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Timestamp: 2019-04-21 12:45:08+00:00

Document:
G.R. No. 148846 - Cecilia Amodia Vda De Melencion, et al. v. Hon. Court of Appeals, et al.
CECILIA AMODIA VDA. DE MELENCION, VENERANDA AMODIA, FELIPE AMODIA, EUTIQUIO AMODIA and GO KIM CHUAN, Petitioners, v. HONORABLE COURT OF APPEALS and AZNAR BROTHERS REALTY COMPANY, Respondents.
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision2 dated March 30, 2001 and praying that the Decision3 of the Regional Trial Court (RTC) of Lapu-Lapu City, dated February 18, 1993, be upheld.
The entire property was originally owned by Esteban Bonghanoy6 who had only one child, Juana Bonghanoy-Amodia,7 mother of the late Leoncia Amodia and petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia, and Eutiquio Amodia8 (the Amodias). The entire property was brought under the operation of the Torrens System.9 However, the title thereto was lost during the Second World War.
City (Register of Deeds). Thereafter, AZNAR made some improvements and constructed a beach house thereon.
On February 18, 1989, petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia and Eutiquio Amodia12 (petitioners Amodias) executed a Deed of Extra-Judicial Settlement with Absolute Sale,13 conveying the subject property in favor of Go Kim Chuan for and in consideration of P70,000.00. The lost title covering the subject property was reconstituted pursuant to Republic Act (RA) No. 26.14 A reconstituted title particularly designated as Original Certificate of Title (OCT) No. RO-2899 was issued in the name of Esteban Bonghanoy15 and, subsequently, a derivative title (TCT No. 20626) was issued in the name of Go Kim Chuan on December 1, 1989. Thereafter, Go Kim Chuan exercised control and dominion over the subject property in an adverse and continuous manner and in the concept of an owner.
On February 14, 1990, AZNAR wrote a letter16 to petitioners Amodias asking the latter to withdraw and/or nullify the sale entered into between them and Go Kim Chuan. On the same date, a Notice of Adverse Claim17 was annotated by AZNAR on TCT No. 20626. Because petitioners did not heed AZNAR's demand, on April 25, 1990, AZNAR filed a case against petitioners Amodias and Go Kim Chuan for Annulment of Sale and Cancellation of TCT No. 2062618 alleging that the sale to Go Kim Chuan was an invalid second sale of the subject property which had earlier been sold to it. Petitioners Amodias denied that they executed the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR, claiming that their purported signatures thereon were forged.19 Trial on the merits ensued.
On February 18, 1993, the RTC dismissed AZNAR's complaint and declared Go Kim Chuan as the real owner of the subject property. The RTC ratiocinated that the signatures of the Amodias in the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed in favor of AZNAR were found by the document examiner of the Philippine Constabulary (PC) Crime Laboratory to be forged, thus, the said deed did not convey anything in favor of AZNAR. Moreover, the subject property had been brought under the Land Registration Act; hence, all transactions involving the same should have complied with the said law. Finally, the RTC held that AZNAR failed to show that Go Kim Chuan acquired the subject property in bad faith.
On March 30, 2001, the CA rendered a Decision holding that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed by the Amodias in favor of AZNAR was registered ahead of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan, thus, pursuant to Article 1544 of the New Civil Code, the former deed should be given preference over the latter; that AZNAR's adverse claim was annotated earlier than the execution of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan; hence, the latter should have respected said adverse claim and should have made inquiries as to possible defects that may exist in the title over the subject property; and that in the absence of a final determination by a court of proper jurisdiction on the alleged forged signatures of the Amodias in the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, the finding of the document examiner was insufficient for the RTC to rule in favor of the petitioners.
(3) Ordering Go Kim Chuan to deliver to the aforesaid plaintiff-appellant the possession of the land in question and to execute a registrable deed of conveyance of the subject property to the said plaintiff-appellant.
Petitioners filed a Motion for Reconsideration22 which the CA denied in its Resolution23 dated June 5, 2001.
In its Comment25 dated September 18, 2001, AZNAR argued, among others, that the Petition is dismissible because the Verification and Certification of Non-forum Shopping were not signed by all the petitioners, invoking this Court's Decision in the case of Loquias v. Office of the Ombudsman,26 and that the same were signed only by one April Socorro Go, daughter of the late Go Kim Chuan, who did not even appear to be authorized to file the instant case in behalf of the other petitioners.
