Você está na página 1de 160

[No. 5246. September 16, 1910.

]
MANUELA GREY ALBA ET AL., petitioners and
appellants, vs. ANACLETO R. DE LA CRUZ, objector and
appellee.
1. 1.REGISTRATION
OF
LAND; NOTICE
TO
DEFENDANTS BY DUE PUBLICATION.In the
original proceedings for the registration of land under
Act No. 496, the appellee herein was made a party
defendant by publication, but was not personally
served with notice: Held, That the decree of the Court
of Land Registration is conclusive against him as well
as all the world.
1. 2.ID.; NATURE AND EFFECT OF PROCEEDINGS
IN
REM; DUE
PROCESS
OF
LAW.The
proceedings for the registration of land, under Act No.
496, are in rem,and not in personam. A proceeding in
rem, dealing with a tangible res, may be instituted
and carried to judgment without personal service
upon the claimants within the State or notice by
name to those outside of it. Jurisdiction is secured by
the power of the court over the res. Such a proceeding
would be impossible were this not so, for it would
hardly do to make a distinction between the
constitutional rights of claimants who were known
and those who were not known. to the plaintiff,
50
5
0

PHILIPPINEREPORTSANNOTATED

GreyAlbavs.DelaCruz
1. when the proceeding is to bar all. (Tyler vs. Judges,
175 Mass,, 71; see also People vs. Chase, 165 111.,
527;
Statevs. Guilbert,
56
Ohio
St.,
575;
People vs. Simon, 176 111., 165; Pennoyer vs. Neff, 95
U.S.,
714; The
Mary, 9
Cranch,
126;
Mankin vs, Chandler, 2 Brock (U. S. Circuit), 125;
Brown vs. Levee Commission, 50 Miss., 468; 2
Freeman, Judgments, 4th ed., secs. 605, 611.)
1. 3.ID.; PROCEEDINGS
IN
REM
AND
IN
PERSONAM, DISTINGUISHED.If the technical
object of the suit is to establish a claim against some
particular person, with a judgment which generally,
in theory at least, binds his body, or to bar some
individual claim or objection, so that only certain
persons are entitled to be heard in defense, the action
is in personam, although it may concern the right to
or possession of a tangible thing. If, on the other
hand, the object is to bar indifferently all who might
be minded to make an objection of any sort against
the right sought to be established, and if anyone in
the world has a right to be heard on the strength of
alleging facts which, if true, show an inconsistent
interest, the proceeding is in rem. (Tyler vs. Judges,
175 Mass., 71.)
1. 4.ID.; FRAUD; SECTION 38, LAND REGISTRATION
ACT;REOPENING, AND MODIFICATION OF
DECREES.By fraud is meant actual fraud,

dishonesty of some sort. This meaning should be


given to the word fraud in section 38 of the Land
Registration Act. Proof of constructive fraud is not
sufficient to authorize the Court of Land Registration
to reopen a case and modify its decree. Specific acts
intended to deceive and deprive another of his right,
or to in some manner injure him, must be alleged and
proved.
1. 5.ID.; ID.; ID.The question whether any particular
transaction shows fraud within the meaning of the
word as used in section 38 of the Land Registration
Act, will, in each case, be a question of f fact.
APPEAL from a judgment of the Court of Land Registration.
Sumulong, J.
The facts are stated in the opinion of the court.
Ramon Salinas, for appellants.
Aniceto G. Reyes, for appellee.
TRENT, J.:
These petitioners, Manuela, Jose, Juan, and Francisco,
surnamed Grey y Alba, are the only heirs of Doa Segunda
Alba Clemente and Honorato Grey, deceased. Remedios Grey
y Alba, a sister of the petitioners, was married on the
51
VOL.17,SEPTEMBER16,1910
51
GreyAlbavs.DelaCruz
21st day of March, 1903, to Vicente Reyes and died on the
13th of July,1905, without leaving any heirs except her

husband. The four petitioners, as cowners, sought to have


registered the following-described property:
A parcel of land situated in the barrio of Talampas,
municipality of Baliuag, Province of Bulacan, upon which are
situated three -houses and one camarin of light material,
having a superficial area of 52 hectares, 51 ares, and 22
centares; bounded on the north by the highway(calzada) of
Talampas and the lands of Rita Ruiz Mateo; on the east by
the lands of the said Rita Ruiz Mateo, Hermenegildo Prado,
Policarpo de Jesus, and a stream called Sapang Buslut; on
the south by the same stream and the lands of
the capellana; and on the west by the stream called Sapang
Buslut, and the lands of Vicente de la Cruz, Jose Camacho
and Domingo Ruiz Mateo.
This parcel of agricultural land is used for the raising of
rice and sugar cane and is assessed at $1,000 United States
currency. The petition, which was filed on the 18th of
December, 1906, was accompanied by a plan and technical
description of the above-described parcel of land,
After hearing the proofs presented, the court entered, on
the 12th of February, 1908, a decree in accordance with the
provisions of paragraph 6 of section 54 of Act No. 926,
directing that the land described in the petition be registered
in the names of the four petitioners, as cowners, subject to
the usufructuary right of Vicente Reyes, widower of
Remedios Grey.
On the 16th of June, 1908, Anacleto Ratilla de la Cruz
filed a motion in the Court of Land Registration asking for a
revision of the case, including the decision, upon the ground
that he is the absolute owner of the two parcels of land which

are described in said motion, and which, according to his


allegations, are included in the lands decreed to the
petitioners. He alleged that the decree of February 12, 1908,
was obtained maliciously and fraudulently by the petitioners,
thereby depriving him of said two parcels of
52
52
PHILIPPINEREPORTSANNOTATED
GreyAlbavs.DelaCruz
land. He further alleged that he was the absolute owner of
the two parcels of land, having inherited them f rom his
father, Baldomero R. de la Cruz, who had a state grant for
the same. He therefore asked, under the provisions of section
38 of the Land Registration Act (No. 496), a revision of the
case, and that the said decree be modified so as to exclude the
two parcels of land described in said motion. The Land Court
upon this motion reopened the case, and after hearing the
additional evidence presented by both parties, rendered, on
the 23d of November, 1908, its decision modifying the former
decree by excluding from the same the two parcels of land
claimed by Anacleto Ratilla de la Cruz. From this decision
and judgment the petitioners appealed and now insist, first,
that the trial court erred in reopening the case and modifying
its decree. dated the 12th of February, 1908, for the reason
that said decree was not obtained by means of f raud; and,
second, that the court erred in holding that the two parcels of
land described in the appellees motion are not their property.
It was agreed by counsel that the two small parcels now in
dispute form a part of the land described in the petition and
were included in the decree of February 12, 1908, and that
the petitioners are the owners of the remainder of the land
described in the said decree.

The petitioners inherited this land from their parents, who


acquired the same, including the two small parcels in
question, by purchase, as is evidenced by a public document
dated the 26th of November, 1864, duly executed before
Francisco Iriarte, alcalde mayor and judge of the Court of
First Instance of the Province of Bulacan.
Baldomero R. de la Cruz, father of the appellee, obtained
in March, 1895, a state grant for several parcels of land,
including the two parcels in question. This grant was duly
inscribed in the old register of property in Bulacan on the 6th
of April of the same year.
It is admitted that at the time the appellants presented
their petition in this case the appellee was occupying the
53
VOL.17,SEPTEMBER16,1910
53
GreyAlbavs.DelaCruz
two parcels of land now in question. It is also admitted that
the name of the appellee does not appear in the said petition
as an occupant of the said two parcels. The petitioners insist
that the appellee was occupying these parcels as their tenant
and for this reason they did not include his name in their
petition, as an occupant, while the appellee contends that he
was occupying the said parcels as the absolute owner under
the state grant by inheritance.
The court below held that the failure on the part of the
petitioners to include the name of the appellee in their
petition, as an occupant of these two parcels of land, was a
violation of section 21 of Act No. 496, and that this
constituted fraud within the meaning of section 38 of said
Land Registration Act. The trial court further held that the

grant from the state should prevail over the public document
of purchase of 1864.
The mother of the petitioners died on November 15, 1881;
their father died prior to that time. Manuela, the oldest of the
petitioners, was about six years of age when their mother
died. So these children were minors when the father of the
appellee obtained the state grant.
On the 13th of June, 1882, Jose Grey, uncle and
representative of the. petitioners, who were then minors,
rented the land owned by the petitioners deceased parents to
one. Irineo Jose for a period of three years. On the 23d of
March, 1895, the said Jose Grey, as the representative of the
petitioners, rented the same land for a period of six years to
Baldomero R. de la Cruz, father of the appellee. This rental
contract was duly executed in writing. This land was
cultivated during these six years by Baldomero H. de la Cruz
and his children, one of whom is the appellee. On the 14th of
December, 1905, Jose Grey, for himself and the other
petitioners, rented the same land to Estanislao R. de la Cruz
for a period of two years. Estanislao de la Cruz on entering
into this rental contract with Jose Grey did so for himself and
his brothers, one of whom is the appellee. While the appellee
admits that his father and
54
54
PHILIPPINEREPORTSANNOTATED
GreyAlbavs.DelaCruz
brother entered into these rental contracts and did, in fact,
cultivate the petitioners land, nevertheless he insists that
the two small parcels in question were.not included in these
contracts. In the rental contract between the uncle of the
petitioners and the father of the appellee the land is not

described. In the rental contract between Jose Grey, one of


the petitioners, and Estanislao R. de la Cruz, brother of the
appellee, the two small parcels of land in question are
included, according to the description given therein. This was
found, to be true by the court below, but the said court held
that as this contract was made by Estanislao R. de la Cruz it
was not binding upon Anacleto R. de la Cruz, the appellee.
The two small parcels of land in question were purchased
by the parents of the petitioners in 1864, as is evidenced by
the public document of purchase and sale of that year. The
same two parcels of land are included in the state grant
issued in favor of Baldomero Ratilla de la Cruz in 1895. This
grant was obtained after the death of the petitioners parents
and while they were minors. So it is clear that the petitioners
honestly believed that the appellee was occupying the said
parcels as their lessee at the time they presented their
application for registration. They did not act in bad faith, nor
with any fraudulent intent, when they omitted to include in
their application the name of the appellee as one of the
occupants of the land. They believed that it was not necessary
nor required that they include in their application the names
of their tenants. Under these circumstances, did the court
below commit an error in reopening this case in June, 1908,
after its decree had been entered in February of the same
year?
The application for registration is to be in writing, signed
and sworn to by the applicant, or by some person duly
authorized in his behalf. It is to contain an accurate
description of the land. It shall contain the name in full and

the address of the applicant, and also the names and


addresses of all occupants of land and of all adjoining
55
VOL.17,SEPTEMBER16,1910
55
GreyAlbavs.DelaCruz
owners, if known; and, if not known, it shall state what
search has been made to find them. In the form of notice
given by statute, which shall be sworn to, the applicant is
required to state and set forth clearly all mortgages or
encumbrances affecting said land, if any, the rights and
interests, legal or equitable, in the possession, remainder,
reversion, or expectancy of all persons, with their names in
full, together with their place of residence and postoffice
addresses. Upon receipt of the application the clerk shall
cause notice of the filing to be published twice in the Official
Gazette. This published notice shall be directed to all persons
appearing to have an interest in the land sought to be
registered and to the adjoining owners, and also to all whom
it may concern. In addition to the notice in the Official
Gazette the Land Court shall, within seven days after said
publication, cause a copy of the notice, in Spanish, to be
mailed by the clerk to every person named in the application
whose address is known; to cause a duly attested copy of the
notice, in Spanish, to be posted in a conspicuous place on
every parcel of land included in the application, and in a
conspicuous place on the chief municipal building of the town
in which the land is situated. The court may also cause other
or further notice of the application to be given in such
manner and to such persons as it may deem proper. The
certificate of the clerk that he has served the notice as
directed by the court by publication or mailing shall be

conclusive proof of such service. Within the time allowed in


the notices, if no person appears and answers, the court may
at once, upon motion of the applicant, no reason to the
contrary appearing, order a general default. By the
description in the published notice to all whom it may
concern, and by express provision of law all the world are
made parties defendant and shall be concluded by the default
and order. If the court, after hearing, finds that the
applicant has title, as stated in his application, a decree of
registration shall be entered.
Every decree of registration shall bind the land and
56
56
PHILIPPINEREPORTSANNOTATED
GreyAlbavs.DelaCruz
quiet title thereto, subject only to the exceptions stated in the
following section. It shall be conclusive upon and against all
persons, including the Insular Government, and all the
branches thereof, whether mentioned by name in the
application, notice, or citation, or included in the general
description to all whom it may concern. Such decree shall not
be opened by reason of the absence, infancy, or other
disability of any person affected thereby, nor by any
proceedings in any court for reversing judgments or decrees;
subject, however, to the right of any person deprived of land
or of any estate or interest therein by decree of
registration obtained by fraud to file in the Court of Land
Registration a petition for review within one year * * *. (Sec.
38 of Act No. 496.)
The appellee is not included in any of the exceptions
named in section 38 referred to above.

It will be seen that the applicant is required to mention


not only the outstanding interest which he admits but also all
claims of interest, though denied by him. By express
provision of law all the world are made parties defendant by
the description in the notice to all whom it may concern.
Although the appellee, occupying the two small parcels of
land in question under the circumstances as we have set
forth, was not served with notice, he was made a party
defendant by publication; and the entering of a deeree on the
12th of February, 1908, must be held to be conclusive against
all persons, including the appellee, whether his (appellees)
name is mentioned in the application, notice, or citation.
The said decree of February 12, 1908, should not have
been opened on account of the absence, infancy, or other
disability of any person affected thereby, and could have been
opened only on the ground that the said decree had been
obtained by fraud. That decree was not obtained by fraud on
the part of the applicants, inasmuch as they honestly
believed that the appellee was occupying these two small
parcels of land as their tenant. One of the petitioners
57
VOL.17,SEPTEMBER16,1910
57
GreyAlbavs.DelaCruz
went upon the premises with the surveyor when the original
plan was made.
Proof of constructive f raud is not sufficient to authorize
the Court of Land Registration to reopen a case and modify
its decree. Specific, intentional acts to deceive and deprive
another of his right, or in some manner injure him, must be
alleged and proved; that is, there must be actual or positive
fraud as distinguished from constructive fraud.

The question as to the meaning of the word fraud in the


Australian statutes has been frequently raised. Two
distinctions have been noted by the Australian courts; the
first is the distinction between the meaning of the word
fraud in the sections relating to the conclusive effect of
certificates of title, and its meaning in the sections relating to
the protection of bona fide purchasers from registered
proprietors. The second is the distinction between legal,
equitable, or constructive fraud, and actual or moral
fraud. In none of the groups of the sections of the Australian
statutes relating to the conclusive effect of certificates of title,
and in which fraud is referred to, is there any express
indication of the meaning of fraud, with the sole exception
of that of the South Australian group. (Hogg on Australian
Torrens System, p. 834.)
With regard to decisions on the sections relating to the
conclusive effect of certificates of title, it has been held in
some cases that the fraud there mentioned means actual or
moral fraud, not merely constructive or legal fraud. In other
cases fraud has been said to include constructive, legal, and
every kind of fraud. In other cases, again, knowledge of other
persons rights, and the deliberate acquisition of registered
title in the face of such knowledge, has been held to be fraud
which rendered voidable the certificates of title so obtained;
and voluntary ignorance is, for this purpose, the same as
knowledge. But in none of these three classes of cases was
there absent the element of intention to deprive another of
just rights, which constitutes the essential characteristics of
actualas distinguished from
58

58
PHILIPPINEREPORTSANNOTATED
GreyAlbavs.DelaCruz
legalfraud. (Id., p. 835, and cases cited in notes Nos. 85,
86, 87, 88, and 89 at bottom of pages 835 and 836.)
By fraud is meant actual frauddishonesty of some sort.
(Judgment of Privy Council in Assets Co. vs. Mere Roihi,
and Assets Co. vs. Panapa Waihopi, decided in March, 1905,
cited by Hogg in his Supplementary Addendum to his work
on Australian Torrens System,supra.) The same meaning
should be given to the word fraud used in section 38 of our
statutes (Act No. 496).
The question as to whether any particular transaction
shows fraud, within the meaning of the word as used in our
statutes, will in each case be a question of fact: We will not
attempt to say what acts would constitute this kind of fraud
in other cases. This must be determined from the facts and
circumstances in each particular case. The only question we
are called upon to determine, and have determined, is
whether or not, under the facts and circumstances in this
case, the petitioners did obtain the decree of February 12,
1908, by means of fraud.
It might be urged that the appellee has been deprived of
his property without due process of law, in violation of section
5 of the Act of Congress of July 1, 1902, known as the
Philippine Bill, which provides that no law shall be
enacted in the said Islands which shall deprive any person of
life, liberty, or property without due process of law.
The Land Registration Act requires that all occupants be
named in the petition and given notice by registered mail.
This did not do the appellee any good, as he was not notified;

but he was made a party defendant, as we have said, by


means of the publication to all whom it may concern. If this
section of the Act is to be upheld this must be declared to be
due process of law.
Before examining the validity of this part of the Act it
might be well to note the history and purposes of what is
known as the Torrens Land Registration System. This
system was introduced in South Australia by Sir Robert
Torrens in 1857 and was there worked out in its practicable
form.
59
VOL.17,SEPTEMBER16,1910
59
GreyAlbavs.DelaCruz
The main principle of registration is to make registered titles
indefeasible. As we have said, upon the presentation in the
Court of Land Registration of an application for the
registration of the title to lands, under this system, the
theory of the law is that all occupants, adjoining owners,
adverse claimants, and other interested persons are notified
of the proceedings, and have a right to appear in opposition to
such application. In other words, the proceeding is against
the whole world. This system was evidently considered by the
Legislature to be a public project when it passed Act No. 496.
The interest of the community at large was considered to be
preferred to that of private individuals.
At the close of this nineteenth century all civilized
nations are coming to registration of title to land, because
immovable property is becoming more and more a matter of
commercial dealing, and there can be no trade without
security. (Dumass Lectures, p. 23.)

The registered proprietor will no longer have reasons to


fear that he may be evicted because his vendor had, unknown
to him, already sold the land to a third person. * * * The
registered proprietor may feel himself protected against any
defect in his vendors title. (Id., p. 21.)
The following summary of benefits of the system of
registration of titles, made by Sir Robert Torrens, has been
fully justified in its use:
First. It has substituted security for insecurity.
Second. It has reduced the cost of conveyances from
pounds to shillings, and the time occupied from months to
days.
Third. It has exchanged brevity and clearness for
obscurity and verbiage.
Fourth. It has so simplified ordinary dealings that he who
has mastered the three Rs can transact his own
conveyancing.
Fifth. It affords protection against fraud.
Sixth. It has restored to their just value many estates.
held under good holding titles, but depreciated in conse60
60
PHILIPPINEREPORTSANNOTATED
GreyAlbavs.DelaCruz
quence of some blur or technical defect, and has barred the
reoccurrence of any similar faults. (Sheldon on Land
Registration, pp. 75, 76.)
The boldest effort to grapple with the problem of
simplification of title to land was made by Mr. (afterwards Sir
Robert) Torrens, a layman, in South Australia in 1857. * * *
In the Torrens system title by registration takes the place
of title by deeds of the system under the general law. A sale

of land, for example, is effected by a registered transfer, upon


which a certificate of title is issued. The certificate is
guaranteed by statute, and, with certain exceptions,
constitutes indefeasible title to the land mentioned therein.
Under the old system the same sale would be effected by a
conveyance, depending for its validity, apart from intrinsic
flaws, on the correctness of a long series of prior deeds, wills,
etc. * * * The object of the Torrens system, then, is to do away
with the delay, uncertainty, and expense of the old
conveyancing system. (Duffy & Eagleson on The Transfer of
Land Act, 1890, pp. 2, 3, 5, 7.)
By Torrens systems generally are meant those systems
of registration of transactions with interest in land whose
declared object * * * is, under governmental authority, to
establish and certify to the ownership of an absolute and
indefeasible title to realty, and to simplify its transfer. (Hogg
on Australian Torrens System, supra, pp. 1, 2.)
Compensation for errors from assurance funds is provided
in all countries in which the Torrens system has been
enacted. Cases of error no doubt will always occur. The
percentage of errors, as compared with the number of
registered dealings in Australia, is very small. In New South
Wales there were, in 1889, 209,894 registered dealings, the
average risk of error being only 2 cents for each dealing. In
Queensland the risk of error was only 1 cents, the number
of registered dealings being 233,309. In Tasmania and in
Western Australia not a cent was paid for compensation for
errors during the whole time of operation, (Dumass
Lectures, supra, p. 96.) This system has been
61

VOL.17,SEPTEMBER16,1910
61
GreyAlbavs.DelaCruz
adopted in various countries of the civilized world, including
some of the States of the American Union, and practical
experience has demonstrated that it has been successful ul as
a public project.
The validity of some of the provisions of the statutes
adopting the Torrens system has been the subject of judicial
decision in the courts of the United States. (Peoplevs. Chase,
165
111.,
527; State vs. Guilbert,
56
Ohio
St.,
575; People vs. Simon, 176 111., 165; Tyler vs. Judges, 175
Mass., 71.)
Act No. 496 of the Philippine Commission, known as the
Land Registration Act, was copied substantially from the
Massachusetts law of 1898.
The Illinois and Massachusetts statutes were upheld by
the supreme. courts of those States.
It is not enough to show a procedure to be
unconstitutional to say that we never heard of it before.
(Tyler vs. Judges, supra; Hurtado vs. California, 110
U.S.,
516.)
Looked at either from the point of view of history or of the
necessary requirements of justice, a proceeding in remdealing
with a tangible res may be instituted and carried to judgment
without personal service upon claimants within the State or
notice by name to those outside of it, and not encounter any
provision of either constitution. Jurisdiction is secured by the
power of the court over the res. As we have said, such a
proceeding would be impossible, were this not so, for it hardly
would do to make a distinction between the constitutional

rights of claimants who were known and those who were not
known to the plaintiff, when the proceeding is to bar all.
(Tyler vs. Judges, supra.) This same doctrine is annunciated
in Pennoyer vs. Neff (95 U.S., 714) ; The Mary (9 Cranch,
126); Mankin vs. Chandler (2 Brock., 125); Brown vs. Levee
Commission (50 Miss., 468); 2 Freeman, Judgments, 4th ed.,
secs. 606, 611.
If the technical object of the suit is to establish a claim
against some particular person, with a judgment which
62
62
PHILIPPINEREPORTSANNOTATED
GreyAlbavs.DelaCruz
generally, in theory at least, binds his body, or to bar some
individual claim or objection, so that only certain persons are
entitled to be heard in defense, the action is in
personam, although it may concern the right to or possession
of a tangible thing. If, on the other hand, the object is to bar
indifferently all who might be minded to make an objection of
any sort against the right sought to be established, and if
anyone in the world has a right to be heard on the strength of
alleging facts which, if true, show an inconsistent interest,
the proceeding is in rem. (Tylervs. Judges, supra.)
In the case of Hamilton vs. Brown (161 U.S., 256) a
judgment of escheat was held conclusive -upon persons
notified by advertisement to all persons interested. In this
jurisdiction, by the provisions of the Code of Civil Procedure,
Act No. 190, a decree allowing or disallowing a will binds
everybody, although the only notice of the proceedings given
is by general notice to all persons interested.
The supreme court of Massachusetts, in the case
of Tylervs. Judges (supra), did not rest its judgment as to the

conclusive effect of the decree upon the ground that the State
had absolute power to determine the persons to whom a
mans property shall go at his death, but upon the
characteristics of a proceeding in rem. So we conclude that
the proceedings had in the case at bar, under all the facts and
circumstances, especially the absolute lack on the part of the
petitioners of any dishonest intent to deprive the appellee of
any right, or in any way injure him, constitute due process of
law.
As to whether or not the appellee can successfully
maintain an action under the provisions of sections 101 and
102 of the Land Registration Act (secs. 2365, 2366,
Compilation) we do not decide.
For these reasons we are of the opinion, and so hold, that
the judgment appealed from should be, and the same is
hereby reversed and judgment entered in favor of the
petitioners in conformity with the decree of the lower court
63
VOL.17,SEPTEMBER16,1910
63
Rodriguezvs.Ravilan
of February 12, 1908, without special ruling as to costs. It is
so ordered.
Arellano,
C.J., Torres, Johnson, and Moreland,
JJ.,concur.
Judgment reversed.
___________________
Copyright 2015 Central Book Supply, Inc. All rights reserved.
[No. 8936. October 2, 1915.]

CONSUELO LEGARDA, with her husband MAURO


PRIETO, plaintiffs and appellants, vs. N. M. SALEEBY,
defendant and appellee.
1. 1.REGISTRATION OF LAND; REGISTRATION OF
SAME LAND IN THE NAMES OF Two DIFFERENT
PERSONS.L obtained a decree of registration of a
parcel of land on the 25th of October, 1906. S, on the
25th of March, 1912, obtained a certificate of
registration for his land which joined the land
theretofore registered by L. The certificate of title
issued to S included a narrow strip of the land
theretofore registered in the name of L. On the 13th
of December, 1912, L presented a petition in the
Court of Land Registration for the adjustment and
correction of the error committed in the certificate
issued to S, which included said narrow strip of
land. Held: That in a case where two certificates of
title include or cover the same land, the earlier in
date must prevail as between the original parties,
whether the land comprised in the latter certificate be
wholly or only in part comprised in the earlier
certificate. In successive registrations where more
than one certificate is issued in respect of a particular
interest in land, the person holding under the prior
certificate is entitled to the land as against the person
who obtained the second certificate. The decree of
registration is conclusive upon and against all
persons.

1. 2.ID.; PURPOSE OF THE TORRENS SYSTEM.The


real purpose of the torrens system of land registration
is to quiet title to land; to put a stop forever to any
question of the legality of the title, except claims
which were noted, at the time of registration, in the
certificate, or which may arise subsequent thereto.
That being the purpose of the law, it would seem that
once the title
591
VOL.31,OCTOBER2,1915.

59
1

LegardaandPrietovs.Saleeby.
1. was registered, the owner might rest secure, without
the necessity of waiting in the portals of the court, or
sitting in the "mirador de su casa," to avoid the
possibility of losing his land. The proceeding for the
registration of land under the torrens system is a
judicial proceeding, but it involves more in its
consequences than does an ordinary action.
1. 3.ID; ID.; EFFECT
OF
REGISTRATION
AND
CERTIFICATE OF TITLE.The registration under
the torrens system and the issuance of a certificate of
title do not give the owner any better title than he
had. He does not obtain title by virtue of the
certificate. He secures his certificate by virtue of the
fact that he has a fee simple title. If he obtains a
certificate of title, by mistake, to more land than he
really and in fact owns, the certificate should be

corrected. If he does not already have a perfect title,


he can not secure his certificate. Having a fee simple
title, and presenting sufficient proof of that fact, he is
entitled to a certificate of registration. The certificate
of registration simply accumulates, in one document,
a precise and correct statement of the exact status of
the fee simple title, which the owner, in fact, has. The
certificate, once issued, is the evidence of the title
which the owner has. The certificate should not be
altered, changed, modified, enlarged or diminished,
except to correct errors, in some direct proceedings
permitted by law. The title represented by the
certificate can not be changed, altered, modified,
enlarged or diminished in a collateral proceeding.
APPEAL from a judgment of the Court of Land Registration.
Concepcion, J.
The facts are stated in the opinion of the court.
Singson, Ledesma & Lim for appellants.
D. R. Williams for appellee.
JOHNSON, J.:
From the record the following facts appear:
First. That the plaintiffs and the defendant occupy, as
owners, adjoining lots in the district of Ermita in the city of
Manila.
Second. That there exists and has existed for a number of
years a stone wall between the said lots. Said wall is located
on the lot of the plaintiff s.

