36 Spouses Domingo v Roces (Lahoz)
DOCTRINE: The provisions of Rule 74, Section 4 of the Rules of Court clearly
April 9, 2003 | Ynares-Santiago | Rule 74
Petitioner: Spouses Eduardo Arenas Domingo & Josefina Chavez Domingo
Respondents: Lilia Montinola Roces, Cesar Roberto Roces, Ana Ines Magdalena
Roces Tolentino, Luis Miguel Roces, Jose Antonio Roces, Maria Vida Roces
SUMMARY: Two parcels of land, originally owned by spouses Roces, were
mortgaged to the GSIS. The GSIS was able to cause the transfer of the said two
titles in its name. Cesar Roces subsequently lied, leaving his wife and five children.
Montinola, a nephew of Lilia, executed an afdavit of self-adjudication over the
subject property and alleged that he was the sole heir of the spouses. Montinola
was able to get a favorable decision, which rendered the titles of the GSIS to the
property as null and void. He was able to secure new titles in his and later executed
a deed of absolute sale in favor of the Domingos.
Upon learning of the sale of the property, the children of the spouses Roces, fled a
complaint against Montinola and the Domingos. They argued that the affidavit of
self-adjudication of Montinola was fraudulent as he was not an heir of the Roces nor
that Lilia was already dead. They claimed, therefore, that the deed of absolute sale
was null and void. The Domingos claimed that they were buyers in good faith and
that the action was barred by estoppel and laches. The trial court ruled in favor of
the Domingos. Upon appeal, the CA declared that the affidavit of self-adjudication
and the deed of absolute sale to the petitioners as null and void.
W/N the annotation barred petitioners from being innocent purchasers for value –
YES
The Domingos could not be considered buyers in good faith. It was held that the
buyer of real property the title of which contains annotations pursuant to Rule 74,
Section 4 of the Rules of Court, they cannot be considered innocent purchaser for
value. The titles contained annotations which made reference to the provisions of
Rule 74, Section 4. The section covers transfers of real property to any person, as
long as the deprived heir or creditor vindicates his rights within two years from the
date of the settlement and distribution of estate. The effects are not limited to the
heirs or original distributees of the estate, but affect any transferee of the properties.
Also the Court recognized that only four months had elapsed from the time the
respondents discovered Montinola's fraudulent acts to the time they filed their
complaint. Therefore no unreasonable delay could be attributed to the respondents
in this case.
covers transfers of real property to any person, as long as the deprived heir or
creditor vindicates his rights within two years from the date of the settlement and
distribution of estate. Buyers of real property, the title of which contains an
annotation pursuant to Rule 74, Section 4 cannot be considered innocent
purchasers for value.
FACTS:
1. Spouses Roces were the owners of two parcels of land on Arayat St.,
Mandaluyong covered by TCT Nos. 57217 and 57218. GSIS caused the
annotation of adverse claim on the titles alleging that the spouses have
mortgaged the land to it.
2. GSIS demanded the surrender of the owner’s duplicates of titles from the
spouses but they failed to do so. GSIS then filed a petition praying that
the duplicates in the spouses’ possession be declared null and void and
the the Register of Deeds (RoD) be directed to issue new duplicates to
GSIS. This petition was granted.
3. Cesar Roces died intestate, leaving his widow Lilia and their 5 children.
4. Reynaldo Montinola, a nephew of Lilia, executed an affidavit of self-
adjudication over the Arayat property.
a. He alleged that:
i. The property was owned by spouses Roces, who both
died intestate.
ii. The spouses left no heirs except the brother of Lilia who
was his father
iii. The spouses left no will or debts
iv. He was the sole heir of the spouses Roces
5. Montinola then filed a petition against the GSIS, praying for the
cancellation of the TCTs in the latter’s possession. During trial, GSIS
failed to produce any document evidencing the alleged real estate
mortgage by the spouses. Hence, the RTC rendered the duplicates in
GSIS’ possession null and void and ordered the RoD to issue new owner’s
duplicates of the said titles.
6. The decision became final and executory and a new TCT was issued in
the name of Montinola.
