MANILA—The Supreme Court (SC) has nullified the sale of two parcels of land in Tacloban City after finding that the buyer was aware the seller was not the real owner of the properties.

In a ruling penned by Associate Justice Maria Filomena D. Singh, the SC’s Third Division canceled the sale made by Bayani S. Cerilla to Edward C. Ciacho, ruling that Ciacho could not be considered an innocent purchaser for value because he knew that Cerilla had no authority to sell the properties.

The case stemmed from land originally inherited by Adolfo T. De Guia. Facing foreclosure due to unpaid debt, De Guia sought Cerilla’s help to settle the mortgage. Although they signed a deed of sale and transferred the land titles to Cerilla, a subsequent agreement was made to re-sell the properties back to De Guia. To secure this deal, De Guia filed an adverse claim on the land titles.

Another agreement followed, in which Cerilla would buy the properties from De Guia for ₱15 million—on the condition that De Guia would first remove illegal settlers. Cerilla paid ₱1.675 million as a partial payment.

When De Guia failed to fulfill the condition, Cerilla sought a loan from Ciacho using the properties as collateral. After failing to repay the loan, Cerilla signed a deed of sale in favor of Ciacho but asked him not to transfer the title. Ciacho ignored this request and registered the properties under his name. De Guia then filed a case before the Regional Trial Court (RTC) seeking to void the sale.

Both the RTC and the Court of Appeals sided with De Guia, holding that Cerilla was merely an “accommodation party” who facilitated paperwork and had no real ownership of the properties. They also ruled that Ciacho was not an innocent buyer since he was aware of De Guia’s legal interest, which was annotated on the land titles.

The Supreme Court affirmed these rulings, stating that under the Civil Code, a valid sale requires consent and authority from the property owner. In this case, the Court noted that there was no intent to permanently transfer ownership to Cerilla, as shown by his immediate resale of the properties to De Guia and his request to Ciacho not to transfer the title.

“Generally, to be considered an innocent purchaser for value, the buyer does not have any notice of defect or irregularity as to the right or interest of the seller, and the buyer is without notice that a third party has a claim to the subject property. Thus, if there is anything on the certificate of title that leads to suspicion or raises any cloud on the title, right or ownership of the subject property, the buyer cannot be deemed as an innocent purchaser for value,” the Court said.

In a separate opinion, Associate Justice Alfredo Benjamin S. Caguioa said De Guia should pursue damages against Cerilla for violating their agreement. He emphasized that an implied trust had been created, where Cerilla held the title for De Guia’s benefit and was not the sole owner.