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SECOND DIVISION

[G.R. No. 158380. May 16, 2005]

MARIQUITA MACAPAGAL, petitioner, vs. CATALINA O. REMORIN, CORAZON CALUZAAMRUNGC!EEP, a"# LAURELIA CALUZA-$ALENCIANO, respondents. %ECI&ION PUNO, J.' Assailed in this petition for review is the Decision dated March 8, 2002 [1] of the Co rt of Appeals in CA!"#$# CV No# %%8&% [2] which reversed and set aside the Decision of the $e'ional (rial Co rt )$(C*, +ranch 88, of , e-on Cit. in Civil Case No# ,!/0!018%, as well as its $esol tion dated Ma. 2, 2001[3] which denied petitioner3s 4otion for reconsideration# Involved in the present controvers. is a &00!s5 are 4eter parcel of land located at No# 2, Serrano 6a7taw Street, "alas, , e-on Cit., 7nown as 6ot 0# 6ot 0, to'ether with an ad8acent 02#0! s5 are 4eter lot 7nown as 6ot %, for4s part of the consolidated 6ots 2% and 20, +loc7 &2, of s 9division plan :sd!&208;, 6$C $ecord No# &;&&2# 6ots 2% and 20 were re'istered in the na4e of Candido Cal -a nder (ransfer Certificate of (itle )(C(* No# &;00%%# : rificacion Arce!Cal -a ): rificacion* is his second wife# Cora-on Cal -a! +a4r n'cheep )Cora-on* is his le'all. adopted da 'hter d rin' his first 4arria'e# After Candido died in &/8&, Cora-on and : rificacion e<ec ted a Deed of E<tra8 dicial Settle4ent dated Nove49er 2&, &/8&[(] ad8 dicatin' 9etween the4selves the properties of Candido, as the latter3s s rvivin' heirs# 6ots 2% and 20, to'ether with 6ot 21 which was re'istered in Candido3s na4e nder (C( No# &;00%1, were ad8 dicated to Cora-on# : rificacion 'ot Candido3s land in + lacan# =owever, ad4inistration of 6ots 21, 2% and 20 were entr sted to : rificacion 9. Cora-on as she had to leave for (hailand after her 4arria'e to a (hai# >n7nown to Cora-on and while she was in (hailand, the 2%!.ear old : rificacion e<ec ted an Affidavit of 6oss dated Dece49er 1&, &/81 alle'in' that (C( Nos# &;00%1 and &;00%% were lost and co ld no lon'er 9e fo nd# She filed a petition with the $(C of , e-on Cit. for the iss ance of new owner3s d plicates of title alle'in' that she was her deceased h s9and3s sole heir# (he petition was 'ranted and (C( Nos# 12;;11 and 12;;1% were iss ed in : rificacion3s na4e# In ? l. &/8;, : rificacion sold the lots to Catalina $e4orin )Catalina* who was iss ed (C( Nos# 1%;82; and 1%280/# Catalina 4ort'a'ed 6ots 2% and 20 to 6 @ $ 6endin' Corporation for two h ndred tho sand ):200,000#00* pesos# After she learned of the fore'oin', Cora-on, thro 'h her attorne.!in!fact $a4on $e4orin, filed a co4plaint on Dece49er 2/, &/8; for reconve.ance and da4a'es a'ainst : rificacion and Catalina 9efore the $(C of , e-on Cit., doc7eted as Civil Case No# ,!%/;;&# :laintiff alle'ed that the two defendants connived with each other in transferrin' the three lots in their na4es thro 'h si4 lated sales# Cora-on li7ewise filed a cri4inal co4plaint for falsification and per8 r. a'ainst the two 9efore the Office of the Cit. Aiscal of , e-on Cit., doc7eted as I#S# No# 82!0222;# On Ma. %, &/82, Catalina e<ec ted a Deed of (ransfer, si'ned 9. : rificacion as witness, ad4ittin' the wron' the. did in ille'all. transferrin' the lots in their na4es and ac7nowled'in' Cora-on to 9e the ri'htf l owner nder the Deed of E<tra8 dicial Settle4ent dated Nove49er 2&,