7. Montinol executed a deed of absolute sale of the property in favor of
spouses Domingo (Domingos). Thereafter, a TCT was issued in the name
of the Domingos.
8. Both the TCTs issued in favor of Montinola, and later on the Domingos,
both contained the annotation:
“Subject to the provision of Section 4, Rule 74 of the Rules of
Court with respect to the inheritance left by the deceased SPS.
CESAR ROCES & LILIA MONTINOLA.”
1
 9.When the children of spouses Roces learned of the sale, they immediately
filed a complaint against Montinola and the Domingos. They alleged that the
affidavit of self-adjudication was fraudulent because Montinola was not an
heir of the spouses and that Lilia was not dead. Therefore, the affidavit and
the deed of absolute sale must be declared null and void.
10. Domingos claim that they were buyers in good faith and that the action was
already barred by estoppel and laches.
11. RTC ruled in favor of the Domingos but on appeal, the CA reversed the same.
The CA reinstated the title in favor of Spouses Roces and ordered Montinola
to return the purchase price to the Domingos.
12. The Domingos filed the current petition claiming that the CA erred in holding
that the annotation in the title regarding Section 4, Rule 74 is an encumbrance
which disqualifies petitioners from being innocent purchasers for value.
ISSUE/S:
1. W/N the annotation barred petitioners from being innocent purchasers for
value – YES.
purchasers for value. In this case, the annotation at the back of the title
was sufficient notice to petitioners of the limitation on Montinola's right to
dispose of the property. The presence of an irregularity which excites or
arouses suspicion should prompt the vendee to look beyond the certificate
and investigate the title of the vendor appearing on the face thereof.
Purchasers of registered land are bound by the annotations found at the
back of the certificate of title.
4. The children of the spouses were also not barred by laches because only
four months elapsed from the time they found out about the sale to the
time they filed their complaint.
DISPOSITION:
WHEREFORE, in view of the foregoing, the instant petition for review is DENIED.
The decision and resolution of the Court of Appeals in CA-G.R. No. CV No. 62473
are AFFIRMED in toto. SO ORDERED.

RATIO:
On whether there was an employer-employee relationship between Kasei and
Francisco - YES
1. It is true that one who deals with property registered under the Torrens
system need not go beyond the same. He is charged with notice only of such
burdens and claims as are annotated on the title. However, this does not
apply when the party has actual knowledge of facts and circumstances that
would impel a reasonably cautious man to make such inquiry or when the
purchaser has knowledge of a defect or the lack of title in his vendor or of
sufficient facts to induce a reasonably prudent man to inquire into the status
of the title of the property in litigation. One who falls within the exception can
neither be denominated an innocent purchaser for value nor a purchaser in
good faith.
2. The titles contained annotations which made reference to the provisions of
Rule 74, Section 41. The section covers transfers of real property
to any person, as long as the deprived heir or creditor vindicates his rights
within two years from the date of the settlement and distribution of estate.
The effects are not limited to the heirs or original distributees of the estate,
but affect any transferee of the properties.
3. The buyer of real property the title of which contain an annotation pursuant
to Rule 74, Section 4 of the Rules of Court cannot be considered innocent

1
SEC. 4. Liability of distributees and estate. — If it shall appear at any time within two (2) years after the
settlement and distribution of an estate in accordance with the provisions of either of the first two sections of
this rule, that an heir or other person has been unduly deprived of his lawful participation in the estate, such
heir or such other person may compel the settlement of the estate in the courts in the manner hereinafter
provided for the purpose of satisfying such lawful participation. And if within the same time of two (2) years, it
shall appear that there are debts outstanding against the estate which have not been paid, or that an heir or
other person has been unduly deprived of his lawful participation payable in money, the court having jurisdiction
of the estate may, by order for that purpose, after hearing, settle the amount of such debts or lawful
participation and order how much and in what manner each distributee shall contribute in the payment
thereof, and may issue execution, if circumstances require, against the bond provided in the preceding
section or against the real estate belonging to the deceased, or both. Such bond and such real estate shall
remain charged with a liability to creditors, heirs, or other persons for the full period of two (2) years after
such distribution, notwithstanding any transfers of real estate that may have been made.