Tañedo vs. Court of Appeals

A contract of sale over a future inheritance is void under Article 1347 of the Civil Code, but in a double sale of immovable property, ownership belongs to the buyer who in good faith first records the sale in the Registry of Property under Article 1544, even if the other buyer is in actual possession; the factual findings of the trial and appellate courts on good faith and credibility are final and conclusive and may not be reviewed in a petition for review on certiorari under Rule 45.

Lazaro Tañedo and Ricardo Tañedo were brothers, Ricardo being the eldest. Petitioners are Lazaro's children — Belinda Tañedo, suing for herself and in representation of her brothers and sisters, and Teofila Corpuz Tañedo, representing her minor daughter Verna Tañedo; private respondents are Ricardo and his wife, Teresita Barera Tañedo. The dispute centered on Lot No. 191 of the cadastral survey of Gerona, Tarlac, which Lazaro expected to inherit from his parents. The controlling statutory backdrop is Article 1347 of the Civil Code, which prohibits contracts upon a future inheritance except in cases expressly authorized by law, and Article 1544, which governs preference among vendees in cases of multiple sales of the same thing.

Lazaro Tañedo and Ricardo Tañedo were brothers, Ricardo being the eldest. Lazaro had ten children, among them petitioner Belinda Tañedo; petitioner Teofila Corpuz Tañedo represented her minor daughter Verna Tañedo. The property in dispute was Lot No. 191 of the cadastral survey of Gerona, Tarlac, covered by Title T-13829 of the Register of Deeds of Tarlac, which Lazaro expected to inherit from his parents.

On October 20, 1962, Lazaro executed a notarized deed of absolute sale in favor of Ricardo and Ricardo's wife, Teresita Barera, conveying for P1,500.00 "one hectare of whatever share I shall have over Lot No. 191," which he described as his "future inheritance" from his parents. After his father Matias died, Lazaro executed an "Affidavit of Conformity" dated February 28, 1980, reaffirming, respecting, acknowledging, and validating the 1962 sale. On January 13, 1981, Lazaro executed another notarized deed of sale in favor of the spouses covering his "undivided ONE TWELVE (1/12)" share in Lot No. 191, acknowledging receipt of P10,000.00 as consideration.

In the meantime, Lazaro had also executed an "Absolute Deed of Sale" dated December 29, 1980, conveying to his ten children his allotted portion under the extrajudicial partition of Matias' estate, which included Lot No. 191. In February 1981, Ricardo learned of this sale to Lazaro's children. On June 7, 1982, the spouses recorded their January 13, 1981 deed of sale in the Registry of Deeds, and the corresponding entry was made in Transfer Certificate of Title No. 166451.

On July 16, 1982, petitioners filed a complaint for rescission and damages against the spouses, seeking to nullify the deeds of sale executed by Lazaro in their favor. Petitioners presented a private writing purportedly prepared and signed by Matias dated December 28, 1978 expressing his desire that whatever inheritance Lazaro would receive should be given to Lazaro's children; a typewritten document dated March 10, 1979 signed by Lazaro in the presence of two witnesses confirming that he would voluntarily abide by his father's wishes; and a letter dated January 1, 1980 from Lazaro to his daughter Carmela stating that his share in the extrajudicial settlement was intended for his children. The spouses, for their part, presented a "Deed of Revocation of a Deed of Sale" dated March 12, 1981, in which Lazaro revoked the sale in favor of petitioners on the ground that it was "simulated or fictitious without any consideration whatsoever."

Shortly after the complaint was filed, Lazaro executed a sworn statement virtually repudiating the contents of both the Deed of Revocation and the January 13, 1981 deed of sale in favor of the spouses. At trial, however, Lazaro testified that he had sold the property to Ricardo and that a lawyer had induced him to execute a deed of sale in favor of his children after giving him five pesos to buy a "drink."

The trial court found that petitioners had failed to adduce a preponderance of evidence to support their claim and decided in favor of the spouses. The Court of Appeals affirmed, ruling that the January 13, 1981 deed of sale was valid and that its registration in good faith vested title in the spouses. Both courts gave more credence to the evidence presented by the spouses than to that of petitioners, and the appellate court refused to overturn the trial court's assessment of the testimonial evidence, holding that the credibility of witnesses is a matter the trial judge who presided at the hearing was in a better position to resolve.