Third. That the plaintiffs, on the 2d day of March, 1906,


presented a petition in the Court of Land Registration for
592
592
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
the registration of their lot. After a consideration of said
petition the court, on the 25th day of October, 1906, decreed
that the title of the plaintiffs should be registered and issued
to them the original certificate provided for under the torrens
system. Said registration and certificate included the wall.
Fourth. Later the predecessor of the defendant presented a
petition in the Court of Land Registration for the registration
of the lot now occupied by him. On the 25th day of March,
1912, the court decreed the registration of said title and
issued the original certificate provided for under the torrens
system. The description of the lot given in the petition of the
defendant also included said wall.
Fifth. Several months later (the 13th day of December,
1912) the plaintiffs discovered that the wall which had been
included in the certificate granted to them had also been
included in the certificate granted to the defendant They
immediately presented a petition in the Court of Land
Registration for an adjustment and correction of the error
committed by including said wall in the registered title of
each of said parties. The lower court however, without notice
to the defendant, denied said petition upon the theory that,
during the pendency of the petition for the registration of the
defendant's land, they failed to make any objection to the
registration of said lot, including the wail, in the name of the
defendant.

Sixth. That the land occupied by the wall is registered in


the name of each of the owners of the adjoining lots. The wall
is not a joint wall.
Under these facts, who is the owner of the wall and the
land occupied by it?
The decision of the lower court is based upon the theory
that the action for the registration of the lot of the defendant
was a judicial proceeding and that the judgment or decree
was binding upon all parties who did not appear and oppose
it. In other words, by reason of the fact that the plaintiffs had
not opposed the registration of that part of the lot on which
the wall was situate they had lost it.
593
VOL.31,OCTOBER2,1915.
593
LegardaandPrietovs.Saleeby.
even though it had been theretofore registered in their name.
Granting that theory to be the correct one, and granting even
that the wall and the land occupied by it, in fact, belonged to
the defendant and his predecessors, then the same theory
should be applied to the defendant himself. Applying that
theory to him, he had already lost whatever right he had
therein, by permitting the plaintiffs to have the same
registered in their name, more than six years before. Having
thus lost his right, may he be permitted to regain it by simply
including it in a petition for registration ? The plaintiffs
having secured the registration of their lot, including the
wall, were they obliged to constantly be on the alert and to
watch all the proceedings in the land court to see that some
one else was not having all, or a portion of the same,
registered? If that question is to be answered in the
affirmative, then the whole scheme and purpose of the

torrens system of land registration must fail. The real


purpose of that system is to quiet title to land; to put a stop
forever to any question of the legality of the title, except
claims which were noted at the time of registration, in the
certificate, or which may arise subsequent thereto. That
being the purpose of the law, it would seem that once a title is
registered the owner may rest secure, without the necessity
of waiting in the portals of the court, or sitting in the
"mirador de su casa," to avoid the possibility of losing his
land. Of course, it can not be denied that the proceeding for
the registration of land under the torrens system is judicial
(Escueta vs.Director of Lands, 16 Phil. Rep., 482). It is
clothed with all the forms of an action and the result is final
and binding upon all the world. It is an action in
rem. (Escueta vs.Director of Lands (supra) ; Grey Alba vs. De
la Cruz, 17 Phil. Rep., 49; Roxas vs. Enriquez, 29 Phil. Rep.,
31; Tylervs. Judges,
175
Mass.,
71; American
Land
Co. vs. Zeiss, 219 U. S., 47.)
While the proceeding is judicial, it involves more in its
consequences than does an ordinary action. All the world are
parties, including the government. After the registra594
594
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
tion is complete and final and there exists no fraud, there are
no innocent third parties who may claim an interest. The
rights of all the world are foreclosed by the decree of
registration. The government itself assumes the burden of
giving notice to all parties. To permit persons who are parties
in the registration proceeding (and they are all the world) to
again litigate the same questions, and to again cast doubt

upon the validity of the registered title, would destroy the


very purpose and intent of the law. The registration, under
the torrens system, does not give the owner any better title
than he had. If he does not already have a perfect title, he
can not have it registered. Fee simple titles only may be
registered. The certificate of registration accumulates in one
document a precise and correct statement of the exact status
of the fee held by its owner. The certificate, in the absence of
fraud, is the evidence of title and shows exactly the real
interest of its owner. The title once registered, with very few
exceptions, should not thereafter be impugned, altered,
changed, modified, enlarged, or diminished, except in some
direct proceeding permitted by law. Otherwise all security in
registered titles would be lost. A registered title can not be
altered,
modified,
enlarged,
or
diminished
in
a collateralproceeding and not even by a direct proceeding,
after the lapse of the period prescribed by law.
For the difficulty involved in the present case the Act (No.
496) providing for the registration of titles under the torrens
system affords us no remedy. There is no provision in said Act
giving the parties relief under conditions like the present.
There is nothing in the Act which indicates who should be the
owner of land which has been registered in the name of two
different persons.
The rule, we think, is well settled that the decree ordering
the registration of a particular parcel of land is a bar to
future litigation over the same between the same parties. In
view of the fact that all the world are parties, it must follow
that future litigation over the title is forever barred; there
can be no persons who are not parties to the action.

595
VOL.31,OCTOBER2,1915.
595
LegardaandPrietovs.Saleeby.
This, we think, is the rule, except as to rights which are noted
in the certificate or which arise subsequently, and with
certain other exceptions which need not be discussed at
present. A title once registered can not be defeated, even by
an adverse, open, and notorious possession. Registered title
under the torrens system can not be defeated by prescription
(section 46, Act No. 496). The title, once registered, is notice
to the world. All persons must take notice. No one can plead
ignorance of the registration.
The question, who is the owner of land registered in the
name of two different persons, has been presented to the
courts in other jurisdictions. In some jurisdictions, where the
"torrens" system has been adopted, the difficulty has been
settled by express statutory provision. In others it has been
settled by the courts. Hogg, in his excellent discussion of the
"Australian Torrens System," at page 823, says: "The general
rule is that in the case of two certificates of title, purporting
to include the same land, the earlier in date prevails, whether
the land comprised in the latter certificate be wholly, or only
in
part,
comprised
in
the
earlier
certificate.
(Oelkers vs. Merry, 2 Q. S. C. R., 193;Miller vs. Davy, 7 N. Z.
R.,
155; Lloyd vs. Mayfield,
7
A.
L.
T.
(V.)
48; Stevens vs. Williams, 12 V. L. R., 152; Register of
Titles vs. Esperance Land Co., 1 W. A. R., 118.)" Hogg adds
however that, "if it can be clearly ascertained by the ordinary
rules of construction relating to written documents, that the
inclusion of the land in the certificate of title of prior date is a
mistake, the mistake may be rectified by holding the latter of

the two certificates of title to be conclusive." (See Hogg on the


"Australian Torrens System," supra, and cases cited. See also
the excellent work of Niblack in his "Analysis of the Torrens
System." page 99.) Niblack, in discussing the general
question, said: "Where two certificates purport to include the
same land the earlier in date prevails. * * * I n successive
registrations, where more than one certificate is issued in
respect of a particular estate or interest in land, the person
claiming under the prior certificate is en596
596
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
titled to the estate or interest; and that person is deemed to
hold under the prior certificate who is the holder of, or whose
claim is derived directly or indirectly from the person who
was the holder of the earliest certificate issued in respect
thereof. While the acts in this country do not expressly cover
the case of the issue of two certificates for the same land,
they provide that a registered owner shall hold the title, and
the effect of this undoubtedly is that where two certificates
purport to include the same registered land, the holder of the
earlier one continues to hold the title" (p. 237).
Section 38 of Act No. 496, provides that; "It (the decree of
registration) shall be conclusive upon and against allpersons,
including the Insular Government and all the branches
thereof, whether mentioned by name in the application,
notice, or citation, or included in the general description 'To
all whom it may concern.' Such decree shall not be opened by
reason of the absence, infancy, or other disability of any
person affected thereby, nor by any proceeding in any court
for reversing judgments or decrees; subject, however, to the

right of any person deprived of land or of any estate or


interest therein by decree of registration obtained by fraud to
file in the Court of Land Registration a petition for review
within one year after entry of the decree (of registration),
provided no innocent purchaser for value has acquired an
interest."
It will be noted, from said section, that the "decree of
registration"
shall
not
be
opened,
for any reason,
in anycourt, except for fraud, and not even for fraud, after the
lapse of one year. If then the decree of registration can not be
opened for any reason, except for fraud, in a direct proceeding
for that purpose, may such decree be opened or set aside in a
collateral proceeding by including a portion of the land in a
subsequent certificate or decree of registration? We do not
believe the law contemplated that a person could be deprived
of his registered title in that way.
We have in this jurisdiction a general statutory provision
597
VOL.31,OCTOBER2,1915.
597
LegardaandPrietovs.Saleeby.
which governs the right of the ownership of land when the
same is registered in the ordinary registry in the name of two
different persons. Article 1473 of the Civil Code provides,
among other things, that when one piece of real property has
been sold to two different persons it shall belong to the
person acquiring it, who first inscribes it in the registry. This
rule, of course, presupposes that each of the vendees or
purchasers has acquired title to the land. The real ownership
in such a case depends upon priority of registration. While we
do not now decide that the general provisions of the Civil
Code are applicable to the Land Registration Act, even

though we see no objection thereto, yet we think, in the


absence of other express provisions, they should have a
persuasive influence in adopting a rule for governing the
effect of a double registration under said Act. Adopting the
rule which we believe to be more in consonance with the
purposes and the real intent of the torrens system, we are of
the opinion and' so decree that in case land has been
registered under the Land Registration Act in the name of
two different persons, the earlier in date shall prevail.
In reaching the above conclusion, we have not overlooked
the forceful argument of the appellee. He says, among other
things; "When Prieto et al. were served with notice of the
application of Teus (the predecessor of the defendant) they
became defendants in a proceeding wherein he, Teus, was
seeking to foreclose their right, and that of others, to the
parcel of land described in his application. Through their
failure to appear and contest his right thereto, and the
subsequent entry of a default judgment against them, they
became irrevocably bound by the decree adjudicating such
land to Teus. They had their day in court and can not set up
their own omission as ground for impugning the validity of a
judgment duly entered by a court of competent jurisdiction.
To decide otherwise would be to hold that lands with torrens
titles are above the law and beyond the jurisdiction of the
courts."
As was said above, the primary and fundamental purpose
598
598
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
of the torrens system is to quiet title. If the holder of a
certificate cannot rest secure in his registered title then the

purpose of the law is defeated. If those dealing with


registered land cannot rely upon the certificate, then nothing
has been gained by the registration and the expense incurred
thereby has been in vain. If the holder may lose a strip of his
registered land by the method adopted in the present case, he
may lose it all. Suppose within the six years which elapsed
after the plaintiff had secured their title, they had mortgaged
or sold their right, what would be the position or right of the
mortgagee or vendee? That mistakes are bound to occur
cannot be denied, and sometimes the damage done thereby is
irreparable. It is the duty of the courts to adjust the rights of
the parties under such circumstances so as to minimize such
damages, taking into consideration all of the conditions and
the diligence of the respective parties to avoid them. In the
present case, the appellee was first negligent (granting that
he was the real owner, and if he was not the real owner he
can not complain) in not opposing the registration in the
name of the appellants. He was a party-defendant in an
action for the registration of the lot in question, in the name
of the appellants, in 1906. "Through his failure to appear and
to oppose such registration, and the subsequent entry of a
default judgment against him, he became irrevocably bound
by the decree adjudicating such land to the appellants. He
had his day in court and should not be permitted to set up his
own omissions as the ground for impugning the validity of a
judgment duly entered by a court of competent jurisdiction."
Granting that he was the owner of the land upon which the
wall is located, his failure to oppose the registration of the
same in the name of the appellants, in the absence of fraud,
forever closes his mouth against impugning the validity of

that judgment. There is no more reason why the doctrine


invoked by the appellee should be applied to the appellants
than to him.
We have decided, in case of double registration under the
Land Registration Act, that the owner of the earliest certif599
VOL.31,OCTOBER2,1915.
599
LegardaandPrietovs.Saleeby.
icate is the owner of the land. That is the rule between
original parties. May this rule be applied to successive
vendees of the owners of such certificates? Suppose that one
or the other of the parties, before the error is discovered,
transfers his original certificate to an "innocent purchaser."
The general rule is that the vendee of land has no greater
right, title, of interest than his vendor; that he acquires the
right which his vendor had, only. Under that rule the vendee
of the earlier certificate would be the owner as against the
vendee of the owner of the later certificate.
We find statutory provisions which, upon first reading,
seem to cast some doubt upon the rule that the vendee
acquires the interest of the vendor only. Sections 38, 55, and
112 of Act No. 496 indicate that the vendee may acquire
rights and be protected against defenses which the vendor
would not. Said sections speak of available rights in favor of
third parties which are cut off by virtue of the sale of the land
to an "innocent purchaser." That is to say, persons who had
had a right or interest in land wrongfully included in an
original certificate would be unable to enforce such rights
against an "innocent purchaser," by virtue of the provisions of
said sections. In the present case Teus had his land,
including the wall, registered in his name. He subsequently

sold the same to the appellee. Is the appellee an "innocent


purchaser," as that phrase is used in said sections? May those
who have been deprived of their land by reason of a mistake
in the original certificate in favor of Teus be deprived of their
right to the same, by virtue of the sale by him to the
appellee? Suppose the appellants had sold their lot, including
the wall, to an "innocent purchaser," would such purchaser be
included in the phrase "innocent purchaser," as the same is
used in said sections? Under these examples there would be
two innocent purchasers of the same land, if said sections are
to be applied. Which of the two innocent purchasers, if they
are both to be regarded as innocent purchasers, should be
protected under the provisions of said sections? These
questions indicate the difficulty with which we are met in
giving mean600
600
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
ing and effect to the phrase "innocent purchaser," in said
sections.
May the purchaser of land which has been included in a
"second original certificate" ever be regarded as an "innocent
purchaser," as against the rights or interest of the owner of
the first original certificate, his heirs, assigns, or vendee? The
first original certificate is recorded in the public registry. It is
never issued until it is recorded. The 'record is notice to all
the world. All persons are charged with the knowledge of
what it contains. All persons dealing with the land so
recorded, or any portion of it, must be charged with notice of
whatever it contains. The purchaser is charged with notice of
every fact shown by the record and is presumed to know

every fact which the record discloses. This rule is so well


established that it is scarcely necessary to cite authorities in
its support (Northwestern National Bank vs. Freeman, 171
U. S., 620, 629; Delvin on Real Estate, sections 710, 710 [a]).
When a conveyance has been properly recorded such
record is constructive notice of its contents and all interests,
legal and equitable, included therein. (Grandinvs. Anderson,
15 Ohio State, 286, 289; Orvis vs. Newell, 17 Conn.,
97; Buchanan vs. International Bank, 78 111., 500;Youngs vs.
Wilson, 27 N. Y., 351; McCabe vs. Grey, 20 Cal.,
509; Montefiore vs. Browne, 7 House of Lords Cases, 341.)
Under the rule of notice, it is presumed that the purchaser
has examined every instrument of record affecting the title.
Such presumption is irrebutable. He is charged with notice of
every fact shown by the record and is presumed to know
every fact which an examination of the record would have
disclosed. This presumption cannot be overcome by proof of
innocence or good faith. Otherwise the very purpose and
object of the law requiring a record would be destroyed. Such
presumption cannot be defeated by proof of want of
knowledge of what the record contains any more than one
may be permitted to show that he was ignorant of the
provisions of the law. The rule that all persons must take
notice of the facts which the public record contains
601
VOL.31,OCTOBER2,1915.
601
LegardaandPrietovs.Saleeby.
is a rule of law. The rule must be absolute. Any variation
would lead to endless confusion and useless litigation.
While there is no statutory provision in force here
requiring that original deeds of conveyance of real property

be recorded, yet there is a rule requiring mortgages to be


recorded. (Arts. 1875 and 606 of the Civil Code.) The record
of a mortgage is indispensable to its validity. (Art. 1875.) In
the face of that statute would the courts allow a mortgage to
be valid which had not been recorded, upon the plea of
ignorance of the statutory provision, when third parties were
interested? May a purchaser of land, subsequent to the
recorded mortgage, plead ignorance of its existence, and by
reason of such ignorance have the land released from such
lien? Could a purchaser of land, after the recorded mortgage,
be relieved from the mortgage lien by the plea that he was
a bona fide purchaser? May there be abona fide purchaser of
said land, bona fide in the sense that he had no knowledge of
the existence of the mortgage ? We believe the rule that all
persons must take notice of what the public record contains is
just as obligatory upon all persons as the rule that all men
must know the law; that no one can plead ignorance of the
law. The fact that all men know the law is contrary to the
presumption. The conduct of men, at times, shows clearly
that they do not know the law, The rule, however, is
mandatory and obligatory, notwithstanding. It would be just
as logical to allow the plea of ignorance of the law affecting a
contract as to allow the defense of ignorance of the existence
and contents of a public record.
In view, therefore, of the foregoing rules of law, may the
purchaser of land f rom the owner of the second original
certificate be an "innocent purchaser," when a part or all of
such land had theretofore been registered in the name of
another, not the vendor? We are of the opinion that said
sections 38, 55, and 112 should not be applied to such

purchasers. We do not believe that the phrase "innocent


purchaser" should be applied to such a purchaser. He cannot
be regarded as an "innocent purchaser" because of the
602
602
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
facts contained in the record of the first original certificate.
The rule should not be applied to the purchaser of a parcel of
land the vendor of which is not the owner of the original
certificate, or his successors. He, in no sense, can be an
"innocent purchaser" of the portion of the land included in
another earlier original certificate. The rule of notice of what
the record contains precludes the idea of innocence. By
reason of the prior registry there cannot be an innocent
purchaser of land included in a prior original certificate and
in a name other than that of the vendor, or his successors. In
order to minimize the difficulties we think this is the safer
rule to establish. We believe the phrase "innocent purchaser,"
used in said sections, should be limited only to cases where
unregistered land has been wrongfully included in a
certificate under the torrens system. When land is once
brought under the torrens system, the record of the original
certificate and all subsequent transfers thereof is notice to all
the world. That being the rule, could Teus even be regarded
as the holder in good faith of that part of the land included in
his certificate which had theretofore been included in the
original certificate of the appellants? We think not. Suppose,
for example, that Teus had never had his lot registered under
the torrens system. Suppose he had sold his lot to the
appellee and had included in his deed of transfer the very
strip of land now in question. Could his vendee be regarded

as an "innocent purchaser" of said strip ? Would his vendee


be an "innocent purchaser" of said strip? Certainly not. The
record of the original certificate of the appellants precludes
the possibility. Has the appellee gained any right by reason of
the registration of the strip of land in the name of his vendor?
Applying the rule of notice resulting from the record of the
title of the appellants, the question must be answered in the
negative. We are of the opinion that these rules are more in
harmony with the purpose of Act No, 496 than the rule
contended for by the appellee. We believe that the purchaser
from the owner of the later certificate, and his successors,
should be required to resort to his vendor for
603
VOL.31,OCTOBER2,1915.
603
LegardaandPrietovs.Saleeby.
damages, in case of a mistake like the present, rather than to
molest the holder of the first certificate who has been guilty
of no negligence. The holder of the first original certificate
and his successors should be permitted to rest secure in their
title, against one who had acquired rights in conflict
therewith and who had full and complete knowledge of their
rights. The purchaser of land included in the second original
certificate, by reason of the facts contained in the public
record and the knowledge with which he is charged and by
reason of his negligence, should suffer the loss, if any,
resulting from such purchase, rather than he who has
obtained the first certificate and who was innocent of any act
of negligence.
The foregoing decision does not solve, nor pretend to solve,
all the difficulties resulting from double registration under
the torrens system and the subsequent transfer of the land.

Neither do we now attempt to decide the effect of the former


registration in the ordinary registry upon the registration
under the torrens system. We are inclined to the view,
without deciding it, that the record under the torrens system
must, by the very nature and purposes of that system,
supersede all other registries. If that view is correct then it
will be sufficient, in dealing with land registered and
recorded under the torrens system, to examine that record
alone. Once land is registered and recorded under the torrens
system, that record alone can be examined for the purpose of
ascertaining the real status of the title to the land.
It would seem to be a just and equitable rule, when two
persons have acquired equal rights in the same thing, to hold
that the one who acquired it first and who has complied with
all the requirements of the law should be protected.
In view of our conclusions, above stated, the judgment of
the lower court should be and is hereby revoked. The record is
hereby returned to the court now having and exercising the
jurisdiction heretofore exercised by the land court, with
direction to make such orders and decrees in
604
604
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
the premises as may correct the error heretofore made in
including the land in question in the second original
certificate issued in favor of the predecessor of the appellee,
as well as in all other duplicate certificates issued.
Without any finding as to costs, it is so ordered.
Arellano, C. J. Torres, and Araullo, JJ., concur.
CARSON J., with whom concurs TRENT, /., dissenting:

I dissent.
In cases of double or overlapping registration, I am
inclined to .agree with the reasoning and authority on which
it is held in the majority opinion (first) that the original
holder of the prior certificate is entitled to the land as against
the original holder of the later certificate, where there has
been no transfer of title by either party to an innocent
purchaser; both, as is shown in the majority opinion, being at
fault in permitting the double registration to take place;
(second) that an innocent purchaser claiming under the prior
certificate is entitled to the land as against the original
holder of the later certificate, and also as against innocent
purchasers from the holder of the later certificate; the
innocent purchaser being in no wise at f ault in connection
with the issuance of the later certificate.
But I am of opinion that neither the authorities cited, nor
the reasoning of the majority opinion sustains the proposition
that the original holder of the prior certificate is entitled to
the land as against an innocent purchaser from the holder of
the later certificate,
As to the text-book authorities cited in the majority
opinion, it is sufficient to say that the rules laid down by both
Hogg and Niblack are mere general rules, admittedly subject
to exception, and of course of no binding force or authority
where the reasoning upon which these rules are based is
inapplicable to the facts developed in a particular case.
In its last analysis the general rule laid down in the
majority opinion rests upon the proposition set forth in the
last page of the opinion wherein it is said that "it would seem
to be a just and equitable rule, when two persons

605
VOL.31,OCTOBER2,1915.
605
LegardaandPrietovs.Saleeby.
have acquired equal rights in the same thing, to hold that the
one who acquired it first and who has complied with all the
requirements of the law should be protected." The rule, as
applied to the matter in hand, may be stated as follows: It
would seem to be a just and equitable rule when two persons
have acquired separate and independent registered titles to
the same land, under the Land Registration Act, to hold that
the one who first acquired registered title and who has
complied with all the requirements of the law in that regard
should be protected, in the absence of any express statutory
provision to the contrary.
Thus stated I have no quarrel with the doctrine as a
statement of the general rule to be applied in cases of double
or overlapping registration under the Land Registration Act;
for it is true as stated in the majority opinion that in the
adjudication and registration of titles by the Courts of Land
Registration "mistakes are bound to occur, and sometimes the
damage done thereby is irreparable;" and that in the absence
of statutory provisions covering such cases, "it is the duty of
the courts to adjust the rights of the parties, under such
circumstances, so as to minimize such damages, taking into
consideration all of the conditions, and the diligence of the
respective parties to avoid them."
But like most such general rules, it has its exceptions and
should not be applied in a case wherein the reasons on which
it is based do not exist, or in cases wherein still more forceful
reasons demand the application of a contrary rule.

The general rule relied upon in the majority opinion is a


mere application of a well settled equity rule that: "Where
conflicting equities are otherwise equal in merit, that which
first accrued will be given the preference." But it is
universally laid down by all the courts which have had
occasion to apply this equity rule that "it should be the last
test resorted to," and that "it never prevails when any other
equitable ground for 'preference exists." (See 19 Cent. Dig.,
tit. Equity, par. 181; and many cases cited in 16 Cyc., 139,
note 57.) It follows that the general rules, that in
606
606
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
cases of double or overlapping registration the earlier
certificate should be protected, ought not to prevail so as to
deprive an innocent purchaser under the later certificate of
his title in any case wherein the fraud or negligence of the
holder of the earlier certificate contributed to the issuance of
the later certificate. Hence the holder of the earlier certificate
of title should not be heard to invoke the "just and equitable
rule" as laid down in the majority opinion, in order to have
his own title protected and the title of an innocent holder of a
later certificate cancelled or annulled, in any case wherein it
appears that the holder of the later certificate was wholly
without fault, while the holder of the earlier certificate was
wholly or largely to blame for the issuance of the later
certificate, in that he might have prevented its issuance by
merely entering his appearance in court in response to lawful
summons personally served upon him in the course of the
proceedings for the issuance of the second certificate, and
pleading his superior rights under the earlier certificate,

instead of keeping silent and by his silence permitting a


default judgment to be entered against him adjudicating title
in favor of the second applicant.
The majority opinion clearly recognizes the soundness of
the principles I am contending for by the reasoning (with
which I am inclined to agree) whereby it undertakes to
demonstrate that as between the original holders of the
double or overlapping registration the general rule should
prevail, because both such original parties must be held to
have been at fault and, their equities being equal, preference
should be given to the earlier title.
The majority opinion further recognizes the soundness of
my contention by the reasoning whereby it undertakes to
sustain the application of the general rule in favor of the
original holder of the earlier certificate against purchasers
from the original holder of the later certificate, by an attempt
to demonstrate that such purchasers can in no event be held
to be innocent -purchasers: because, as it is said, negligence
may and should always be imputed to such
607
VOL.31,OCTOBER2,1915.
607
LegardaandPrietovs.Saleeby.
a purchaser, so that in no event can he claim to be
withoutfault when it appears that the lands purchased by
him f rom the holder of a duly registered certificate of title
are included within the bounds of the lands described in a
certificate of title of an earlier date.
At considerable length the majority opinion (in reliance
upon the general rule laid down under the various systems of
land registration, other than those based on the torrens
system) insists that a purchaser of land duly registered in the

Land Registration Court, is charged with notice of the


contents of each and every one of the thousands and tens of
thousands of certificates of registry on file in the land
registry office, so that negligence may be imputed to him if he
does not ascertain that all or any part of the land purchased
by him is included within the boundary lines of any one of the
thousands or tens of thousands of tracts of land whose
original registry bears an earlier date than the date of the
original registry of the land purchased by him. It is
contended that he cannot claim to be without fault should he
buy such land because, as it is said, it was possible for him to
discover that the land purchased by him had been made the
subject of double or overlapping registration by a comparison
of the description and boundary lines of the thousands of
tracts and parcels of land to be found in the land registry
office.
But such a ruling goes far to defeat one of the principal
objects sought to be attained by the introduction and
adoption of the so-called torrens system for the registration of
land. The avowed intent of that system of land registration is
to relieve the purchaser of registered lands from the necessity
of looking farther than the certificate of title of the vendor in
order that he may rest secure as to the validity of the title to
the lands conveyed to him. And yet it is said in the majority
opinion that he is charged with notice of the contents of every
other certificate of title in the office of the registrar so that
his f ailure to acquaint himself with its contents may be
imputed to him as negligence.
If the rule announced in the majority opinion is to pre608

608
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
vail, the new system of land registration, instead of making
transf ers of real estate simple, expenditious and secure, and
instead of avoiding the necessity for expensive and oftimes
uncertain searches of the land records and registries, in order
to ascertain the true condition of the title before purchase,
will, in many instances, add to the labor, expense and
uncertainty of any attempt by a purchaser to satisfy himself
as to the validity of the title to lands purchased by him.
As I have said before, one of the principal objects, if not the
principal object, of the torrens system of land registration
upon which our Land Registration Act is avowedly modelled
is to facilitate the transfer of real estate. To that end the
Legislature undertakes to relieve prospective purchasers and
all others dealing in registered lands from the necessity of
looking farther than the certificate of title to such lands
furnished by the Court of Land Registration, and I cannot,
therefore, give my consent to a ruling which charges a
purchaser or mortgagee of registered lands with notice of the
contents of every other certificate of title in the land registry,
so that negligence and fault may be imputed to him should he
be exposed to loss or damages as a result of the lack of such
knowledge.
Suppose a prospective purchaser of lands registered under
the Land Registration Act desires to avoid the imputation of
negligence in the event that, unknown to him, such lands
have been made the subject of double or overlapping
registration, what course should he pursue? What measures
should he adopt in order to search out the information with

notice of which he is charged? There are no indexes to guide


him nor is there anything in the record or the certificate of
title of the land he proposes to buy which necessarily or even
with reasonable probability will furnish him a clue as to the
fact of the existence of such double or overlapping
registration. Indeed the only course open to him, if he desires
to assure himself against the possibility of double or
overlapping registration, would seem to be a careful,
609
VOL,31,OCTOBER2,1915.
609
LegardaandPrietovs.Saleeby.
laborious and extensive comparison of the registered
boundary lines contained in the certificate of title of the tract
of land he proposes to buy with those contained in all the
earlier certificates of title to be found in the land registry.
Assuredly it was never the intention of the author of the new
Land Registration Act to impose such a burden on a
purchaser of duly registered real estate, under penalty that a
lack of the knowledge which might thus be acquired may be
imputed to him by this court as negligence in ruling upon the
respective equities of the holders of lands which have been
the subject of double or overlapping registration.
On the other hand, I think that negligence and fault may
fairly be imputed to a holder of a registered certificate of title
who stood supinely by and let a default judgment be entered
against him, adjudicating all or any part of his registered
lands to another applicant, if it appears that he was served
with notice or had actual notice of the pendency of the
proceedings in the Court of Land Registration wherein such
default judgment was entered.