&/8&# (he doc 4ent was presented 9. Cora-on in a 4otion to dis4iss Civil Case No# ,!%/;;& 9 t the 4otion was withdrawn when co nsel for Catalina and : rificacion o98ected on the 'ro nd that the Deed of (ransfer was e<ec ted witho t his le'al assistance# (he Deed of (ransfer, however, was presented 9. Cora-on 9efore the $e'ister of Deeds of , e-on Cit.# Catalina3s (C( No# 1%280/ over 6ots 2% and 20 was cancelled and (C( No# 120;00 was iss ed in Cora-on3s na4e# :rior thereto, however, Catalina 4ort'a'ed 6ots 2% and 20 to respondent 6a relia Cal -a!Valenciano )6a relia* for two h ndred ninet.!five tho sand ):2/0,000#00* pesos to pa. off her 4ort'a'e inde9tedness to 6 @ $ 6endin' Corporation# (he inscription of the 4ort'a'e in favor of 6a relia was carried over to Cora-on3s (C( No# 120;00# On March 2&, &/88, Cora-on, : rificacion, Catalina, and 6a relia e<ec ted a Me4orand 4 of A'ree4ent[5] to settle Civil Case No# ,!%/;;& and Cri4inal Char'e No# I#S# 82!0222;# (he A'ree4ent read ! (his 4e4orand 4 of a'ree4ent, 4ade and e<ec ted 9. and a4on' ! CO$ABON CA6>BA!+AM$>N"C=EE:, of le'al a'e, 4arried, citi-en of (hailand 9. 4arria'e 9 t Ailipino 9. 9irth, resident of +an'7o7, (hailand, represented 9. her attorne.!in!fact, CONS>E6O $# CA$>+IOC :>$IAICACION A$CE!CA6>BA and CA(A6INA O"OD!$EMO$IN, of le'al a'es, widowEsF, Ailipino citi-ens and residents at )sic* No# 2 Serrano 6a7taw St#, , e-on Cit.C and 6A>$E6IA VA6ENCIANO, of le'al a'e, 4arried, Ailipino citi-en, and resident of No# /8 +a.ani St#, Santol, , e-on Cit.C witnesseth, that ! Ghereas, the a9ove!na4ed parties are involved in Civil Case No# ,!%/;;& of the $e'ional (rial Co rt of , e-on Cit. and in Cri4inal Char'e No# I#S# 82!0222; of the Cit. Aiscal3s Office of , e-on Cit.C Ghereas, said parties have decided to 4 t all. resolve their differences o t!of!co rt vol ntaril. and witho t an. d ress or nd e infl ence on 9oth )sic* of the4C Now, therefore, for and in consideration of the fore'oin' pre4ises, the a9ove parties here9. a'ree and stip late as followsH (hat the first part., Cora-on Cal -a!+a4r n'cheep, here9. cedes and 'rants nto and in favor of : rificacion Arce!Cal -a f ll ownership and other real ri'hts over the so thern4ost apart4ent )'ara'e* as well as the portion of the lot occ pied there9., descri9ed as 6ot 20, +loc7 &2 of the s 9dn# plan :sd!&208; covered 9. (ransfer Certificate of (itle No# 120;00 of the $e'istr. of Deeds for , e-on Cit.C s 98ect to the condition that said : rificacion Arce!Cal -a shall ass 4e satisfaction of the 4ort'a'e de9t contracted 9. Catalina O'o.!$e4orin in favor of Mrs# 6a relia C# Valenciano annotated at the 9ac7 of the title thereofC and shall ca se transfer of said annotation to the title to 9e iss ed in her ): rificacion3s* na4eC and f rther4ore that an. and all e<penses for se're'ation s rve., re!titlin' and annotation of said 4ort'a'e shall 9e sho ldered 9. said : rificacion Arce! Cal -aC (hat the parties a'ree that the. shall e<ec te s ch for4al re5 isites for the i4ple4entation of this a'ree4ent, and that henceforth the. waive and reno nce whatever conflictin' clai4s the. 4a. have over the intestate estate of Candido Cal -a, deceased#

