In a dispute over land ownership, the Supreme Court clarified that the principle of double sales does not apply when different vendors sell the same property to different buyers. The Court also held that a defectively notarized deed of sale remains valid between the parties, provided its authenticity can be proven. This means that ownership can still be transferred even if a sale isn’t properly notarized, as long as the sale itself is legitimate and can be proven through other evidence. For property buyers and sellers, this emphasizes the importance of ensuring proper documentation and verifying the legitimacy of all parties involved in a real estate transaction.
Conflicting Claims: Who Holds the Stronger Hand in Disputed Land?
This case, Mr. and Mrs. Ernesto Manlan v. Mr. and Mrs. Ricardo Beltran, revolves around a contested 500-square-meter portion of land in Dumaguete City. The petitioners, the Manlans, claimed to have purchased the land in 1983 from one of the co-owners, Manuel Orbeta. Meanwhile, the respondents, the Beltrans, asserted their ownership based on deeds of sale executed in 1986 and 1990 by all the Orbeta co-owners (except Manuel, who was deceased), and a subsequent Transfer Certificate of Title (TCT) issued in their name. The core legal question is: Who has the superior right to the property, and how do defects in notarization affect the validity of a real estate transaction?
The Regional Trial Court (RTC) ruled in favor of the Beltrans, a decision affirmed by the Court of Appeals (CA). The lower courts found that while the 1990 Deed of Absolute Sale (DOAS) in favor of the Beltrans had a defective notarization, the defect did not invalidate the conveyance of the property. The CA also stated that the rule on double sales under Article 1544 of the New Civil Code did not apply because the Manlans and Beltrans purchased the property from different vendors. The Manlans then elevated the case to the Supreme Court, questioning the validity of the 1990 DOAS and claiming the rules on double sales should apply.
The Supreme Court began its analysis by emphasizing that it is not a trier of facts and generally defers to the factual findings of the lower courts, particularly when the CA affirms those findings. The Court then addressed the Manlans’ argument that the rules on double sales under Article 1544 of the Civil Code should govern the case.
Article 1544 of the Civil Code provides the rules for determining ownership when the same thing has been sold to different vendees:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.
However, the Supreme Court clarified that Article 1544 applies only when the same vendor sells the same property to different buyers. In this case, the Manlans bought the property from Manuel Orbeta alone, while the Beltrans bought it from all the Orbeta co-owners. Since there were different vendors, the Court concluded that the rule on double sales did not apply. As the Court articulated in Cheng v. Genato:
(a) (b) (c)
The Court then addressed the Manlans’ argument that the defective notarization of the 1990 DOAS invalidated the sale to the Beltrans. The Manlans claimed that because one of the signatories was already deceased when the deed was notarized, the deed was fraudulent.
The Supreme Court rejected this argument, citing Article 1358 of the Civil Code, which requires certain contracts, including those involving real rights over immovable property, to appear in a public document. However, the Court clarified that this requirement is for convenience and does not affect the validity or enforceability of the contract itself. Even a verbal contract of sale for real estate can have legal effect between the parties.
The Court emphasized that a defectively notarized document simply loses its status as a public document and becomes a private document. As such, its due execution and authenticity must be proven by preponderance of evidence, as outlined in Section 20, Rule 132 of the Rules of Court. Here, Ricardo Beltran testified that he personally witnessed the Orbetas sign the contract and that they affirmed their signatures before the notary public. This was sufficient to prove the authenticity of the deed, even with the defective notarization.
Finally, the Supreme Court addressed the Manlans’ claim that their counterclaim constituted a direct attack on the Beltrans’ title, which is permissible under the rules. The Court cited Section 48 of Presidential Decree No. 1529, the Property Registration Decree, which prohibits collateral attacks on a certificate of title. The question is whether the case constitutes direct or indirect attack, as defined in Sps. Sarmiento v. Court of Appeals:
An action is deemed an attack on a title when the object of the action or proceeding is to nullify the title, and thus challenge the judgment pursuant to which the title was decreed. The attack is direct when the object of the action is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.
The Court found that the Manlans’ claim of bad faith on the part of the Beltrans in registering the property was merely incidental to the principal case of quieting of title and recovery of possession. Therefore, it constituted a collateral attack on the Beltrans’ title, which is prohibited.
The Supreme Court distinguished this case from Sampaco v. Lantud and Development Bank of the Phils. v. CA and Carlos Cajes, where the counterclaims specifically sought the cancellation of the title and reconveyance of the property. In those cases, the counterclaims were considered direct attacks. Here, the Manlans’ counterclaim did not specifically ask for the reconveyance of the property, and their allegations were merely a restatement of their defense in the Answer.
FAQs
| What was the key issue in this case? | The key issue was determining who had the superior right to a parcel of land when two different parties claimed ownership based on purchases from different vendors and whether a defective notarization affects the validity of a sale. |
| Does the principle of double sales apply in this case? | No, the principle of double sales does not apply because the Manlans and Beltrans bought the property from different vendors (Manuel Orbeta alone versus all the Orbeta co-owners). The double sales rule applies only when the same vendor sells the same property to multiple buyers. |
| What is the effect of the defective notarization of the Deed of Absolute Sale? | The defective notarization does not invalidate the sale itself, but it reduces the document to a private instrument. This means that the authenticity and due execution of the deed must be proven by preponderance of evidence, rather than relying on the presumption of validity afforded to public documents. |
| What evidence was used to prove the authenticity of the Deed of Absolute Sale? | Ricardo Beltran’s testimony that he personally witnessed the Orbetas sign the contract and affirm their signatures before the notary public was sufficient to prove the authenticity of the deed, despite the defective notarization. |
| What is the difference between a direct and collateral attack on a title? | A direct attack on a title is a legal action specifically aimed at annulling or setting aside the judgment that led to the title. A collateral attack is an attempt to challenge the validity of the title in a separate action where the primary goal is something else. |
| Why was the Manlans’ counterclaim considered a collateral attack? | The Manlans’ counterclaim was considered a collateral attack because it did not specifically seek the reconveyance of the property, and their allegations of bad faith were merely incidental to the primary action of quieting of title and recovery of possession. |
| What is the significance of registering a property title? | Registering a property title provides legal recognition and protection of ownership rights. While registration isn’t always determinative, it generally strengthens a claim, especially in cases involving conflicting claims of ownership. |
| What is required for a contract involving real rights to be valid? | While Article 1358 of the Civil Code states that such contracts must appear in a public document, this is only for convenience. The contract is valid and binding between the parties as long as all the essential requisites for validity are present, regardless of whether it’s in a public or private document. |
| Can a verbal contract of sale for real estate have legal effect? | Yes, even a verbal contract of sale for real estate can produce legal effects between the parties, provided all the essential requisites for its validity are present. |
In conclusion, the Supreme Court upheld the CA’s decision, reinforcing the principle that ownership of property is determined by a confluence of factors, including the validity of the sale, the presence of proper documentation, and adherence to legal requirements. The case underscores the importance of ensuring that real estate transactions are conducted with due diligence and in compliance with the law.
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: Manlan vs. Beltran, G.R. No. 222530, October 16, 2019
Leave a Reply