In Spouses Lolito Chua and Myrna Palomaria vs. Spouses Agustin Lo and Josefina N. Becina, the Supreme Court addressed a dispute over land ownership arising from a series of sales and subdivisions, clarifying the rights of parties when deeds of sale inaccurately reflect prior agreements. The Court ruled in favor of the petitioners, affirming their right to quiet title over a 600 sq m portion of land, underscoring the principle that one cannot sell what one does not own. This decision clarifies the legal recourse available to landowners when faced with conflicting claims arising from erroneous conveyances.

Navigating Conflicting Land Claims: Can a Defective Deed Cloud a Valid Title?

The case revolves around a parcel of coconut land originally owned by spouses Lolito and Myrna Chua (spouses Chua). Over time, portions of this land were sold to sisters Delia N. Becina (Delia) and Josefina N. Becina (Josefina). Initially, two sales occurred in 1976 and 1977, conveying a total of 5,012 sq m to the sisters. Subsequent subdivisions of the land led to confusion, as the areas allocated to Josefina and Delia appeared to exceed the agreed-upon amount. A pivotal meeting at the office of Atty. Tomas Añonuevo resulted in an agreement: Lot No. 505-B-2 would be transferred to Josefina, while Lot No. 505-B-3 would remain in Lolito’s name. To resolve the excess area issue, Lot No. 505-B-3 was further subdivided into Lot No. 505-B-3-A (600 sq m) and Lot No. 505-B-3-B (1,478 sq m).

However, the execution of a Deed of Sale on February 25, 1984, aimed at formalizing these agreements, became a source of contention. This deed conveyed Lot No. 505-B-2 to Josefina. Later, Lolito sold Lot No. 505-B-3-A to his brother Sergio, now covered by TCT No. T-114915. In violation of the agreement, Josefina and her spouse Agustin occupied the entire Lot No. 505-B-3, including Lot No. 505-B-3-A. Further complicating matters, Victor Lo, Delia’s husband (after Delia’s death), sold the entire Lot No. 505-B-3 to Agustin Lo Realty Corporation. This prompted the spouses Chua to file a complaint for quieting of title, seeking to reclaim Lot No. 505-B-3-A, arguing that the respondents were only entitled to 5,012 sq m and that the sale to Agustin Lo Realty Corporation exceeded this limit.

The Supreme Court, in analyzing the issue, emphasized the nature of the initial transactions as contracts to sell. “By law, a contract to sell is defined as a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, the full payment of the purchase price.” The Court found that ownership was not transferred until the execution of the February 25, 1984, Contract of Sale. The confusion stemmed from the inaccurate reflection of the parties’ original intent in this subsequent contract.

Building on this principle, the Court acknowledged the agreement reached at Atty. Añonuevo’s office, where the parties consented to the execution of the Contract of Sale in favor of Josefina, conveying Lot No. 505-B-2. Delia’s subsequent actions, or lack thereof, indicated her acquiescence to this arrangement. However, the sale by Victor Lo to Agustin Lo Realty Corporation of the entire Lot No. 505-B-3, which included the 600 sq m portion (Lot No. 505-B-3-A), was deemed problematic because it exceeded Delia’s rightful share. The Court stated that “one cannot sell what he does not own and this rule has much force when the subject of the sale is a titled land that belongs to another person.” Therefore, the Deed of Sale executed by Victor was nullified insofar as it included the 600 sq m portion.

The Court then addressed the petitioners’ action to quiet title. The requisites for such an action are (1) the plaintiff has a legal or equitable title to the property, and (2) the claim casting a cloud on the title is invalid. Here, Sergio possessed legal title to Lot No. 505-B-3-A, evidenced by TCT No. T-114915. The Deed of Sale executed by Victor, conveying the entire Lot No. 505-B-2, cast a cloud on Sergio’s title, as Victor did not own the entirety of the property. Thus, the Court granted the petition, affirming Sergio’s ownership and ordering Agustin Lo Realty Corporation to surrender possession of Lot No. 505-B-3-A.

The respondents argued that the 3,534 sq m conveyed to Josefina included a 500 sq m lot sold in 1975 and a 528 sq m compensation for damages. However, the Court found insufficient evidence to support this claim. While upholding the validity of the 1975 sale of 500 sq m, it directed the spouses Chua to execute a separate contract to formalize this transaction. In conclusion, the Supreme Court’s decision in this case clarifies the importance of accurate deeds of sale and underscores the principle that one cannot transfer ownership of property they do not rightfully possess.

FAQs

What was the key issue in this case?	The key issue was whether the petitioners were entitled to recover Lot No. 505-B-3-A, representing an excess area allegedly sold to Delia and Josefina. This involved clarifying the ownership rights based on previous contracts and a subsequent erroneous deed of sale.
What is a contract to sell, as defined in the case?	A contract to sell is a bilateral agreement where the seller reserves ownership despite delivery, binding themselves to sell exclusively to the buyer upon full payment of the price. In this case, the initial sales were considered contracts to sell because ownership was not immediately transferred.
Why was the Deed of Sale executed by Victor Lo deemed invalid?	The Deed of Sale was deemed invalid because Victor Lo sold the entire Lot No. 505-B-3 to Agustin Lo Realty Corporation, including the 600 sq m portion (Lot No. 505-B-3-A) that he did not own. One cannot sell property that belongs to another person.
What are the requisites for an action to quiet title?	The requisites are that the plaintiff has a legal or equitable title to the property, and the deed or claim casting a cloud on the title is invalid or inoperative. Both conditions were met in this case, allowing the petitioners to quiet their title.
What did the Court order regarding the 500 sq m lot sold in 1975?	The Court upheld the validity of the 1975 sale but ordered the spouses Chua to execute a separate contract to formalize this transaction and deliver the said 500 sq m apart from the 5,012 sq m subject matter of the 1976 and 1977 sale transactions.
How did the Court address the agreement made at Atty. Añonuevo’s office?	The Court acknowledged the agreement as a basis for the execution of the Contract of Sale in favor of Josefina, conveying Lot No. 505-B-2. This agreement demonstrated the parties’ consent to the allocation of land, affecting their respective rights.
What is the significance of TCT No. T-114915 in the case?	TCT No. T-114915 is significant because it represents Sergio’s legal title to the 600 sq m portion (Lot No. 505-B-3-A). It is a fundamental principle that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.
What was the final ruling of the Supreme Court?	The Supreme Court granted the petition, reversed the Court of Appeals’ decision, and declared the Deed of Sale executed by Victor Lo in favor of Agustin Lo Realty Corporation null and void insofar as the 600 sq m area is concerned.

The Supreme Court’s decision underscores the importance of clear and accurate documentation in real estate transactions. It serves as a reminder that one cannot transfer ownership of property they do not rightfully possess, and it reinforces the legal recourse available to landowners seeking to protect their rights against conflicting claims.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Spouses Lolito Chua and Myrna Palomaria vs. Spouses Agustin Lo and Josefina N. Becina, G.R. No. 196743, August 14, 2019