• Validity of the 1962 Sale: Petitioners argued that the October 20, 1962 contract of sale over Lazaro's future inheritance was void ab initio under paragraph 2 of Article 1347 of the New Civil Code, and not merely voidable or annullable as the trial court concluded.
• Bad Faith in Registration: Petitioners contended that private respondents acted in bad faith in registering the January 13, 1981 deed of sale with the Register of Deeds of Tarlac, since respondent Ricardo already knew of the earlier deed of sale in favor of petitioners.
• Preponderance of Evidence: Petitioners maintained that their testimonial and documentary evidence clearly established by preponderance that they are the legitimate and lawful owners of the property in question.
• Fraud, Deceit, and Moral Ascendancy: Petitioners alleged that respondent Ricardo, by fraud and deceit and with foreknowledge that the property had already been sold to petitioners, caused Lazaro to execute the January 13, 1981 deed; that only half of the P10,000.00 purchase price was paid at the time of execution, contrary to the written acknowledgment, thus showing bad faith; that the deed of revocation of the sale in their favor was tainted with fraud or deceit; and that Ricardo took undue advantage of Lazaro's weakness and unschooled and pitiful situation, having exercised moral ascendancy over his younger brother as the eldest brother who had reached fourth year college of law and had at one time been a former Vice-Governor of Tarlac, while Lazaro had only attained first year high school.

• Validity of the Sale of Future Inheritance: Whether the sale of a future inheritance executed on October 20, 1962 is valid.
• Validity of the Subsequent Sale and Registration: Whether the subsequent execution on January 13, 1981, and registration with the Registry of Property, of a deed of sale covering the same property to the same buyers is valid.
• Review of Factual Findings: Whether the Supreme Court may review the respondent Court's findings that the buyers acted in good faith in registering the subsequent deed of sale and its alleged failure to consider petitioners' evidence, and whether the respondent Court's conclusions are illogical and off-tangent.

• Validity of the Sale of Future Inheritance: No. Under Article 1347 of the Civil Code, no contract may be entered into upon a future inheritance except in cases expressly authorized by law; the 1962 sale is void and cannot be the source of any right nor the creator of any obligation, and the affidavit of conformity seeking to ratify it is equally useless.
• Validity of the Subsequent Sale and Registration: Yes. The January 13, 1981 sale was executed after the inheritance had vested in Lazaro, and under Article 1544 of the Civil Code, ownership of immovable property sold to different vendees belongs to the buyer who in good faith first records the sale in the Registry of Property.
• Review of Factual Findings: No. The matters raised involve questions of fact, appreciation of evidence, and credibility of witnesses, which are not proper in a petition for review under Rule 45; only questions of law may be raised and passed upon.

• Validity of the Sale of Future Inheritance: Article 1347 of the Civil Code prohibits contracts upon a future inheritance except in cases expressly authorized by law. The Court ruled categorically that the 1962 sale was invalid and could not be the source of any right nor the creator of any obligation between the parties. Consequently, the February 28, 1980 affidavit of conformity, insofar as it sought to validate or ratify the 1962 sale, was useless and suffered from the same infirmity — a point even private respondents conceded in their memorandum. The Court noted, however, that the 1962 sale was not really at issue, since the documents critical to the resolution were the 1980 and 1981 deeds, which were executed after the death of Matias and after the extrajudicial settlement of his estate, when Lazaro already held actual title over the property.

• Validity of the Subsequent Sale and Registration: The January 13, 1981 deed of sale in favor of the spouses and the December 29, 1980 deed of sale in favor of petitioners were both executed after the death of Matias and after the extrajudicial settlement of his estate, which vested in Lazaro actual title over the property; these dispositions, though conflicting, were no longer infected with the infirmities of the 1962 sale. The Court of Appeals correctly identified the subject matter of the January 13, 1981 sale as Lazaro's entire undivided 1/12 share in Lot No. 191, the same property disposed of in favor of petitioners. Because the property is immovable, Article 1544 of the Civil Code governs: ownership belongs to the buyer who in good faith first recorded the sale in the Registry of Property. Although the deed in favor of the spouses was later than the one in favor of petitioners, ownership vested in the spouses because of the undisputed fact of registration on June 7, 1982, while petitioners never registered their sale at all. Petitioners' claim that they were in possession and that the spouses never took possession did not defeat the registered buyer's preferred right, since as between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property.

• Review of Factual Findings: The contentions that the spouses acted in bad faith, that only half of the purchase price was paid contrary to the written acknowledgment, that the deed of revocation was tainted with fraud or deceit, and that Ricardo exercised moral ascendancy over Lazaro all involved questions of fact, appreciation of evidence, and credibility of witnesses, which are not proper in a petition for review under Rule 45. The Supreme Court is not a trier of facts; only questions of law may be raised and passed upon. Absent any whimsical or capricious exercise of judgment, and unless the lack of any basis for the lower courts' conclusions is amply demonstrated, their findings will not be disturbed. The Court found none of the recognized exceptions present, and the mere fact that petitioners' evidence was not believed by both the trial and the appellate courts, which instead gave more credence to the evidence of private respondents, was not in itself a reason for setting aside such findings. The Court was far from convinced that both courts gravely abused their respective authorities and judicial prerogatives.