+efore the a'ree4ent co ld 9e i4ple4ented, however, : rificacion died on ? l. 28, &/88# Conse5 entl., another co4pro4ise a'ree4ent [6]was e<ec ted on Septe49er /, &/88, viz.H :6AIN(IAA AND DEAENDAN(S )sic* respectf ll. s 94it for the 7ind consideration and approval of the =onora9le Co rt this Co4pro4ise A'ree4ent, which provides, th sH &# (hat the. a'reed, as the. here9. a'ree, to dis4iss the co4plaint of the plaintiff as well as the co nterclai4 of the defendants )sic*C 2# (hat the. 9ind the4selves not to 9rin' an. f rther action, s it or co4plaint a'ainst each other in connection with this case andIor the propert. in 5 estion or the s 98ect!4atter hereofC 1# (hat p rs ant to the parties3 Me4orand 4 of A'ree4ent of March 2&, &/8; )sic*, a cop. of which is attached as Anne< JAK hereof, and with the death of defendant : rificacion Arce Cal -a on ? l. 28, &/88, in , e-on Cit., witho t an heir, plaintiff Cora-on Cal -a +a4r n'cheep and defendant Catalina O# $e4orin a'reed, as the. here9. a'ree, that title to the so thern4ost apart4ent )'ara'e* as well as the portion of the lot occ pied there9., descri9ed as 6ot 20, +loc7 &2 of the s 9division plan :sd!&208; covered 9. (ransfer Certificate of (itle No# 120;00 of the $e'istr. of Deeds for , e-on Cit. shall 9e transferred direct to its interested 9 .er with defendant Catalina O# $e4orin ass 4in' and pa.in' )fro4 the proceeds of the sale* her 4ort'a'e o9li'ation with Mrs# 6a relia C# Valenciano annotated at the 9ac7 of the title thereofC an. and all e<penses for se're'ation s rve., re!titlin', capital 'ains ta<es and those connected with the annotation andIor release of said 4ort'a'e sho ld now 9e sho ldered 9. defendant Catalina O# $e4orinC said defendant f rther a'rees to e<ec te s ch other doc 4ents or papers as are necessar. to i4ple4ent the afore4entioned Me4orand 4 of A'ree4ent of March 2&, &/8; )sic*# (he A'ree4ent was approved 9. ? d'e +eni'no (# Da.aw in his Decision dated Septe49er &;, &/88#[)] On Ma. 2%, &/8/, Cora-on sold the s 98ect 6ot 0 to 6a relia 9. virt e of a deed entitled JSale of >nse're'ated :ortion of 6and#K Controvers. er pted anew when Catalina sold the sa4e lot to herein petitioner Mari5 ita Macapa'al on A ' st 2%, &/8/ clai4in' to 9e a thori-ed nder the Co4pro4ise A'ree4ent# 6a relia de4anded that petitioner and her fa4il. vacate the pre4ises, to no avail# On Nove49er 28, &/8/, 6a relia filed an e8ect4ent s it a'ainst petitioner 9efore the Metropolitan (rial Co rt )Me(C* of , e-on Cit., doc7eted as Civil Case No# 22%%# In t rn, petitioner filed a co4plaint for n llification of contract and da4a'es with pra.er for a te4porar. restrainin' order andIor writ of preli4inar. prohi9itor. in8 nction a'ainst Catalina, Cora-on and 6a relia 9efore the $(C of , e-on Cit., doc7eted as Civil Case No# ,!/0!018%, root of the present petition# :etitioner so 'ht to n llif. the sale e<ec ted 9. Cora-on in favor of 6a relia and to declare valid the one e<ec ted 9. Catalina in her favor# :laintiff li7ewise as7ed that the Me(C of , e-on Cit. 9e ordered to desist fro4 hearin' the e8ect4ent s it# On Octo9er &0, &//1, the $(C of , e-on Cit. rendered 8 d'4ent in favor of petitioner# Cora-on and 6a relia appealed to the Co rt of Appeals which reversed the decision of the trial co rt#[*] =ence, this petition for review#
[8]

:etitioner contends that the sale e<ec ted 9. Catalina in her favor sho ld prevail over the one e<ec ted 9. Cora-on in favor of 6a relia, as Catalina was the one a thori-ed to sell the disp ted propert. nder the Co4pro4ise A'ree4ent dated Septe49er /, &/88# $espondents, on the other hand, contend that Cora-on, the re'istered owner of the disp ted propert., did not 'ive Catalina a thorit. to sell the lot considerin' Catalina3s connivance with : rificacion in ille'all. transferrin' the lots in their na4es, in the first place# It was provided in the A'ree4ent that Catalina shall pa. off her 4ort'a'e o9li'ation and incidental e<penses fro4 the

