2. CRUZ vs. SUZARA.

docx 1

LTD - Module 7 - by MBC

2. Gloria R. CRUZ, petitioner,
vs. Court of Appeals, Romy V. SUZARA and Manuel R. VIZCONDE, respondents
G.R. No. 120122, 1997 November 6

FACTS:
In September 1982, Gloria Cruz (petitioner) was the owner of a lot covered by TCT
242553 under her name. She sold this 747 square meters lot and improvements in
Barangay Dona Imelda, Quezon City to Romy Suzara (private respondent) her live-in
partner without benefit of marriage (common law husband) since 1977. She issued a
deed of absolute sale without any monetary consideration in Suzara’s favor. Suzara
registered the property in his name and used the property as collateral to get a bank
loan of P350,000.00. However, he failed to pay the loan and after 4 years the mortgage
was foreclosed.

Gloria Cruz paid the bank P40, 638.00 to restructure the loan and extend the
redemption period to two years. However,without Gloria’s knowledge, Suzara paid the
loan before the expiration of the extended period and was able to redeem the property.

To protect her interest, Gloria executed an affidavit of Adverse Claim which she filed
with the Registry of Deed against Suzara. Gloria asserted that the sale to Suzara was null
and void because it lacked monetary consideration and contrary to law and public
policy. However, this was too late because Suzara had sold the property to Manuel
Vizconde (private respondent) in December 22, 1989.

On February 22, 1990, petitioner Gloria filed a complaint with the RTC Manila
against respondent Suzara for quieting of title, declaration of nullity of documents and
damages with prayer for a writ of preliminary injunction. Respondent Suzara denied
petitioner Gloria’s claim, alleging that he was already the registered owner of the
property as evidenced by TCT No. 295388, through notarized Deed of Absolute sale
dated December 22,1989 was for monetary consideration and not by fraud nor duress,
he alleged that Gloria was estopped from impugning the validity of the sale and
questioning his Torrens Title on the property.

On April 3, 1990, Gloria filed an amended complaint in order to implead respondent

Vizconde as additional defendant.

On May 22, 1990, the Registry of Deed filed a manifestation informing the trial
court that respondent Suzara had sold the property to co-respondent Vizconde who was
already the registered owner of the property and that the notice of lis pendens filed by
Gloria could not be annotated until the annotation be judicially ordered.

On September 24, 1990, Vizconde answered the amended complaint alleging that
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he (Vizconde) was a purchaser for value in good faith because Suzara sold him the
property long before Gloria executed the Affidavit of Adverse Claim dated February 22,
1990, the Deed of Absolute Sale of Suzara and Vizconde was dated December 22, 1989.

On May 24, 1993, the trial court rendered a decision dismissing the complaint and
the counterclaims as well as the cross claim of respondent Vizconde. It ruled that the
sale between petitioner and respondent Suzara was valid with “love, affection and
accommodation” being the consideration for the sale. It also found Vizconde an
innocent purchaser for value because at that time he purchased the property he was
unaware of the adverse claim of petitioner Gloria. The Court of Appeals affirmed the
judgment of the court a qou.

Petitioner Gloria Cruz filed a petition for review on certiorari with the Supreme
Court, seeking to reverse the decision of CA and trial court.

ISSUE:
Whether or not the certificate of title which Manuel Vizconde (respondent)
possessed be declared null and void as Gloria Cruz (petitioner) order for the
reconveyance of the property.

HELD:
NO. Torrens Title issued in Vizconde’s name is valid because he is a purchaser of
registered land for value in good faith. Therefore, he holds an indefeasible title of the
land. However, this is without prejudice to any appropriate remedy petitioner Gloria
may take against her common-law husband, respondent Suzara.

PRINCIPLES AND ANALYSIS:

Article 1490 of Civil Code:

Article 1490 of Civil Code: “the husband and wife cannot sell property to one
another except, (1) When a separation of property was agreed upon in the marriage
settlements; or (2) When there has been a judicial separation of property under article
191. ”

Cf. Cruz vs. Suzara

As a rule which, for policy consideration and the dictates of morality require that
the prohibition apply to common-law relationships, petitioner Gloria can no longer seek
reconveyance of the property to her as it has been acquired by respondent Vizconde in
good faith and for value from her own transferee.
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Section 52 of PD 1529:

Section 52. Constructive notice upon registration. -Every conveyance, mortgage,

lease, lien, attachment, order, judgment, instrument or instrument affecting registered
land shall, if registered, filed or entered in the office of the Register of Deeds for the
province or city where the land to which it relates lies, be constructive notice to all
persons from the time of such registering, filing or entering.

Registration is constructive notice to third persons.

A deed or other voluntary instrument involving registered land shall not take effect
as a conveyance or bind the land but shall operate only as a contract between the
parties and as evidence of authority of the Register of Deeds to make registration. The
act of registration shall be the operative act to convey or affect the land insofar as
third persons are concerned. It is the act of registration which creates a constructive
notice to the whole world and binds third persons. Without such registration, a
conveyance does not affect or bind the land. A person dealing with registered land is
merely charged with notice of the burdens on the property which are noted on the face
of the register or the certificate of title.

Purchaser is not required to explore further than what title indicates for
hidden defects.

a. It is basic that a person dealing with registered property need not go beyond,
but only has to rely on the title.

b. Therefore, there is nothing in the certificate of title to indicate any cloud or vice
in the ownership of the property, or any encumbrance to it, the purchaser is not
required to explore farther than what the Torrens title upon its indicates in quest for
hidden defect or inchoate right that may subsequently defeat his right to it.

c. If this were not the case the efficacy and conclusiveness of the certificate of title
which the Torrens system seeks to insure would entirely be futile and nugatory.

Cf. Cruz vs. Vizconde

Respondent Vizconde paid a full and fair price for the property at the time of
purchase and before he had notice of petitioner’s claim or interest in the property. Since
registration is constructive notice to third persons, he was not required to explore
whether the title had hidden defects.
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Section 53 of PD 1529:

Section 53. “In all cases of registration procured by fraud, the owner may pursue
all his legal and equitable remedies against the parties to such fraud without
prejudice, however, to the rights of any innocent holder for value of a certificate of
title. After the entry of the decree of registration on the original petition or
application, any subsequent registration procured by the presentation of a forged
duplicate certificate of title, or a forged deed or other instrument, shall be null and
void.”

Indefeasibility of Torrens Title for Innocent Holder for Value in Good

Faith:

a. Remedy without prejudice against innocent holder for value of a certificate of

title.

b. Good faith consists in the possessor’s belief that the person from whom he
received the thing was the owner of the same and could convey his title. Good faith,
while it is always to be presumed in the absence of proof to the contrary, requires a
well-founded belief that the person from whom title was received was himself the
owner of the land, with the right to convey it.

c. Court cannot disregard such rights and order the total cancellation of the
certificate for that would impair public confidence in the certificate of title.

d. Innocent purchaser for value relying on a Torrens title issued is protected.

Cf. Cruz vs. Vizconde

Vizconde was a purchaser for value in good faith because the time he bought the
property he had no knowledge that some other person had a right to or an adverse
interest in the property. His Torrens Title is therefore indefeasible because he is an
innocent holder who paid a full price for the property in good faith.