The owner of land who enjoys the benefits secured to him


by its registry in the Court of Land Registration may
reasonably be required to appear and defend his title when
he has actual notice that proceedings are pending in that
court wherein another applicant, claiming the land as his
own, is seeking to secure its registry in his name. All that is
necessary for him to do is to enter his appearance in those
proceedings, invite the court's attention to the certificate of
title registered in his name, and thus, at the cost of the
applicant, avoid all the damage and inconvenience flowing
from the double or overlapping registration of the land in
question. There is nothing in the new system of land
registration which seems to render it either expedient or
necessary to relieve a holder of a registered title of the duty
of appearing and defending that title, when he has actual
notice that it is being attacked in a court of competent
jurisdiction, and if, as a result of his neglect or failure so to
do, his lands become subject to double or over610
610
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.'Saleeby.
lapping registration, he should not be permitted to subject an
innocent purchaser, holding under the later certificate, to all
the loss and damage resulting from the double or overlapping
registration, while he goes scot free and holds the land under
a manifest misapplication of the equitable rule that "where
conflicting equities are otherwise equal in merit, that whichfirst accrued will be given the preference." It is only where
both or neither of the parties are at fault that the rule is
properly applicable as between opposing claimants under an
earlier and a later certificate of registry to the same land.

Of course all that is said in the briefs of counsel and the


majority opinion as to the right of the holder of a certificate
to rest secure in his registered title so that those dealing with
registered lands can confidently rely upon registry
certificates thereto is equally forceful by way of argument in
favor of the holder of one or the other certificate in case of
double or overlapping registration. The problem is to
determine which of the certificate holders is entitled to the
land. The decision of that question in f avor of either one
must necessarily have the effect of destroying the value of the
registered title of the other and to that extent shaking the
public confidence in the value of the whole system for the
registration of lands. But, in the language of the majority
opinion, "that mistakes are bound to occur cannot be denied
and sometimes the damage done thereby is irreparable. It is
the duty of the courts to adjust the rights of the parties under
such circumstances so as to minimize the damages, taking
into consideration all the conditions and the diligence of the
respective parties to avoid them."
It will be observed that I limit the exception to the general
equitable rule, as laid down in the majority opinion, to cases
wherein the holder of the earlier certificate of title has actual
notice of the pendency of the proceedings in the course of
which the later certificate of title was issued, or to cases in
which. he has received personal notice of the pendency of
those proceedings. Unless he has actual notice of the
pendency of such proceedings I readily agree with
611
VOL.31,OCTOBER2,1915.
611
LegardaandPrietovs.Saleeby.

the reasoning of the majority opinion so far as it holds that


negligence, culpable negligence, should not be imputed to him
for failure to appear and defend his title so as to defeat his
right to the benefit of the equitable rule. It is true that the
order of publication in such cases having been duly complied
with, all the world is charged with notice thereof, but it does
not necessarily follow that, in the absence of actual notice,
culpable negligence in permitting a default judgment to be
entered against him may be imputed to the holder of the
earlier certificate so as to defeat his right to the land under
the equitable rule favoring the earlier certificate. Such a
holding would have the effect (to quote the language of the
majority opinion) of requiring the holder of a certificate of
title to wait indefinitely "in the portals of the court" and to sit
in the "mirador de su casa"in order to avoid the possibility of
losing his lands; and I agree with the.writer of the majority
opinion that to do so would place an unreasonable burden on
the holders of such certificate, which was not contemplated
by the authors of the Land Registration Act. But no
unreasonable burden is placed upon the holder of a
registered title by a rule which imputes culpable negligence
to him when he sits supinely by and lets a judgment in
default be entered against him adjudicating title to his lands
in favor of another applicant, despite the fact that he has
actual knowledge of the pendency of the proceedings in which
such judgment is entered and despite the fact that he has
been personally served with summons to appear and default
his title.
"Taking into consideration all of the conditions and the
diligence of the respective parties," it seems to me that there

is no "equality in merit" between the conflicting equities set


up by an innocent purchaser who acquires title to the land
under a registered certificate, and the holder of an earlier
certificate who permitted a default judgment to be entered
against him, despite actual notice of the pendency of the
proceedings in the course of which the later certificate was
issued.
612
612
PHILIPPINEREPORTSANNOTATED
LegardaandPrietovs.Saleeby.
I am convinced, furthermore, that aside from the superior
equities of the innocent purchaser in cases such as that now
under discussion, there are strong reasons of convenience and
public policy which militate in favor of the recognition of his
title rather than that of the holder of the earlier title.
One ruling exposes all persons purchasing or dealing in
registered lands to unknown, unspecified and uncertain
dangers, to guard against which all such persons will be put
to additional cost, annoyance and labor on every occasion
when any transaction is had with regard to such lands; while
the other ruling tends to eliminate consequences so directly
adverse to the purpose and object for which the land
registration law was enacted, and imposes no burden upon
any holder of a certificate of registered lands other than that
of defending his title on those rare, definite and specific
occasions wherein he has actual notice that his title is being
challenged in a Court of Land Registration, a proceeding in
which the cost and expense is reduced to the minimum by the
conclusive character of his certificate of title in support of his
claim of ownership. Furthermore, judgment against the
innocent purchaser and in favor of the holder of the earlier

certificate in a case such as that under consideration must


inevitably lend to increase the danger of double or
overlapping registrations by encouraging holders of
registered titles, negligently or fraudulently and collusively,
to permit default judgments to be entered against them
adjudicating title to all or a part of their registered lands in
favor of other applicants, despite actual notice of the
pendency of judicial proceedings had for that purpose, and
this, without adding in any appreciable degree to the security
of their titles, and merely to save them the very slight trouble
or inconvenience incident to an entry of appearance in the
court in which their own titles were secured, and inviting
attention to the fact that their right, title and ownership in
the lands in question has already been conclusively
adjudicated.
The cases wherein there is a practical possibility of double
613
VOL.31,OCTOBER2,1915.
613
LegardaandPrietovs.Saleeby.
or overlapping registration without actual notice to the
holder of the earlier certificate must in the very nature of
things be so rare as to be practically negligible. Double or
overlapping registration almost invariably occurs in relation
to lands held by adjoining occupants or claimants. It is
difficult to conceive of a case wherein double registration can
take place, in the absence of fraud, without personal service
of notice of the pendency of the proceedings upon the holder
of the earlier certificate, the statute requiring such notice to
be served upon the owner or occupant of all lands adjoining
those for which application for registration is made; and the
cases wherein an adjoining land owner can, even by the use

of fraud, conduct proceedings for the registration of his land


to a successful conclusion without actual notice to the
adjoining property owners must be rare indeed.
In the case at bar the defendant purchased the land in
question from the original holder of a certificate of title
issued by the Court of Land Registration, relying upon the
records of the Court of Land Registration with reference
thereto and with no knowledge that any part of the land thus
purchased was included in an earlier certificate of title issued
to plaintiff. The plaintiff, the holder of the earlier certificate
of title, negligently permitted a default judgment to be
entered against him in the Court of Land Registration,
adjudicating part of the lands included in his own certificate
of title in f avor of another applicant, f rom whom the
defendant in this action acquired title, and this despite the
fact that he was an adjoining land owner, had actual notice of
the pendency of the proceedings and was personally served
with summons to appear and defend his rights in the
premises. It seems to me that there can be no reason for
doubt as to the respective merits of the equities of the
parties, and further that the judgment of the majority in
favor of the plaintiff will inevitably tend to increase the
number of cases wherein registered land owners in the future
will fail to appear and defend their titles when challenged in
other proceedings in the Courts of Land Regis614
614
PHILIPPINEREPORTSANNOTATED
UnitedStatesvs.Asuncion.
tration, thereby enormously increasing the possibility and
probability of loss and damage to innocent third parties and
dealers in registered lands generally, arising out of

erroneous, double or overlapping registration of lands by the


Courts of Land Registration.
Judgment reversed: case remanded with instructions.
________________
Copyright 2015 Central Book Supply, Inc. All rights reserved.

996

PHILIPPINEREPORTSANNOTATED

GovernmentofthePhilippineIslandsvs.Abural.
[No. 14167. August 14,1919.]
THE GOVERNMENT OF THE PHILIPPINE ISLANDS,
petitioner and appellee. ANTIPAS VAZQUEZ and BASILIO
GAYARES, petitioners and appellants, vs.RUFINA ABURAL
ET AL., objectors and appellees.
1. 1.LAND
REGISTRATION; TORRENS
SYSTEM;
PURPOSE.The prime purpose of the Torrens
System, as established in the Philippine Islands by
the Land Registration Law (Act No. 496), is to decree
land titles that shall be final, irrevocable, and
indisputable.
1. 2.ID.; CADASTRAL
SYSTEM;
PURPOSE.The
purpose of the offspring of the Torrens System here

known as the Cadastral System, as established in the


Philippine Islands by the Cadastral Act (No. 2259), is,
like the purpose of the Torrens System, proper
incontestability of title. As stated in section 1 of the
Cadastral Act, the purpose is to serve the public
interest, by requiring that the titles to any lands "be
settled and adjudicated."
1. 3.ID.; ID.; PROCEEDINGS.Many
taken to guard against injustice.

precautions

are

1. 4.ID. ; ID. ; ID.After trial in a cadastral case, three


actions are taken. The first adjudicates ownership in
favor of one of the claimants. This 'constitutes the
decisionthe judgmentthe decree of the court. The
second action is the declaration by the court that the
decree is final and its order for the issuance of the
certificates of title by the Chief of the Land
Registration Office. Such order is made if within
thirty days from the date of receipt of a copy of the
decision no appeal is taken from the decision, The
third and last action devolves upon the General Land
Registration Office.
997
VOL.39,AUGUST14,1919.

99
7

GovernmentofthePhilippineIslandsvs.Abural.

1. 5.ID. ; ID. ; ID. ; FINALITY OF DECREE.For a


decree to exist in legal contemplation, it is not
necessary to await the preparation of a so-called
decree by the Land Registration Office.
1. 6.ID. ; ID. ; ID. ; ID.Cadastral
proceedings
commenced. Notice published in the Official Gazette.
Trial judge also issued general notice. S asks for the
registration in his name of lot No. 1608. Hearing had.
On September 21, 1916, the court in a decree awarded
the lot to S. On November 23, 1916, the time for an
appeal having passed, the court declares the decree
final. On July 23, 1917, before the issuance by the
Land Registration Office of the so-called technical
decree, V and G ask that the case be reopened to
receive proof relative to the ownership of the lot.
Motion denied by the trial court. Held: That since the
judgment of the Court of First Instance of September
21, 1916, has become final, and since no action was
taken within the time provided by law for the
prosecution of an appeal by bill of exceptions, the
Supreme Court is without jurisdiction, and the appeal
must be dismissed.
1. 7.ID.; ID.; RELIEF FROM JUDGMENT.Whether
sections 113 and 513 of the Code of Civil Procedure
apply to cadastral proceedings, quaere.

1. 8.GENERAL LAND REGISTRATION OFFICE.The


General Land Registration Office has been instituted
"for the due effectuation and accomplishment of the
laws relative to the registration of land."
(Administrative Code of 1917, sec. 174.)
APPEAL from a judgment of the Court of First Instance of
Occidental Negros. Romualdez, J.
The facts are stated in the opinion of the court.
Cohn & Fisher for appellants.
Hilado & Hilado for appellees.
MALCOLM, J.:
The principal question which this appeal presents isWhen
does the registration of title, under the Torrens System of
Land Registration, especially under the different Philippine
laws establishing the Cadastral System, become final,
conclusive, and indisputable ? The supplementary questions
areAt what stage of the cadastral proceedings does a decree
exist in legal contemplation ? Does it exist from the moment
that the court, after hearing the evidence,
998
998

PHILIPPINEREPORTSANNOTATED

GovernmentofthePhilippineIslandsvs.Abural.

adjudicates the land in favor of a person and then, or later,


decrees the land in favor of this person, or does it exist when
the Chief of the Land Registration Office transcribes the
adjudication in the prescribed form?
STATEMENT OF THE CASE.
Cadastral proceedings were commenced in the municipality
of Hinigaran, Province of Occidental Negros, upon an
application of the Director of Lands, on June 16,1916. Notice
of the proceedings were published in the Official Gazette as
provided by law. The trial judge also issued general notice to
all Interested parties. Among others, Victoriano Siguenza
presented an, answer asking for registration in his name of
lot No. 1608. The instant petitioners, Antipas Vazquez and
Basilio Gayares, although said to reside in this municipality,
and although said to have participated in other cadastral
cases, did not enter any opposition as to this lot. Hearing was
had during September, 1916. On September 21 of this year,
the court issued the following decree:
"It is hereby decreed that, upon a previous declaration of
general default, the following lots be adjudged and registered
in the names of those persons whose names appear next after
the lots, and in accordance with the following conditions: * * *

"Lot No. 1608 with the improvements thereon to the


conjugal partnership of Victoriano Siguenza and Marcela
Guanzon."
On November 23 of the same year, the court declared final
the foregoing decree in the following language:
"The decision rendered by the court in the above-entitled case
having become final on September 21,1916, it is hereby
ordered that the Chief of the General Land Registration
Office issue the decrees corresponding to the lots adjudged by
said decision.
"An appeal having however been interposed as to the lots
enumerated as follows, the decrees thereon, must be
suspended until further order by this court:
"Lot No. 521.
999
VOL.39,AUGUST14,1919.

999

GovernmentofthePhilippineIslandsvs.Abural.
Eight months later, that is, on July 23, 1917, but before the
issuance by the Land Registration Office of the so-called
technical decree, Antipas Vazquez and Basilio Gayares, the
latter as guardian of the minor Estrella Vazquez, came into
the case for the first time. The petitioners, after setting forth

their right of ownership in lot No. 1608, and that it was


included in their "Hacienda, Santa Filomena," and after
stating that they were in complete ignorance of the
proceedings, asked that the judgment of the court be
annulled and that the case be reopened to receive proof
relative to the ownership of the lot. Counsel for Victoriano
Siguenza answered by countermotion, asking the court to
dismiss the motion presented on behalf of Vazquez and
Gayares. The court denied the motion for a new trial on the
theory that there being a decree already rendered and no
allegation of fraud having been made, the court lacked
jurisdiction. It may also be stated parenthetically that
counsel for Vazquez and Gayares made an unsuccessful
attempt in the Supreme Court, through mandamus, to have
the record completed by the taking of evidence.
In order that the matter may not be confused, let it again
be made clear that counsel for petitioners have not raised, the
question of fraud as provided for in section 38 of the Land
Registration Law, nor have they asked to be relieved from a
judgment or order, pursuant to section 113 of the Code of
Civil Procedure, because of mistake, inadvertence, surprise,
or excusable neglect. As a matter of fact, they could not well
claim fraud because all the proceedings were public and free
from any suspicion. of chicanery. As a matter of fact, also, any
special reliance on section 113 of the Code of Civil Procedure
would not get them anywhere because more than six months
had elapsed af ter the issuance of a judgment in this case.
The issue fundamentally becomes one of whether or not the
Supreme Court has jurisdiction over the appeal, since if the

judgment and the supplemental decree issued by the Judge of


the Court of First Instance on September 21, 1916, and
November 23, 1916, respectively, have become final,
petitioners may not bring their appeal
1000
1000

PHILIPPINEREPORTSANNOTATED

GovernmentofthePhilippineIslandsvs.Abural.
bef ore this court, because the time for the filing of their bill
of exceptions has expired; while, if the cadastral proceedings
did not become final until the f ormal decree was issued by
the Land Registration Office, then it was proper for them to
ask for a reopening of the case, and it would, consequently, be
just as proper for this court to order the trial court to permit
the same.
OPINION,
The prime purpose of the Torrens System is, as has been
repeatedly stated, to decree land, titles that shall be final,
irrevocable, and indisputable. Incontestability of title is the
goal. All due precaution must accordingly be taken to guard
against injustice to interested individuals who, for some good
reason, may not be able to protect their rights. Nevertheless,
even at the cost of possible cruelty which may result in
exceptional cases, it does become necessary in the interest of

the public weal to enf orce registration laws. No stronger


words can be found than those appearing in section 38 of the
Land Registration Law (Act No. 496) wherein it is said that:
"Every decree of registration shall bind the land, and quiet
title thereto. * * * It shall be conclusive upon and against all
persons, including the Insular Government and all the
branches thereof, whether mentioned by name in the
application, notice, or citation, or included in the general
description 'To all whom it may concern,' Such decree shall
not be opened. by reason of the absence, inf ancy, or other
disability of any person affected thereby, nor by any
proceeding in any court for reversing judgments or decrees;
subject, however, to the right of any person deprived of land
or of any estate or interest therein by decree of registration
obtained by fraud to file in the Court of Land Registration
(Court of First Instance) a petition for review within one year
after entry of the decree,' provided no in-nocent purchaser for
value has acquired an interest."
While such statements can be made of the Torrens System
proper, they become even more incisive and peremptory
1001
VOL.39,AUGUST14,1919.
GovernmentofthePhilippineIslandsvs.Abural.

1001

when we come to consider the offspring of this system, here


known as the Cadastral System. Under the Torrens System
proper, whether action shall or shall not be taken is optional
with the solicitant. Under the Cadastral System, pursuant to
initiative on the part of the Government, titles for all the
land within a stated area, are adjudicated whether or not the
people living within this district desire to have titles issued.
The purpose, as stated in section one of the Cadastral Act
(No. 2259), is to serve the public interests, by requiring that
the titles to any lands "be settled and adjudicated."
Admitting that such compulsory registration of land and
such excessive interf erence with private property constitutes
due process of law and that the Acts providing for the same
are constitutional, a question not here raised, yet a study of
the law indicates that many precautions are taken to guard
against injustice. The proceedings are initiated by a notice of
survey. When the lands have been surveyed and plotted, the
Director of Lands, represented by the Attorney-General, files
a petition in court praying that the titles to the lands named
be settled and adjudicated. Notice of the filing of the petition
is then published twice in successive issues of the Official
Gazette in both the English and Spanish languages. All
persons interested. are given the benefit of assistance by
competent officials and are informed of their rights. A trial is
had. "All conflicting interests shall be adjudicated by the
court and decrees awarded in favor of the persons entitled to
the lands or the various parts thereof, and such decrees,
when final, shall be the bases of original certificates of title in
favor of said persons." (Act No. 2259, sec. 11.) Aside from this,

the commotion caused. by the survey and a trial affecting


ordinarily many people, together with the presence of
strangers in the community, should serve to put all those
affected on their guard.
After trial in a cadastral case, three actions are taken. The
first adjudicates ownership in favor of one of the
1002
1002

PHILIPPINEREPORTSANNOTATED

GovernmentofthePhilippineIslandsvs.Abural.
claimants. This constitutes the decisionthe judgmentthe
decree of the court, and speaks in a judicial manner. The
second action is the declaration by the court that the decree
is final and its order for the issuance of the certificates of title
by the Chief of the Land Registration Office. Such order is
made if within thirty days from the date of receipt of a copy of
the decision no appeal is taken from the decision. This again
is judicial action, although to a less degree than the first.
The third and last action devolves upon the General Land
Registration Office. This office has been instituted "for the
due effectuation and accomplishment of the laws relative to
the registration of land." (Administrative Code of 1917, sec.
174.) An official found in the office, known as the chief
surveyor, has as one of his duties "to prepare final decrees in

all adjudicated cases." (Administrative Code of 1917, sec.


177.) 'This latter decree contains the technical description of
the land and may not 'be issued until a considerable time
after the promulgation of the judgment. The form for the
decree used by the General Land Registration Office
concludes with the words: "Witness, the Honorable (name of
the judge), on this the (date)." The date that is used as
authority for the issuance of the decree is the date when,
after hearing the evidence, the trial court decreed the
adjudication and .registration of the land.
The judgment in a cadastral survey, including the
rendition of the decree, is a judicial act. As the law says, the
judicial decree when final is the base of the certificate of title.
The issuance of the decree by the Land Registrationoffice is a
ministerial act The date of the judgment, or more correctly
stated, the date on which the defeated party receives a copy
of the decision, begins the running of the time for the
interposition of a motion for a new trial or for the perfection
of an appeal to the Supreme Court. The date of the title
prepared by the Chief Surveyor is unimportant, for the
adjudication has taken place and all that is left to be
performed is the mere formulation of the
1003
VOL.39,AUGUST14,1919.
GovernmentofthePhilippineIslandsvs.Abural.

1003

technical description. If an unknown individual could wait


possibly years until the day before a surveyor gets around to
transcribing a technical description of a piece of land, the
defeated party could just as reasonably expect the same
consideration for his appeal. As a matter of fact, the so-called
unknown is a party just as much as the known oppositor for
notice is to all the world, and the decree binds all the world.
Both counsel for petitioners and respondents rely upon the
decision
of
this
court
in
the
case
of Tambunting vs.Manuel ([1916], 35 Phil.; 699). That case
and the instant case are not the same. In the Tambunting
case the contest was really between two parties each claiming
to have a Torrens title; here one party has the title and the
other is seeking to oust him from his fortress. In the
Tambunting case the declaration of ownership but not the
decree. of registration had issued; here both declaration and
decree have issued. The doctrines announced in the decision
inGrey Alba vs. De la Cruz ([1910], 17 Phil., 49) relating to
general notice and the indefeasibility of land titles under the
Torrens system are much more applicable and can, with as
much reason, be applied to the cadastral system.
As a general rule, registration of title under the' cadastral
system is final, conclusive and indisputable, after the passage
of the thirty-day period allowed f or an appeal f rom the date
of receipt by the party of a copy of the judgment of the court
adjudicating ownership without any step having been taken
to perfect an appeal. The prevailing party may then have
execution of the judgment as of right and is entitled to the
certificate of title issued by the Chief of the Land

Registration Office. The exception is the special provision


providing for fraud.
Counsel for appellants and appellees have favored the
court with able arguments relative to the applicability of
sections 113 and 513 of the Code of Civil Procedure to
1004
1004

PHILIPPINEREPORTSANNOTATED

GovernmentofthePhilippineIslandsvs.Abural.
cadastral proceedings. The view we take of the case would
make unprofitable any discussion of this question.
It appearing that the judgment of the Court of First
lnstance of Occidental Negros of September 21, 1916, has
become final, and that no action was taken within the time
provided by law for the prosecution of an appeal by bill of
exceptions, this court is without jurisdiction. Accordingly the
appeal is dismissed with costs against the appellants. So
ordered.
Arellano,
C.
J., Torres, Johnson, Street, Avancea, andMoir, JJ., concur.
Appeal dismissed.
1005

Copyright 2015 Central Book Supply, Inc. All rights reserved.

G.R. No. 166838.June 15, 2011.*


STA. LUCIA REALTY & DEVELOPMENT, INC.,
petitioner, vs. CITY OF PASIG, respondent,
MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL,
intervenor.
Taxation; Local Government Units; While a local
government unit is authorized under several laws to collect
real estate tax on properties falling under its territorial
jurisdiction, it is imperative to first show that these properties
are unquestionably within its geographical boundaries.
While a local government unit is authorized under several
laws to collect real estate tax on properties falling under its
territorial jurisdiction, it is imperative to first show that
these

properties

are

unquestionably

within

its

geographical boundaries.
Land Titles; While certificates of title are indefeasible,
unassailable and binding against the whole world, including
the government itself, they do not create or vest title. They
merely confirm or record title already existing and vested.
In De Pedro v. Romasan Development Corporation, 452 SCRA
564 (2005), we proclaimed that: We agree with the petitioners
that, generally, a certificate of title shall be conclusive as to
all matters contained therein and conclusive evidence of the
ownership of the land referred to therein. However, it bears
stressing that while certificates of title are indefeasible,
unassailable and binding against the whole world, including
the govern-

_______________
* FIRST DIVISION.
45
VOL.652,JUNE15,2011

4
5

Sta.LuciaRealty&Development,Inc.vs.CityofPasig
ment itself, they do not create or vest title. They merely
confirm or record title already existing and vested. They
cannot be used to protect a usurper from the true owner, nor
can they be used as a shield for the commission of fraud;
neither do they permit one to enrich himself at the expense of
other.
Same; Mere reliance therefore on the face of the Transfer
Certificates of Title (TCT) will not suffice as they can only be
conclusive evidence of the subject properties locations if both
the stated and described locations point to the same area.
Although it is true that Pasig is the locality stated in the
TCTs of the subject properties, both Sta. Lucia and Cainta
aver that the metes and bounds of the subject properties, as
they are described in the TCTs, reveal that they are within
Caintas boundaries. This only means that there may be a
conflict between the location as stated and the location as
technically described in the TCTs. Mere reliance therefore on
the face of the TCTs will not suffice as they can only be
conclusive evidence of the subject properties locations if both
the stated and described locations point to the same area.
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Abelardo B. Albis, Jr. for petitioner.

Carlos C. Abesamis for respondent.