In their Reply27 dated October 22, 2001, petitioners contended that April Socorro Go is one of the legitimate children and an heir of the late Go Kim Chuan and, as such, she has personal knowledge of the truth of the facts alleged in the Petition. Petitioners submitted that they substantially complied with the Rules of Court by attaching the required Verification and Certification of Non-Forum Shopping and since the same are required simply to facilitate and promote the orderly administration of justice, compliance therewith should not be imposed with absolute literalness.
On December 19, 2001, petitioners, through counsel, filed a Motion28 for Leave to Admit Amended Petition29 for Review on Certiorari (Amended Petition). Petitioners manifested that they were seeking to correct a defect in the designation of parties and prayed that the Heirs of Go Kim Chuan, namely, Estrella S. Go, Sonia Beth Go-Reynes, Daryl Go, and April Socorro Go be impleaded as petitioners instead of the earlier designated petitioners, Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia, Eutiquio Amodia, and Go Kim Chuan. Counsel for petitioners admitted that he inadvertently included the petitioners Amodias in the initial Petition for Review on Certiorari (Original Petition), as they were parties before the RTC and CA. The counsel also manifested that he was only representing the Heirs of Go Kim Chuan in this case. Lastly, he claimed that other than the substitution of the original petitioners, both the Original Petition and Amended Petition uniformly raised the same issues and should be given due course in the greater interest of justice and that the instant Motion was not interposed for delay.
Per directive of the Court,30 AZNAR filed its Comment31 on the said motion wherein AZNAR manifested that it had no serious objection to the admission of the Amended Petition if the same was intended merely to implead the Heirs of Go Kim Chuan as petitioners. However, AZNAR interposed strong opposition to the Amended Petition's admission since the names of the petitioners Amodias were deleted without their written consent.
In their Reply,32 the Heirs of Go Kim Chuan, through counsel, claimed that petitioners Amodias were excluded from the Amended Petition because they can no longer be located despite diligent efforts exerted by counsel. The counsel claims that after the rendition of the assailed CA Decision, he sent several letters to petitioners Amodias but they did not reply; hence, the Heirs of Go Kim Chuan, left with no choice, filed the instant case before this Court on their own.
The Court issued a Resolution33 dated September 16, 2002 giving due course to the Petition and requiring the parties to submit their respective Memoranda.
In their Memorandum,34 petitioners Heirs of Go Kim Chuan reiterate the same issues raised in the Original Petition and the Amended Petition. They argue that Act 3344 only refers to transactions affecting lands or interests therein not previously registered under the Spanish Mortgage Law or under the Torrens system; that if AZNAR could not have registered the sale in 1964 under Act 496 because the title over the subject property was lost, AZNAR should have availed itself of the remedy of reconstitution; that registration under Act 3344 is without legal effect and could not operate as constructive notice to petitioners and third persons, hence, may not be used as basis for the application of Art. 1544 of the New Civil Code; that the Notice of Adverse Claim of AZNAR was annotated on TCT No. 20626 only on February 14, 1990 after the execution of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan on February 18, 1989, hence, the CA erred when it held that Go Kim Chuan was not a buyer in good faith for supposedly having knowledge of such adverse claim; and that the doctrine laid down in Heirs of Severa Gregorio v. CA35 is inapplicable since it referred to a case wherein the original copy of the document under review was not produced in evidence while in the instant case, the original copy of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed by the Amodias in favor of AZNAR was presented before the trial court judge.
On the other hand, in its Memorandum,36 AZNAR maintains that the Original Petition is dismissible because the Verification and Certification of Non-Forum Shopping thereof were not signed by all the petitioners. AZNAR further claims that the Amended Petition was filed in order to cure a fatal defect which should not be countenanced by this Court. AZNAR also contends that Go Kim Chuan was a buyer in bad faith as he had prior constructive notice that the subject property was sold to AZNAR because the sale was registered with the Register of Deeds under Act 3344; that the 1964 sale was registered under Act 3344 because the subject property was not actually covered by a Torrens title at the time; that there was no other mode of registration except under Act 3344; that Go Kim Chuan had to wait for the reconstitution of the lost title, hence, it could not be said that he examined any certificate of title and could feign ignorance of the sale in favor of AZNAR; that the second sale did not transfer the subject property to Go Kim Chuan since it was no longer within the vendors' power to convey; that with respect to the issue of forgery, the finding of the document examiner is not conclusive; and that such issue was belied by petitioner Veneranda Amodia herself when she declared that the negotiated sale in 1964 between AZNAR and the Amodias was not consummated because the latter did not receive the full consideration for the subject property.
