GasatayavMabasa

CORONA,J.:

Before us is an appeal by certiorari

under Rule 45 of the 1997 Rules of Civil
Procedureassailingthedecision1[1]oftheCourt
of Appeals (CA) in CAG.R. CV No. 55055
which, in turn, affirmed the decision of the
RegionalTrialCourt(RTC)ofLanaodelNorte,
Branch7.2[2]

The facts follow.

Respondent Editha Mabasas father,

BuenaventuraMabasa,wasgrantedahomestead
patentonLots279,272and972locatedinLala,
Lanao del Norte. Buenaventura Mabasa
mortgagedtheselotstosecurealoanfromthe
Development Bank of the Philippines (DBP).
Becauseofhisfailuretopayhisindebtedness,
DBP foreclosed on the lots and sold them at
publicauctionwhereitemergedasthehighest
bidder.DBPthenobtainedtitlestothelots:Lot
279 under TCT No. T2247 and consolidated
Lots272and972underTCTNo.T2448.

When Buenaventura Mabasa died,

respondentssiblingsauthorizedhertonegotiate
with DBP for therepurchase of the lots. DBP
allowed respondent to reacquire the foreclosed
propertiesthroughadeedofconditionalsalefor
P25,875.3[3]

Gasataya,forthelattertoassumepaymentofher
obligation to DBP. They further agreed that
SabasGasatayawouldtakepossessionofthelots
for20yearsanddevelopthemintoafishpond.
As consideration thereof, respondent received
P10,000 cash, in addition to the P25,000 that
SabasGasatayahadtopayDBPonherbehalf.

UponrepresentationbySabasGasataya
thatrespondentsobligationtoDBPhadalready
beensettled,theyenteredintoanotheragreement
denominatedasDeedofSaleofFishpondLands
withRighttoRepurchase.
Eight years after the execution of the above deed
of sale with right to repurchase, respondent
discovered that Sabas Gasataya had stopped
paying DBP. As a result, DBP revoked her right
to repurchase the subject lots.

DBP later on held a public auction of the

propertieswherepetitionerparticipatedandbid
the highest price of P27,200. Eventually, he
acquiredtitlestothelotsforwhichhewasissued
TCTNo.T11720inlieuofTCTNo.T2447
(Lot279)andTCTNo.T11721forTCTNo.T
2448(Lots272and972).
Respondent then filed a complaint in
theRTCforreconveyanceoftitlesoflandswith
damages4[4] against petitioner and Sabas
Gasataya(Gasatayas).Sheclaimedthatthelatter
deliberatelyrenegedonhiscommitmenttopay
DBPto:(1)revokeherrighttorepurchasethe
lotsunderthedeedofconditionalsaleand(2)
subjectthepropertiestoanotherpublicauction
wherepetitionercouldbid.

Subsequently, respondent entered into

an agreement with petitioners father, Sabas

1
2
3

Petitioner and his father denied the

allegations saying that the deed of conditional
saleassumedbythelatterfromrespondentwas
renderedineffectivebyDBPsrefusal toaccept
paymentsthereon.


The trial court ruled in favor of
respondent findingthat theGasatayasfailedto
controvertherclaimthattheydefraudedherjust
so petitioner could acquire the lots at public
auction.5[5] According to the trial court, the
Gasatayas failed to prove that DBP indeed
rejected payments from Sabas Gasataya. The
trialcourtruled:

d.
Ordering [the
Gasatayas]topay[respondent]
the sum of P5,000.00 for
attorneys fees; P5,000.00 as
litigationexpenses;

e.
Ordering [the
Gasatayas]topaycostsofthis
proceeding[s].

SOORDERED.6[6]

WHEREFORE,
judgmentisherebyrenderedin
favor of the [respondent] and
against [the Gasatayas]
ordering[them]towit:

a.
Ordering
[petitioner] to reconvey to
[respondent] TCT. No.[T
11720]andTCTNo.T11721,
bothoftheRegistryofDeeds
fortheProvinceofLanaodel
Norte, upon tender to and
receipt by [petitioner] of the
amount of
P37,200.00
Philippinemoney;

b.
Ordering the
Registrar of Deeds for the
ProvinceofLanaodelNorteto
procureandcausethetransfer
and registration of the
aforesaid transfer certificates
of title in favor and in the
name of herein [respondent]
EdithaS.Mabasa;

Petitionerandhisfatherappealedtothe
CA which affirmed the RTCs decision and
dismissedtheirappealforlackofmerit.TheCA
declared:

The contention of
[respondent] that [the
Gasatayas] deliberately chose
nottopayDBPasagreed,in
orderforthemtoacquiresaid
properties ina fraudulent and
treacherous manner, was not
fully controverted by [them].
[The Gasatayas] failed to
produce evidence to support
theirdefenses.

