G.R. No.

L-5567 May 29, 1953

JUAN EVANGELISTA, petitioner,

vs.
GUILLERMO MONTAÑO, FLORENCIO TAYTAY, and TITO PAZ, respondents.

Eulalio Chavez, Teofilo de Guia and Victoriano H. Endaya for petitioner.

Augusto L. Valencia for respondents.

TUASON, J.:

This is an appeal by certiorari from the Court of Appeals.

The plaintiff brought the action to recover certain portion of a parcel of land which he
brought from one Juana Dalisay on September 29, 1947, and which Tito Paz, Guillermo
Montaño and Florencio Taytay, defendants, were severally occupying under claim of
ownership. These defendants resisted the action on the ground that they were the
owner of their respective lots through purchases, while the others disclaimed any
interest in the suit.

The Court of Appeals found these facts to have been established:

. . . on July 20, 1933, there was issued in favor of one Fortunato Dalisay a
homestead patent covering a parcel of public land with an area of 19 hectares,
84 areas and 93 centiares situated in the barrio of Paclasan, municipality of
Mansalay, Province of Mindoro. On March 28, 1939, Fortunato Dalisay sold for
the sum of P225 a portion of said homestead containing an area of 5 hectares to
the defendant Tito Paz, and for the purpose executed in favor of the latter a
public deed of sale in which the portion sold was delimited (Exhibit "4"). Tito Paz
immediately took possession of the portion sold to him, declared it in his name
for purposes of the payment of real estate taxes on May 10, 1939, and since then
he has been in possession thereof up to the present. However, he did not have
his deed of conveyance recorded in the Register of Deeds for Mindoro and noted
on the corresponding certificate of title.

Fortunato Dalisay died in the year of 1941 and the property was inherited by his
daughter Juana Dalisay. On the strength of an affidavit of consolidation of
ownership, executed but Juana Dalisay on November 5, 1946, and filed with the
Register of Deeds for Mindoro on the same date, Transfer Certificate of Title No.
T-118, Office of the Register of Deeds for Mindoro, covering the property, free
from all liens and incumbrances, was issued in her name and delivered to her.

On November 7, 1941, in consideration of the sum of P200, Juan Dalisay sold to

defendant Guillermo Montaño a portion of said homestead containing an area of
two hectares, and for the purpose executed in favor of the latter a public deed of
sale in which the portion sold appears delimited (Exhibit 5). And on April 9, 1946,
she again sold to the same party for P300 another portion of that homestead
containing an area of one hectares by means of another public deed in which the
portion sold was also delimited (Exhibit 7). Guillermo Montano took possession of
those portions, which contained an aggregate area of 3 hectares immediately
after were to him, and until how he is in possession thereof. Like Tito Paz,
however, he failed to have his deed of conveyances recorded in the Register of
Deeds of Mindoro and noted on the corresponding certificate of title.

On November 7, 1944 Juana Dalisay, by means of a public deeds and in

consideration of the sum of P200, sold to the defend- ant Florencio Taytay a
portion of that homestead containing an area of 2 hectares, which also appear
delimited in the deed (Exhibit 6). Florencio Taytay took possession of the portion
immediately after it was sold to him, but also failed to have his deed of
conveyance recorded in the Register of Deed for Mindoro, and annotated on the
corresponding certificate of title.

It further appears that on November 14, 1946, Juana Dalisay and her husband,
Pedro de la Cruz, constituted on the whole lot covered by Transfer Certificate of
Title No. T-118 a mortgage in favor of the Philippine National Bank to guarantee
the payment of a loan in the sum of P4,000. This transaction was dult annotated
on the back of said transfer certificate of title.

Sometime prior to July 28, 1947, the spouses Juana Dalisay and Pedro de la
Cruz offered for sale to the plaintiff the whole homestead and showed him
Transfer Certificate of Title No. T-118. The latter examined said certificate of title
and finding that the only encumbrance noted thereon was the mortgage in favor
of the Philippine National Bank, became interested in the property. Instead,
however, of immediately closing the deal, he endorsed the matter his lawyer for
further study. The latter wrote on July 28, 1947, a letter to the Register of Deeds
of Mindoro inquiring whether there were any transaction concerning property
which were pending registration and not yet noted on said certificate of title
(Exhibit G). On August 1, 1947, the Register of Deeds for Mindoro answered
plaintiff`s lawyer that there were in his office no transaction concerning the land
which were pending registration (Exhibit D). Not contented with this information,
the plaintiff inspected the land accompanied by Juana Dalisay. He found on the
land the herein defendants, who advised him not to buy it because the same had
already been sold to them. As Juana Dalisay, however, told plaintiff that the
defendants were only her tenants, plaintiff decided to but the property and on
September 29, 1947, the necessary deed of sale, in which it was recorded that
Juana Dalisay, assisted by her husband, Pedro de la Cruz, in consideration of
the payment by the plaintiff of the sum of P9,000, sold and conveyed to the latter
the whole parcel of the land described in Transfer Certificate of Title No. T-118,
Registry of Deeds for the Province of Mindoro, was executed by said Juana
Dalisay (Exhibit B). This conveyance having been duly approved by the
Secretary of Agriculture and Commerce (Exhibits E and E-1) and the obligation in
favor of the Philippine National Bank having been paid and the mortgage
 constituted on the property released (Exhibit G), the plaintiff presented said deed
with the necessary papers to the Register of Deeds for the Province of Mindoro
and secured the issuance in his name of Transfer Certificate of the Title No. 463,
Register of Deeds for Mindoro, which cancelled Transfer Certificate of Title No.
T-118, free from all liens and encumbrances (Exhibit A). Armed with this
certificate of title, the plaintiff demanded that defendants vacate the portions of
the property respectively held by them. The latter refused. Hence, this action.