Before resolving the main issues raised, the Court shall first deal with an apparent procedural lapse in this case.
Counsel for petitioners filed a Motion for Leave to Admit Amended Petition for Review on Certiorari in order to implead the Heirs of the late Go Kim Chuan as the new petitioners and to delete the names of petitioners Amodias because they could no longer be located. Said petitioners sought the relaxation of the rules so that in the interest of justice, the case can be decided on the merits. AZNAR opposes the Amended Petition because it was allegedly filed to cure a fatal defect in the original petition â”€ non-compliance with the rules on Verification and Certification of Non-Forum Shopping.
The purpose of verification is simply to secure an assurance that the allegations of the petition (or complaint) have been made in good faith; or are true and correct, not merely speculative. This requirement is simply a condition affecting the form of pleadings, and noncompliance therewith does not necessarily render it fatally defective. Indeed, verification is only a formal, not a jurisdictional requirement.
The issue in the present case is not the lack of verification but the sufficiency of one executed by only one of plaintiffs. This Court held in Ateneo de Naga University v. Manalo, that the verification requirement is deemed substantially complied with when, as in the present case, only one of the heirs-plaintiffs, who has sufficient knowledge and belief to swear to the truth of the allegations in the petition (complaint), signed the verification attached to it. Such verification is deemed sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct, not merely speculative.
nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded.
Thus, we held in Iglesia ni Cristo that the commonality of interest is material and crucial to relaxation of the Rules.
We resolve the first question in the negative.
While it is true that the original document was produced before the RTC, the finding of forgery relies wholly on the testimony of the document examiner. It falls short of the required independent examination to be conducted by the trial court judge. Other than the statement of the document examiner, the RTC decision contains no other basis to support its conclusion of the existence of forgery. Accordingly, the CA was correct in rejecting the RTC's finding and in applying the doctrine laid down in the case of Heirs of Severa Gregorio v. CA.
However, we resolve the second question in favor of Go Kim Chuan.
In the case at bench, it is uncontroverted that the subject property was under the operation of the Torrens System even before the respective conveyances to AZNAR and Go Kim Chuan were made. AZNAR knew of this, and admits this as fact. Yet, despite this knowledge, AZNAR registered the sale in its favor under Act 3344 on the contention that at the time of sale, there was no title on file. We are not persuaded by such a lame excuse.
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR was registered under Act No. 3344 and not under Act No. 496, the said document is deemed not registered.48 Rather, it was the sale in favor of Go Kim Chuan which was registered under Act No. 496.
Although it is obvious that Go Kim Chuan registered the sale in his favor under Act 496 while AZNAR did not, we still cannot make an outright award of the subject property to the petitioners solely on that basis. For the law is clear: mere registration of title is not enough. Good faith must accompany the registration.
To fully resolve the second question, therefore, it is imperative that we determine whether Go Kim Chuan was a registrant in good faith.
The CA found that AZNAR registered its Notice of Adverse Claim ahead of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan. Because of this, the CA declared that Go Kim Chuan was not a buyer in good faith, because he should have respected such adverse claim or, at least, inquired into the validity thereof.
The instant case falls squarely within the foregoing exceptions.
Citing Santiago v. Court of Appeals,55 AZNAR contends that even if the adverse claim was annotated on TCT No. 20626 only on February 4, 1990, the prior registration of the sale in its favor under Act 3344 served as constructive notice to Go Kim Chuan and thus negates the latter's claim of good faith, since the Court held in that case, "Registration, however, by the first buyer under Act 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer in good faith."
Moreover, before buying the subject property, Go Kim Chuan made verifications with the Office of the City Assessor of Lapu-Lapu City and the Register of Deeds. He likewise visited the premises of the subject property and found that nobody interposed any adverse claim against the Amodias. After he decided to buy the subject property, he paid all taxes in arrears, caused the publication of the Deed of Extra-Judicial Settlement with Absolute Sale in a newspaper of general circulation, caused the reconstitution of the lost certificate of title and caused the issuance of the assailed TCT in his name.57 Given these antecedents, good faith on the part of Go Kim Chuan cannot be doubted.
