Dear Atty. Angela,

I am an owner of a house and lot in Bulacan, which I inherited from my parents, but there were unpaid debts in the property so I asked for the help of my friend Ben to pay off the mortgage and prevent foreclosure. With this agreement, we signed a deed of sale and the title was transferred to Ben’s name. After I paid off my debt to Ben in a year, we signed another deed of sale to re-sell back the property to me and to protect my interest, I filed an adverse claim on the title. A few months after, I got surprised to find out that Ben used the property as collateral in his loan and eventually sold it to a third party without my knowledge. Can I file a case against Ben and the third party to invalidate their sale and I could get back ownership of the property?

Denise

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Dear Denise,

Yes, Ben was merely an accommodation party and not the real owner and as such, doen not have any authority to sell the property. The third party is also a purchaser in bad faith as he knew there was an adverse claim annotated in the title.

In the recent case of Ciacho v. Sps. De Guia, G.R. No. 259051 (26 February 2025), the Supreme Court explained that, “Under the Civil Code, for a sale to be valid, the parties must clearly agree to the sale. The parties’ actions during and after the agreement can serve as basis to determine their intent. The seller must also be the owner of the property or have authority to sell it.”

“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.”

In this case, there was no real intention to transfer ownership you to Ben. Even after the title was transferred under his name, Ben did not act as if he owned the land. He was just helping with the paperwork to facilitate the sale of the properties. This was supported by the fact that the property was quickly re-sold to you.

More importantly, the third party cannot claim to be an innocent buyer because he was aware of facts that should have raised doubts about Ben’s ownership and he knew about your legal claim as annotated on the title which negates his claim of innocence.

Atty. Angela Antonio