PURA CARREON, ET AL. vs. RUFO AGCAOILI, ET AL. G.R. No. L-11156 February 23, 1961, IN RELATION TO PURCHASER IN GOOD FAITH,

Below this digest is the full text of the case.


PURA CARREON, ET AL. vs. RUFO AGCAOILI, ET AL. G.R. No. L-11156 February 23, 1961

Facts:
1. The land in question in this case was acquired during the marriage of Bonifacio Carreon and Celerina Dawag.

2. When Carreon died, Celerian Dawag executed an affidavit stating that she was the only heir of her deceased husband and a TCT was issued in her name cancelling the OCT but in thruth and infact, she has children to her deceased husband who alsow owned the land.

3. She sold the land to Agcaoili who do not know that the land was owned in common by the seller and her children although they were townmate and the lien on the land was already expired.

4. children of Celerina with the deceased husband filed a complaint against the spouses Agcaoili seeking to have the deed of sale executed by their mother declared as one of mortgage and to recover one half pro-indiviso of the land

ISSUE.
Whether or not, defendant is a purchaser in bad faith.

According to the Supreme Court, There is no proof that when defendant purchased the land, he knew of any flaw in the title of the seller and although they were town mates with the seller, he is a member of the Philippine Constabulary which is the reason why he seldom come home to visit his relative, and fraud cannot be presumed, it must be proven with clear and convincing evidence.

So he is a purchaser in good faith.



G.R. No. L-11156 February 23, 1961
PURA CARREON, ET AL. vs. RUFO AGCAOILI, ET AL.

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-11156 February 23, 1961

PURA CARREON, ET AL., plaintiffs-appellants,
vs.
RUFO AGCAOILI and LOURDES SANTIAGO, defendants- appellees.

Domingo R. Maddumba for plaintiffs-appellants.
Meris, Moya, Revilla & Gaffud for defendant-appellee.
Nillo and Tiburcio for the other defendant-appellee.

BAUTISTA ANGELO, J.:

During the marriage of Bonifacio Carreon and Celerina Dauag the registered land subject of this case was acquired. After the death of Carreon, his widow
Celerina executed on September 24, 1946, an affidavit adjudicating to herself alone the said land. She declared in said document that she was the only
heiress of her husband. The original certificate of title covering the land was cancelled and a transfer certificate was issued in her name. There was
however annotated on her certificate a lien to the effect that her title was subject to Section 4 of Rule 74 of the Rules of Court.

On September 25, 1946, she borrowed P1,200.00 from the Philippine National Bank guaranteed by a mortgage on one-half of the land. A memorandum of the mortgage
was annotated on her transfer certificate. After the maturity of the loan, she requested a certain Mr. Pintang to look for a buyer of the land for P3,000.00.
One by the name of Rufo Agcaoili was found. The latter made an advance payment of Pl,500.00 and the balance was paid in full on October 13, 1947. The loan
from the bank was paid, the mortgage was released and the deed of absolute sale executed in his favor was registered.1 A new transfer certificate of title
was issued in the name of Agcaoili.

On February 19, 1955, the children of Celerina with the deceased husband filed a complaint against the spouses Agcaoili seeking to have the deed of sale
executed by their mother declared as one of mortgage and to recover one half pro-indiviso of the land described in the complaint. Simultaneous with the
filing of said complaint, Celerina filed an action for intervention which was dismissed by the trial court.

Defendants filed a motion for summary judgment upon the plea that the main averments of the complaint even if admitted do not constitute a cause of action
and supported their plea with certain documentary evidence. Plaintiffs filed an opposition on the ground that there was a genuine issue which could not
be determined unless a trial is had. The trial court, however, allowed the parties to submit evidence in support of their contentions and after a careful
analysis thereof found for defendants holding that plaintiffs, claim has no legal basis.

As may be gleaned from the appellants' assignments of error, the present appeal is predicated on the arguments that appellees were buyers in bad faith;
that there existed a trust relationship between them and appellants, and that such being the case, the action against appellees is imprescriptible.

There is no clear proof that when Rufo Agcaoili bought the land he knew of any flaw in the title of Celerina Dauag. The mere fact that he was a townmate
of Celerina is not sufficient basis to conclude that he knew that she had children by her first husband. It has been shown that since 1920 Rufo Agcaoili
has been an enlisted man in the Philippine constabulary and seldom come home to visit his relatives. A man of such a situation cannot be expected to know
the relatives and children of his vendor even if they are townmates,. Fraud cannot be presumed. It must be established by clear and sufficient evidence.
Here every indication is that Agcaoili bought the land in all good faith oblivious of the source of its acquisition.

If fraud had been committed such was perpetrated by Celerina, appellants' mother. By her action she induced Agcaoili to believe that she was the absolute
owner of the land which bore a torrens title. In dealing with it he merely relied on such title. He was not required to do more. He is only charged with
notice of the burdens which are noted on the face of said title. So, after he bought the land and a new title was issued in his name, he became a purchaser
thereof for value and a holder of a good and valid title.2

On the transfer certificate of title issued to Agcaoili there was annotated a statement that it was subject to Section 4, Rule 74 of the Rules of Court.
This was an annotation carried over from Celerina's transfer certificate. Section 4, Rule 74, provides the following:

SEC. 4. Liability of distributees and estate. — If it shall appear at any time within two years after the settlement and distribution of an estate in accordance
with the provisions of either of the first two sections of this rule, that an heir or other person has been unduly deprived of his lawful participation
in the estate, such heir or such other person may compel the settlement of the estate in the courts in the manner hereinafter provided for the purpose
of satisfying such lawful participation. And if within the same time of two years, it shall appear that there are debts outstanding against the estate
which have not been paid, or that an heir or other person has been unduly deprived of his lawful participation payable in money, the court having jurisdiction
of the estate may, by order for that purpose, after hearing, settle the amount of such debts or lawful participation and order how much and in what manner
each distributee shall contribute in the payment thereof, and may issue execution, if circumstances require, against the bond provided in the preceding
section or against the real estate belonging to the deceased, or both. Such bond and such real estate shall remain charged with a liability to creditors,
heirs, or other persons for the full period of two years after such distribution, notwithstanding any transfers of the real estate that may have been made.


The above lien is effective only for a period of two years. From September 28, 1946, when a transfer certificate of title was issued to Celerina, to September
8, 1949 when the deed of sale in favor of Agcaoili was issued and registered, more than two years had elapsed We sustain the lower court's opinion that
thenceforth the right to have such lien cancelled became vested on appellee Agcaoili and that the same had become functus oficio.3 And there being no fraud
in the transaction on the part of appellee, nor proof that he knew of any legal infirmity in the title of his vendor, we find no reason to apply the proposition
that he is deemed to be holding the land in trust for the children of Celerina Dauag.

WHEREFORE, the decision appealed from is affirmed, without pronouncement as to costs.

Bengzon, Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.

Footnotes

1 It is also noted that the said sale was approved by the Secretary of Agriculture and Natural Resources, the land having been acquired as a homestead.


2 Castillo v. Valdez, 53 Phil. 120; Seva and Seva v. Nolan and Arimas, 64 Phil. 374; Bacolod-Murcia Milling Co., Inc. v. Concepcion de la Rama de Villaruz,
L-4526, September 29, 1951.

3 Laplana v. Garchitorena Chereau 48 Phil. 163.