proceeds of the sale onl. to reass re Catalina that her o9li'ation wo ld 9e paid in the event that Cora-on sells the propert.# Ge r le in favor of respondents# As correctl. pointed o t 9. the appellate co rt, Cora-on was the re'istered owner of the disp ted 6ot 0 at the ti4e the two sales were e<ec ted# As owner, she had the ri'ht to en8o. and dispose of 6ot 0 as well as to e<cl de an. person fro4 s ch en8o.4ent and disposal# [10] A waiver 4a. not 9e cas all. attri9 ted when the ter4s thereof do not e<plicitl. and clearl. prove an intent to a9andon the ri'ht#[11] In the case at 9ar, the Co4pro4ise A'ree4ent dated Septe49er /, &/88 cannot 9e ta7en as a waiver of Cora-on3s a thorit. to sell and 'rant thereof to Catalina considerin' that the A'ree4ent 4erel. provided that Catalina pa. off her 4ort'a'e o9li'ation and incidental e<penses fro4 the proceeds of the sale# Altho 'h it was i4perative, as part of the co4pro4ise, that the 4one. co4e fro4 the proceeds of the sale, it was not e<pressl. stated, nor did it necessaril. 4ean, that Catalina herself 9e the one to directl. sell the propert.# (he 4one. 4a. 4erel. 9e handed over to her for s ch pa.4ent# (he r le is that an. reasona9le do 9t that the lan' a'e sed conve.s a thorit. to sell will .ield a constr ction that no s ch a thorit. has 9een 'iven# [12] A thorit. to sell 4 st 9e co ched in clear and n4ista7a9le lan' a'e#[13] Moreover, intent to 'ive Catalina a thorit. to sell 4a. not 9e easil. attri9 ted to Cora-on considerin' that the latter had to file the reconve.ance case as a res lt of : rificacion3s and Catalina3s acts of transferrin' the disp ted lot in their na4es notwithstandin' the clear ter4s of the Deed of E<tra8 dicial Settle4ent dated Nove49er 2&, &/8&# In contract interpretation, anal.sis is not to 9e li4ited to the words sed in the contract, as the. 4a. not acc ratel. reflect the parties3 tr e intent#[1(] A49i' ities are constr ed a'ainst the drafter onl. when 8 stified 9. the operative facts and s rro ndin' circ 4stances#[15] It is for this reason that the interpreter 4 st loo7 at the reason 9ehind and the circ 4stances nder which the contract was e<ec ted# [16] If the words of the contract appear to 9e contrar. to the evident intention as revealed 9. the circ 4stances, the latter shall prevail over the for4er#[1)] Even ass 4in' arguendo that the parties intended to confer pon Catalina a thorit. to sell the disp ted propert., the. clearl. did not intend the A'ree4ent to 9e the doc 4ent itself considerin' that the. a'reed to e<ec te s ch other doc 4ents or papers as are necessar. to i4ple4ent the a'ree4ent,[18] which the. never did# >nder Article &828, para'raph 0 of the Civil Code, a special power of attorne. is necessar. for an a'ent to enter into an. contract 9. which the ownership of an i44ova9le propert. is trans4itted or ac5 ired either 'rat ito sl. or for a val a9le consideration# Catalina ad4ittedl. did not have s ch a doc 4ent in her favor# Neither can petitioner de4and enforce4ent of the Co4pro4ise A'ree4ent on the 'ro nd that she was the Jinterested 9 .erK referred to therein to who4 title to the disp ted propert. shall 9e directl. transferred# +ein' a stran'er to the A'ree4ent, petitioner cannot de4and its enforce4ent for it is settled that a co4pro4ise a'ree4ent deter4ines the ri'hts and o9li'ations onl. of the parties to it#[1*] It cannot favor or pre8 dice a third person [20] even if he was aware of the contract and has acted with 7nowled'e of it#[21] Moreover, if petitioner was indeed the interested 9 .er referred to in the A'ree4ent and there was alread. a closed deal 9etween her, Cora-on and Catalina, even 9efore the e<ec tion of the Co4pro4ise A'ree4ent,[22] it is stran'e that petitioner was not identified o tri'ht as the 9 .er and that the Deed of Sale in her favor was e<ec ted onl. so4e twelve )&2* 4onths after or on A ' st 2%, &/8/# :etitioner cannot 9e considered a 9 .er in 'ood faith considerin' that she did not 9 . the disp ted lot fro4 its re'istered owner# One who 9 .s fro4 a person who is not the re'istered owner is not a 9 .er in 'ood faith# [23] Moreover, in do 9le sales of real propert., ownership passes to the vendee who, in 'ood faith, first recorded it in the $e'istr. of :ropert.# [2(] (C( No# %1210 was iss ed

in 6a relia3s na4e on ? l. 2&, &/8/ 9. virt e of the JSale of >nse're'ated :ortion of 6andK e<ec ted in her favor 9. Cora-on# (he fact that the deed of sale 9etween respondents Cora-on and 6a relia did not acc ratel. reflect the tr e consideration thereof is not ca se for declaration of its n llit.# Ghen the parties intended to 9e 9o nd 9. the contract e<cept that it did not reflect the act al p rchase price of the [25] propert., there is onl. a relative si4 lation of the contract which re4ains valid and enforcea9le# It cannot 9e declared n ll and void since it does not fall nder the cate'or. of an a9sol tel. si4 lated [26] [27] or fictitio s contract# (he contract of sale is valid 9 t s 98ect to refor4ation# IN $IE+ +!EREO,, the petition is DENIED# (he assailed Decision of the Co rt of Appeals, dated March 8, 2002, as well as its $esol tion dated Ma. 2, 2001 in CA!"#$# CV No# %%8&% is AAAI$MED# &O OR%ERE%. Austria-Martinez, Callejo, Sr., Tinga, and Chico-Nazario, JJ., conc r.