ANNEX-I_Rural-Bank-of-Sta.-Ignacia-vs.-Dimatulac-G.R.-No.-142015-29-April-2003..doc - ANNEX I RURAL BANK vs DIMATULAC G.R No 142015 SECOND DIVISION

ANNEX-I_Rural-Bank-of-Sta.-Ignacia-vs.-Dimatulac-G.R.-No.-142015-29-April-2003..doc

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ANNEX IRURAL BANK vs. DIMATULACG.R. No. 142015. April 29, 2003SECOND DIVISION, QUISIMBUING, J.FACTS: Back in August 17, 1965, Prudencia Reyes purchased from the now defunct Rural ProgressAdministration (RPA), an 800-square meter parcel of land located in Barrio Suizo and Barrio San Rafael,Tarlac, Tarlac. As a result of the purchase, TCT No. 65765 was issued in her favor. However, the deed ofsale in favor of Reyes was later cancelled by the Department of Agrarian Reform (DAR) by reason of hernon-occupancy of said property, and made the land available for distribution to the landless residents ofSan Rafael.In 1971, respondents took possession of the property and were allocated portions of 200 square meterseach. They paid the purchase price and awaited their Emancipation Patent titles.Despite her knowledge that the land had reverted to the government, Reyes sold the property to thespouses Maximo Valentin and Retina Razon in a Deed of Sale dated April 4, 1973. The spouses thereafterobtained TCT No. 106153 thereon. On finding, however, that respondents were in possession of theproperty, Valentin and Razon filed a complaint for recovery and damages against respondents with theRegional Trial Court of Tarlac, Tarlac. The Republic of the Philippines intervened in said case and alongwith respondents, contending that the title of the spouses was null and void, because the sale by Reyeswas in violation of the terms and conditions of sale of the lot by the RPA to Reyes.The trial court decided in favor of the spouses Maximo Valentin and Retina Razon. But on appeal, theappellate court in CA-G.R. CV No. 14909, entitled "Spouses Maximo E. Valentin and Retina Razon v.Sps. Ricardo Garcia and Mona Macabili, et al.," reversed the judgment, cancelled the title of the spouses,and decreed the reversion of the property to the government for disposition to qualified beneficiaries. Thedecision of the Court of Appeals, attained finality on September 22, 1990.Meanwhile, on February 15, 1987, Razon, through her attorney-in-fact, mortgaged the property topetitioner rural bank to secure a loan of P37,500.00. The property was subsequently extra-judiciallyforeclosed when Razon failed to pay the loan and on October 20, 1987, petitioner purchased the property.TCT No. 330969 dated May 11, 1989 was accordingly issued to herein petitioner.On March 4, 1997, petitioner filed a complaint for unlawful detainer and damages with the MTC ofTarlac, Tarlac, docketed as Civil Case No. 6367. Petitioner alleged that respondents were occupying the
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