected by the law. In the absence of a showing that he had actual notice of the defect in the title of the vendors or that he is a buyer in bad faith, the deed of sale in his favor and the corresponding certificate of title issued in his name can not be nullified and cancelled. Hence, it was error for the respondent court to invalidate the sale made by Victoria and Maximina Martin in favor of Magno de la Cruz to the extent that it prejudiced the two-third (2/3) pro-indiviso share of respondents in the property and to order petitioner to reconvey said share to respondents. The petition of Magno de la Cruz is meritorious, and the decision appealed from should be modified accordingly.

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