ADVERSE CLAIM

Case: Spouses Sy v. De Vera-Navarro, G.R. No. 239088, April 3, 2019

FACTS:
The case stems from a complaint filed by petitioner Sps. Sy against respondents De Vera-Navarro and BHTLI before the RTC
for Declaration of Nullity of Deed of Absolute Sale, Cancellation of Transfer Certificate of Titles, Recovery of Ownership, and Damages.
Petitioner John was one of the co-owners of a parcel of land and the four-storey building at Rizal Street, Barangay Zone IV, Zamboanga
City, covered by TCT No. T-171,105 (subject property) with a market value of P40,000,000. Petitioner John, for himself and in
representation of his co-owners, borrowed P3,720,000 from respondent De Vera-Navarro, secured by a Real Estate Mortgage Contract
(Mortgage Contract) over the subject property. The Mortgage Contract was annotated on TCT No. T-171-105. Petitioners Sps. Sy then
alleged that immediately after the execution of the Mortgage Contract, respondent De Vera-Navarro asked petitioner John to execute
an undated Deed of Absolute Sale with a consideration of P5,000,000. Afterwards, on Mar. 22, 2011, petitioner John was informed by
respondent BHTLI that the ownership of the subject property had been transferred to respondent De Verra-Navarro; that TCT T-
199,288 was issued in favor of respondent De Verra-Navarro; and that respondent BHTLI was demanding Sps. Sy to vacate the
property. Upon learning this, one of the co-owners, petitioner Valentino, caused the annotation of an adverse claim on TCT T-199,288.
Thereafter, a Deed of Absolute Sale was executed between De Vera-Navarro and BHTLI. The RTC declared that Deed of Absolute Sale
between petitioner John and respondent De Vera-Navarro is an equitable mortgage and thus null and void, and further held that BHTLI
cannot be considered as a buyer in good faith because there was a notice of adverse claim and because petitioners Sps. Sy were still
in possession of the subject property. The CA reversed the rulings and ruled in favor of BHTLI. Hence, this petition.

ISSUE/S: W/N BHTLI can be considered as a buyer in good faith, considering that there was a notice of adverse claim over the subject
property.

RULING:
No. While respondent BHTLI contends that is an innocent purchaser for value, supposedly having no knowledge of any
infirmity on the sale at the time of its transaction with respondent De Vera-Navarro, it still cannot be considered as a buyer in good
faith. Jurisprudence holds that he who alleges that he is a purchaser of registered land is burdened to prove such statement. Such
burden is not discharged by simply invoking the ordinary presumption of good faith. In the instant case, the Court finds that respondent
BHTLI failed to discharge such burden. Instead of showing good faith on the part of respondent BHTLI, the incontrovertible facts
establish respondent BHTLI' s status as a buyer in bad faith. The Court has held that actual lack of knowledge of the flaw in title by
one's transferor is not enough to constitute a buyer in good faith where there are circumstances that should put a party on guard,
such as the presence of occupants in the subject property.47 Again, it is not disputed that petitioners Sps. Sy have been in continuing
possession of the subject property. Yet, this fact did not prompt respondent BHTLl to investigate further as to the contract of sale it
entered with respondent De Vera-Navarro. Further, respondent BHTLI cannot seriously feign ignorance of any infirmity, considering
that prior to its entering into the Deed of Absolute Sale dated March 30, 2011 with respondent De Vera-Navarro, petitioner Valentino
had already caused on March 24, 2011 the annotation of an adverse claim on TCT T-199,288.
FOUNDATION

Case: Spouses Padilla v. Salovino, G.R. No. 232823, August 28, 2019

FACTS:
In January 2000, spouses Padilla filed an application for registration for a parcel of land situated in Lot 12, Block 14, Upper
Bicutan, Taguig. The Registry of Deeds of Rizal issued TCT No. 37273 registering the property in petitioners’ name. On March 3, 2014,
respondents filed a Complaint for Cancellation of Title, Declaration of Nullity of Instrument with Reconveyance and Damages against
petitioners, alleging that they were the bona fide residents of the subject property, and that petitioners were able to secure the
registration over the property through fraud and misrepresentation. Petitioners filed a Motion to Dismiss for failure to state a cause
of action as respondents were not the real parties-in-interest. They assailed that respondents admitted that the subject land belonged
to the State. As such, petitioners posited that the present complaint was actually an action for reversion, which only the State could
file. The RTC granted petitioners’ motion and dismissed respondents’ complaint. It agreed that the present action was for reversion
and as such, may be instituted only by the State through the OSG. The CA reversed the RTC Decision. Hence, this petition.

ISSUE/S: W/N the subject land is belongs to public domain and as such, the action should be of reversion to be instituted by the OSG.

RULING:
Yes. A reversion proceeding is the manner through which the State seeks to revert the land to the mass of public domain and
is the proper remedy when public land is fraudulently awarded and disposed of in favor of private individuals or corporations.
Reversion is not automatic as the government, through the OSG, must file an appropriate action. Since the land originated from a
grant by the government, its cancellation is thus a matter between the grantor and the grantee. In other words, it is only the State
which may institute reversion proceedings. In the present case, a thorough and holistic review of respondents’ complaint reveals that
they do not in fact assert ownership over the subject property. They merely aver that they are the qualified applicants for a land grant
from the government being the bona fide residents thereof. In recognizing that ownership over the property should first revert to the
State before title thereto is granted to them, respondents cannot now claim that they have a pre-existing right of ownership over the
property in question even before the issuance of title in favor of petitioners. As such, even if petitioners may have committed fraud
or misrepresentation in their application, ownership of the property reverts to the State and not to respondents. They are but
applicants for the purchase of land belonging to the public domain.