FACTS: Subject
property: two parcels of prime sugar land in Negros Occidental.
On June 29, 1960, Alfredo de Ocampo filed an application
for registration of the two parcels of land.
This was contested by the Republic of the Philippines
Bureau of Education. The reason is according to the Republic, the lots were
bequeathed to the Bureau of Education by Esteban Jalandoni on September 21,
1926. And by virtue of the donation, they have a TCT.
In 1965, the CFI ordered the registration of the lot in
favor of de Ocampo. In the same year, an OCT was issued in his name.
On January 6, 1966, de Ocampo sold one whole lot and a
portion of the other lot to Anglo Sr. The deed of absolute sale was registered
and annotated at the back of the OCTs.
The Republic caused the annotations of
notice of lis pendens in Anglo Sr.’s TCT.
Despite the notice of lis pendens, Anglo Sr., conveyed the
lots to Anglo Agricultural Corporation in exchange for shares of stock.
The CA ruled against de Ocampo and ordered his OCT and TCT
to be declared null. De Ocampo passed away during the pendency of the
litigation and left no property to his heirs. The only available remedy for
Anglo Sr., and Anglo Agricultural Corporation was to recover the value of the
lots from the Assurance Fund as provided under Act No. 496 and PD 1529.
During trial, Anglo Sr. And Anglo Agricultural Corporation
presented Atty. David Lozada, the then Registrar of Deeds of Negros Occidental.
He confirmed that ta the time of the sale between de Ocampo
and Anglo Sr., there were no annotations of notices of lis pendens in de
Ocampo’s OCT.
The RTC ruled that Anglo Sr., and Anglo Agricultural
Corporation were entitled to Php6,623,617 as damages payable under the
Assurance Fund.
But they did not implead de Ocampo in their claim for
damages.
RP opposed this, saying that Anglo Sr., is a purchaser in
bad faith because he did not ascertain the legal condition of the title he was
buying.
ISSUES: 1. Whether or not Anglo Sr., and Anglo
Agricultural Corporation are entitled to an award of damages from the Assurance
fund.
2. Whether or not Anglo Sr., and Anglo Agricultural
Corporation should have impleaded de Ocampo in their complain for recovery of
damages from the Assurance Fund.
HELD: 1. No.
Respondents do not meet the criteria set to recover damages from the Assurance
Fund.
In the sale to Anglo Sr., by de Ocampo, the former was in
good faith. Individuals who rely on a clean certificate of title in making the
decision to purchase the real property are often referred to as innocent
purchasers for value and in good faith.
However, Anglo Sr. no longer had an interest over the lots
after he had transferred these to Anglo Agricultural Corporation in exchange
for shares of stock. Hence, he no longer has a claim from the Assurance Fund.
Anglo Agricultural Corporation cannot be considered as a
transferee in good faith because it was already aware of the title’s notices of
lis pendens. Thus, it also has no right to claim damages from the Assurance
Fund.
The governing law at the time of the transactions in this
case is Presidential Decree No. 1529. Based solely on Section 95 of
Presidential Decree No. 1529, the following conditions must be met:
1. the
individual must sustain loss or damage, or the individual is deprived of land
or any estate or interest.
2. the
individual must not be negligent.
3. the
loss, damage, or deprivation is the consequence of either.
(a)
fraudulent registration under the Torrens system after
the land’s original registration, or
(b)
any error, omission, mistake, or misdescription in any
certificate of title or in any entry or memorandum in the registration book.
4. the individual must be barred or otherwise precluded
under the provision of any law from bringing an action for the recovery of such
land or the estate or interest therein.
Anglo Agricultural Corporation does not meet the first
requisite. It no longer suffered a loss due to respondent Anglo Sr.’s
undertaking to assume all liability in the agreement
2. The respondents complied with the procedural requirement
under PD 1529.
The law says (Section 96 in relation to Section 97) that it
is required to implead the person causing the fraud, in this case, de Ocampo,
in the claim for damages. However, in the proceedings before the Regional Trial
Court, respondents Anglo, Sr. and Anglo Agricultural Corporation presented
evidence with respect to the death of de Ocampo and the absence of properties
that could constitute his estate.
RP did not present countervailing evidence to show that de
Ocampo or his estate was still a viable party. Using preponderance of evidence,
the Regional Trial Court could reasonably conclude that de Ocampo can no longer
be impleaded.
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