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Alicia de Santos Vs IAC

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Alicia De Santos vs.

IAC
Facts:
A large parcel of land located in in Mactan Cebu is owned in common by Spouses
Aton and Arong (Spouses Aton) and Spouses Casiban and Aton (Spouses
Casiban). However, due to world war, the Original Certificate of Title (OCT) of
said property on file with Registry of Deeds got lost. Later, Spouses Aton sold
their share to Eleuteria who filed an action/petition for the reconstitution of the said
lost OCT in the names of original owners (Spouses Aton & Casiban).
Consequently, a new OCT was issued in favor of said original owners, and
thereafter, an oral division was executed in favor of Eleuteria naming her a
successor -in-interest of the share owned by Spouses Aton. Subsequently, the heirs
of Spouses Aton executed an extrajudicial declaration of heirs, which paved way to
the execution of deed of sale in favor of Eleuteria for the portion owned by
Spouses Aton. Hence, a Transfer Certificate of Title (TCT) was issued in the name
of Eleuteria covering the said portion with Spouses Casiban.
Four years thereafter, Spouses Casiban sold their portion to Spouses Bunagan, who
likewise filed an action for the judicial reconstitution of the OCT of the entire
property. Similarly, a new OCT was issued in the names of the original owners;
then a deed of sale was executed by Spouses Casiban in favor of Spouses Bunagan.
This also paved way to the issuance of TCT in favor of Spouses Bunagan for said
portion with Spouses Aton.
In other words, there was not only a double issuance of OCT due to reconstitution
of title; there was also a double sale that took place: first is involving the sale in
favor of Eleuteria; second the one executed to Spouses Bunagan. After the transfer
of TCT to Spouses, Bunagan, they subsequently sold their portion of another
person, Alicia Santos. The new owner, Alicia then filed a petition for Quieting of
Title, to remove cloud or issue on her ownership.

Issue:
Which of the two reconstitution and transaction is valid and genuine and which is
not.

Ruling:
The Court held that the first is valid. It ruled that the later reconstitution proceeding
had no legal effect and validity because there was already a prior reconstitution of
the original certificate of title covering the same lot way back. Notably, property
involved here is registered under the Torrens System and all parties are deemed to
have constructive notice of these public documents registered in the office of the
Register of Deeds. The fact that there already existed a perfectly valid reconstituted
title, TCT No. T-0043 in the name of Eleuteria and the Spouses Casiban, will make
subsequent petition for reconstitution void and without any force and effect.
Needless to state, all subsequent certificates of title including that of Spouses
Bunagan and Alicia Santos, are also void because of the legal truism that the spring
cannot rise higher than its source.
In the same vein, Alicia De Santos cannot be considered as purchaser in good faith.
A purchaser in good faith and for value is one who buy property of another,
without notice that some other person has a right to or interest in such property and
pays a full and fair 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.

Consequently, the element of-"without notice that some other person has a right to
or interest in such property"-is absent in this case. Alicia De Santos is deemed to
have knowledge of a public record, that is, there is a prior reconstituted title on file
with the Registry of Deeds of Lapu-Lapu City. Besides, petitioner should know
that respondent was in actual possession of this portion of Lot 5659.

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