Crispino T. Pablo, Jr. for intervenor.
LEONARDO-DE CASTRO,J.:
For review is the June 30, 2004 Decision1 and the January
27, 2005 Resolution2 of the Court of Appeals in CA-G.R. CV
No. 69603, which affirmed with modification the August 10,
_______________
1 Rollo, pp. 39-55; penned by Associate Justice Ruben T.
Reyes with Associate Justices Eliezer R. De los Santos and
Arturo D. Brion (now Associate Justice of the Supreme
Court), concurring.
2 Id., at pp. 57-58.
46
46 SUPREMECOURTREPORTSANNOTATED
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
1998 Decision3 and October 9, 1998 Order4 of the Regional
Trial Court (RTC) of Pasig City, Branch 157, in Civil Case
No. 65420.
Petitioner Sta. Lucia Realty & Development, Inc. (Sta.
Lucia) is the registered owner of several parcels of land with
Transfer Certificates of Title (TCT) Nos. 39112, 39110 and
38457, all of which indicated that the lots were located
in Barrio Tatlong Kawayan, Municipality of Pasig5 (Pasig).
The parcel of land covered by TCT No. 39112 was
consolidated with that covered by TCT No. 518403, which
was situated in Barrio Tatlong Kawayan, Municipality of
Cainta, Province of Rizal (Cainta). The two combined lots
were subsequently partitioned into three, for which TCT Nos.
532250, 598424, and 599131, now all bearing the Cainta
address, were issued.

TCT No. 39110 was also divided into two lots, becoming
TCT Nos. 92869 and 92870.
The lot covered by TCT No. 38457 was not segregated, but
a commercial building owned by Sta. Lucia East Commercial
Center, Inc., a separate corporation, was built on it. 6
Upon Pasigs petition to correct the location stated in TCT
Nos. 532250, 598424, and 599131, the Land Registration
Court, on June 9, 1995, ordered the amendment of the TCTs
to read that the lots with respect to TCT No. 39112 were
located in Barrio Tatlong Kawayan, Pasig City.7
On January 31, 1994, Cainta filed a petition 8 for the
settlement of its land boundary dispute with Pasig before the
RTC, Branch 74 of Antipolo City (Antipolo RTC). This case,
_______________
3 Id., at pp. 59-70.
4 Id., at pp. 71-72.
5 Now City of Pasig.
6 Rollo, pp. 12-13.
7 Id., at p. 233.
8 CA Rollo, pp. 155-158.
47
VOL.652,JUNE15,2011
47
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
docketed as Civil Case No. 94-3006, is still pending up to this
date.
On November 28, 1995, Pasig filed a Complaint, 9docketed
as Civil Case No. 65420, against Sta. Lucia for the collection
of real estate taxes, including penalties and interests, on the
lots covered by TCT Nos. 532250, 598424, 599131, 92869,

92870 and 38457, including the improvements thereon (the


subject properties).
Sta. Lucia, in its Answer, alleged that it had been
religiously paying its real estate taxes to Cainta, just like
what its predecessors-in-interest did, by virtue of the
demands and assessments made and the Tax Declarations
issued by Cainta on the claim that the subject properties
were within its territorial jurisdiction. Sta. Lucia further
argued that since 1913, the real estate taxes for the lots
covered by the above TCTs had been paid to Cainta. 10
Cainta was allowed to file its own Answer-in-Intervention
when it moved to intervene on the ground that its interest
would be greatly affected by the outcome of the case. It
averred that it had been collecting the real property taxes on
the subject properties even before Sta. Lucia acquired them.
Cainta further asseverated that the establishment of the
boundary monuments would show that the subject properties
are within its metes and bounds.11
Sta. Lucia and Cainta thereafter moved for the suspension
of the proceedings, and claimed that the pending petition in
the Antipolo RTC, for the settlement of boundary dispute
between Cainta and Pasig, presented a prejudicial question
to the resolution of the case.12
_______________
9 Rollo, pp. 75-81.
10 Id., at p. 13.
11 Id., at p. 88.
12 Id., at p. 258.
48
48 SUPREMECOURTREPORTSANNOTATED

Sta.LuciaRealty&Development,Inc.vs.CityofPasig
The RTC denied this in an Order dated December 4, 1996
for lack of merit. Holding that the TCTs were conclusive
evidence as to its ownership and location, 13 the RTC, on
August 10, 1998, rendered a Decision in favor of Pasig:
WHEREFORE, in view of the foregoing, judgment is
hereby rendered in favor of [Pasig], ordering Sta. Lucia
Realty and Development, Inc. to pay [Pasig]:
1)P273,349.14 representing unpaid real estate taxes and
penalties as of 1996, plus interest of 2% per month until
fully paid;
2)P50,000.00 as and by way of attorneys fees; and
3)The costs of suit.
Judgment is likewise rendered against the intervenor
Municipality of Cainta, Rizal, ordering it to refund to Sta.
Lucia Realty and Development, Inc. the realty tax payments
improperly collected and received by the former from the
latter in the aggregate amount of P358,403.68.14
After Sta. Lucia and Cainta filed their Notices of Appeal,
Pasig, on September 11, 1998, filed a Motion for
Reconsideration of the RTCs August 10, 1998 Decision.
The RTC, on October 9, 1998, granted Pasigs motion in an
Order15 and modified its earlier decision to include the realty
taxes due on the improvements on the subject lots:
WHEREFORE, premises considered, the plaintiffs
motion for reconsideration is hereby granted. Accordingly, the
Decision, dated August 10, 1998 is hereby modified in that
the defendant is hereby ordered to pay plaintiff the amount of
P5,627,757.07 representing the unpaid taxes and penalties on

the improvements on the subject parcels of land whereon real


estate taxes are adjudged as due for the year 1996.16
_______________
13 Id., at p. 69.
14 Id., at p. 70.
15 Id., at pp. 71-72.
16 Id., at p. 72.
49
VOL.652,JUNE15,2011
49
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
Accordingly, Sta. Lucia filed an Amended Notice of Appeal
to include the RTCs October 9, 1998 Order in its protest.
On October 16, 1998, Pasig filed a Motion for Execution
Pending Appeal, to which both Sta. Lucia and Cainta filed
several oppositions, on the assertion that there were no good
reasons to warrant the execution pending appeal.17
On April 15, 1999, the RTC ordered the issuance of a Writ
of Execution against Sta. Lucia.
On May 21, 1999, Sta. Lucia filed a Petition
forCertiorari under Rule 65 of the Rules of Court with the
Court of Appeals to assail the RTCs order granting the
execution. Docketed as CA-G.R. SP No. 52874, the petition
was raffled to the First Division of the Court of Appeals,
which on September 22, 2000, ruled in favor of Sta. Lucia, to
wit:
WHEREFORE, in view of the foregoing, the instant
petition
is
hereby GIVEN
DUE
COURSE and GRANTED by this Court. The assailed Order
dated April 15, 1999 in Civil Case No. 65420 granting the
motion for execution pending appeal and ordering the

issuance of a writ of execution pending appeal is hereby SET


ASIDE and declared NULL and VOID.

18

The Court of Appeals added that the boundary dispute


case presented a prejudicial question which must be decided
before x x x Pasig can collect the realty taxes due over the
subject properties.19
Pasig sought to have this decision reversed in a Petition
for Certiorari filed before this Court on November 29, 2000,
but this was denied on June 25, 2001 for being filed out of
time.20
Meanwhile, the appeal filed by Sta. Lucia and Cainta was
raffled to the (former) Seventh Division of the Court of Ap_______________
17 Id., at p. 237.
18 Id., at p. 93.
19 Id.
20 Id., at p. 95.
50
50 SUPREMECOURTREPORTSANNOTATED
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
peals and docketed as CA-G.R. CV No. 69603. On June 30,
2004, the Court of Appeals rendered its Decision, wherein it
agreed with the RTCs judgment:
WHEREFORE, the
appealed
Decision
is
hereby AFFIRMEDwith

the MODIFICATION that

award of P50,000.00 attorneys fees is DELETED.

the

21

In affirming the RTC, the Court of Appeals declared that


there was no proper legal basis to suspend the
proceedings.22 Elucidating on the legal meaning of a
prejudicial question, it held that there can be no

prejudicial question when the cases involved are both


civil.23 The Court of Appeals further held that the elements
of litis pendentia and forum shopping, as alleged by Cainta to
be present, were not met.
Sta. Lucia and Cainta filed separate Motions for
Reconsideration, which the Court of Appeals denied in a
Resolution dated January 27, 2005.
Undaunted, Sta. Lucia and Cainta filed separate Petitions
for Certiorari with this Court. Caintas petition, docketed as
G.R. No. 166856 was denied on April 13, 2005 for Caintas
failure to show any reversible error. Sta. Lucias own
petition is the one subject of this decision.24
In praying for the reversal of the June 30, 2004 judgment
of the Court of Appeals, Sta. Lucia assigned the following
errors:
ASSIGNMENT OF ERRORS
I
THE HONORABLE COURT OF APPEALS ERRED IN
AFFIRMING [WITH MODIFICATION] THE DECISION OF
THE REGIONAL TRIAL COURT IN PASIG CITY
_______________
21 Id., at p. 54.
22 Id., at p. 46.
23 Id., at p. 47.
24 Id., at p. 102.
51
VOL.652,JUNE15,2011
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
II.

51

THE HONORABLE COURT OF APPEALS ERRED IN NOT


SUSPENDING THE CASE IN VIEW OF THE PENDENCY
OF THE BOUNDARY DISPUTE WHICH WILL FINALLY
DETERMINE
THE
SITUS
OF
THE
SUBJECT
PROPERTIES
III.
THE HONORABLE COURT OF APPEALS ERRED IN NOT
HOLDING THAT THE PAYMENT OF REALTY TAXES
THROUGH THE MUNICIPALITY OF CAINTA WAS VALID
PAYMENT OF REALTY TAXES
IV.
THE HONORABLE COURT OF APPEALS ERRED IN NOT
HOLDING THAT IN THE MEANTIME THAT THE
BOUNDARY DISPUTE CASE IN ANTIPOLO CITY
REGIONAL TRIAL COURT IS BEING FINALLY
RESOLVED, THE PETITIONER STA. LUCIA SHOULD BE
PAYING THE REALTY TAXES ON THE SUBJECT
PROPERTIES THROUGH THE INTERVENOR CAINTA TO
PRESERVE THE STATUS QUO.25
Pasig, countering each error, claims that the lower courts
correctly decided the case considering that the TCTs are clear
on their faces that the subject properties are situated in its
territorial jurisdiction. Pasig contends that the principles
of litis pendentia, forum shopping, and res judicata are all
inapplicable, due to the absence of their requisite elements.
Pasig maintains that the boundary dispute case before the
Antipolo RTC is independent of the complaint for collection of
realty taxes which was filed before the Pasig RTC. It avers
that the doctrine of prejudicial question, which has a
definite meaning in law, cannot be invoked where the two

cases involved are both civil. Thus, Pasig argues, since there
is no legal ground to preclude the simultaneous hearing of
both cases, the suspension of the proceedings in the Pasig
RTC is baseless.
_______________
25 Id., at p. 17.
52
52 SUPREMECOURTREPORTSANNOTATED
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
Cainta also filed its own comment reiterating its legal
authority over the subject properties, which fall within its
territorial jurisdiction. Cainta claims that while it has been
collecting the realty taxes over the subject properties since
way back 1913, Pasig only covered the same for real property
tax purposes in 1990, 1992, and 1993. Cainta also insists that
there is a discrepancy between the locational entries and the
technical descriptions in the TCTs, which further supports
the need to await the settlement of the boundary dispute case
it initiated.
The errors presented before this Court can be narrowed
down into two basic issues:
1)Whether the RTC and the CA were correct in deciding
Pasigs Complaint without waiting for the resolution of
the boundary dispute case between Pasig and Cainta;
and
2)Whether Sta. Lucia should continue paying its real
property taxes to Cainta, as it alleged to have always
done, or to Pasig, as the location stated in Sta. Lucias
TCTs.

We agree with the First Division of the Court of Appeals in


CA-G.R. SP No. 52874 that the resolution of the boundary
dispute between Pasig and Cainta would determine which
local government unit is entitled to collect realty taxes from
Sta. Lucia.26
The
Local
Government
Unit
entitled
To Collect Real Property Taxes
The Former Seventh Division of the Court of Appeals held
that the resolution of the complaint lodged before the Pasig
RTC did not necessitate the assessment of the parties
evidence on the metes and bounds of their respective
territories.
_______________
26 Id., at p. 93.
53
VOL.652,JUNE15,2011
53
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
It cited our ruling in Odsigue v. Court of Appeals27 wherein
we said that a certificate of title is conclusive evidence of both
its ownership and location.28 The Court of Appeals even
referred to specific provisions of the 1991 Local Government
Code and Act No. 496 to support its ruling that Pasig had the
right to collect the realty taxes on the subject properties as
the titles of the subject properties show on their faces that
they are situated in Pasig.29
Under Presidential Decree No. 464 or the Real Property
Tax Code, the authority to collect real property taxes is
vested in the locality where the property is situated:
Sec.5.Appraisal of Real Property.All real property,
whether taxable or exempt, shall be appraised at the current

and fair market value prevailing in the locality where the


property is situated.
xxxx
Sec.57.Collection of tax to be the responsibility of
treasurers.The collection of the real property tax and all
penalties accruing thereto, and the enforcement of the
remedies provided for in this Code or any applicable laws,
shall be the responsibility of the treasurer of the province,
city
or
municipality where
the
property
is
situated. (Emphases ours.)
This requisite was reiterated in Republic Act No. 7160,
also known as the 1991 the Local Government Code, to wit:
Section201.Appraisal of Real Property.All real
property, whether taxable or exempt, shall be appraised at
the current and fair market value prevailing in the
locality where the property is situated. The Department
of Finance shall promulgate the necessary rules and
regulations for the classification, appraisal, and assessment
of real property pursuant to the provisions of this Code.
_______________
27 G.R. No. 111179, July 4, 1994, 233 SCRA 626.
28 Id., at p. 631.
29 Rollo, pp. 47-51.
54
54 SUPREMECOURTREPORTSANNOTATED
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
Section233.Rates of Levy.A province or city or a
municipality within the Metropolitan Manila Area shall fix a

uniform rate of basic real property tax applicable to their


respective localities as follows: x x x. (Emphases ours.)
The only import of these provisions is that, while a local
government unit is authorized under several laws to collect
real estate tax on properties falling under its territorial
jurisdiction, it is imperative to first show that these
properties are unquestionably within its geographical
boundaries.

Accentuating on the importance of delineating territorial


boundaries, this Court, in Mariano, Jr. v. Commission on
Elections30 said:
The importance of drawing with precise strokes the
territorial boundaries of a local unit of government cannot be
overemphasized. The boundaries must be clear for they
define the limits of the territorial jurisdiction of a

local government unit. It can legitimately exercise


powers of government only within the limits of its

territorial jurisdiction. Beyond these limits, its acts


are ultra vires.Needless to state, any uncertainty in the

boundaries of local government units will sow costly conflicts


in the exercise of governmental powers which ultimately will
prejudice the peoples welfare. This is the evil sought to be
avoided by the Local Government Code in requiring that the
land area of a local government unit must be spelled out in
metes and bounds, with technical descriptions. 31 (Emphasis
ours.)
The significance of accurately defining a local government
units boundaries was stressed in City of Pasig v. Commission
on Elections,32 which involved the consolidated petitions filed
by the parties herein, Pasig and Cainta, against two decisions

of the Commission on Elections (COMELEC) with respect to


the plebiscites scheduled by Pasig for the ratification of its
_______________
30 312 Phil. 259; 242 SCRA 211 (1995).
31 Id., at pp. 265-266; p. 217.
32 372 Phil. 864; 314 SCRA 179 (1999).
55
VOL.652,JUNE15,2011
55
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
creation of two new Barangays. Ruling on the contradictory
reliefs sought by Pasig and Cainta, this Court affirmed the
COMELEC decision to hold in abeyance the plebiscite to
ratify the creation of Barangay Karangalan; but set aside the
COMELECs other decision, and nullified the plebiscite that
ratified the creation of Barangay Napico in Pasig, until the
boundary dispute before the Antipolo RTC had been resolved.
The aforementioned case held as follows:
1.The Petition of the City of Pasig in G.R. No. 125646 is
DISMISSED for lack of merit; while
2.The Petition of the Municipality of Cainta in G.R. No.
128663 is GRANTED. The COMELEC Order in UND
No. 97-002, dated March 21, 1997, is SET ASIDE and
the plebiscite held on March 15, 1997 to ratify the
creation of Barangay Napico in the City of Pasig is
declared null and void. Plebiscite on the same is ordered
held in abeyance until after the courts settle with
finality the boundary dispute between the City of Pasig
and the Municipality of Cainta, in Civil Case No. 943006.33

Clearly therefore, the local government unit entitled to


collect real property taxes from Sta. Lucia must undoubtedly
show that the subject properties are situated within its
territorial jurisdiction; otherwise, it would be acting beyond
the powers vested to it by law.
Certificates
of
Title
as
Conclusive Evidence of Location
While we fully agree that a certificate of title is conclusive
as to its ownership and location, this does not preclude the
filing of an action for the very purpose of attacking the
statements therein. In De Pedro v. Romasan Development
Corporation,34 we proclaimed that:
_______________
33 Id., at p. 872; p. 185.
34 492 Phil. 643; 452 SCRA 564 (2005).
56
56 SUPREMECOURTREPORTSANNOTATED
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
We agree with the petitioners that, generally, a certificate
of title shall be conclusive as to all matters contained therein
and conclusive evidence of the ownership of the land referred
to therein. However, it bears stressing that while certificates
of title are indefeasible, unassailable and binding against the
whole world, including the government itself, they do not
create or vest title. They merely confirm or record title
already existing and vested. They cannot be used to protect a
usurper from the true owner, nor can they be used as a shield
for the commission of fraud; neither do they permit one to
enrich himself at the expense of other.35

In Pioneer Insurance and Surety Corporation v. Heirs of


Vicente Coronado,36 we set aside the lower courts ruling that
the property subject of the case was not situated in the
location stated and described in the TCT, for lack of adequate
basis. Our decision was in line with the doctrine that the
TCT is conclusive evidence of ownership and location.
However, we refused to simply uphold the veracity of the
disputed TCT, and instead, we remanded the case back to the
trial court for the determination of the exact location of the
property seeing that it was the issue in the complaint filed
before it.37
In City Government of Tagaytay v. Guerrero,38 this Court
reprimanded the City of Tagaytay for levying taxes on a
property that was outside its territorial jurisdiction, viz.:
In this case, it is basic that before the City of Tagaytay
may levy a certain property for sale due to tax delinquency,
the subject property should be under its territorial
jurisdiction. The city officials are expected to know such basic
principle of law. The failure of the city officials of
Tagaytay to verify if the property is within its
jurisdiction before

levying

taxes

on

the

same

constitutes gross negligence. (Emphasis ours.)


39

_______________
35 Id., at p. 655; p. 577.
36 G.R. No. 180357, August 4, 2009, 595 SCRA 263.
37 Id., at pp. 271-272.
38 G.R. Nos. 140743 & 140745, September 17, 2009, 600
SCRA 33.
39 Id., at p. 63.

57
VOL.652,JUNE15,2011
57
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
Although it is true that Pasig is the locality stated in the
TCTs of the subject properties, both Sta. Lucia and Cainta
aver that the metes and bounds of the subject properties, as
they are described in the TCTs, reveal that they are within
Caintas boundaries.40 This only means that there may be a
conflict between the location as stated and the location as
technically described in the TCTs. Mere reliance therefore on
the face of the TCTs will not suffice as they can only be
conclusive evidence of the subject properties locations if both
the stated and described locations point to the same area.
The Antipolo RTC, wherein the boundary dispute case
between Pasig and Cainta is pending, would be able to best
determine once and for all the precise metes and bounds of
both Pasigs and Caintas respective territorial jurisdictions.
The resolution of this dispute would necessarily ascertain the
extent and reach of each local governments authority, a
prerequisite in the proper exercise of their powers, one of
which is the power of taxation. This was the conclusion
reached by this Court inCity of Pasig v. Commission on
Elections,41 and by the First Division of the Court of Appeals
in CA-G.R. SP No. 52874. We do not see any reason why we
cannot adhere to the same logic and reasoning in this case.
The Prejudicial Question Debate
It would be unfair to hold Sta. Lucia liable again for real
property taxes it already paid simply because Pasig cannot
wait for its boundary dispute with Cainta to be decided.
Pasig has consistently argued that the boundary dispute case
is not a prejudicial question that would entail the suspension

of its collection case against Sta. Lucia. This was also its
argument in City of Pasig v. Commission on Elections,42 when
it sought to nullify the COMELECs ruling to hold in
abeyance (until
_______________
40 Rollo, pp. 32-33, 191-192.
41 Supra note 32.
42 Id.
58
58 SUPREMECOURTREPORTSANNOTATED
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
the settlement of the boundary dispute case), the plebiscite
that will ratify its creation of Barangay Karangalan. We
agreed with the COMELEC therein that the boundary
dispute case presented a prejudicial question and explained
our statement in this wise:
To begin with, we agree with the position of the
COMELEC that Civil Case No. 94-3006 involving the
boundary dispute between the Municipality of Cainta and the
City of Pasig presents a prejudicial question which must
first be decided before plebiscites for the creation of the
proposed barangays may be held.
The City of Pasig argues that there is no prejudicial
question since the same contemplates a civil and criminal
action and does not come into play where both cases are civil,
as in the instant case. While this may be the general rule,
this Court has held in Vidad v. RTC of Negros Oriental,

Br. 42, that, in the interest of good order, we can very


well suspend action on one case pending the final

outcome of another case closely interrelated or linked


to the first.
In the case at bar, while the City of Pasig vigorously
claims
that
the
areas
covered
by
the
proposed Barangays Karangalan and Napico are within its
territory, it can not deny that portions of the same area are
included in the boundary dispute case pending before the
Regional Trial Court of Antipolo. Surely, whether the areas
in controversy shall be decided as within the territorial
jurisdiction of the Municipality of Cainta or the City of Pasig
has
material
bearing
to
the
creation
of
the
proposedBarangays Karangalan and Napico. Indeed, a
requisite for the creation of a barangay is for its territorial
jurisdiction to be properly identified by metes and bounds or
by more or less permanent natural boundaries. Precisely
because territorial jurisdiction is an issue raised in the
pending civil case, until and unless such issue is resolved
with finality, to define the territorial jurisdiction of the
proposed barangays would only be an exercise in futility. Not
only that, we would be paving the way for potentially ultra
vires acts of such barangays. x x x.43 (Emphases ours.)
_______________
43 Id., at pp. 869-870.
59
VOL.652,JUNE15,2011
59
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
It is obvious from the foregoing, that the term prejudicial
question, as appearing in the cases involving the parties
herein, had been used loosely. Its usage had been more in
reference to its ordinary meaning, than to its strict legal

meaning under the Rules of Court. 44Nevertheless, even


without the impact of the connotation derived from the term,
our own Rules of Court state that a trial court may control its
own proceedings according to its sound discretion:
POWERS AND DUTIES OF COURTS AND
JUDICIAL OFFICERS
Rule 135

SEC.5.Inherent powers of courts.Every court


shall have power:
xxxx
(g)To amend and control its process and orders so as to
make them comformable to law and justice.
Furthermore, we have acknowledged and affirmed this
inherent power in our own decisions, to wit:
The court in which an action is pending may, in the
exercise of a sound discretion, upon proper application for a
stay of that action, hold the action in abeyance to abide the
outcome of another pending in another court, especially
where the parties and the issues are the same, for there is
power inherent in every court to control the disposition of
causes (sic) on its dockets with economy of time and effort for
itself, for counsel, and for litigants. Where the rights of
parties to the second action cannot be properly determined
until the questions raised in the first action are settled the
second action should be stayed.
The power to stay proceedings is incidental to the power
inherent in every court to control the disposition of the cases
on its dockets, considering its time and effort, that of counsel
and the litigants. But if proceedings must be stayed, it must

be done in order to avoid multiplicity of suits and prevent


vexatious litigations, conflicting
_______________
44 REVISED RULES OF COURT, Rule 111, Section 5.
60
60 SUPREMECOURTREPORTSANNOTATED
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
judgments, confusion between litigants and courts. It bears
stressing that whether or not the RTC would suspend the
proceedings in the SECOND CASE is submitted to its sound
discretion.45
In light of the foregoing, we hold that the Pasig RTC
should have held in abeyance the proceedings in Civil Case
No. 65420, in view of the fact that the outcome of the
boundary dispute case before the Antipolo RTC will
undeniably affect both Pasigs and Caintas rights. In fact, the
only reason Pasig had to file a tax collection case against Sta.
Lucia was not that Sta. Lucia refused to pay, but that Sta.
Lucia had already paid, albeit to another local government
unit. Evidently, had the territorial boundaries of the
contending local government units herein been delineated
with accuracy, then there would be no controversy at all.
In the meantime, to avoid further animosity, Sta. Lucia is
directed to deposit the succeeding real property taxes due
on the subject properties, in an escrow account with the Land
Bank of the Philippines.
WHEREFORE, the instant petition is GRANTED. The
June 30, 2004 Decision and the January 27, 2005 Resolution
of the Court of Appeals in CA-G.R. CV No. 69603 are SET
ASIDE. The City of Pasig and the Municipality of Cainta are

both directed to await the judgment in their boundary


dispute case (Civil Case No. 94-3006), pending before Branch
74 of the Regional Trial Court in Antipolo City, to determine
which local government unit is entitled to exercise its powers,
including the collection of real property taxes, on the
properties subject of the dispute. In the meantime, Sta. Lucia
Realty and Development, Inc. is directed to deposit the
succeeding real property taxes due on the lots and
improvements covered by TCT Nos. 532250, 598424, 599131,
92869, 92870 and 38457 in an escrow account with the Land
Bank of the Philippines.
_______________
45 Security Bank Corporation v. Judge Victorio, 505 Phil.
682, 699-700; 468 SCRA 609, 627-628 (2005).
61
VOL.652,JUNE15,2011
61
Sta.LuciaRealty&Development,Inc.vs.CityofPasig
SO ORDERED.
Velasco, Jr.** (Actg. Chairperson), Bersamin,*** Del
Castillo and Perez, JJ., concur.
Petition granted, judgment and resolution set aside.
Note.It is well settled that a Torrens title cannot be
collaterally attacked. The issue on the validity of title, i.e.,
whether or not it was fraudulently issued, can only be raised
in an action expressly instituted for that purpose. (Urieta
Vda. de Aguilar vs. Alfaro, 623 SCRA 130 [2010])
o0o
Copyright 2015 Central Book Supply, Inc. All rights reserved.

