CASE DIGEST (BATCH 3)

TIRO VS PHILIPPINE ESTATES CORPORATION

Petition for review on certiorari assailing the decision of the Court of Appeals which affirms the RTC decision
favouring respondent

Petitioners filed a complaint for quieting of land against herein respondents. Petitioners which happened to
be siblings alleged that they are the rightful owner of the land subject to this dispute. Petitioners averred
that they are the successors-in-interest of the original owners of the land and that they were in open,
continuous, exclusive and notorious possession of the land since time immemorial until they were prevented
to enter such property in 1995 by persons who claimed to be the new owners of the property.

Based on the records of the registry of deeds, the original title named after Julian and Pedro Tiro,
predecessors-in-interest of herein petitioners, have been cancelled since September 10 1969 and have
been transferred in the name of Julio Baba and Olimpia Mesa. The disputed property was supported by (1)
an Extrajudicial Declaration of Heir and Confirmation of Sale dated August 20 1969 executed by Maxim
Ochea who claimed to be the only living heir of Juan and Pedro Tiro. And (2) a document entitled Deed of
confirmation executed on the same date by spouses Amores who transferred the property in 1947.

Based on the facts and evidences presented on the case, Ochea committed fraud when she
misrepresented herself. And due to that misrepresentation, the property which was claimed fraudulously
has already been subject to five transfers.

The Court of Appeals ruled that even assuming that the first few transfers were in bad faith, the transfer to
herein respondent who acted in good faith by relying only on the title and was not aware of the irregularity
became root of a valid title.

The indefeasibility of the torrens title should not be used as a means to perpetrate fraud against the rightful
owner of real property. Good faith must concur with registration because, otherwise, registration would be
an exercise in futility. However, where good faith is established, as in the case of an innocent purchaser for
value, a forged document may become the root of a valid title.

A person is considered in law as an innocent purchaser for value when he buys the property of another,
without notice that some other person has a right or an interest in such property, and pays a full price for
the same at the time of such purchase, or before he has notice of the claims or interest of some other
person in the property. A person dealing with registered land may safely rely on the correctness of the
certificate of title of the vendor/transferor, and the law will in no way oblige him to go behind the
certificate to determine the condition of the property. The courts cannot disregard the rights of innocent
third persons, for that would impair or erode public confidence in the torrens system of land registration.
Thus, a title procured by fraud or misrepresentation can still be the source of a completely legal and valid
title if the same is in the hands of an innocent purchaser for value.