Both the Court of First Instance and the Court of Appeal absolved the defendants,
having found and declared after weighing the evidence that the plaintiff was not a
purchaser in good faith. That this conclusion is a finding of fact and, being a finding of
fact, not subject to review, is too plain to admit of argument.

The assignment of error that need some attention is that which assail the validity of the
defendant's titles on the premise that their purchase were not approved by the
Secretary of Agriculture and Natural Resources as provided for by section 118 of
Commonwealth Act No. 141, as amended by section 1 of Commonwealth Act No. 456.

The Court of Appeals agreed with the plaintiff that these conveyance "violated said
provision." But, citing Maninang vs. Consolacion, 12 Phil., 242; Ibañez, et al. vs.
Hongkong and Shanghai Banking Corporation, et al. 22 Phil., 572; Wolfson vs. Estate of
Martinez, 20 Phil., 341; and Puyat & Sons, Inc. De la Amas, et al., 2 Off. Gaz., No. 2,
February 1943, p. 162, for authority, the court opined, as had the trial court, that the
"plaintiff had no personality to invoke said law." Plaintiff's counsel, on the otherhand,
contends that the authorities relied upon by the Court of Appeals are not in point, and
that the applicable decision are Oliveros vs. Porciongcola, 69 Phil., 305 and Porkan, et
al vs. Navarro 73 Phil., 698, which he submits, are against the Appellate Court's
opinion.

From the view we take of the case, however, there is no necessity of deciding this point.
We will proceed at once to consider the question at issue on the merits, except to advert
to the fact that the sale to Tito Paz., which was executed on March 28, 1939, did not
come which the operation of Act No. 456, which was approved on June 8, 1939, and
was not retroactive; only the sales to Guillermo Montaño and Florencio Taytay were
affected by the new legislation.

The provision added to Section 118 of Commonwealth Act. No. 141 by the amendment,
and which is the provision pertinent to the case, estate that, "No alienation, transfer, or
conveyance of any homestead after five years and before twenty-five years after
issuance of title shall be valid without the approval of the Secretary of Agriculture and
Natural Resources, which approval shall not be denied except to constitutional and legal
grounds."

By Article 1461 of the Civil Code of 1889, in force at the time of the disputed sales, the
vendor was bound to deliver and warrant the subject matters of the sales. By virtue of
this warranty, she was responsible to the vendees for the legal peaceful possession of
the lots she sold (Article 1474). We take this to mean, among others, obligation to clear
title, including the securing the approval of the sales by the Secretary of Agricultural and
Natural Resources.

By force by this obligation, the plaintiff, who stepped into the shoes of his grantor, can
not use the lack of approval to nullify the sales. A seller will not be allowed to tale
advantage of his or her wrong or omissions. Under the maximum "Equity regards that
has done which should have been done," the Court will view the sales as though the
obligation imposed upon the parties had been met, and treat the purchaser as the
owners of the subject matters of the sales, notwithstanding the defects of the
conveyances or of their execution. As a corollary, the purchaser as owners will be
protected against subsequent purchasers and encumbrances, except bona
fide purchaser for value and without notice, which the plaintiff clearly was not. (21 C.J.,
201, 202.)

It is important to keep in mind in this connection that the warrant of approval of the sales
by the Secretary of Agriculture and Natural Resources did not, in our opinion, invalidate
the sales. Upon the facts upon the instant case, the required approval may be regarded
as directory. Section 118 of Commonwealth Act. No. 141, as amended, specifically
enjoins that the approval by the Department Secretary "shall not be denied except on
constitutional and legal grounds." There being no allegation that there were
constitutional or legal impediments to the sales, and no pretence that if the sales had
been submitted to the Secretary concerned they would have been disapproved,
approval was a menesterial duty, to be had as a matter of course and demandable if
refused. For this reason, and if necessary, approval may not be applied for and its effect
will be to ratify and adopt the transaction as if they had been previously authorized.

It was the sale of the portions already convey to the defendants which should not have
been approved, and, we incline to believe, would not have been approved if the
Secretary of Agriculture and Natural resources had been apprised of the conveyances
to the defendants. For the plaintiff's purchased was illegal in the broader sense of the
term. From this standpoint, the plaintiff does not come with clean hands, and his title
may be said to be tainted with fraud, at least constructive fraud. Such title cannot be
permitted to defeat whose only defect is the lack of authorization which might be had of
course, and which it was the duty of plaintiff's predecessor in interest to obtain, in the
first place.

Plaintiff's next point is that, regardless of any approval by the Secretary of Agriculture
and Natural Resources, the sales to the defendants were absolutely void because they
were not registered. This contention overlooks the doctrine, well settle in an unbroken
line of decisions, that unrecorded sales of land brought under the Land Registration Act
are effective between the binding upon the immediate parties, and that the registration
required by section 50 of that Act is intended primarily for the protection of the innocent
third persons, i.e., persons who, without knowledge of the sales and good faith, have
acquired rights to the property. As has been shown the plaintiff was not an innocent
purchaser for value.
The decision of the Court of Appeals is affirmed, with costs against the petitioner.

Paras, C.J., Feria, Bengzon, Montemayor, Reyes, Jugo and Bautista Angelo,
JJ., concur.