Bornales v IAC

Facts:

Sixto Dumolong, married to Isabel Marquez, was originally awarded a parcel of land in Capiz in 1927. But Sixto and Isabel had lived separately since 1920. They had no child. Subsequently, Sixto cohabited with Placida Dumolong, with whom he had a son (Renito Dumolong).

In November 1977,  Placida filed for reconstitution of title over the lot. This was granted by the CFI, Capiz. In March 1978, a Deed of Extrajudicial Adjudication and Sale of Real Property was sold to spouses Carlito Patanao and Minda Dumolong; and spouses Bernardo Decrepito and Loreta Dumolong. This was executed by Renito and by Isabel whose supposed thumbmark appeared in the document. The deed was registered in November 1978. 3 months later, they sold the lot to the Bornales spouses through a Deed of Absolute sale.

Isabel filed an Action for Reconveyance against all the spouses. Only the Bornales spouses answered and the other spouses were declared in default. The RTC held in favor of Isabel on the grounds that all the defendants were purchasers in bad faith, that the land was conjugal property of Isabel and Sixto, and that the Deed was a forgery through the machinations of the defendants.

CA affirmed the RTC.

Issue:

Whether or not the spouses Bornales are purchasers in good faith?

Held:

No.  The Bornales spouses have been tenants/lessees of the land during Sixto’s lifetime. Having been cultivators of the land, it is unimaginable that they were unaware of the transactions affecting the land.  It appears that they were aware that Isabel was the legal wife of Sixto and was a rightful heir to the properties of the latter.

The fact alone that the petitioners knew that they purchased the property with full knowledge of the flaws and defect in the title of the vendors is proof of their bad faith.  Having bought the land registered under the Torrens system from their vendors who procured title by means of fraud, petitioners cannot invoke the indefeasibility of a certificate of title against Isabel to the extent of her interest. The Torrens system should not be used as a means to perpetuate fraud against the rightful owner. Registration, to be effective, must be made in good faith.

*CA affirmed

Doctrine: The Torrens system should not be used as a means to perpetuate fraud against the rightful owner. Registration, to be effective, must be made in good faith.