G.R. No. 180027.July 18, 2012.*


REPUBLIC
OF
THE
PHILIPPINES,
petitioner, vs.MICHAEL C. SANTOS, VANNESSA C.
SANTOS, MICHELLE C. SANTOS and DELFIN SANTOS,
all represented by DELFIN C. SANTOS, Attorney-in-Fact,
respondents.
Civil Law; Regalian Doctrine; Words and Phrases; Jura
Regalia simply means that the State is the original proprietor
of all lands and, as such, is the general source of all private
titles.We start our analysis by applying the principle
of Jura
Regalia or
the Regalian Doctrine. Jura
Regalia simply means that the State is the original
_______________
* SECOND DIVISION.
145
VOL.677,JULY18,2012
145
Republicvs.Santos
proprietor of all lands and, as such, is the general source
of all private titles. Thus, pursuant to this principle, all
claims of private title to land, save those acquired from native
title, must be traced from some grant, whether express or
implied, from the State. Absent a clear showing that land had
been
let
into
private
ownership
through
the
States imprimatur, such land is presumed to belong to the
State.
Same; Property Registration Decree (P.D. No. 1529);
Public Land Act (C.A. No. 141); Section 14(1) of Presidential
Decree No. 1529 and Section 48(b) of Commonwealth Act No.
141 specify identical requirements for the judicial
confirmation of imperfect titles.Section 14(1) of
Presidential Decree No. 1529 refers to the original

registration of imperfect titles to public land acquired under


Section 11(4) in relation to Section 48(b) of Commonwealth
Act No. 141, or the Public Land Act, as amended. Section
14(1) of Presidential Decree No. 1529 and Section 48(b) of
Commonwealth Act No. 141 specify identical requirements
for the judicial confirmation of imperfect titles, to wit: 1.
That the subject land forms part of the alienable and
disposable lands of the public domain; 2. That the applicants,
by themselves or through their predecessors-in-interest, have
been in open, continuous, exclusive and notorious possession
and occupation of the subject land under a bona fide claim of
ownership, and; 3. That such possession and occupation must
be since June 12, 1945 or earlier.
Same; Same; Section 14(2) of Presidential Decree No.
1529 sanctions the original registration of lands acquired by
prescription under the provisions of existing law.Section
14(2) of Presidential Decree No. 1529 sanctions the original
registration of lands acquired by prescription under the
provisions of existing law. In the seminal case of Heirs
of Mario Malabanan v. Republic, 587 SCRA 172 (2009),
this Court clarified that the existing law mentioned in the
subject provision refers to no other than Republic Act No.
386, or the Civil Code of the Philippines.
PETITION for review on certiorari of a decision of the Court
of Appeals.
The facts are stated in the opinion of the Court.
Office of the Solicitor General for petitioner.146
146
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos

Dime, Labastilla, De Leon, Tayag and Eviota for


respondents.
PEREZ,J.:
For review1 is the Decision2 dated 9 October 2007 of the
Court of Appeals in CA-G.R. CV No. 86300. In the said
decision, the Court of Appeals Affirmed in toto the 14
February 2005 ruling3 of the Regional Trial Court (RTC),
Branch 15, of Naic, Cavite in LRC Case No. NC-2002-1292.
The dispositive portion of the Court of Appeals decision
accordingly reads:
WHEREFORE, the instant appeal is hereby DENIED.
The assailed decision dated February 14, 2005 of the
Regional Trial Court (Branch 15) in Naic, Cavite, in LRC
Case No. NC-2002-1292 is AFFIRMED in toto. No costs.4
The aforementioned ruling of the RTC granted the
respondents Application for Original Registration of a parcel
of land under Presidential Decree No. 1529.
The antecedents are as follows:
Prelude
In October 1997, the respondents purchased three (3)
parcels of unregistered land situated in BarangayCarasuchi,
Indang, Cavite.5 The 3 parcels of land were previously owned
by one Generosa Asuncion (Generosa), one Teresita Sernal
_______________
1 Via a Petition for Review on Certiorari under Rule 45 of
the Rules of Court.
2 Penned by Associate Justice Jose L. Sabio, Jr. with
Associate Justices Noel G. Tijam and Myrna Dimaranan
Vidal, concurring. Rollo, pp. 21-35.

3 Penned by Judge Lerio C. Castigador. Id., at pp. 123-129.


4 Id., at p. 34.
5 See Deeds of Absolute Sale. Records, pp. 181-183.
147
VOL.677,JULY18,2012
147
Republicvs.Santos
(Teresita) and by the spouses Jimmy and Imelda Antona,
respectively.6
Sometime after the said purchase, the respondents caused
the survey and consolidation of the parcels of land.
Hence, per the consolidation/subdivision plan Ccs-04-003949D, the 3 parcels were consolidated into a single lotLot 3
with a determined total area of nine thousand five hundred
seventy-seven (9,577) square meters.7
The Application for Land Registration
On 12 March 2002, the respondents filed with the RTC an
Application8 for Original Registration of Lot 3. Their
application was docketed as LRC Case No. NC-2002-1292.
On the same day, the RTC issued an Order9 setting the
application for initial hearing and directing the satisfaction
of jurisdictional requirements pursuant to Section 23 of
Presidential Decree No. 1529. The same Order, however, also
required the Department of Environment and Natural
Resources (DENR) to submit a report on the status of Lot 3.10
On 13 March 2002, the DENR Calabarzon Office
submitted its Report11 to the RTC. The Report relates that
the area covered by Lot 3 falls within the Alienable and
Disposable Land, Project No. 13 of Indang, Cavite per
LC12 3013 certified on March 15, 1982. Later, the

respondents submitted a Certification13 from the DENRCommunity Environment and Natural Resources Office
(CENRO) attesting that, indeed,
_______________
6 Id.
7 Id., at p. 9.
8 Id., at pp. 1-5.
9 Id., at p. 21.
10 Id.
11 Id., at p. 59.
12 Stands for Land Classification Map.
13 Dated 30 January 2002. Rollo, p. 48.
148
148
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos
Lot 3 was classified as an Alienable or Disposable Land as
of 15 March 1982.
After fulfillment of the jurisdictional requirements, the
government, through the Office of the Solicitor General, filed
the lone opposition14 to the respondents application on 13
May 2003.
The Claim, Evidence and Opposition
The respondents allege that their predecessors-ininterest i.e., the previous owners of the parcels of land
making up Lot 3, have been in continuous, uninterrupted,
open, public [and] adverse possession of the said parcels
since time immemorial.15 It is by virtue of such lengthy
possession, tacked with their own, that respondents now
hinge their claim of title over Lot 3.

During trial on the merits, the respondents presented,


among others, the testimonies of Generosa 16 and the
representatives of their two (2) other predecessors-ininterest.17 The said witnesses testified that they have been in
possession of their respective parcels of land for over thirty
(30) years prior to the purchase thereof by the respondents in
1997.18 The witnesses also confirmed that neither they nor
the interest they represent, have any objection to the
registration of Lot 3 in favor of the respondents.19
_______________
14 Records, pp. 66-68.
15 Id., at p. 3.
16 TSN, 10 February 2004, pp. 12-14-A.
17 Teresita Sernal was represented by her son, Charlie
Sernal. TSN, 10 February 2004, pp. 14-A-16; The Spouses
Jimmy and Imelda Antona were represented by Gregorio
Sernal. TSN, 10 February 2004, pp. 17-20.
18 Id., at pp. 13, 15 and 18.
19 Id., at pp. 13-14-A, 14-B and 19.
149
VOL.677,JULY18,2012
149
Republicvs.Santos
In addition, Generosa affirmed in open court a Joint
Affidavit20 she executed with Teresita.21 In it, Generosa
revealed that the portions of Lot 3 previously pertaining to
her and Teresita were once owned by her father, Mr. Valentin
Sernal (Valentin) and that the latter had continuously,
openly and peacefully occupied and tilled asabsolute owner
such lands even before the outbreak of World War 2.22

To substantiate the above testimonies, the respondents


also presented various Tax Declarations23 covering certain
areas of Lot 3the earliest of which dates back to 1948 and
covers the portions of the subject lot previously belonging to
Generosa and Teresita.24
On the other hand, the government insists that Lot 3still
forms part of the public domain and, hence, not subject to
private acquisition and registration. The government,
however, presented no further evidence to controvert the
claim of the respondents.25
The Decision of the RTC and the Court of Appeals
On 14 February 2005, the RTC rendered a ruling granting
the respondents Application for Original Registration of Lot
3. The RTC thus decreed:
WHEREFORE, in view of the foregoing, this Court
confirming its previous Order of general default, decrees and
adjudges Lot 3 (Lot 1755) Ccs-04-003949-D of Indang,
Cadastre, with a total area of NINE THOUSAND FIVE
HUNDRED FIFTY-SEVEN (9,557) square meters and its
technical description as above-described and situated in Brgy.
[Carasuchi], Indang, Cavite, pursuant to the provi_______________
20 Records, pp. 130-131.
21 Testimony of Generosa. TSN, 10 February 2004, p. 13.
22 Records, p. 130.
23 Id., at pp. 107-128.
24 Id., at p. 107.
25 See Manifestation and Comment. Id., at p. 191.
150

150
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos
sions of Act 496 as amended by P.D. No. 1529, it is hereby
decreed and adjudged to be confirmed and registered in the
name

of

herein

applicants MICHAEL

C.

SANTOS,

VANESSA C. SANTOS, MICHELLE C. SANTOS, and


DELFIN C. SANTOS, all residing at No. 60 Rockville
Subdivision, Novaliches, Quezon City.
Once this decision has become final, let the corresponding
decree of registration be issued by the Administrator, Land
Registration Authority.26
The government promptly appealed the ruling of the RTC
to the Court of Appeals.27 As already mentioned earlier, the
Court of Appeals affirmed the RTCs decision on appeal.
Hence, this petition.28
The sole issue in this appeal is whether the Court of
Appeals erred in affirming the RTC ruling granting original
registration of Lot 3 in favor of the respondents.
The government would have Us answer in the affirmative.
It argues that the respondents have failed to offer evidence

sufficient to establish its title over Lot 3and, therefore, were


unable to rebut the Regalianpresumption in favor of the
State.29
The government urges this Court to consider the DENR
Calabarzon
Office Report as
well
as
the
DENRCENROCertification, both of which clearly state that Lot
3 only became Alienable or Disposable Land on 15 March

1982.30 The government posits that since Lot 3 was only


classified as alienable and disposable on 15 March 1982, the
period of prescription against the State should also

commence to run only from such date. 31 Thus, the


respondents 12 March 2002 applica_______________
26 Rollo, pp. 128-129.
27 Via Notice of Appeal. Records, pp. 205-206.
28 Rollo, pp. 1-19.
29 Id., at p. 14.
30 Id., at pp. 14-16.
31 Id.
151
VOL.677,JULY18,2012
151
Republicvs.Santos
tionfiled nearly twenty (20) years after the said
classificationis still premature, as it does not meet the
statutory period required in order for extraordinary
prescription to set in.32
Our Ruling
We grant the petition.
Jura Regalia and the Property Registration Decree
We start our analysis by applying the principle of Jura
Regalia or
the Regalian Doctrine.33 Jura
Regalia simply
means that the State is the original proprietor of all lands
and, as such, is the general source of all private titles. 34
Thus, pursuant to this principle, all claims of private title to
land, save
_______________
32 Id.
33 The principle is presently enshrined in Section 2,
Article XII of the Constitution, thus:

Section2.All lands of the public domain, waters,


minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources

are owned by the State. With the exception of agricultural


lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State.
The State may directly undertake such activities, or it may
enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a period
not exceeding twenty-five years, renewable for not more than
twenty-five years, and under such terms and conditions as
may be provided by law. In cases of water rights for
irrigation, water supply fisheries, or industrial uses other
than the development of water power, beneficial use may be
the measure and limit of the grant. (Emphasis supplied)
34 Seville v. National Development Company, 403 Phil.
843, 854-855; 351 SCRA 112, 120 (2001).
152
152
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos
those acquired from native title,35 must be traced from some
grant, whether express or implied, from the State.36 Absent a
clear showing that land had been let into private ownership
through the States imprimatur, such land is presumed to
belong to the State.37

Being an unregistered land, Lot 3 is therefore presumed


as land belonging to the State. It is basic that those who seek
the entry of such land into the Torrens system of registration
must first establish that it has acquired valid title thereto as
against the State, in accordance with law.
In this connection, original registration of title to land is
allowed by Section 14 of Presidential Decree No. 1529, or
otherwise known as the Property Registration Decree. The
said section provides:
Section 14.Who may apply.The following persons
may file in the proper Court of First Instance an application
for registration of title to land, whether personally or through
their duly authorized representatives:
(1)Those who by themselves or through their
predecessors-in-interest

have

been

in

open,

continuous, exclusive and notorious possession


and occupation of alienable and disposable lands

of the public domain under a bona fide claim of


ownership since June 12, 1945, or earlier.

(2)Those who have acquired ownership of


private

lands

by

prescription

provisions of existing laws.

under

the

_______________
35 Separate Opinion of then Associate Justice Reynato S.
Puno in Cruz v. Secretary of Environment and Natural
Resources, 400 Phil. 904, 960; 347 SCRA 128, 199 (2000).
36 Agcaoili, Property Registration Decree and Related
Laws (Land Titles and Deeds), 2006, p. 2.

37 Republic v. Register of Deeds of Quezon, G.R. No.


73974, 31 May 1995, 244 SCRA 537, 546; Aranda v. Republic,
G.R. No. 172331, 24 August 2011, 656 SCRA 140, 146-147.
153
VOL.677,JULY18,2012
153
Republicvs.Santos
(3) Those who have acquired ownership of private
lands or abandoned river beds by right of accession or
accretion under the existing laws.
(4)Those who have acquired ownership of land in any
other manner provided for by law. (Emphasis supplied)
Basing from the allegations of the respondents in their
application for land registration and subsequent pleadings, it
appears that they seek the registration of Lot 3 under either
the first or the second paragraph of the quoted section.

However, after perusing the records of this case, as well as


the laws and jurisprudence relevant thereto, We find
that neither justifies registration in favor of the respondents.
Section 14(1) of Presidential Decree No. 1529
Section 14(1) of Presidential Decree No. 1529 refers to the
original registration of imperfect titles to public land
acquired under Section 11(4) in relation to Section 48(b) of
Commonwealth Act No. 141, or the Public Land Act, as
amended.38 Section 14(1) of Presidential Decree No. 1529
and
_______________
38 Section 11(4) of Commonwealth Act No. 141 authorizes
the disposition of public agricultural lands via confirmation
of imperfect or incomplete titles. Section 48(b) of the same
law, on the other hand, lays out the requisites for the judicial
confirmation of imperfect titles, to wit:

Section48. The following described citizens of the


Philippines, occupying lands of the public domain or claiming
to own any such lands or an interest therein, but whose titles
have not been perfected or completed, may apply to the Court
of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate
of title therefor, under the Land Registration Act, to wit:
x x x x.
(b)Those who by themselves or through their

1945 or earlier. An examination of the evidence on record


reveals so:
First. The testimonies of respondents predecessors-ininterest and/or their representatives were patently deficient
on this point. None of them testified about possession and
occupation of the subject parcels of land dating back to 12
_______________
lands of the public domain, under a bona fide claim

predecessors

immediately preceding the filing of the application for

in

interest

have

been

in

open,

continuous, exclusive, and notorious possession and

occupation of agricultural
154
154
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos
Section 48(b) of Commonwealth Act No. 141 specify identical
requirements for the judicial confirmation of imperfect
titles, to wit:39
1.That the subject land forms part of the alienable and
disposable lands of the public domain;
2.That the applicants, by themselves or through their
predecessors-in-interest, have been in open, continuous,
exclusive and notorious possession and occupation of the
subject land under a bona fide claim of ownership; and,
3.That such possession and occupation must be since
June 12, 1945 or earlier.

In this case, the respondents were not able to satisfy


thethird requisite, i.e.,

that

the

respondents

failed

to

establish that they or their predecessors-in-interest, have


been in possession and occupation of Lot 3 since June 12,

of acquisition or ownership, for at least thirty years

confirmation of title except when prevented by war

or force majeure. These shall be conclusively presumed


to have performed all the conditions essential to a

Government grant and shall be entitled to a certificate


of title under the provisions of this chapter.
x x x x.
Presidential Decree No. 1073 further amended Section
48(b) of Commonwealth Act No. 141, by fixing the date of
possession and occupation required under the latter to June
12, 1945 or earlier. (Emphasis supplied)
39 Republic v. East Silverlane Realty Development
Corporation, G.R. No. 186961, 20 February 2012, 666 SCRA
401.
155
VOL.677,JULY18,2012
155
Republicvs.Santos
June 1945 or earlier. Rather, the said witnesses merely
related that they have been in possession of their lands for
over thirty years prior to the purchase thereof by
respondents in 1997.40

Neither can the affirmation of Generosa of the Joint


Affidavit be considered as sufficient to prove compliance with
the third requisite. The said Joint Affidavit merely contains
a general claim that Valentin had continuously, openly and
peacefully occupied and tilled as absolute owner the parcels
of Generosa and Teresita even before the outbreak of World
War 2which lacks specificity and is unsupported by any
other evidence. In Republic v. East Silverlane Realty
Development Corporation,41

this Court dismissed a

similar unsubstantiated claim of possession as a mere


conclusion of law that is unavailing and cannot suffice:
Moreover, Vicente Oco did not testify as to what specific acts
of dominion or ownership were performed by the respondents
predecessors-in-interest and if indeed they did. He merely
made ageneral claim that they came into possession before

World War II, which is a mere conclusion of law and not


factual proof of possession, and therefore unavailing

and cannot suffice.42 Evidence of this nature should


have been received with suspicion, if not dismissed as
tenuous and unreliable.

Second.The supporting tax declarations presented by


the respondents also fall short of proving possession since 12
June 1945 or earlier. The earliest declaration submitted by
the respondents, i.e., Tax Declaration No. 9412,

43

was

issued only in 1948 and merely covers the portion of Lot


3previously pertaining to Generosa and Teresita. Much
worse,
_______________
40 TSN, 10 February 2004, pp. 13, 15 and 18.
41 Supra note 39.

42 The Director, Lands Mgt. Bureau v. Court of Appeals,


381 Phil. 761, 772; 324 SCRA 757, 765 (2000).
43 Records, p. 107.
156
156
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos
Tax Declaration No. 9412 shows no declared improvements
on such portion of Lot 3 as of 1948posing an apparent

contradiction to the claims of Generosa and Teresita in


their Joint Affidavit.
Indeed, the evidence presented by the respondents does
not qualify as the well-nigh incontrovertible kind that is
required to prove title thru possession and occupation of
public land since 12 June 1945 or earlier. 44 Clearly,
respondents are not entitled to registration under Section
14(1) of Presidential Decree No. 1529.
Section 14(2) of Presidential Decree No. 1529
The respondents, however, make an alternative plea for
registration, this time, under Section 14(2) of Presidential
Decree No. 1529. Notwithstanding their inability to comply
with Section 14(1) of Presidential Decree No. 1529, the
respondents claim that they were at least able to establish
possession and occupation of Lot 3 for a sufficient number of

years so as to acquire title over the same viaprescription.45


As earlier intimated, the government counters the
respondents alternative plea by arguing that the statutory
period required in order for extraordinary prescription to set
in was not met in this case. 46 The government cites the
DENR Calabarzon Office Report as well as the DENRCENRO Certification, both of which state that Lot 3 only

became Alienable or Disposable Land on 15 March 1982.47


It posits that the period of prescription against the State
should also commence to run
_______________
44 Santiago v. De los Santos, G.R. No. L-20241, 22
November 1974, 61 SCRA 146, 152; Director of Lands v.
Buyco, G.R. No. 91189, 27 November 1992, 216 SCRA 78,
94; The Director, Lands Mgt. Bureau v. Court of
Appeals, supra note 42 at p. 772; p. 765.
45 Comment. Rollo, pp. 174-187.
46 Id., at pp. 14-16.
47 Id.
157
VOL.677,JULY18,2012
157
Republicvs.Santos
only from such date.48 Hence, the government concludes, the
respondents 12 March 2002 application is still premature. 49
We find the contention of the government inaccurate but
nevertheless deny registration of Lot 3 under Section 14(2) of
Presidential Decree No. 1529.
Section 14(2) of Presidential Decree No. 1529 sanctions
the original registration of lands acquired by prescription
under the provisions of existing law. In the seminal case
of Heirs of Mario Malabanan v. Republic,50 this Court
clarified that the existing law mentioned in the subject
provision refers to no other than Republic Act No. 386, or
the Civil Code of the Philippines.
Malabanan acknowledged that only lands of the public
domain that are patrimonial in character are susceptible
to acquisitive prescription and, hence, eligible for

registration under Section 14(2) of Presidential Decree No.


1529.51 Applying the pertinent provisions of the Civil
Code,52 Malabanan further elucidated that in order for
public land to be considered as patrimonial there must be
an express declaration by the State that the public dominion
property is no longer intended for public service or the
development of the national wealth or that the property has
been converted into patrimonial.53 Until then, the period of
acquisitive prescription against the State will not commence
to run.54
The requirement of an express declaration contemplated
by Malabanan is separate and distinctfrom the mere
_______________
48 Id.
49 Id.
50 G.R. No. 179987, 29 April 2009, 587 SCRA 172.
51 Id., at p. 198.
52 Article 422 in relation to Article 420(2) and Article 421
of the Civil Code.
53 Supra note 50 at p. 203.
54 Id.
158
158
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos
classification of public land as alienable and disposable. 55 On
this point, Malabanan was reiterated by the recent case
of Republic v. Rizalvo, Jr.56
_______________
55 The discussion of Malabanan on this point is
instructive:

Let us now explore the effects under the Civil Code of a


declaration by the President or any duly authorized
government officer of alienability and disposability of lands of
the public domain. Would such lands so declared
alienable and disposable be converted, under the Civil

Code, from property of the public dominion into


patrimonial property? After all, by connotative definition,
alienable and disposable lands may be the object of the
commerce of man; Article 1113 provides that all things
within the commerce of man are susceptible to prescription;
and the same provision further provides that patrimonial
property of the State may be acquired by prescription.
Nonetheless, Article 422 of the Civil Code states that
[p]roperty of public dominion, when no longer
intended for public use or for public service, shall

form part of the patrimonial property of the State. It

is this provision that controls how public dominion


property may be converted into patrimonial property

susceptible to acquisition by prescription. After all,


Article 420 (2)makes clear that those property which
belong to the State, without being for public use, and are
intended for some public service or for the development of the
national wealth are public dominion property. For as long
as the property belongs to the State, although already

classified as alienable or disposable, it remains


property of the public dominion if when it is intended

for some public service or for the development of the


national wealth. Id., at pp. 202-203. (Emphasis supplied)
Malabanan then laid out the rule:

Accordingly, there must be an express declaration


by the State that the public dominion property is no

longer intended for public service or the development


of the national wealth or that the property has been

converted into patrimonial. Without such express


declaration,

the

property, even

if

classified

as

alienable or disposable, remains property of the public

dominion, pursuant to Article 420(2), and thus


159
VOL.677,JULY18,2012
159
Republicvs.Santos
In this case, the respondents were not able to present any
express declaration from the State, attesting to the
patrimonial character of Lot 3. To put it bluntly, the
respondents were not able to prove that acquisitive
prescription has begun to run against the State, much less
that they have acquired title to Lot 3 by virtue thereof. As
jurisprudence tells us, a mere certification or report
classifying the subject land as alienable and disposable is not
sufficient.57 We are, therefore, left with the unfortunate but
necessary verdict that the respondents are not entitled to the
registration under Section 14(2) or Presidential Decree No.
1529.
There being no compliance with either the first or

second paragraph of Section 14 of Presidential Decree


No. 1529, the Regalian presumption stands and must
be enforced in this case. We accordingly overturn the
decisions or the RTC and the Court of Appeals for not being
supported by the evidence at hand.

WHEREFORE, the instant petition is GRANTED. The 9


October 2007 Decision of the Court of Appeals in CA-G.R. CV
No. 86300 affirming the 14 February 2005 Decision of the
Regional Trial Court, Branch 15, of Naic, Cavite in LRC Case
No. NC-2002-1292 is hereby REVERSED and SET ASIDE.
The respondents application for registration is, accordingly,
DENIED.
_______________
incapable of acquisition by prescription. It is only
when

such

alienable

and

disposable

lands

are

expressly declared by the State to be no longer


intended for public service or for the development of

the national wealth that the period of acquisitive


prescription can begin to run. Such declaration shall
be in the form of a law duly enacted by Congress or a
Presidential

Proclamation

in

cases

where

Notes.Under the Regalian doctrine, all lands of the


public domain belong to the State and the latter is the source
of any asserted right to ownership in landthe State
presumably owns all lands not otherwise appearing to be
clearly within private ownership. (Republic vs. Roche, 624
SCRA 116 [2010])
All lands not appearing to be clearly within private
ownership are presumed to belong to the State; The burden
of proof in overcoming the presumption of State ownership of
the lands of the public domain is on the person applying for
registration (or claiming ownership), who must prove that the
land subject of the application is alienable or disposable.
(Valiao vs. Republic, 661 SCRA 299 [2011])
o0o
Copyright 2015 Central Book Supply, Inc. All rights reserved.

the

President is duly authorized by law. Id., at p. 203.


(Underscoring supplied)
56 G.R. No. 172011, 7 March 2011, 644 SCRA 516.
57 Id., at p. 526. Heirs of Mario Malabanan v.
Republic, supra note 50 at p. 203.
160
160
SUPREMECOURTREPORTSANNOTATED
Republicvs.Santos
Costs against respondents.
SO ORDERED.
Carpio (Chairperson), Brion, Sereno and Reyes, JJ.,
concur.
Petition granted, judgment reversed and set aside.

