My aunt borrowed from my parents the Torrens Title covering the 80 square meters of land where we are staying. My parents were also made to sign a document that was later on discovered as a Deed of Sale. The deed was registered last year, and the Certificate of Title covering the 80 square meters of land was cancelled, and a new one was issued in the name of my aunt. My parents were very upset about what my aunt had done. They executed an Affidavit of Adverse Claim and registered the same with the Register of Deeds.
Last month, my aunt connived with a real estate broker and the latter sold the property to Ken. My parents filed a complaint before the Barangay against my aunt and Ken involving the matter. During one of the meetings with the Lupon Tagapamayapa, Ken insisted that he is a buyer in good faith, because he did not see any claim or encumbrance when he examined the owner’s duplicate of title in the name of my aunt, which was presented to him by the broker. Can we still recover the property from Ken who claims to be a buyer in good faith?
The Deed of Sale allegedly executed by your parents and your aunt is considered a simulated sale. An absolutely simulated sale or fictitious sale is a void or inexistent contract under Article 1409 (2) and Article 1346 of the New Civil Code of the Philippines.
The essential requisites of a contract are provided under Article 1318 of the same law, which are as follows: “(1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established.”
The abovementioned essential requisites of a contract are lacking in the alleged sale entered by your parents, hence it is void. Thus, your aunt who derived her right based on a void sale acquired no right over the property. Consequently, she cannot pass any right to Ken.
Ken’s claim that he is a buyer in good faith is not correct because he merely relied on the owner’s duplicate of title that was shown to him by the broker. He should have investigated further by verifying the copy with the Register of Deeds. It is important also to emphasize that an Affidavit of Adverse Claim had already been annotated in the copy of the title with the Register of Deeds. The annotation of the said affidavit is a notice to the whole world that somebody else is claiming the said property.
Please be guided by the decision of the Supreme Court in the case of Rufloe et al. vs Burgos et al (GR No. 143573, January 30, 2009), where it stated through the Associate Justice Teresita J. Leonardo-De Castro that:
“The circumstances surrounding this case point to the absolute lack of good faith on the part of respondents.
The evidence shows that the Rufloes caused a notice of adverse claim to be annotated on the title of Delos Reyes as early as November 5, 1979. The annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real property, and serves as a notice and warning to third parties dealing with said property that someone is claiming an interest on the same or may have a better right than the registered owner thereof.”
Thus, Ken is not prudent enough because he did not investigate further before buying the property. His reliance on the owner’s duplicate of title is not a sufficient basis, so as to consider him as a buyer in good faith.
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to firstname.lastname@example.org