Hemedes v. CA
MAXIMA HEMEDES v. THE HONORABLE COURT OF APPEALS, DOMINIUM REALTY AND CONSTRUCTION CORPORATION, ENRIQUE D. HEMEDES, and R & B INSURANCE CORPORATION
G.R. No. 107132. October 8, 1999
The instant controversy involves a question of ownership over an unregistered parcel of land, situated in Sala, Cabuyao, Laguna. It was originally owned by the late Jose Hemedes, father of Maxima Hemedes and Enrique D. Hemedes. Jose Hemedes executed a document entitled Donation Inter Vivos With Resolutory Condition whereby he conveyed ownership over the subject land, together with all its improvements, in favor of his third wife, Justa Kauapin, subject to the following resolutory conditions:
(a) Upon the death or remarriage of the DONEE, the title to the property donated shall revert to any of the children, or their heirs, of the DONOR expressly designated by the DONEE in a public document conveying the property to the latter; or
(b) In absence of such an express designation made by the DONEE before her death or remarriage contained in a public instrument as above provided, the title to the property shall automatically revert to the legal heirs of the DONOR in common.
Pursuant to the first condition abovementioned, Justa Kausapin executed a Deed of Conveyance of Unregistered Real Property by Reversion conveying to Maxima Hemedes the subject property except the possession and enjoyment of the said property which shall remain vested in Justa Kausapin during her lifetime, or widowhood and which upon her death or remarriage shall also automatically revert to, and be transferred to Maxima Hemedes.
Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage over the subject property in its favor to serve as security for a loan which they obtained in the amount of P6,000.00., R & B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay the loan even after it became due. The land was sold at a public auction with R & B Insurance as the highest bidder and a certificate of sale was issued by the sheriff in its favor. Since Maxima Hemedes failed to redeem the property within the redemption period, R & B Insurance executed an Affidavit of Consolidation. The annotation of usufruct in favor of Justa Kausapin was maintained in the new title.
Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa Kausapin executed whereby she transferred the same land to her stepson Enrique D. Hemedes, pursuant to the resolutory condition in the deed of donation executed in her favor by her late husband Jose Hemedes. Enriques D. Hemedes sold the property to Dominium Realty and Construction Corporation (Dominium). Dominium leased the property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who, even before the signing of the contract of lease, constructed two warehouses made of steel and asbestos costing about P10,000,000.00 each. Upon learning of Asia Brewery’s constructions upon the subject property, R & B Insurance sent it a letter informing the former of its ownership of the property as evidenced by TCT No. 41985 issued in its favor and of its right to appropriate the constructions since Asia Brewery is a builder in bad faith.
Dominium and Enrique D. Hemedes filed a complaint with the Court of First Instance of Binan, Laguna for the annulment of TCT No. 41985 issued in favor of R & B Insurance and/or the reconveyance to Dominium of the subject property. Specifically, the complaint alleged that Dominium was the absolute owner of the subject property by virtue of the deed of sale executed by Enrique D. Hemedes, who in turn obtained ownership of the land from Justa Kausapin, as evidenced by the Kasunduan. The plaintiffs asserted that Justa Kausapin never transferred the land to Maxima Hemedes and that Enrique D. Hemedes had no knowledge of the registration proceedings initiated by Maxima Hemedes.
The trial court rendered judgment in favor of plaintiffs Dominium and Enrique D. Hemedes, The Court of Appeals affirmed the assailed decision in toto.
Which of the two conveyances by Justa Kausapin, the first in favor of Maxima Hemedes and the second in favor of Enrique D. Hemedes, effectively transferred ownership over the subject land?
Public respondents finding that the Deed of Conveyance of Unregistered Real Property By Reversion executed by Justa Kausapin in favor of Maxima Hemedes is spurious is not supported by the factual findings in this case. In upholding the deed of conveyance in favor of Maxima Hemedes, we must concomitantly rule that Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights over the subject property. Justa Kausapin sought to transfer to her stepson exactly what she had earlier transferred to Maxima Hemedes the ownership of the subject property pursuant to the first condition stipulated in the deed of donation executed by her husband. Thus, the donation in favor of Enrique D. Hemedes is null and void for the purported object thereof did not exist at the time of the transfer, having already been transferred to his sister. Similarly, the sale of the subject property by Enrique D. Hemedes to Dominium is also a nullity for the latter cannot acquire more rights than its predecessor-in-interest and is definitely not an innocent purchaser for value since Enrique D. Hemedes did not present any certificate of title upon which it relied.
Whether or not R&B Insurance is a purchaser in good faith
R & B Insurance alleges that, contrary to public respondents ruling, the presence of an encumbrance on the certificate of title is no reason for the purchaser or a prospective mortgagee to look beyond the face of the certificate of title. We sustain petitioner R & B Insurances claim that it is entitled to the protection of a mortgagee in good faith.
The annotation of usufructuary rights in favor of Justa Kausapin upon Maxima Hemedes OCT does not impose upon R & B Insurance the obligation to investigate the validity of its mortgagor’s title. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance. The usufructuary is entitled to all the natural, industrial and civil fruits of the property and may personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct, even by a gratuitous title, but all the contracts he may enter into as such usufructuary shall terminate upon the expiration of the usufruct.
Clearly, only the jus utendi and jus fruendi over the property is transferred to the usufructuary. The owner of the property maintains the jus disponendi or the power to alienate, encumber, transform, and even destroy the same. This right is embodied in the Civil Code, which provides that the owner of the property, the usufruct of which is held by another, may alienate it, although he cannot alter the propertys form or substance, or do anything which may be prejudicial to the usufructuary.
There is no doubt that the owner may validly mortgage the property in favor of a third person and the law provides that, in such a case, the usufructuary shall not be obliged to pay the debt of the mortgagor, and should the immovable be attached or sold judicially for the payment of the debt, the owner shall be liable to the usufructuary for whatever the latter may lose by reason thereof.