G.R. No. 171726.February 23, 2011.*


VICENTE YU CHANG AND SOLEDAD YU CHANG,
petitioners, vs. REPUBLIC
OF
THE
PHILIPPINES,
respondent.
Land Registration; Requisites for the approval of an
application for registration of title; Applicants must overcome
the presumption that the land they are applying for is part of
the public domain and that they have an interest therein
sufficient to warrant registration in their names arising from
an imperfect title.Under this provision, in order that
petitioners application for registration of title may be
granted, they must first establish the following: (1) that the

subject land forms part of the disposable and alienable lands


of the public domain and (2) that they have been in open,
continuous, exclusive and notorious possession and
occupation of the same under a bona fide claim of ownership,
since June 12, 1945, or earlier. Applicants must overcome the
presumption that the land they are applying for
_______________
** In lieu of Justice Teresita J. Leonardo-De Castro per
Special Order No. 947 dated February 11, 2011.
* THIRD DIVISION.
111
VOL.644,FEBRUARY23,2011
1
11
YuChangvs.Republic
is part of the public domain and that they have an
interest therein sufficient to warrant registration in their
names arising from an imperfect title.
Same; The classification of land is descriptive of its legal
nature or status and does not have to be descriptive of what
the land actually looks like; Unless and until the land
classified as forest land is released in an official proclamation
to that effect so that it may form part of the disposable
agricultural lands of the public domain, the rules on
confirmation of imperfect title do not apply.As clarified by
this Court in Heirs of Jose Amunategui v. Director of Forestry,
126 SCRA 69 (1983), a forested area classified as forest land
of the public domain does not lose such classification simply
because loggers or settlers may have stripped it of its forest
cover. Parcels of land classified as forest land may actually be
covered
with
grass
or
planted
with
crops

by kaingincultivators or other farmers. Forest lands do not


have to be on mountains or in out-of-the-way places. The
classification of land is descriptive of its legal nature or
status and does not have to be descriptive of what the land
actually looks like. Unless and until the land classified as
forest land is released in an official proclamation to that
effect so that it may form part of the disposable agricultural
lands of the public domain, the rules on confirmation of
imperfect title do not apply.
Same; Petitioners possession of the subject forest land
prior to the date when it was classified as alienable and
disposable is inconsequential and should be excluded from
the computation of the period of possession; The
adverse possession which can be the basis of a grant of title in
confirmation of imperfect title cases cannot commence until
after forest land has been declared and alienable.Moreover,
during the hearing of petitioners application, the Republic
presented
a
Report of
Rene
Gomez,
Land
Investigator/Inspector, CENRO No. V-2-3, which disclosed
that the lots applied for by the petitioners were classified as
alienable and disposable under Project No. 9-E, L.C. Map No.
3393 and released and certified as such only on October 30,
1986. A Compliance dated January 19, 1999 submitted by
OIC-CENR Officer Joaquin Ed A. Guerrero to the trial court
also stated that Lots. 2199 and 2200 of Cad. 291
were verified to be within Alienable and Disposable area
under Project No. 9-E, L.C. Map No. 3393, as certified on
October 30, 1986 by the then Bureau of Forestry. Evidently,
therefore, the subject lots were declared alienable
112

SUPREMECOURTREPORTSANNOTATED

12
YuChangvs.Republic
and disposable only on October 30, 1986. Prior to that
period, the same could not be the subject of confirmation of
imperfect title. Petitioners possession of the subject forest
land prior to the date when it was classified as alienable and
disposable is inconsequential and should be excluded from
the computation of the period of possession. To reiterate, it is
well settled that possession of forest land, prior to its
classification as alienable and disposable land, is ineffective
since such possession may not be considered as possession in
the concept of owner. The adverse possession which can be
the basis of a grant of title in confirmation of imperfect title
cases cannot commence until after forest land has been
declared and alienable.
BRION, J., Separate Opinion:
Land Registration; The mode of acquisition recognized by
Section 48(b) of the Public Land Act and made registrable
under Section 14(1) of the Property Registration Decree is
through confirmation of an imperfect or incomplete title.
Section 48(b) of the Public Land Act is the law that
recognizes the substantive right of a possessor and occupant
of an alienable and disposable land of the public domain,
while Section 14(1) of the Property Registration Decree
recognizes this right by authorizing its registration, thus
bringing the land within the coverage of the Torrens System.
The mode of acquisition recognized by Section 48(b) of the
Public Land Act and made registrable under Section 14(1) of
the Property Registration Decree is throughconfirmation of
an imperfect or incomplete title. Both provisions allow

confirmation of an imperfect or incomplete title only if the


claimant has been in open, continuous, exclusive and
notorious possession and occupation of alienable and
disposable lands of the public domain since June 12, 1945
or earlier.
Same; Even if possession of the alienable public land
commenced on a date later than June 12, 1945, and such
possession being open, continuous and exclusive, then the
possessor may have the right to register the land by virtue of
Section 14(2) of the Property Registration Decree; This
recourse is open only to private lands acquired through
prescription.Section 48(b) of the Public Land Act and
Section 14(1) of the Property Registration Decree, however,
are not the only open avenues to register title over the land.
[E]ven if possession of the alienable public land commenced
on a date later than June 12, 1945, and such possession being
open, continuous and
113
VOL.644,FEBRUARY23,2011
1
13
YuChangvs.Republic
exclusive, then the possessor may have the right to
register the land by virtue of Section 14(2) of the

Property Registration Decree. x x x But this recourse is


open

only

toprivate

lands

acquired

through

prescription; the provision thus calls for the application of


Civil Code concepts of private property and prescription.
Same; Prescription is a mode of acquiring ownership and
other real rights over immovable property through the lapse of
time in the manner and under the conditions laid down by
law.Prescription is a mode of acquiring ownership and

other real rights over immovable property through the lapse


of time in the manner and under the conditions laid down by
law. Acquisitive prescription of dominion and other real
rights may be ordinary and extraordinary. If the applicants
possession of the immovable property is coupled with good
faith and just title, the lapse of 10 years is sufficient;
otherwise, the law requires 30 years of uninterrupted,
adverse possession of the property.
Same; The 10 or 30-year period of prescription that
Section 14(2) of the Property Registration Decree and the Civil
Code speak of commences to run only from the time the land,
separately from being declared alienable and disposable, is
declared as patrimonial property of the State, i.e., property
held by the State and its private capacity.Thus, the 10 or
30-year period of prescription that Section 14(2) of the
Property Registration Decree and the Civil Code

speak of commences to run only from the time the

land, separately from being declared alienable and


disposable, is declared as patrimonial property of the
State, i.e., property held by the State and its private
capacity.
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
VILLARAMA, JR.J.:
This petition for review on certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, as amended, assails the
Deci114
114
SUPREMECOURTREPORTSANNOTATED

YuChangvs.Republic
sion1 dated August 26, 2005 and the Resolution 2 dated
February 13, 2006 of the Court of Appeals (CA) in CA-G.R.
CV No. 67430. The CA reversed and set aside the April 28,
2000 Decision3 of the Regional Trial Court of Pili, Camarines
Sur, Branch 31, in LRC No. P-115, LRA Rec. No. N-68012,
which granted petitioners application for registration of title
over two parcels of land, denominated as Lots 2199 and 2200
of Cad. 291, Pili Cadastre.
The antecedent facts, as culled from the records, are as
follows:
On March 22, 1949, petitioners father, L. Yu Chang 4and
the Municipality of Pili, Camarines Sur, through its then
Mayor, Justo Casuncad, executed an Agreement to Exchange
Real Property5 wherein the former assigned and transferred
to the Municipality of Pili his 400-square-meter residential
lot in Barrio San Roque, Pili, Camarines Sur, in exchange for
a 400-square-meter piece of land located in San Juan, Pili.
Thereafter, L. Yu Chang and his family took possession of the
property thus obtained and erected a residential house and a
gasoline station thereon. He also declared the property in his
name under Tax Declaration No. 01794 6 and 017957 and paid
the real property taxes thereon as evidenced by twenty-eight
(28) official receipts from February 21, 1951 up to March 10,
1976. When L. Yu Chang died on September 30, 1976, his
_______________
1 Rollo, pp. 49-60. Penned by Associate Justice Magdangal
M. De Leon, with Associate Justices Salvador J. Valdez, Jr.
and Mariano C. Del Castillo (now a Member of this Court),
concurring.

2 Id., at pp. 64-66. Penned by Associate Justice Magdangal


M. De Leon, with Associate Justices Jose L. Sabio, Jr. and
Mariano C. Del Castillo (now a Member of this Court),
concurring.
3 Id., at pp. 176-182. Penned by Judge Martin P. Badong,
Jr.
4 Leoncio Yu Chang in other parts of the records.
5 Records, pp. 9-11.
6 Exh. M, Additional Exhibits for the Petitioners.
7 Exh. M-1, id.
115
VOL.644,FEBRUARY23,2011
115
YuChangvs.Republic
wife, Donata Sta. Ana and his seven children inherited the
property and succeeded in the possession of the property.
On March 1, 1978, a Deed of Transfer and Renunciation 8of
their rights over the property was executed by L. Yu Changs
five children, Rafaela, Catalina, Flaviana, Esperanza, and
Antonio, in favor of herein petitioners. After the transfer,
petitioners had the subject property surveyed and subdivided
into two lots, Lot 2199 9 and Lot 220010 of Plan SWO-05000888, Pili Cadastre. Petitioners also declared the lots in
their names for taxation purposes as shown in Tax
Declaration No. 0263311 and paid the real property taxes
thereon.
On February 21, 1997, petitioner Soledad Yu Chang, for
herself and in representation of her brother and co-petitioner,
Vicente Yu Chang, filed a petition12 for registration of title
_______________
8 Records, pp. 12-13.

9 Lot 2199 was described as follows: A parcel of land (Lot2199 of Plan SWO-05-000888 Cad. 291, Pili Cadastre),
situated in the Poblacion, Municipality of Pili, Province of
Camarines Sur, Island of Luzon. Bounded on the SW., along
line 1-2 by Lot 2184 on the NW., along line 2-3 by Lot 2198,
all of Cad. 291, Pili Cadastre, on the NE., along line 3-4 by
National Road (20.00m. wide) and on the SE., along line 4-1
by Lot 2200, SWO-05-000888. Containing an area of ONE
HUNDRED THIRTY[-]THREE (133) square meters. x x x
(Records, p. 2.)
10 Lot 2200 was described as follows: A parcel of land
(Lot-2200 of Plan SWO-05-000888, Cad. 291, Pili Cadastre),
situated in the Poblacion, Municipality of Pili, Province of
Camarines Sur, Island of Luzon. Bounded on the NW., along
line 1-2 by Lot 2199, SWO-05-000888, on the NE., along line
2-3 by Lot 2394, beyond by National Road (20.00 m. wide) on
the SE., along line 3-4 by Lot 1, Cad. 291, Pili Cadastre, (Lot
2, PSU-48590 Port. Accepted), and on the SW., along line 4-1
by Lot 2184, Cad-291 Pili Cadastre. Containing an area of
TWO HUNDRED SIXTY[-]FOUR (264) square meters. x x x
(Id.)
11 Exh O, Additional Exhibits for the Petitioners.
12 Records, pp. 1-7. Exh. A, entitled Re: Petition for Land
Registration of Lot 2199 and Lot 2200 of Plan SWO-05000888, CAD.
116
116
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic
over the aforementioned lots under the Property Registration
Decree. In their petition, they declared that they are the coowners of the subject lots; that they and their predecessors-

in-interest have been in actual, physical, material, exclusive,


open, occupation and possession of the above described
parcels of land for more than 100 years 13; and that allegedly,
they have continuously, peacefully, and adversely possessed
the property in the concept of owners. Hence, they are
entitled to confirmation of ownership and issuance and
registration of title in their names.
In support of their application, petitioners submitted the
following documents, to wit:
1.Agreement to Exchange Real Property;
2.Deed of Transfer and Renunciation;
3.Approved Plan of Lot 2199 and Lot 2200, Cad. 291, Pili
Cadastre;
4.Approved Technical Description of Lot 2199;
5.Approved Technical Description of Lot 2200;
6.Field Appraisal and Assessment Sheet (FAAS) A.R.P.
No. 026-044 for Lot 2199 Cad. 291; and
7.Field Appraisal and Assessment Sheet (FAAS) A.R.P.
No. 026-043 for Lot 2200 Cad. 291 Pili Cadastre.
The Republic, through the Office of the Solicitor General
(OSG), filed an Opposition14 to the application, alleging,inter
alia, that: (1) neither the applicants nor their predecessorsin-interest have been in open, continuous, exclusive and
notorious possession of the land since June 12, 1945 or prior
thereto; (2) the muniments of title, tax declarations and tax
_______________
291, Pili Cadastre and to Cover the Same under the
Operation of the Property Registration Decree and to Have
the Title Thereto Registered and Confirmed.

13 Id., at p. 3; Rollo, p. 33.


14 Records, pp. 61-62.
117
VOL.644,FEBRUARY23,2011
117
YuChangvs.Republic
receipts do not constitute competent and sufficient evidence of
a bona fide acquisition of the land; and (3) that the parcels of
land applied for are portions of the public domain and are not
subject to private appropriation.
No other parties filed their opposition. Thus, on December
14, 1998, an Order of General Default 15 was issued by the
trial court.
After hearing, the trial court rendered a Decision granting
petitioners application. The fallo of the trial courts decision
reads:
WHEREFORE, in view of the foregoing, decision is
hereby rendered as follows:
1.Confirming the imperfect title of the herein applicants
Vicente Yu Chang and Soledad Yu Chang over the two (2)
parcels of land described in paragraph two (2) page 2 of the
Petition, particularly Lot 2199, Plans S0-05-000888, Cad.
291, Pili Cadastre and Lot 2200, Plan SWO-05-000888, Cad.
291, Pili Cadastre; both Filipino citizens, residents of #14
Joaquin St., Corinthian Garden, Quezon City and San Juan,
Pili, Camarines Sur respectively;
2.Ordering the dismissal of the application in the
Cadastral proceeding with respect to Lots 2199 and 2200,
Cad. 291, Pili Cadastre under CAD Case No. N-9;
3.After finality of this decision, let the corresponding
decree of registration be issued by the Administrator, Land

Registration Authority to the herein applicants abovementioned.


SO ORDERED.16
The Republic appealed the decision to the CA on the
ground that the court a quo erred in granting petitioners
application for registration of Lots 2199 and 2200 despite
their failure to show compliance with the requirements of the
law. In addition, the Republic asserted that the land was
_______________
15 Id., at p. 118.
16 Id., at pp. 181-182.
118
118
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic
classified as public forest land; hence, it could not be subject
to appropriation and alienation.
As aforesaid, the CA reversed the trial courts decision on
August 26, 2005, and dismissed petitioners application for
land registration. The CA considered the petition to be
governed by Section 48(b) of Commonwealth Act (C.A.) No.
141 or the Public Land Act, as amended, and held that
petitioners were not able to present incontrovertible evidence
that the parcels of land sought to be registered are alienable
and disposable.17 The CA relied on the testimony of Lamberto
Orcena, Land Management Officer III of CENRO, Iriga City,
who testified that prior to October 30, 1986, the entire area
encompassing the right side of the Naga-Legaspi Highway,
including the subject properties, was classified as forest land.
According to the CA, even if the area within which the
subject properties are located is now being used for

residential and commercial purposes, such fact will not


convert the subject parcels of land into agricultural
land.18 The CA stressed that there must be a positive act from
the government declassifying the land as forest land before it
could be deemed alienable or disposable land for agricultural
or other purposes.19
Additionally, the CA noted that the lands sought to be
registered were declared disposable public land only on
October 30, 1986. Thus, it was only from that time that the
period of open, continuous and notorious possession
commenced to toll against the State.
Aggrieved, petitioners are now before this Court via the
present appeal, raising the sole issue of whether the
appellate court erred in dismissing their application for
registration of title on the ground that they failed to prove
compliance with the requirements of Section 48(b) of
thePublic Land Act, as amended.
_______________
17 Rollo, p. 57.
18 Id., at p. 58.
19 Id., at pp. 58-59.
119
VOL.644,FEBRUARY23,2011
119
YuChangvs.Republic
Petitioners insist that the subject properties could no
longer be considered and classified as forest land since there
are buildings, residential houses and even government
structures existing and standing on the land. 20In their
Memorandum,21 petitioners point out that the original owner
and possessor of the subject land was the Municipal

Government of Pili which was established in 1930. The land


was originally part of the municipal ground adjacent to the
Municipal Building located at the right side of the NagaLegaspi National Highway.22 From 1949, when L. Yu Chang
acquired the property through barter and up to the filing of
petitioners application in 1997, petitioners and their
predecessors-in-interest had been in actual physical and
material possession of the land in the concept of an owner,
notorious and known to the public and adverse to the whole
world.
The Republic, through the OSG, for its part, maintains
that petitioners failed to prove their open, continuous,
exclusive and notorious possession of the subject lots for the
period of time required by law. The OSG also submits that
the subject lands were declared as alienable and disposable
only on October 30, 1986.
We deny the petition for lack of merit.
Section 48(b) of the Public Land Act, as amended by P.D.
1073, under which petitioners application was filed, provides:
SEC.48.The following described citizens of the
Philippines, occupying lands of the public domain or claiming
to own any such lands or an interest therein, but whose titles
have not been perfected or completed, may apply to the
Regional Trial Court of the province or city where the land is
located for confirmation of their claims and the issuance of a
certificate of title therefor, under the Property Registration
Decree, to wit:
xxxx
_______________
20 Id., at p. 22.

21 Id., at pp. 112-123.


22 Id., at p. 120.
120
120
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic
(b)Those who by themselves or through their
predecessors[-]
in[-]interest have been in the open, continuous, exclusive, and
notorious possession and occupation of alienable and
disposable agricultural lands of the public domain, under
a bona fide claim of acquisition or ownership, since June 12,
1945, except when prevented by war or force majeure. These
shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this
chapter.
x x x x23
Under this provision, in order that petitioners application
for registration of title may be granted, they must first
establish the following: (1) that the subject land forms part of
the disposable and alienable lands of the public domain and
(2) that they have been in open, continuous, exclusive and
notorious possession and occupation of the same under
a bona fide claim of ownership, since June 12, 1945, or
earlier.24 Applicants must overcome the presumption that the
land they are applying for is part of the public domain and
that they have an interest therein sufficient to warrant
registration in their names arising from an imperfect title.25
In the instant case, petitioners did not adduce any
evidence to the effect that the lots subject of their application
are alienable and disposable land of the public domain.

Instead, petitioners contend that the subject properties could


no longer be considered and classified as forest land since
there are building structures, residential houses and even
government buildings existing and standing on the area.
This, however, is hardly the proof required under the law. As
clarified by this
_______________
23 See Agcaoili, PROPERTY REGISTRATION DECREE AND
RELATED LAWS (LAND TITLES AND DEEDS), 2006 Ed., p. 69.
24 Ong v. Republic, G.R. No. 175746, March 12, 2008, 548
SCRA 160, 166.
25 Collado v. Court of Appeals, G.R. No. 107764, October
4, 2002, 390 SCRA 343, 361.
121
VOL.644,FEBRUARY23,2011
121
YuChangvs.Republic
Court in Heirs of Jose Amunategui v. Director of Forestry,26a
forested area classified as forest land of the public domain
does not lose such classification simply because loggers or
settlers may have stripped it of its forest cover. Parcels of
land classified as forest land may actually be covered with
grass or planted with crops by kaingincultivators or other
farmers. Forest lands do not have to be on mountains or in
out-of-the-way places. The classification of land is descriptive
of its legal nature or status and does not have to be
descriptive of what the land actually looks like. 27 Unless and
until the land classified as forest land is released in an
official proclamation to that effect so that it may form part of
the disposable agricultural lands of the public domain, the

rules on confirmation of imperfect title do not apply. 28 As


aptly held by the appellate court:
[T]he fact that the area within which the subject parcels of
land are located is being used for residential and commercial
purposes does not serve to convert the subject parcels of land
into agricultural land. It is fundamental that before any land
may be declassified from the forest group and converted into
alienable or disposable land for agricultural or other
purposes, there must be a positive act from the government.
A person cannot enter into forest land and by the simple act
of cultivating a portion of that land, earn credits towards an
eventual confirmation of imperfect title. The Government
must first declare the forest land to be alienable and
disposable agricultural land before the year of entry,
cultivation and exclusive and adverse possession can be
counted for purposes of an imperfect title.29
Moreover, during the hearing of petitioners application,
the Republic presented a Report 30 of Rene Gomez, Land
Investigator/Inspector, CENRO No. V-2-3, which disclosed
that the lots applied for by the petitioners were classified as
alienable
_______________
26 No. L-27873, November 29, 1983, 126 SCRA 69.
27 Id., at p. 75.
28 Id.
29 Rollo, pp. 58-59.
30 Exh. 5, Additional Exhs. For the Oppositor.
122
122
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic

and disposable under Project No. 9-E, L.C. Map No. 3393 and
released and certified as such only on October 30, 1986. A
Compliance31 dated January 19, 1999 submitted by OICCENR Officer Joaquin Ed A. Guerrero to the trial court also
stated that Lots. 2199 and 2200 of Cad. 291 wereverified to
be within Alienable and Disposable area under Project No. 9E, L.C. Map No. 3393, as certified on October 30, 1986 by the
then Bureau of Forestry. Evidently, therefore, the subject lots
were declared alienable and disposable only on October 30,
1986. Prior to that period, the same could not be the subject
of confirmation of imperfect title. Petitioners possession of
the subject forest land prior to the date when it was classified
as alienable and disposable is inconsequential and should be
excluded from the computation of the period of
possession.32 To reiterate, it is well settled that possession of
forest land, prior to its classification as alienable and
disposable land, is ineffective since such possession may not
be considered as possession in the concept of owner. 33 The
adverse possession which can be the basis of a grant of title
in confirmation of imperfect title cases cannot commence
until after forest land has been declared and alienable. 34
Much as this Court wants to conform to the States policy
of encouraging and promoting the distribution of alienable
public lands to spur economic growth and remain true to the
ideal of social justice, our hands are tied by the laws
stringent
_______________
31 Exh. R, records, p. 121.
32 Ponciano, Jr. v. Laguna Lake Development Authority,
G.R. No. 174536, October 29, 2008, 570 SCRA 207, 227

citing Republic v. Herbieto, G.R. No. 156117, May 26, 2005,


459 SCRA 183, 201-202; Almeda v. Court of Appeals, G.R. No.
85322, April 30, 1991, 196 SCRA 476, 480; Vallarta v.
Intermediate Appellate Court, No. L-74957, June 30, 1987,
151 SCRA 679, 690; Republic v. Court of Appeals, No. L40402, March 16, 1987, 148 SCRA 480, 492.
33 Supra note 23 at p. 74.
34 See Republic v. Diloy, G.R. No. 174633, August 26,
2008, 563 SCRA 413, 424.
123
VOL.644,FEBRUARY23,2011
123
YuChangvs.Republic
safeguards against registering imperfect titles.35 Here,
petitioners failed to present well-nigh incontrovertible
evidence necessary to prove their compliance of the
requirements under Section 48(b) of C.A. No. 141. Hence, the
Court of Appeals did not err in dismissing their application
for confirmation and registration of title.
WHEREFORE, the petition is hereby DENIED. The
Decision dated August 26, 2005 and the Resolution dated
February 13, 2006 of the Court of Appeals in CA-G.R. CV No.
67430 are hereby AFFIRMED.
With costs against the petitioners.
SO ORDERED.
Bersamin, Abad** and Sereno, JJ., concur.
Brion (J., Acting Chairperson), See: Separate Opinion.
SEPARATE OPINION
BRION,*** J.:
I concur in the result for the reasons discussed below.
The Facts

The petitioners father, L. Yu Chang, was the owner of a


400 square meter property located in San Roque, Pili,
Camarines, Sur. On March 22, 1949, he agreed
toexchange this property for a similarly-sized property
inSan Juan, Pili, Camarines Sur (subject property) owned by

the concept of owners. Hence, they possessed the [subject]


property in the concept of owners. Hence, they claimed to be
entitled to a confirmation of ownership and the issuance and
registration of title in their names.
The Regional Trial Court (RTC) of Pili, Camarines

the Municipality of Pili (embodied in an Agreement to

Sur granted the petitioners application. On appeal,

Exchange Real Prop_______________

the CA reversed the RTCs decision. Agreeing with the


respondent Republic of the Philippines (represented by the

35 Republic v. Bibonia, G.R. No. 157466, June 21, 2007,


525 SCRA 268, 277.
** Designated additional member per Special Order No.
926 dated January 24, 2011.
*** Designated Acting Chairperson per Special Order No.
925 dated January 24, 2011.
124
124
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic
erty. From then on, L. Yu Chang and his family took
possession of the subject property where they constructed a
residential house and a gas station. When L. Yu Chang died,
his other children ceded their rights to the subject property to
the petitioners (as embodied in a Deed of Transfer and
Renunciation dated March 1, 1978).

Appeals (CA)declared that the petitioners failed to

On February 21, 1997, petitioners (as co-owners) filed

a petition for registration of the title over the subject


property, contending that they and their predecessors-in-

interest have been an actual, physical, material, exclusive,


open occupation and possession of the [subject property] for
more than 100 years and that they have continuously,
peacefully, and adversely possessed the [subject] property in

Office

of

the

Solicitor

General),

the Court

of

present incontrovertible evidence that the subject


property sought to be registered are alienable and
disposable,

as

required

under

Section

48(b)

of

Commonwealth Act No. 141 (Public Land Act). The CA


pointed out that, according to official records, the subject
property was previously classified as forest land, and

was declared disposable public land only on October


30, 1986. Thus, it was only from that time that the

period of open, continuous and notorious possession


commenced to toil against the State.
The petitioners seek the reversal of the CAs judgment
through the present petition for review on certiorari under
Rule 45 of the Rules of Court. They insist that the subject
property can no longer be considered and classified as forest
125
VOL.644,FEBRUARY23,2011
125
YuChangvs.Republic
land because there are buildings, residential houses, and
government structures existing on the land.
The Ponencia

The ponencia denied the petition for lack of merit.


