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Manotok Vs CA

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G.R. No.

L-39044 January 31, 1985

MANOTOK REALTY, INC., petitioner


versus
THE HON. COURT OF APPEALS and FELIPE CARILLO, respondents

Facts:

Manotok Ralty Inc., is the registered owner of a parcel of land covered by Tax
Declaration Nos. 2455 and 2456 issued by the City Assessor's Officece of Manila and by TCT
55125 and TCT No. 76130 of the Register of Deeds of the City of Manila. It acquired the
aforementioned property from the Testate Estate of Clara Tambunting de Legarda, being the
highest bidder in a sale conducted by the Probate Court.

After having acquired said property, the petitioner subdivided it, but could not take
possession thereof because the whole area is occupied by several houses among which is the one
belonging to the herein respondent Felipe Carillo. In spite of demands to vacate and surrender
possession of the property, respondent continued to occupy the disputed lot and refused to
surrender possession.

Petitioner alleges that he acquired the lot in dispute from a certain Delfin Dayrit on
September 25, 1962, pursuant to a deed of assignment. Dayrit in turn, had acquired the property
from the late Carla Tambunting by virtue of a Contract of Sale on Installment Basis for which
receipts were duly issued. Dayrit could not continue paying the succeeding installments as they
fell due and that it was only lately, more specifically on September 25, 1962, when Dayrit
conveyed the lot to appellant Carillo.

After the petitioner failed in its attempts to take possession of the lot, it led the
reivindicatory action against the respondent. The trial court decided the case in favor of the
petitioner. Whereas, the intermediate appellate court declared respondent Felipe Carillo a builder
in good faith with the right to remain in the questioned premises.Petitoner asks for a petition for
review to reverse the decision of the Court of Appeals.

Issue:

Whether or not Felipe Carino is a possessor in good faith.

Ruling:

A possessor in good faith is one who is not aware that there exists in his title or mode
of acquisition any flaw which invalidates it. One who acquires real estate with
knowledge of a defect or lack of title in his vendor cannot claim that he has
acquired title thereto in good faith as against the true owner of the land or of an
interest therein; and the same rule must be applied to one who has knowledge of
facts which should put a reasonable man upon his guard, and then claims that he
acted in good faith under the belief that there was no defect in the title of the
vendor. The records show that when Dayrit executed the deed of assignment in favor
of the respondent, the disputed lot was already registered and titled in the name of
the petitioner. Such an act of registration served as a constructive notice to the
whole world and the title issued in favor of petitioner made his ownership
conclusive upon and against all persons including Dayrit and herein respondent,
although no personal notice was served on either of the latter. Therefore, the
presumption of good faith in favor of the respondent cannot apply because as far as
the law is concerned, he had notice of the ownership by the petitioner over said lot.

WHEREFORE, the questioned decision of the Court of Appeals is hereby SET


ASIDE and another one is entered AFFIRMING in toto the decision of the Court of
First Instance of Manila

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