Facts:
The respondents filed a motion for quieting the title and recovery of possession and ownership against the petitioners. Apparently, they claim they are the owners of the parcel of land by virtue of the deed of sale they entered into with Roberto Marfori to whom the petitioners allegedly sold their land to. The Egaos acquired their land title by virtue of a free patent and transferred their ownership in favor of Marfori by virtue of a deed of sale. However, the Certificate of Title was not transferred in Marfori’s favor. Upon purchase of the land from Marfori, the respondents introduced improvements thereon and paid taxes for the property. However, the petitioners illegally occupied portions of the land. Petitioner answers that they are the true owner of the land by virtue of the Certificate of Title issued by the Register of Deeds pursuant to their Free Patent. The lower court ruled in favor of Egao. Upon appeal, the CA reversed the decision of the lower court on grounds that the main issue should be whether Egao can validly sell the land to Marfori who subsequently transferred the ownership to the respondents. The CA holds both Egao and Marfori to be in pari delicto for violating the 5-year restriction provided by Commonwealth 141 against encumbrance and alienation of public lands acquired thru free patent or homestead patent. They cannot therefore obtain affirmative relief. It also declares the respondents as innocent purchasers for value who the obtained the duplicate of the OCT still in the name of the Egaos from Marfori and ownership was transferred to them by physical possession of the property. It thus promulgated judgment holding the respondents the absolute owners of the land in dispute, to cancel the OCT of the petitioner and its transfer thereof to the respondents and to surrender peaceful possession of the land to the respondents.
Issue:
Whether or not the petitioners validly transferred their ownership to Marfori to resolve the rights of the respondents over the land in dispute?
Ruling:
The SC holds that based on the adduced evidence, the Egaos sold the lot to Marfori within the 5-year restriction period provided by law on Free Patent based on the Deed of Sale entered into by the parties. Although the petitioners denied the validity of the Deed of Sale the court held that it was notarized and a notarial document has in its favor the presumption of regularity. When the land was sold to the respondents, they know that the OCT is still registered under the name of the petitioners. Thus, they are not considered to be innocent purchaser as contrary to the ruling of the CA. Where a purchaser neglects to make the necessary inquiries and closes his eyes to facts which should put a reasonable man on his guard as to the possibility of the existence of a defect in his vendor's title, and relying on the belief that there was no defect in the title of the vendor, purchases the property without making any further investigation, he cannot claim that he is a purchaser in good faith for value. A private individual cannot bring an action for reversion or any action which would have an effect of canceling a free patent and the certificate of title issued on the basis thereof since the land covered will form part again of the public domain. Sec. 124 of the Public Land Act provides that deeds of sale of patented lands, perfected within the prohibited five (5) year period are null and void thus the Egaos have no title to pass to Marfori and nobody can dispose that which does not belong to him. The respondents are not innocent purchasers for value with no standing to question the rights of the petitioners over the land and to file an action to quiet the title. The petitioners remained to be the registered owners and entitled to remain in physical possession of the disputed property. Respondents are ordered to deliver the OCT to the petitioners without prejudice to an action for reversion of the land to be instituted by the Solicitor General for the State.
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