The ponencia declared that a petition for registration
under Section 48(b) of the Public Land Act1 can prosper only
if the following are established: (a) that the subject property
forms of the disposable and alienable lands of the public
domain, and (b) that the petitioners have been in open,
continuous, exclusive and notorious possession occupation of
the subject property under a bona fide claim of
ownership since June 12, 1945 or earlier.
The ponencia agreed with the CA and held that the
petitioners failed to adduce any evidence showing that the
subject property is alienable and disposable land of the public
domain; the petitioners insistence that the subject property
can no longer be considered and classified as forest land
because there are structures erected thereon is unavailing
because the classification of land is descriptive of the lands
legal nature or status, and does not have to be descriptive of
what
_______________
1 Sec. 48.The following-described citizens of the
Philippines, occupying lands of the public domain or claiming
to own any such lands or an interest therein, but whose titles
have been perfected or completed, may apply to the Court of
First Instance of the province where the land is located for
confirmation of other claims and the issuance of title therefor,
under the Land Registration Act, to wit:
xxxx
(b) Those who by themselves or through their
predecessors in interest have been in open, continuous,

exclusive, and notorious possession and occupation of


alienable and disposable lands of the public domain, under
abona fide claim of acquisition or ownership, since June 12,
1945, except when prevented by war or force majeure. These
shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this
chapter.
126
126
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic
the land actually looks like. Unless and until a land
classified as a forest land is formally declared in an official
proclamation to be part of the disposable agricultural lands
of the public domain, the rules on confirmation of imperfect
title do not apply.2
Since the subject property was declared alienable and
disposable only on October 30, 1986, it is only from that time
that the petitioners possession can be considered as basis to
establish their claim of ownership over the subject property.
Prior to the classification of a forest land as alienable and
disposable agricultural land, the land of public domain
cannot be alienated.3 Prescription does not lie against the
State and adverse possession, which is the basis for a
confirmation of title, cannot commence. 4 In these lights,
the ponencia concluded

that the

petitioners

failed

to

prove compliance with the requirements of Section


48(b) of the Public Land Act.
An Alternative View

While the ponencia denied the petition and thereby


arrived at the correct result, it failed to make the proper
consideration in resolving the basic issue presentedi.e.,
whether the petitioners have a valid title over the
subject property that can be registered under the law.
a.Registration under the Section 14(1) of
the Property Registration Decree
Section 48(b) of the Public Land Act reads:
Sec.48.The following-described citizens of the
Philippines, occupying lands of the public domain or claiming
to own any such
_______________
2 Ponencia at 7.
3 CONSTITUTION, Article XII, Section 2.
4 CIVIL CODE, Article 1113; Celestial v. Cachopero, G.R.
No. 142595, October 15, 2003, 413 SCRA 469.
127
VOL.644,FEBRUARY23,2011
127
YuChangvs.Republic
lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of First
Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate
of title therefore, under the Land Registration Act, to wit:
xxx
(b) Those who by themselves or through their
predecessors in interest have been in open, continuous,
exclusive, and notorious possession and occupation of
alienable and disposable lands of the public domain,
under a bona fideclaim of acquisition or ownership,

since June 12, 1945, except when prevented by war or


force majeure. These shall be conclusively presumed
and to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate
of title under the provisions of this chapter.
Complementing Section 48(b) of the Public Land Act is
Section 14(1) of Presidential Decree (P.D.) No. 1529 (Property
Registration Decree), which provides:
Sec.14.Who may apply.The following persons may file
in the proper Court of First Instance [now Regional Trial
Court] an application for registration of title to land, whether
personally or through their duly authorized representatives:
(1)Those who by themselves or through their
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of
alienable and disposable lands of the public domain
under a bona fide claim of ownership since June 12,
1945, or earlier.
Section 48(b) of the Public Land Act is the law that
recognizes the substantive right of a possessor and occupant
of an alienable and disposable land of the public domain,
while Section 14(1) of the Property Registration Decree
recognizes this right by authorizing its registration, thus
bringing the land within
128
128
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic
the coverage of the Torrens System. 5 The mode of
acquisition recognized by Section 48(b) of the Public Land Act
and made registrable under Section 14(1) of the Property
Registration Decree is through confirmation of an

imperfect or incomplete title.6 Both provisions allow


confirmation of an imperfect or incomplete title only if the
claimant has been in open, continuous, exclusive and
notorious possession and occupation of alienable and
disposable lands of the public domain since June 12, 1945
or earlier.
Parenthetically, I discussed the use of June 12, 1945 as
the cut-off date in my dissenting opinion in Heirs of Mario
Malabanan v. Republic, based on the legislative history of the
Public Land Act and the Courts ruling inAbejaron v.
Nabasa.7 Prior to the Public Land Acts amendment by P.D.
No. 1073, the law provided for a simple 30-year prescriptive
period for judicial confirmation of imperfect title. 8 P.D. No.
1073, however, changed the required 30-year possession and
occupation period provision, to possession and occupation of
the land applied for since June 12, 1945, or earlier.9 The
_______________
5 See Heirs of Mario Malabanan v. Republic, G.R. No.
178987, April 29, 2009, 587 SCRA 172, 190-191.
I concurred with therein majoritys opinion with respect to
the relation between Section 48(b) of the Public Land Act and
Section 14(1) of the Property Registration Decree, see pp.
230-234.
6 Effectively, this is a grant of title by the State under
Section 11(4) of the Public Land Act, which states:
SEC.11.Public lands suitable for agricultural purposes
can be disposed of only as follows and not otherwise:
(1)For homestead settlement:
(2)By sale:

(3)By lease;
(4)By confirmation of imperfect or incomplete
title;
(5)By judicial legalization;
(6)By administrative legalization (free patent).
7 G.R. No. 84831, June 20, 2001, 359 SCRA 47.
8 Heirs of Mario Malabanan v. Republic, supra note 2 at
p. 234.
9 Id., at p. 235.
129
VOL.644,FEBRUARY23,2011
129
YuChangvs.Republic
significance of this date though was never explained by the
law. In order not to prejudice the vested rights of those who
complied with the original 30-year period of possession (but
whose possession began only after the June 12, 1945 cut-off
date set by P.D. No. 1073), the Court declared that the P.D.s
requirements as inapplicable to them:
Filipino citizens who by themselves or their predecessors-ininterest have been, prior to the effectivity of P.D. 1073 on
January 25, 1977, in open, continuous, exclusive and
notorious possession and occupation of agricultural lands of
the public domain, under abona fide claim of acquisition of
ownership, for at least 30 years, or at least since January 24,
1947 may apply for judicial confirmation of their imperfect or
incomplete title under Sec. 48(b) of the Public Land Act. 10
Whether the cut-off date is June 12, 1945 or January 24,
1947 (applying the 30-year prescriptive period used prior to
the effectivity of P.D. No. 1073), the petitioners application
for registration of land pursuant to Section 48(b) of the Public

Land Act [in relation with Section 14(1) that the Property
Registration Decree] should be denied. The facts stated that
the petitioners (through their predecessors-in-interest)
possessed the subject property only after March 22,
1949 exchange agreement with the Municipality of Pili. The
petitioners obvious failure to meet the laws alternative
deadline renders any discussion of Section 48(b) of the Public
Land Act unnecessary.
b.Registration under Section 14(2) of the
Property Registration Decree
Section 48(b) of the Public Land Act and Section 14(1) of
the Property Registration Decree, however, are not the only
open avenues to register over the land. [E]ven if possession
of the alienable public land commenced on a date later than
_______________
10 Id., at p. 236, citing Abejaron v. Nabasa.
130
130
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic
June 12, 1945, and such possession being open, continuous
and exclusive, then the possessor may have the right to
register the land by virtue of Section 14(2) of the

Property Registration Decree.11 Section 14(2) of the


Property Registration Decree states:
SECTION14.Who may apply.The following persons
may file in the proper Court of First Instance an application
for registration of title to land, whether personally or through
their duly authorized representatives:
xxxx

(2)Those

who

of private lands

have
by

acquired

ownership

prescription under

provisions of existing laws.

the

But this recourse is open only to private lands acquired

through prescription; the provision thus calls for the

application of Civil Code concepts of private property and


prescription.
Prescription is a mode of acquiring ownership and other
real rights over immovable property through the lapse of
time in the manner and under the conditions laid down by
law.12 Acquisitive prescription of dominion and other real
rights may be ordinary and extraordinary. 13 If the applicants
possession of the immovable property is coupled with good
faith and just title, the lapse of 10 years is sufficient; 14
otherwise,
_______________
11 Heirs of Mario Malabanan v. Republic, supra note 2 at
p. 197.
12 CIVIL CODE, Article 1106.By prescription, one acquires
ownership and other real rights through the lapse time in the
manner and under the conditions laid down by law.
In the same way, rights and conditions are lost by
prescription. (1930a).
13 CIVIL CODE, Article 1117.Acquisitive prescription of
dominion and other real rights may be ordinary or
extraordinary.
14 CIVIL CODE, Article 1134.Ownership and other real
rights over immovable property are acquired by ordinary
prescription through possession of ten years.

131
VOL.644,FEBRUARY23,2011
131
YuChangvs.Republic
the law requires 30 years of uninterrupted, adverse
possession of the property.15
Whether ordinary or extraordinary, prescription will

run only against properties that are within the

commerce of men. Properties of public dominion are not

susceptible to acquisitive prescription.16 Article 1113 of the


Civil Code states that property of the State or any of its
subdivisions not patrimonial in character shall not be the
object of prescription. Properties of the public domain become
patrimonial properties only when they no longer intended for
public use or for public service.17 A land declared as alienable
and disposable by the government does not necessarily
become patrimonial property; it remains part of the public
dominion:

17 Art.420.The following things are property of public


dominion:
(1) Those intended for public use, such as roads, canals,
rivers, torrents, ports and bridges constructed by the State,
bank, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for
public use, and are intended for some public service or for the
development of the national wealth. (339a).
Art.421.All other property of the State, which is not of
the character stated in the preceding article, is patrimonial
property. (340a).
Art. 422.Property of public dominion, when no longer
intended for public use or for public service, shall form part
of the patrimonial property of the State. (341a).
132
132
SUPREMECOURTREPORTSANNOTATED
YuChangvs.Republic

[T]here must be an express declaration by the State that

able or disposable, remains property of the public

public service or the development of the national

acquisition by prescription. It is only when such alienable

patrimonial. Without such express declaration, the

State to be no longer intended for public service or for

_______________

of acquisitive prescription can begin to run. Such

the public dominion property is no longer intended for


wealth or that the property has been converted into
property even, if classified as alien-

15 CIVIL CODE, Art.1137.Ownership and other real


rights over immovables also prescribe through uninterrupted
adverse possession thereof for thirty years, without need of
title or of good faith.
16 Celestial v. Cachopero, supra note 4.

dominion, pursuant to Article 420(2), and thus incapable of

and disposable lands are expressly declared by the

the development of the national wealth that the period


declaration shall be in the form of a law duly enacted by
Congress or a Presidential Proclamation in cases where the
President is duly authorized by law.18
Thus, the 10 or 30-year period of prescription that
Section 14(2) of the Property Registration Decree and
the Civil Code speak of commences to run only from

the time the land, separately from being declared


alienable and disposable, is declared as patrimonial

property of the State, i.e., property held by the State


and its private capacity.19
Tested against these requirements in the application of
Section 14(2) of the Property Registration Decree, it is clear
that the petitioners application for registration of their title
should be denied. Although the subject property was declared
alienable and disposable by the government on October 30,
1986, the petitionersfor purposes of a claim of prescription
failed to establish whether it had also been declared as
patrimonial property.
Thus, the petitioners have no basis to register the subject
property either on the basis of Section 14(1) or 14(2) of the
Property Registration Decree. For this reason, the petition
should be denied.
_______________
18 Heirs of Malabanan v. Republic, supra note 2 at p. 303,
which position is similar to what I discussed in my dissenting
opinion, at pp. 253-254.
19 CIVIL CODE, Art.425.Property of private ownership,
besides the patrimonial property of the State, provinces,
cities, and municipalities, consists of all property belonging
to private persons, either individually or collectively.
133
VOL.644,FEBRUARY23,2011
133
YuChangvs.Republic
Petition denied, judgment and resolution affirmed.
Note.The well-entrenched rule is that all lands not
appearing to be clearly of private dominion presumably

belong to the State. (Republic vs. T.A.N. Properties, Inc., 555


SCRA 477 [2008])
o0o
Copyright 2015 Central Book Supply, Inc. All rights reserved.
G.R. No. 186961.February 20, 2012.*
REPUBLIC OF THE PHILIPPINES, petitioner, vs. EAST
SILVERLANE REALTY DEVELOPMENT CORPORATION,
respondent.
Remedial Law; Civil Procedure; Appeals; A petition for
review should be confined to questions of law and that the
Supreme Court is not a trier of facts.Preliminarily, with
respect to the infirmity suffered by this petition from the
standpoint of Rule 45, this Court agrees with the respondent
that the issue of whether the respondent had presented
sufficient proof of the required possession under a bona
fide claim of ownership raises a question of fact, considering
that it invites an evaluation of the evidentiary record.
However, that a petition for review should be confined to
questions of law and that this Court is not a trier of facts and
bound by the factual findings of
_______________
* SECOND DIVISION.
402
4
SUPREMECOURTREPORTSANNOTATED
02
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
the CA are not without exceptions. Among these
exceptions, which obtain in this case, are: (a) when the
judgment of the CA is based on a misapprehension of facts or

(b) when its findings are not sustained by the evidence on


record.
Civil Law; Property; Land Registration; Public Land Act;
Judicial Confirmation of Imperfect Title; Under Section 11 of
the Public Land Act, one of the modes of disposing public
lands suitable for agricultural purposes is by confirmation of
imperfect or incomplete titles.The PLA governs the
classification and disposition of lands of the public domain.
Under Section 11 thereof, one of the modes of disposing
public lands suitable for agricultural purposes is by
confirmation of imperfect or incomplete titles. On the other
hand, Section 48 provides the grant to the qualified possessor
of an alienable and disposable public land. Thus: SEC. 48.
The following-described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such lands
or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of First
Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate
of title therefor, under the Land Registration Act, to wit: (a)
Those who prior to the transfer of sovereignty from Spain to
the United States have applied for the purchase, composition
or other form of grant of lands of the public domain under the
laws and royal decrees then in force and have instituted and
prosecuted the proceedings in connection therewith, but have
with or without default upon their part, or for any other
cause, not received title therefor, if such applicants or
grantees and their heirs have occupied and cultivated said
lands continuously since the filing of their applications. (b)
Those who by themselves or through their predecessors in

interest have been in open, continuous, exclusive, and


notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition or
ownership, for at least thirty years immediately preceding
the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter. (c)
Members of the national cultural minorities who by
themselves or through their predecessors-in-interest have
been in open, continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to
agriculture,
403
VOL.666,FEBRUARY20,2012
4
03
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
whether disposable or not, under a bona fide claim of
ownership for at least 30 years shall be entitled to the rights
granted in sub-section (b) hereof. Presidential Decree No.
1073 (P.D. No. 1073), which was issued on January 25, 1977,
deleted subsection (a) and amended subsection (b) as follows:
SECTION 4. The provisions of Section 48 (b) and Section 48
(c), Chapter VIII of the Public Land Act are hereby amended
in the sense that these provisions shall apply only to
alienable and disposable lands of the public domain which
have been in open, continuous, exclusive and notorious
possession and occupation by the applicant thru himself or
thru his predecessor-in-interest under a bona fide claim of
ownership since June 12, 1945.

Same; Same; Same; Property Registration Decree (P.D.


No. 1529); Persons Who May Apply for Registration of Title to
Land.P.D. No. 1529, which was enacted on June 11, 1978,
codified all the laws relative to the registration of property.
Section 14 thereof partially provides: Section 14. Who may
apply. The following persons may file in the proper Court of
First Instance an application for registration of title to land,
whether personally or through their duly authorized
representatives: (1) Those who by themselves or through
their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of
alienable and disposable lands of the public domain under a
bona fide claim of ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership of private lands by
prescription under the provision of existing laws. (3) Those
who have acquired ownership of private lands or abandoned
river beds by right of accession or accretion under the
existing laws. (4) Those who have acquired ownership of land
in any other manner provided for by law.
Same; Same; Same; Article 420 of the Civil Code
enumerates the properties belonging to the public dominion,
outside thereof are patrimonial property, hence, susceptible to
acquisitive prescription.Property is either part of the public
domain or privately owned. Under Article 420 of the Civil
Code, the following properties are of public dominion: (a)
Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads and others of similar character; (b) Those
which belong to the State, without being for public use, and
are intended for some public service or for the development of

the national wealth. All other properties of the State, which


is not of the
404
4
SUPREMECOURTREPORTSANNOTATED
04
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
character mentioned in Article 420 is patrimonial
property, hence, susceptible to acquisitive prescription.
Same; Same; Same; Without express declaration that the
property is no longer intended for public service or
development of national wealth, the property, even if classified
as alienable or disposable, remains property of the State, and
thus, may not be acquired by prescription.In Heirs of
Malabanan, this Court ruled that possession and occupation
of an alienable and disposable public land for the periods
provided under the Civil Code do not automatically convert
said property into private property or release it from the
public domain. There must be an express declaration that the
property is no longer intended for public service or
development of national wealth. Without such express
declaration, the property, even if classified as alienable or
disposable, remains property of the State, and thus, may not
be acquired by prescription.
Same; Same; Same; The possession and occupation
required to acquire an imperfect title over an alienable and
disposable public land must be open, continuous, exclusive
and notorious in character.It is explicit under Section 14
(1) that the possession and occupation required to acquire an
imperfect title over an alienable and disposable public land
must be open, continuous, exclusive and notorious in
character. In Republic of the Philippines v. Alconaba, 427

SCRA 611 (2004), this Court explained that the intent behind
the use of possession in conjunction with occupation is to
emphasize the need for actual and not just constructive or
fictional possession. The law speaks ofpossession and
occupation. Since these words are separated by the
conjunction and, the clear intention of the law is not to make
one synonymous with the other. Possession is broader than
occupation because it includes constructive possession. When,
therefore, the law adds the word occupation, it seeks to
delimit the all encompassing effect of constructive possession.
Taken together with the words open, continuous, exclusive
and notorious, the word occupation serves to highlight the
fact that for an applicant to qualify, his possession must not
be a mere fiction. Actual possession of a land consists in the
manifestation of acts of dominion over it of such a nature as a
party would naturally exercise over his own property.
(citations omitted)405
VOL.666,FEBRUARY20,2012
4
05
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
Same; Same; Same; Possession; Acquisitive Prescription;
Possession for purposes of prescription must be in the concept
of an owner, public, peaceful and uninterrupted.On the
other hand, Section 14 (2) is silent as to the required nature
of possession and occupation, thus, requiring a reference to
the relevant provisions of the Civil Code on prescription. And
under Article 1118 thereof, possession for purposes of
prescription must be in the concept of an owner, public,
peaceful and uninterrupted. In Heirs of Marcelina ArzadonCrisologo v. Raon, 532 SCRA 391 (2007), this Court
expounded on the nature of possession required for purposes

of prescription: It is concerned with lapse of time in the


manner and under conditions laid down by law, namely, that
the possession should be in the concept of an owner, public,
peaceful, uninterrupted and adverse. Possession is open
when it is patent, visible, apparent, notorious and not
clandestine. It is continuous when uninterrupted, unbroken
and not intermittent or occasional; exclusive when the
adverse possessor can show exclusive dominion over the land
and an appropriation of it to his own use and benefit; and
notorious when it is so conspicuous that it is generally known
and talked of by the public or the people in the neighborhood.
The party who asserts ownership by adverse possession must
prove the presence of the essential elements of acquisitive
prescription. (citations omitted)
Same; Same; Same; Same; Same; A person who seeks the
registration of title to a piece of land on the basis of possession
by himself and his predecessors-in-interest must prove his
claim by clear and convincing evidence.The phrase
adverse, continuous, open, public, and in concept of owner,
by which the respondent describes its possession and that of
its predecessors-in-interest is a conclusion of law. The burden
of proof is on the respondent to prove by clear, positive and
convincing evidence that the alleged possession of its
predecessors-in-interest was of the nature and duration
required by law. It is therefore inconsequential if the
petitioner failed to present evidence that would controvert
the allegations of the respondent. A person who seeks the
registration of title to a piece of land on the basis of
possession by himself and his predecessors-in-interest must
prove his claim by clear and convincing evidence, i.e., he must

prove his title and should not rely on the absence or


weakness of the evidence of the oppositors.
406
406
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Office of the Solicitor General for petitioner.
Jaime Y. Sindiong for respondent.
REYES,J.:
This Court is urged to review and set aside the July 31,
2008 Decision1 and February 20, 2009 Resolution 2 of the
Court of Appeals (CA) in CA-G.R. CV No. 00143. In its July
31, 2008 Decision, the CA affirmed the August 27, 2004
Decision of the Regional Trial Court (RTC), Branch 40 of
Cagayan De Oro City. The dispositive portion thereof states:
WHEREFORE, premises foregoing, the instant appeal is
hereby DISMISSED for lack of merit. The assailed Decision
dated August 27, 2004 is hereby AFFIRMED in toto.

SO ORDERED.3
In its February 20, 2009 Resolution, the CA denied the
petitioners August 29, 2008 Motion for Reconsideration.4
The Factual Antecedents

The respondent filed with the RTC an application for land


registration, covering a parcel of land identified as Lot 9039
of Cagayan Cadastre, situated in El Salvador, Misamis
Oriental and with an area of 9,794 square meters. The
respondent purchased the portion of the subject property
consisting of
_______________
1 Penned by Associate Justice Rodrigo F. Lim, Jr., with
Associate Justices Michael P. Elbinias and Ruben C. Ayson,
concurring; Rollo, pp. 43-54.
2 Id., at p. 56.
3 Id., at p. 54.
4 Id., at pp. 57-61.
407
VOL.666,FEBRUARY20,2012
407
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
4,708 square meters (Area A) from Francisca Oco pursuant to
a Deed of Absolute Sale dated November 27, 1990 and the
remaining portion consisting of 5,086 square meters (Area B)
from Rosario U. Tan Lim, Nemesia Tan and Mariano U. Tan
pursuant to a Deed of Partial Partition with Deed of Absolute
Sale dated April 11, 1991. It was claimed that the
respondents predecessors-in-interest had been in open,
notorious, continuous and exclusive possession of the subject
property since June 12, 1945.
After hearing the same on the merits, the RTC issued on
August 27, 2004 a Decision, granting the respondents
petition for registration of the land in question, thus:
ACCORDINGLY, finding the application meritorious, and
pursuant to applicable law and jurisprudence on the matter,
particularly the provisions of P.D. 1529, judgment is hereby

rendered granting the instant application. The Land


Registration Authority is hereby ordered to issue a decree in
the name of the applicant East Silverlane Realty
Development Corporation covering the parcel of land, Lot
9039, Cad 237, having an area of 9,794 square meters covered
by the two (2) tax declarations subject of this petition. Based
on the decree, the Register of Deeds for the Province of
Misamis Oriental is hereby directed to issue an original
certificate of title in the name of the applicant covering the
land subject matter of this application. 5
On appeal by the petitioner, the CA affirmed the RTCs
August 27, 2004 Decision. In its July 31, 2008 Decision, 6the
CA found no merit in the petitioners appeal, holding that:
It is a settled rule that an application for land
registration must conform to three requisites: (1) the land is
alienable public land; (2) the applicants open, continuous,
exclusive and notorious possession and occupation thereof
must be since June 12, 1945, or earlier; and (3) it is a bona
fide claim of ownership.
_______________
5 Id., at pp. 108-109.
6 Supra note 1.
408
408
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
In the case at bench, petitioner-appellee has met all the
requirements. Anent the first requirement, both the report
and certification issued by the Department of Environment
and Natural Resources (DENR) shows that the subject land
was within the alienable and disposable zone classified under

BF Project [N]o. 8 Blk. I, L.C. Map [N]o. 585 and was


released and certified as such on December 31, 1925.
Indubitably, both the DENR certification and report
constitute a positive government act, an administrative
action, validly classifying the land in question. It is a settled
rule that the classification or re-classification of public lands
into alienable or disposable, mineral or forest land is now a
prerogative of the Executive Department of the government.
Accordingly, the certification enjoys a presumption of
regularity in the absence of contradictory evidence. As it is,
the said certification remains uncontested and even
oppositor-appellant Republic itself did not present any
evidence to refute the contents of the said certification. Thus,
the alienable and disposable character of the subject land
certified as such as early as December 31, 1925 has been
clearly established by the evidence of the petitioner-appellee.
Anent the second and third requirements, the applicant is
required to prove his open, continuous, exclusive and
notorious possession and occupation of the subject land under
a bona fideclaim of ownership either since time immemorial
or since June 12, 1945.
xxxx
In the case at bench, ESRDC tacked its possession and
occupation over the subject land to that of its predecessors-ininterest. Copies of the tax declarations and real property
historical ownership pertaining thereto were presented in
court. A perusal of the records shows that in 1948, a portion
of the subject land was declared under the name of Agapito
Claudel. Subsequently, in 1957 until 1991 the same was
declared under the name of Francisca Oco. Thereafter, the

same was declared under the name of ESRDC. A certification


was likewise issued by the Provincial Assessor of Misamis
Oriental that previous tax declarations pertaining to the said
portion under the name of Agapita Claudel could no longer
be located as the files were deemed lost or destroyed before
World War II.
On the other hand, the remaining portion of the said land
was previously declared in 1948 under the name of Jacinto
Tan Lay Cho. Subsequently, in 1969 until 1990, the same was
declared under the
409
VOL.666,FEBRUARY20,2012
409
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
name of Jacinto Tan. Thereafter, the same was declared
under the name of ESRDC. A certification was likewise
issued by the Provincial Assessor that the files of previous
tax declarations under the name of Jacinto Tan Lay Cho were
deemed lost or destroyed again before World War II.
In 1991 or upon ESRDCs acquisition of the subject
property, the latter took possession thereto. Albeit it has
presently leased the said land to Asia Brewery, Inc., where
the latter built its brewery plant, nonetheless, ESRDC has its
branch office located at the plant compound of Asia Brewery,
Inc.
Corollarily, oppositor-appellants contentions that the
court a quo erred in considering the tax declarations as
evidence of ESRDCs possession of the subject land as the
latters
predecessors-in-interest
declared
the
same
sporadically, is untenable.
It is a settled rule that albeit tax declarations and realty
tax payment of property are not conclusive evidence of

ownership, nevertheless, they are good indicia of the


possession in the concept of owner for no one in his right
mind would be paying taxes for a property that is not in his
actual or at least constructive possession. They constitute at
least proof that the holder has a claim of title over the
property. The voluntary declaration of a piece of property for
taxation purposes manifests not only ones sincere and honest
desire to obtain title to the property and announces his
adverse claim against the State and all other interested
parties, but also the intention to contribute needed revenues
to the Government. Such an act strengthens ones bona
fide claim of acquisition of ownership.
Finally, it bears stressing that the pieces of evidence
submitted by petitioner-appellee are incontrovertible. Not
one, not even oppositor-appellant Republic, presented any
countervailing evidence to contradict the claims of the
petitioners that they are in possession of the subject property
and their possession of the same is open, continuous and
exclusive in the concept of an owner for over 30 years.
Verily, from 1948 when the subject land was declared for
taxation purposes until ESRDC filed an application for land
registration in 1995, ESRDC have been in possession over the
subject land in the concept of an owner tacking its possession
to that its predecessors-in-interest for forty seven (47) years
already. Thus, ESRDC was able to prove sufficiently that it
has been in possession of the subject property for more than
30 years, which possession is characterized
410
410
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation

as open, continuous, exclusive, and notorious in the concept of


an owner.7 (citations omitted)
The petitioner assails the foregoing, alleging that the
respondent failed to prove that its predecessors-in-interest
possessed the subject property in the manner and for the
length of time required under Section 48 (b) of
Commonwealth Act No. 141, otherwise known as the Public
Land Act (PLA), and Section 14 of Presidential Decree No.
1529, otherwise known as the Property Registration Decree
(P.D. No. 1529). According to the petitioner, the respondent
did not present a credible and competent witness to testify on
the specific acts of ownership performed by its predecessorsin-interest on the subject property. The respondents sole
witness, Vicente Oco, can hardly be considered a credible and
competent witness as he is the respondents liaison officer
and he is not related in any way to the respondents
predecessors-in-interest. That coconut trees were planted on
the subject property only shows casual or occasional
cultivation and does not qualify as possession under a claim
of ownership.
Issue
This Court is confronted with the sole issue of whether the
respondent has proven itself entitled to the benefits of the
PLA and P.D. No. 1529 on confirmation of imperfect or
incomplete titles.
Our Ruling
This Court resolves to GRANT the petition.

