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PROPERTY RULES

Not mine to give

Gregoria owned a parcel of land in Bulacan. She died and was survived by her three sons: Ted, Francis, and Carl. The tax declaration for the Bulacan property was thereafter issued under the names of Ted, Francis and Carl.

Years later, her sons followed her to heaven. Only Ted was survived by children: Greg, Enri, Sim, and Sev.

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Unknown to his brothers, Enri executed an affidavit of self-adjudication declaring himself to be Gregoria’s only surviving heir, thereby adjudicating upon himself the land in Bulacan. He sold the property to Marie.

Appalled by their uncle’s actions, the heirs of Greg, Sim and Sev demanded from Marie the nullification of Enri’s affidavit of self-adjudication and the deed of absolute sale. They also sought to redeem Enri’s one-fourth share. Marie refused.

The heirs of Greg, Sim and Sev further discovered that Marie obtained a loan from Banco Mayaman and mortgaged the property to the said bank as security. At the time of the loan, the property was still covered by a tax declaration.

The bank approved the loan application with the agreement that the land shall be brought under the Torrens system.

Pursuant to such undertaking, an original certificate of title was issued in Marie’s name. The mortgage was thereafter annotated to the title.

The heirs of Greg, Sim and Sev filed a complaint in court for the annulment of document, recovery of possession, and reconveyance of the property.

They sought the annulment of Enri’s affidavit of self-adjudication, the deed of sale executed by Enri and Marie, and the deed of real estate mortgage executed by Marietta in favor of the Banco Mayaman. They also demanded the reconveyance of their three-fourth share in the property, their exercise of their right of redemption of Enri’s one-fourth share.

Meanwhile, Marie defaulted in her loan obligation.

Banco Mayaman instituted foreclosure proceedings on the land, and eventually became its highest bidder. For failure of Marie to redeem the property, the title to the property was consolidated in favor of Banco Mayaman.

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Q: Is Enri’s Affidavit of Self-Adjudication valid? Can it be a valid basis of the sale of the property to Marie?

A: No. Basic is the principle that “no one can give what one does not have.”

A seller can only sell what he or she owns, or that which he or she does not own but has authority to transfer, and a buyer can only acquire what the seller can legally transfer. This principle is incorporated in our Civil Code. It provides that in a contract of sale, the seller binds himself to transfer the ownership of the thing sold, thus:

Art. 1458. By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefore a price certain in money or its equivalent.

The seller cannot perform this obligation if he or she does not have a right to convey ownership of the thing.

Hence, Article 1459 of the Civil Code provides:

Art. 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (Heirs of Gregorio Lopez vs. DBP vs. G.R. No.193551, November 19, 2014 citing Articles 148 and 149 of the Civil Code)
Q: Who owns the Bulacan property?

A: Title or rights to a deceased person’s property are immediately passed to his or her heirs upon death.

The heirs’ rights become vested without need for them to be declared “heirs.”

Before the property is partitioned, the heirs are co-owners of the property.

In this case, the rights to Gregoria’s property were automatically passed to her sons. Since only Ted was survived by children, the rights to the property ultimately passed to them when Gregoriaz’s sons died. The children entitled to the property were Greg, Sim, Sev, and Enri.

Gregoria’s grandchildren, Greg, Sim, Sev, and Enri became co-owners of the property, with each of them entitled to an undivided portion of only a quarter of the property.

Upon their deaths, their children became the co-owners of the property, who were entitled to their respective shares, such that the heirs of Greg became entitled to Greg’s one-fourth share, and Sim’s and Sev’s respective heirs became entitled to their corresponding one fourth shares in the property.

Q: Can Enri alienate the entire property without the consent of the other co-owners?

A: No. Enri’s right to the property was limited to his one-fourth share, he had no right to sell the undivided portions that belonged to his siblings or their respective heirs.

Any sale by one heir of the rest of the property will not affect the rights of the other heirs who did not consent to the sale. Such sale is void with respect to the shares of the other heirs.

The law provides that “(e) ach co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. (Heirs of Gregorio Lopez vs. DBP vs. G.R. No.193551, November 19, 2014 citing Art. 493 Civil Code)

Q: Given the above, what did Enri convey to Marie?

A: Enri could only convey to Marie his undivided one-fourth share of the property, and Marie could only acquire that share.

This is because Marie obtained her rights from Enri who, in the first place, had no title or interest over the rest of the property that he could convey.

This is despite Enri’s execution of the affidavit of self-adjudication wherein he declared himself to be the only surviving heir of Gregoria. The affidavit of self-adjudication is invalid for the simple reason that it was false. (Heirs of Gregorio Lopez vs. DBP vs. G.R. No.193551, November 19, 2014 citing Art. 493 Civil Code)

Q: What is the effect of the issuance of the original certificate of title in favor of Marie?

A: Nothing. It does not cure Enri’s lack of title or authority to convey his co-owners’ portions of the property.

Issuance of a certificate of title is not a grant of title over petitioners’ undivided portions of the property.

The physical certificate of title does not vest in a person ownership or right over a property. It is merely an evidence of such ownership or right. (Heirs of Gregorio Lopez vs. DBP vs. G.R. No.193551, November 19, 2014 citing Art. 493 Civil Code)

Q: Could Marie be considered an innocent purchaser for value and thus could have acquired a valid title over the whole property?

A: As a rule, an ordinary buyer may rely on the certificate of title issued in the name of the seller. He or she need not look “beyond what appears on the face of the certificate of title.

However, the ordinary buyer will not be considered an innocent purchaser for value if there is anything on the certificate of title that arouses suspicion, and the buyer failed to inquire or take steps to ensure that there is no cloud on the title, right, or ownership of the property being sold.

Marie cannot claim the protection accorded by law to innocent purchasers for value because the circumstances do not make this available to her.

In this case, there was no certificate of title to rely on when she purchased the property from Enri. At the time of the sale, the property was still unregistered. What was available was only a tax declaration issued under the name of “Heirs of Gregoria.”
The defense of having purchased the property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith on the clear title of the registered owner.

It does not apply when the land is not yet registered with the Registry of Deeds. (Heirs of Gregorio Lopez vs. DBP vs. G.R. No.193551, November 19, 2014 citing Art. 493 Civil Code)

Q: Is the mortgage valid?

A: No. Marie acquired no valid title or ownership from Enri over the undivided portions of the property, no valid mortgage was executed over the same property in favor of the bank.

Without a valid mortgage, there was also no valid foreclosure sale and no transfer of ownership of petitioners’ undivided portions to the bank.

In other words, the bank acquired no right over the undivided portions since its predecessor-in-interest was not the owner and held no authority to convey the property.

The protection accorded to mortgagees in good faith cannot be extended to mortgagees of properties that are not yet registered or registered but not under the mortgagor’s name. (Heirs of Gregorio Lopez vs. DBP vs. G.R. No.193551, November 19, 2014 citing Art. 493 Civil Code)

Ma. Soledad Deriquito-Mawis is currently the Dean. Lyceum of the Philippines University; president of Philippine Association of Law Schools; and Senior Partner at Gatchalian Castro & Mawis Law Office

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