• Sale of Future Inheritance (Article 1347, Civil Code) — No contract may be entered into upon a future inheritance except in cases expressly authorized by law. A sale of future inheritance is therefore void and cannot be the source of any right nor the creator of any obligation between the parties; an affidavit of conformity executed later to validate or ratify such a sale suffers from the same infirmity. The Court applied this doctrine to void the October 20, 1962 sale and the February 28, 1980 affidavit of conformity, even as it noted that the 1962 sale was not really at issue because the critical deeds were executed after the inheritance had vested.

• Double Sale of Immovable Property (Article 1544, Civil Code) — Where the same immovable property has been sold to different vendees, ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. As between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property. The Court applied this rule to hold that ownership vested in the spouses, who registered their January 13, 1981 deed of sale on June 7, 1982, while petitioners never registered their December 29, 1980 deed.

• Finality of Factual Findings of Lower Courts — The factual findings of the trial court, as well as the Court of Appeals, are final and conclusive and may not be reviewed on appeal; in a petition for review under Rule 45, only questions of law may be raised and passed upon. Reassessment of facts is allowed only in exceptional circumstances: when the conclusion is grounded entirely on speculation, surmises, or conjectures; when the inference made is manifestly absurd, mistaken, or impossible; when there is grave abuse of discretion in the appreciation of facts; when the judgment is premised on a misapprehension of facts; or when the findings went beyond the issues of the case and are contrary to the admissions of both appellant and appellee. The Court found none of these grounds present.

• "(n)o contract may be entered into upon a future inheritance except in cases expressly authorized by law." — This is the Court's categorical statement of the rule under Article 1347 of the Civil Code, which served as the basis for voiding the 1962 sale and the affidavit of conformity that sought to ratify it.
• "Thus, although the deed of sale in favor of private respondents was later than the one in favor of petitioners, ownership would vest in the former because of the undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all." — This passage states the ratio decidendi on the double sale, applying Article 1544 of the Civil Code to prefer the buyer who first registered the sale notwithstanding the earlier date of the competing deed.
• "As between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property." — This is the Court's canonical formulation of the preference rule, which it used to reject petitioners' claim that their actual possession defeated the registered buyer's right.
• "It is well-settled that the Supreme Court is not a trier of facts. In petitions for review under Rule 45 of the Revised Rules of Court, only questions of law may be raised and passed upon." — This passage articulates the procedural ground for refusing to review the lower courts' findings on good faith, credibility, and appreciation of evidence.

• Chua Tiong Tay vs. Court of Appeals and Goldrock Construction and Development Corp., G.R. No. 112130, March 31, 1995 — Cited as controlling precedent for the rule that the factual findings of the trial court and the Court of Appeals are final and conclusive and may not be reviewed on appeal, subject to the enumerated exceptional circumstances, none of which the Court found present.
• South Sea Surety and Insurance Company, Inc. vs. Hon. Court of Appeals, et al., G.R. No. 102253, June 2, 1995 — Cited for the rule that the Supreme Court will not assess and evaluate all over again the testimonial and documentary evidence adduced by the parties, particularly where the findings of both the trial court and the appellate court on the matter coincide.
• Nuguid vs. Court of Appeals, 171 SCRA 213 (March 13, 1989) — Cited for the rule that as between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property.

• Article 1347, Civil Code — Provides that no contract may be entered into upon a future inheritance except in cases expressly authorized by law. The Court applied this provision to declare the October 20, 1962 sale void and incapable of creating any right or obligation, and to render useless the February 28, 1980 affidavit of conformity that sought to validate it.
• Article 1544, Civil Code — Governs the preferential rights of vendees in cases of multiple sales. For immovable property, ownership belongs to the person acquiring it who in good faith first recorded it in the Registry of Property; absent inscription, to the person who in good faith was first in possession; and absent both, to the person who presents the oldest title, provided there is good faith. The Court applied the registration rule to vest ownership in the spouses, who first recorded their deed on June 7, 1982.
• Rule 45, Rules of Court — Governs petitions for review on certiorari. The Court applied the rule that only questions of law may be raised and passed upon, and declined to review the lower courts' factual findings on good faith, appreciation of evidence, and credibility of witnesses.

Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.