WHEREFORE, the instant Petition for Review is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 51814 is REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No. 2254-L, is REINSTATED. No costs.
1 Dated June 23, 2001, rollo, pp. 4-32.
2 Particularly docketed as CA-G.R. C.V. No. 51814, penned by Associate Justice B.A. Adefuin-Dela Cruz (now retired), with Associate Justices Andres B. Reyes, Jr. and Josefina Guevara-Salonga, concurring; id. at 34-42.
3 Particularly docketed as Civil Case No. 2254-L; id. at 82-87.
5 Go Kim Chuan died on March 26, 1997 as evidenced by his death certificate dated June 28, 2001; id. at 71.
6 Also referred to as Esteban Bunghanoy in other pleadings and documents.
7 Also referred to as Juana Bunghanoy in other pleadings and documents.
8 Also referred to as Eustaquio Amodia in other pleadings and documents.
9 Act No. 496 (1903) or the Land Registration Act, now Presidential Decree No. 1529 (1978) or the Property Registration Decree.
11 Act No. 3344 is the law amending Act No. 2837, which in turn amended Section 194 of the Administrative Code, otherwise known as the SYSTEM OF RECORDING FOR UNREGISTERED REAL ESTATE.
12 Leoncia Amodia, at the time of the execution of said Deed, already passed away. She died single and without issue.
14 Entitled: AN ACT PROVIDING A SPECIAL PROCEDURE FOR THE RECONSTITUTION OF TORRENS CERTIFICATES OF TITLE LOST OR DESTROYED and approved on September 25, 1946.
16 CA rollo, p. 27.
17 Particularly denominated as Entry. No. 994-V-VIII-D.B. made by Ateniso Coronado, Assistant Administrator of AZNAR, record, p. 8.
18 Complaint for Civil Case No. 2254-L, rollo, pp. 74-76.
19 Answer for Civil Case No. 2254-L, records, pp. 10-13.
20 Notice of Appeal, id. at 93.
30 Resolution dated January 28, 2002; id. at 202.
35 G.R. No. 117609, December 29, 1998, 300 SCRA 565.
37 G.R. No. 168943, October 27, 2006, 505 SCRA 828, 840-841, citing Ateneo de Naga University v. Manalo, 458 SCRA 325 (2005).
39 Jimenez v. Commission on Ecumenical Mission and Relations of the United Presbyterian Church in the USA, 432 Phil. 895, 907 (2002), citing Heirs of Severa Gregorio v. CA, supra note 35. (Emphasis supplied).
41 Naval v. Court of Appeals, G.R. No. 167412, February 22, 2006, 483 SCRA 102, 110.
42 Naawan Community Rural Bank Inc. v. Court of Appeals, 443 Phil. 56, 64 (2003).
43 Aznar Brothers Realty Company v. Court of Appeals, 384 Phil. 95, 113-114 (2000).
44 Soriano v. Heirs of Magali, 118 Phil. 505, 511 (1963), citing Secs. 50 and 51 of Act 496.
45 Tapec v. Court of Appeals, G.R. No. 111952, October 26, 1994, 237 SCRA 749, 757.
46 Radiowealth Finance Co. v. Palileo, 274 Phil. 516 (1991).
48 Aznar Brothers Realty Company v. Aying, G.R. No. 144773, May 16, 2005, 458 SCRA 496, 501.
49 Heirs of Clemente Ermac v. Heirs of Vicente Ermac, 451 Phil. 368, 377 (2003).
51 Claverias v. Quingco, G.R. No. 77744, March 6, 1992, 207 SCRA 66, 84.
52 Blanco v. Rivera, G.R. No. 145878, April 25, 2006, 488 SCRA 148, 154, citing Bayoca v. Nogales, 340 SCRA 154 (2000).
53 Tan v. Court of Appeals, 421 Phil. 134, 141-142 (2001).
54 Velasquez, Jr. v. Court of Appeals, G.R. NOS. 138480 and 139449, March 25, 2004, 426 SCRA 309, 314.
55 317 Phil. 400, 414 (1995).
56 Abrigo v. De Vera, supra note 47, at 557.
57 Supra note 19, at 11-12.
58 Velasquez, Jr. v. Court of Appeals, supra note 54, at 315, citing Chu, Sr. v. Benelda Estate, 353 SCRA 424 (2001).
59 Republic v. Guerrero, G.R. No. 133168, March 28, 2006, 485 SCRA 424, 444.

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