xxx
xxx
xxx

Moreover,
[the
Gasatayas]areinpossessionof
said land[s] by virtue of a
Deedof Sale withaRight to
Repurchase and not because
theDBPgrantedittothem[T]o
facilitate their acquisition of
the land in question, [they]
deliberately defaulted in the
payment of the assumed
obligation to the damage and
prejudice of [respondent].
Consequently, the lands in
question were subjected to

c.
Ordering [the
Gasatayas] to cede, transfer
and reconvey to [respondent]
the physical possession and
occupancyofLot279,272and
Lot 972as covered by the
aforesaidcertificatesoftitle;

public bidding wherein

[petitioner] participated and
eventuallywon[theGasatayas]
committed a breach of trust
amounting to fraud which
would warrant an action for
reconveyance.7[7]

irrefutableespeciallywhenaffirmedbytheCA. 9
[9]AbsentanyevidencethattheCAoverlooked
salientmattersthatcouldjustifyareversalofthe
outcomeofthiscase,wedeclinetodisturbsuch
factualconclusions.

Petitioner, however, insists that

respondenthadnorighttothedisputedlotssince
theconditionalsaleagreementwheresuchright
was based had long been cancelled by DBP.
According to petitioner, a void and inexistent
deed cannot override his right as registered
ownerofthelots.

Petitioner alone came to us via this appeal by

certiorari seeking the reversal of the CA
decision.

Before us, petitioner contests the CA

decision affirming the trial courts order to
reconvey his titles on the disputed lots to
respondent who, according to him, is not the
ownerthereof.

WeaffirmtheCA.

Reconveyanceisavailablenot onlyto
the legal owner of a property but also to the
personwithabetterrightthanthepersonunder
whose name said property was erroneously
registered.8[8] Whilerespondentisnotthelegal
ownerofthedisputedlots,shehasabetterright
than petitioner to the contested lots on the
followinggrounds: first,thedeedofconditional
saleexecutedbyDBPvestedonhertherightto
repurchase the lots and second, her right to
repurchasethemwouldhavesubsistedhadthey
(theGasatayas)notdefraudedher.

Thetrialcourtsfindings,asaffirmedby
theCA,that petitionerandhisfatherdeceived
respondenttoacquirethedisputedlotsbindus.
Wellsettledistherulethatfactualconclusions
of the trial court deserve respect and become

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8

Wedisagree.

Petitionercannot discredit the deed of

conditionalsalejustsohecantokeephistitlesto
thelots.PetitionershouldberemindedthatDBP
revokedrespondentsrighttorepurchasethelots
under said deed because of the deceitful
maneuveringsthatheandhisfatheremployed.If
weweretosustainpetitionersargument,thenwe
would,ineffect,rewardhimforhismisdeed.

Neither can this Court uphold

petitionerscontentionthathistitlesareunsullied
onthemerefactthathepurchasedtheproperties
at public auction. Fraud overthrows the
presumption that the public sale was attended
with regularity. The public sale did not vest
petitioner with any validtitle to theproperties
sinceitwasbuttheconsequenceofhisandhis
fathersfraudulentschemes.

The registration of the properties in

petitionersnamedidnotobliteratethefactthat
fraudprecededandfacilitatedsuchregistration.
Actual or positive fraud proceeds from an
intentional deception practiced by means of

misrepresentationofmaterialfacts,10[10] which
inthiscasewastheconsciousrepresentationby
petitioners father (Sabas Gasataya) that
respondentsobligationtoDBPhadalreadybeen
settled.Itisfraudtoknowinglyomitorconceala
fact, upon which benefit is obtained, to the
prejudice of another.11[11] Consequently, fraud
isagroundforreconveyance.12[12]

Moreover, the law only protects an

innocent purchaser for value and not one who
has knowledge of and participation in the
employmentoffraud.Aninnocentpurchaserfor
valueisonewhobuysthepropertyofanother
withoutnoticethatsomeotherpersonhasaright
toorinterestinthatsameproperty,andwhopays
afullandfairpriceatthetimeofthepurchaseor
before receiving any notice of another persons
claim.13[13] Obviously, petitioner was not an
innocentpurchaserforvalue.

Asafinalpoint,theCourttakessignificantnote
of the fact that respondents father originally
acquired the subject lots through homestead
grant. Commonwealth Act 141 (Public Land
Act) aims to confine and preserve to the
homesteaderandhiskinthehomesteadlots.We,
therefore, agree with the CAs disquisition that
courtsshouldlendastoutshouldertohelpkeepa
homestead in the homesteaders family for the
sternrealitycannotbebeliedthathomesteaders
and their families are generally in the lower
stratum of life and most likely, when they
alienate the homestead, it is out of dire
necessity.14[14] According to the CA,
desperation does not allow much of a choice,
hence homesteaders and their kin should be
given every opportunity to repurchase their
homestead.

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11
12
13
14

WHEREFORE, the assailed decision

of the Court of Appeals in CAG.R. CV No.
55055isherebyAFFIRMED.
Costsagainstpetitioner.

SOORDERED.