Preliminarily, with respect to the infirmity suffered by this


petition from the standpoint of Rule 45, this Court agrees
with the respondent that the issue of whether the respondent
had presented sufficient proof of the required possession un_______________
7 Rollo, pp. 48-54.
411
VOL.666,FEBRUARY20,2012
411
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
der a bona fide claim of ownership raises a question of fact,
considering that it invites an evaluation of the evidentiary
record.8 However, that a petition for review should be
confined to questions of law and that this Court is not a trier
of facts and bound by the factual findings of the CA are not
without exceptions. Among these exceptions, which obtain in
this case, are: (a) when the judgment of the CA is based on a
misapprehension of facts or (b) when its findings are not
sustained by the evidence on record.
This Courts review of the records of this case reveals that
the evidence submitted by the respondent fell short of
proving that it has acquired an imperfect title over the
subject property under Section 48 (b) of the PLA. The
respondent cannot register the subject property in its name
on the basis of either Section 14 (1) or Section 14 (2) of P.D.
No. 1529. It was not established by the required quantum of
evidence that the respondent and its predecessors-in-interest
had been in open, continuous, exclusive and notorious
possession of the subject property for the prescribed statutory
period.
The PLA governs the classification and disposition of
lands of the public domain. Under Section 11 thereof, one of

the modes of disposing public lands suitable for agricultural


purposes is by confirmation of imperfect or incomplete
titles.9 On the other hand, Section 48 provides the grant to
the qualified possessor of an alienable and disposable public
land. Thus:
_______________
8 Republic of the Philippines v. Manna Properties, Inc.,
490 Phil. 654, 665; 450 SCRA 247, 258 (2005).
9 Sec.11.Public lands suitable for agricultural purposes
can be disposed of only as follows, and not otherwise:
(1)For homestead settlement;
(2)By sale;
(3)By lease;
(4)By confirmation of imperfect or incomplete
titles;
(a)By judicial legalization;
(b)By administrative legalization (free
patent).
412
412
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
SEC.48.The
following-described
citizens
of
the
Philippines, occupying lands of the public domain or claiming
to own any such lands or an interest therein, but whose titles
have not been perfected or completed, may apply to the Court
of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate
of title therefor, under the Land Registration Act, to wit:
(a)Those who prior to the transfer of sovereignty from
Spain to the United States have applied for the purchase,
composition or other form of grant of lands of the public

domain under the laws and royal decrees then in force and
have instituted and prosecuted the proceedings in connection
therewith, but have with or without default upon their part,
or for any other cause, not received title therefor, if such
applicants or grantees and their heirs have occupied and
cultivated said lands continuously since the filing of their
applications.
(b)Those who by themselves or through their
predecessors in interest have been in open, continuous,
exclusive, and notorious possession and occupation of
agricultural lands of the public domain, under a bona fide
claim of acquisition or ownership, for at least thirty years
immediately preceding the filing of the application for
confirmation of title except when prevented by war or force
majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant
and shall be entitled to a certificate of title under the
provisions of this chapter.
(c)Members of the national cultural minorities who by
themselves or through their predecessors-in-interest have
been in open, continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to
agriculture, whether disposable or not, under a bona fide
claim of ownership for at least 30 years shall be entitled to
the rights granted in sub-section (b) hereof.
Presidential Decree No. 1073 (P.D. No. 1073), which was
issued on January 25, 1977, deleted subsection (a) and
amended subsection (b) as follows:
SECTION4.The provisions of Section 48 (b) and Section
48 (c), Chapter VIII of the Public Land Act are hereby

amended in the sense that these provisions shall apply only


to alienable and disposable lands of the public domain which
have been in open, continuous,
413
VOL.666,FEBRUARY20,2012
413
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
exclusive and notorious possession and occupation by the
applicant thru himself or thru his predecessor-in-interest
under a bona fide claim of ownership since June 12, 1945.
Notably, the first PLA, or Act No. 926, required a
possession and occupation for a period of ten (10) years prior
to the effectivity of Act No. 2096 on July 26, 1904 or on July
26, 1894. This was adopted in the PLA until it was amended
by Republic Act No. 1942 on June 22, 1957, which provided
for a period of thirty (30) years. It was only with the
enactment of P.D. No. 1073 on January 25, 1977 that it was
required that possession and occupation should commence on
June 12, 1945.
P.D. No. 1529, which was enacted on June 11, 1978,
codified all the laws relative to the registration of property.
Section 14 thereof partially provides:
Section14.Who may apply.The following persons
may file in the proper Court of First Instance an application
for registration of title to land, whether personally or through
their duly authorized representatives:
(1)Those who by themselves or through their
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of
alienable and disposable lands of the public domain under a
bona fide claim of ownership since June 12, 1945, or earlier.

(2)Those who have acquired ownership of private lands


by prescription under the provision of existing laws.
(3) Those who have acquired ownership of private lands
or abandoned river beds by right of accession or accretion
under the existing laws.
(4)Those who have acquired ownership of land in any
other manner provided for by law.
Section 14 (1) and Section 14 (2) are clearly different.
Section 14 (1) covers alienable and disposable land while
Section 14 (2) covers private property. As this Court
categorically stated in Heirs of Malabanan v. Republic of the
Philip414
414
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
pines,10 the distinction between the two provisions lies with
the inapplicability of prescription to alienable and disposable
lands. Specifically:
At the same time, Section 14 (2) puts into operation the
entire regime of prescription under the Civil Code, a fact
which does not hold true with respect to Section 14 (1). 11
roperty is either part of the public domain or privately
owned.12 Under Article 420 of the Civil Code, the following
properties are of public dominion:
(a)Those intended for public use, such as roads, canals,
rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads and others of similar character;
(b)Those which belong to the State, without being for
public use, and are intended for some public service or for the
development of the national wealth.

All other properties of the State, which is not of the


character mentioned in Article 420 is patrimonial
property,13 hence, susceptible to acquisitive prescription.14
In Heirs of Malabanan, this Court ruled that possession
and occupation of an alienable and disposable public land for
the periods provided under the Civil Code do not
automatically convert said property into private property or
release it from the public domain. There must be an express
declaration that the property is no longer intended for public
service or development of national wealth. Without such
express declaration, the property, even if classified as
alienable or disposable, remains property of the State, and
thus, may not be acquired by prescription.
_______________
10 G.R. No. 179987, April 29, 2009, 587 SCRA 172.
11 Id., at p. 201.
12 Article 419, Civil Code.
13 Article 421, Civil Code.
14 Supra note 10, at p. 202.
415
VOL.666,FEBRUARY20,2012
415
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
Nonetheless, Article 422 of the Civil Code states that
[p]roperty of public dominion, when no longer intended for
public use or for public service, shall form part of the
patrimonial property of the State. It is this provision that
controls how public dominion property may be converted into
patrimonial property susceptible to acquisition by
prescription. After all, Article 420 (2) makes clear that those
property which belong to the State, without being for public
use, and are intended for some public service or for the

development of the national wealth are public dominion


property. For as long as the property belongs to the
State, although already classified as alienable or
disposable, it remains property of the public dominion
if when it is intended for some public service or for

the development of the national wealth. (emphasis


supplied)
Accordingly, there must be an express declaration

by the State that the public dominion property is no

longer intended for public service or the development


of the national wealth or that the property has been

converted into patrimonial. Without such express


declaration,

the

property,

even

if

classified

as

alienable or disposable, remains property of the public


dominion,

pursuant

to

Article

420(2),

and

thus

incapable of acquisition by prescription. It is only


when

such

alienable

and

disposable

lands

are

expressly declared by the State to be no longer


intended for public service or for the development of

the national wealth that the period of acquisitive


prescription can begin to run. Such declaration shall
be in the form of a law duly enacted by Congress or a
Presidential

Proclamation

in

cases

where

the

President is duly authorized by law.

15

In other words, for one to invoke the provisions of Section


14 (2) and set up acquisitive prescription against the State, it
is primordial that the status of the property as patrimonial
be first established. Furthermore, the period of possession
preceding the classification of the property as patrimonial

cannot be considered in determining the completion of the


prescriptive period.
_______________
15 Id., at p. 203.
416
416
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
To prove that its predecessors-in-interest were in
possession of the subject property on or prior to June 12,
1945 or had completed the prescriptive period of thirty (30)
years, the respondent submitted the following tax
declarations:
a)Tax Declaration in the name of Agapita Claudel
for the year 1948;
b)Tax Declarations in the name of Francisca Oco
for the years 1957, 1963, 1969, 1973, 1974, 1980, 1987,
1989 and 1991;
c)Tax Declarations in the respondents name for
the years 1991, 1992 and 1994;
d)Tax Declarations in the name of Jacinto Tan Lay
Cho for the years 1948 and 1952;
e)Tax Declarations in the name of Jacinto Tan for
the years 1969, 1973, 1974, 1980, 1989 and 1990; and
f)Tax Declarations in the respondents name for
the years 1991, 1992 and 1994.
Pursuant to Agapita Claudels 1948 Tax Declaration, there
were nineteen (19) coconut and ten (10) banana trees planted
on Area A. The coconut trees were supposedly four years old,
hence, the reasonable presumption that she had been in
possession even before June 12, 1945.16

The respondent also offered the following testimony of


Vicente Oco:
Q Mr. Witness, If you know about what period your
predecessor has started to possess this land subject matter of
this application?
A Per my personal knowledge, it was before the second
world war but the Municipality of El Salvador was created on
June 15, 1948 by virtue of RA 268 and its started to officially
function only on August 2, 1948[.]
_______________
16 Rollo, p. 102.
417
VOL.666,FEBRUARY20,2012
417
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
Q From whom did you acquire this information?
A From the seller and the adjoining lot owners.17
To prove that its predecessors-in-interest exercised acts of
dominion over the subject property, the respondent claimed
that per Francisca Ocos Tax Declarations, the following
improvements were introduced in Area A: nineteen (19)
coconut and ten (10) banana trees in Area A in 1957 and
1963; thirty-three (33) coconut trees in 1969 and 1973; thirtythree (33) coconut trees, one (1) mango tree and three (3)
seguidillas vines in 1974; thirty-three (33) coconut trees in
1980; eighty-seven (87) coconut trees in 1987; and fifteen (15)
coconut trees in 1989. Per Jacinto Tans Tax Declarations,
there were fifty-seven (57) coconut trees in Area B in 1973,
1974, 1980, 1989 and 1990.18
A reading of the CAs July 31, 2008 Decision shows that it
affirmed the grant of the respondents application given its
supposed compliance with Section 14 (2) of P.D. No. 1529. It

ruled that based on the evidence submitted, the respondent


is not qualified to register the subject property in its name
under Section 14 (1) as the possession and occupation of its
predecessors-in-interest commenced after June 12, 1945.
Nonetheless, as the CA ruled, the respondent acquired title to
the subject property by prescription as its predecessors-ininterest had possessed the subject property for more than
thirty (30) years. CitingBuenaventura v. Republic of the
Philippines,19 the CA held that even if possession commenced
after June 12, 1945, registration is still possible under
Section 14 (2) and possession in the concept of an owner
effectively converts an alienable and disposable public land
into private property.
This Court, however, disagrees on the conclusion arrived
at by the CA. On the premise that the application for
registra_______________
17 Id., at pp. 102-103.
18 Id., at pp. 99-101.
19 G.R. No. 166865, March 2, 2007, 517 SCRA 271.
418
418
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
tion, which was filed in 1995, is based on Section 14 (2), it
was not proven that the respondent and its predecessors-ininterest had been in possession of the subject property in the
manner prescribed by law and for the period necessary before
acquisitive prescription may apply.
While the subject land was supposedly declared alienable
and disposable on December 31, 1925 per the April 18, 1997
Certification and July 1, 1997 Report of the Community

Environment and Natural Resources Office (CENRO),20 the


Department of Agrarian Reform (DAR) converted the same
from agricultural to industrial only on October 16,
1990.21 Also, it was only in 2000 that the Municipality of El
Salvador passed a Zoning Ordinance, including the subject
property in the industrial zone.22Therefore, it was only in
1990 that the subject property had been declared patrimonial
and it is only then that the prescriptive period began to run.
The respondent cannot benefit from the alleged possession of
its predecessors-in-interest because prior to the withdrawal
of the subject property from the public domain, it may not be
acquired by prescription.
On the premise that the application of the respondent is
predicated on Section 14 (1), the same would likewise not
prosper. As shown by the tax declarations of the respondents
predecessors-in-interest, the earliest that the respondent can
trace back the possession of its predecessors-in-interest is in
1948. That there were four-year old coconut trees in Area A
as stated in Agapita Claudels 1948 Tax Declaration cannot
be considered a well-nigh controvertible evidence that she
was in possession prior to June 12, 1945 without any
evidence that she planted and cultivated them. In the case of
Jacinto Tan Lay Cho, the earliest tax declaration in his name
is dated 1948 and there is no evidence that he occupied and
possessed
_______________
20 Rollo, p. 142.
21 Id., at pp. 84, 133.
22 Id., at pp. 89-90, 138-140.
419

VOL.666,FEBRUARY20,2012
419
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
Area B on or prior to June 12, 1945. Furthermore, the
testimony of the respondents lone witness that the
respondents predecessors-in-interest were already in
possession of the subject property as of June 12, 1945 lacks
probative value for being hearsay.
It is explicit under Section 14 (1) that the possession and
occupation required to acquire an imperfect title over an
alienable and disposable public land must be open,
continuous, exclusive and notorious in character. InRepublic
of the Philippines v. Alconaba,23 this Court explained that the
intent behind the use of possession in conjunction with
occupation is to emphasize the need for actual and not just
constructive or fictional possession.
The law speaks of possession and occupation. Since these
words are separated by the conjunction and, the clear
intention of the law is not to make one synonymous with the
other. Possession is broader than occupation because it
includes constructive possession. When, therefore, the law
adds the word occupation, it seeks to delimit the all
encompassing effect of constructive possession. Taken
together with the words open, continuous, exclusive and
notorious, the word occupation serves to highlight the fact
that for an applicant to qualify, his possession must not be a
mere fiction. Actual possession of a land consists in the
manifestation of acts of dominion over it of such a nature as a
party
would
naturally
exercise
over
his
own
24
property. (citations omitted)

On the other hand, Section 14 (2) is silent as to the


required nature of possession and occupation, thus, requiring
a reference to the relevant provisions of the Civil Code on
prescription. And under Article 1118 thereof, possession for
purposes of prescription must be in the concept of an owner,
public, peaceful and uninterrupted. In Heirs of Marcelina
_______________
23 471 Phil. 607; 427 SCRA 611 (2004).
24 Id., at p. 620; pp. 619-620.
420
420
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
Arzadon-Crisologo v. Raon,25 this Court expounded on the
nature of possession required for purposes of prescription:
It is concerned with lapse of time in the manner and under
conditions laid down by law, namely, that the possession
should be in the concept of an owner, public, peaceful,
uninterrupted and adverse. Possession is open when it is
patent, visible, apparent, notorious and not clandestine. It is
continuous when uninterrupted, unbroken and not
intermittent or occasional; exclusive when the adverse
possessor can show exclusive dominion over the land and an
appropriation of it to his own use and benefit; and notorious
when it is so conspicuous that it is generally known and
talked of by the public or the people in the neighborhood. The
party who asserts ownership by adverse possession must
prove the presence of the essential elements of acquisitive
prescription.26 (citations omitted)
This Court is not satisfied with the evidence presented by
the respondent to prove compliance with the possession
required either under Section 14 (1) or Section 14 (2).

First, the twelve (12) Tax Declarations covering Area A


and the eleven (11) Tax Declarations covering Area B for a
claimed possession of more than forty-six (46) years (19481994) do not qualify as competent evidence of actual
possession and occupation. As this Court ruled in Wee v.
Republic of the Philippines:27
It bears stressing that petitioner presented only five tax
declarations (for the years 1957, 1961, 1967, 1980 and 1985)
for a claimed possession and occupation of more than 45
years (1945-1993). This type of intermittent and
sporadic assertion of alleged ownership does not prove

open, continuous, exclusive and notorious possession


and occupation. In any event, in the absence of other
competent evidence, tax declarations do not conclusively
estab_______________
25 G.R. No. 171068, September 5, 2007, 532 SCRA 391.
26 Id., at p. 404.
27 G.R. No. 177384, December 8, 2009, 608 SCRA 72.
421
VOL.666,FEBRUARY20,2012
421
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
lish either possession or declarants right to registration of
title.28(emphasis supplied and citation omitted)
The phrase adverse, continuous, open, public, and in
concept of owner, by which the respondent describes its
possession and that of its predecessors-in-interest is a
conclusion of law. The burden of proof is on the respondent to
prove by clear, positive and convincing evidence that the
alleged possession of its predecessors-in-interest was of the

nature and duration required by law. 29 It is therefore


inconsequential if the petitioner failed to present evidence
that would controvert the allegations of the respondent. A
person who seeks the registration of title to a piece of land on
the basis of possession by himself and his predecessors-ininterest must prove his claim by clear and convincing
evidence, i.e., he must prove his title and should not rely on
the absence or weakness of the evidence of the oppositors.30
The respondents claim of ownership will not prosper on
the basis of the tax declarations alone. In Cequea v.
Bolante,31 this Court ruled that it is only when these tax
declarations are coupled with proof of actual possession of the
property that they may become the basis of a claim of
ownership.32 In the absence of actual public and adverse
possession, the declaration of the land for tax purposes does
not prove ownership.33
Second, that the nineteen (19) coconut trees supposedly
found on Area A were four years old at the time Agapita
Claudel filed a Tax Declaration in 1948 will not suffice as
_______________
28 Id., at p. 83.
29 See The Director, Lands Mgt. Bureau v. Court of
Appeals, 381 Phil. 761, 772; 324 SCRA 757, 767 (2000).
30 Arbias v. Republic of the Philippines, G.R. No. 173808,
September 17, 2008, 565 SCRA 582, 597.
31 386 Phil. 419; 330 SCRA 216 (2000).
32 Id., at p. 430.
33 Id., at p. 431; p. 228.
422
422
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation

evidence that her possession commenced prior to June 12,


1945, in the absence of evidence that she planted and
cultivated them. Alternatively, assuming that Agapita
Claudel planted and maintained these trees, such can only be
considered casual cultivation considering the size of Area A.
On the other hand, that Jacinto Tan Lay Cho possessed Area
B in the concept of an owner on or prior to June 12, 1945
cannot be assumed from his 1948 Tax Declaration.
Third, that plants were on the subject property without
any evidence that it was the respondents predecessors-ininterest who planted them and that actual cultivation or
harvesting was made does not constitute well-nigh
incontrovertible evidence of actual possession and
occupation. As this Court ruled in Wee:
We are, therefore, constrained to conclude that the mere
existence of an unspecified number of coffee plants, sans any
evidence as to who planted them, when they were planted,
whether cultivation or harvesting was made or what other
acts of occupation and ownership were undertaken, is not
sufficient to demonstrate petitioners right to the registration
of title in her favor.34
Fourth, Vicente Ocos testimony deserves scant
consideration and will not supplement the inherent
inadequacy of the tax declarations. Apart from being selfserving, it is undoubtedly hearsay. Vicente Oco lacks personal
knowledge as to when the predecessors-in-interest of the
respondent started to occupy the subject property and
admitted that his testimony was based on what he allegedly
gathered from the respondents predecessors-in-interest and
the owners of adjoining lot. Moreover, Vicente Oco did not

testify as to what specific acts of dominion or ownership were


performed by the respondents predecessors-in-interest and if
indeed they did. He merely made a general claim that they
came into possession before World War II, which is a mere
conclusion of law and
_______________
34 Supra note 27, at p. 84.
423
VOL.666,FEBRUARY20,2012
423
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
not factual proof of possession, and therefore unavailing and
cannot suffice.35 Evidence of this nature should have been
received with suspicion, if not dismissed as tenuous and
unreliable.
Finally, that the respondents application was filed after
only four years from the time the subject property may be
considered patrimonial by reason of the DARs October 26,
1990 Order shows lack of possession whether for ordinary or
extraordinary prescriptive period. The principle enunciated
in Heirs of Malabanan cited above was reiterated and applied
in Republic of the Philippines v. Rizalvo:36
On this basis, respondent would have been eligible for
application for registration because his claim of ownership
and possession over the subject property even exceeds thirty
(30) years. However, it is jurisprudentially clear that the
thirty (30)-year period of prescription for purposes of
acquiring ownership and registration of public land under
Section 14 (2) of P.D. No. 1529 only begins from the moment
the State expressly declares that the public dominion
property is no longer intended for public service or the

development of the national wealth or that the property has


been converted into patrimonial.37
WHEREFORE, premises considered, the instant petition
is GRANTED. The July 31, 2008 Decision and February 20,
2009 Resolution of the Court of Appeals in CA-G.R. CV No.
00143 are REVERSED and SET ASIDE and the respondents
application for registration of title over Lot 9039 of Cagayan
Cadastre is hereby DENIED for lack of merit.
SO ORDERED.
Carpio, Villarama, Jr.,** Perez and Sereno, JJ., concur.
_______________
35 Supra note 29, at p. 770; p. 765.
36 G.R. No. 172011, March 7, 2011, 644 SCRA 516.
37 Id.
424
424
SUPREMECOURTREPORTSANNOTATED
Republicvs.EastSilverlaneRealtyDevelopmentCorporation
Petition granted, judgment and resolution reversed and set
aside.
Notes.Under ordinary acquisitive prescription, a person
acquires ownership of a patrimonial property through
possession for at least ten (10) years, in good faith and with
just title. Under extraordinary acquisitive prescription, a
persons uninterrupted adverse possession of patrimonial
property for at least thirty (30) years, regardless of good faith
or just title, ripens into ownership. (Republic vs. Ching, 634
SCRA 415 [2010])
An applicant for judicial confirmation of imperfect title
must prove compliance with Section 14 of Presidential Decree
No. 1529 or the Property Registration Decree. (Republic vs.
Rizalvo, Jr., 644 SCRA 516 [2011])

o0o
_______________
** Additional Member in lieu of Associate Justice Arturo
D. Brion per Special Order No. 1195 dated February 15,
2012.
Copyright 2015 Central Book Supply, Inc. All rights reserved.

G.R. No. 161380.April 21, 2014.*


AZNAR
BROTHERS
REALTY
COMPANY,
petitioner, vs.SPOUSES JOSE and MAGDALENA YBAEZ,
respondents.
Remedial Law; Civil Procedure; Pre-Trial; The parties
had the obligation to disclose during the pre-trial all the
issues they intended to raise during the trial, except those
involving privileged or impeaching matters, for the rule is that
the definition of issues during the pre-trial conference will bar
the consideration of others, whether during trial or on
appeals.The holding by both lower courts was proper and
correct. The noninclusion in the pre-trial order barred the
identity of the property in litis as an issue, for it is basic that
any factual
_______________
* FIRST DIVISION.
1
2
2
SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
issue not included in the pre-trial order will not be heard and
considered at the trial, much less, on appeal. The parties had

the obligation to disclose during the pre-trial all the issues


they intended to raise during the trial, except those involving
privileged or impeaching matters, for the rule is that the
definition of issues during the pre-trial conference will bar
the consideration of others, whether during trial or on
appeal. The basis of the exclusion is that the parties are
concluded by the delimitation of the issues in the pre-trial
order because they themselves agreed to it.
Same; Same; Courts; Supreme Court; Jurisdiction; The
Supreme Court is not a trier of facts; Exceptions.For the
Spouses Ybaez to call upon the Court now to analyze or
weigh evidence all over again upon such a factual matter
would be impermissible considering that the Court is not a
trier of facts. There are exceptional instances in which the
Court has held itself competent to make its own appreciation
of the facts, and not be concluded by the findings of fact of the
trial and appellate courts, namely: (1) when the factual
findings of the CA and those of the trial court were
contradictory; (2) when the findings are grounded entirely on
speculation, surmises, or conjectures; (3) when the inference
made by the CA from its findings of fact was manifestly
mistaken, absurd, or impossible; (4) when there is grave
abuse of discretion in the appreciation of facts; (5) when the
CA, in making its findings, went beyond the issues of the
case, and such findings were contrary to the admissions of
both appellant and appellee; (6) when the judgment of the CA
was premised on a misapprehension of facts; (7) when the CA
failed to notice certain relevant facts that, if properly
considered, would justify a different conclusion; (8) when the
findings of facts were themselves conflicting; (9) when the

findings of fact were conclusions without citation of the


specific evidence on which they were based; and (10) when
the findings of fact of the CA were premised on the absence of
evidence but such findings were contradicted by the evidence
on record.
Civil Law; Land Registration; Although a deed or
instrument affecting unregistered lands would be valid only
between the parties thereto, third parties would also be
affected by the registered deed or instrument on the theory of
constructive notice once it was further registered.Although a
deed or instrument affecting unregistered lands would be
valid only between the parties thereto, third parties
3
VOL.722,APRIL21,2014
AznarBrothersRealtyCompanyvs.Ybaez
would also be affected by the registered deed or
instrument on the theory of constructive notice once it was
further registered in accordance with Section 194, i.e., the
deed or instrument was written or inscribed in the day book
and the register book for unregistered lands in the Office of
the Register of Deeds for the province or city where the realty
was located. As ruled inGutierrez v. Mendoza-Plaza, 607
SCRA 807 (2009): The non-registration of the aforesaid deed
does not also affect the validity thereof. Registration is not a
requirement for validity of the contract as between the
parties, for the effect of registration serves chiefly to bind
third persons. The principal purpose of registration is

merely to notify other persons not parties to a


contract that a transaction involving the property has

been entered into. The conveyance of unregistered land

shall not be valid against any person unless registered, except


(1) the grantor, (2) his heirs and devisees, and (3) third
persons having actual notice or knowledge thereof. As held by
the Court of Appeals, petitioners are the heirs of Ignacio, the
grantor of the subject property. Thus, they are bound by the
provisions of the deed of donation inter vivos.
Same; Same; Even with the effectivity of Presidential
Decree (P.D.) No. 1529, all unregistered lands may still be
registered pursuant to Section 113 of P.D. No. 1529, which
essentially replicates Section 194, as amended by Act No.
3344, to the effect that a deed or instrument conveying real
estate not registered under the Torrens system should affect
only the parties thereto unless the deed or instrument was
registered in accordance with the same section.Section 3 of
P.D. No. 1529, albeit expressly discontinuing the system of
registration under the Spanish Mortgage Law, has
considered lands recorded under that system as unregistered
land that could still be recorded under Section 113 of P.D. No.
1529 until the land shall have been brought under the
operation of the Torrens system; and has provided that
[t]he books of registration for unregistered lands provided
under Section 194 of the Revised Administrative Code, as
amended by Act No. 3344, shall continue to remain in force;
provided, that all instruments dealing with unregistered
lands shall henceforth be registered under Section 113 of this
Decree. It is clear, therefore, that even with the effectivity of
P.D. No. 1529, all unregistered lands may still be registered
pursuant to Section 113 of P.D. No. 1529, which essentially
replicates Section 194, as amended by Act No. 3344, to the
effect that a deed or instrument conveying

4
4

SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
real estate not registered under the Torrens system should
affect only the parties thereto unless the deed or instrument
was registered in accordance with the same section.
Same; Same; Constructive Notice; The only exception to
the rule on constructive notice by registration of the deed or
instrument affecting unregistered realty exists in favor of a
third party with a better right.The only exception to the
rule on constructive notice by registration of the deed or
instrument affecting unregistered realty exists in favor of a
third party with a better right. This exception is provided in
Section 194, as amended by Act No. 3344, to the effect that
the registration shall be understood to be without prejudice
to a third party with a better right; and in paragraph (b) of
Section 113 of P.D. No. 1529, to the effect that any recording
made under this section shall be without prejudice to a third
party with a better right. As to who is a third party with
better right under these provisions is suitably explained
in Hanopol v. Pilapil, 7 SCRA 452 (1963), a case where the
sale of unregistered land was registered under Act No. 3344
but the land was sold twice, as follows: It thus appears that
the better right referred to in Act No. 3344 is much more
than the mere prior deed of sale in favor of the first vendee.
In

the

Lichauco

case

just

mentioned, it

was

the

prescriptive right that had supervened. Or, as also


suggested in that case, other facts and circumstances
exist which, in addition to his deed of sale, the first

vendee can be said to have better right than the


second purchaser.
Same; Same; Laches; Words and Phrases; Laches is the
failure or neglect for an unreasonable and unexplained length
of time to do that which by exerting due diligence a party
could and should have done earlier.Laches is the failure or
neglect for an unreasonable and unexplained length of time
to do that which by exerting due diligence a party could and
should have done earlier. A suit that is barred on the ground
of laches is also called a stale demand. Laches is based on
grounds of public policy that requires, for the peace of society,
the discouragement of stale claims and, unlike the statute of
limitations, is not a mere question of time but is principally a
question of the inequity or unfairness of permitting a right or
claim to be enforced or asserted. Tempus enim modus
tollendi obligationes et actiones, quia tempus currit contra
desides et sui juris contemptores (For time is a means of
dissipating obligations and actions, because
5
VOL.722,APRIL21,2014
AznarBrothersRealtyCompanyvs.Ybaez
time runs against the slothful and careless of their own
rights).Truly, the law serves those who are vigilant and
diligent, not those who sleep when the law requires them to
act.
Same; Same; Elements of Laches.For laches to bar a
claim, four elements must be shown, namely: (1) conduct on
the part of the defendant, or one under whom he claims,
giving rise to a situation of which a complaint is made and for
which the complainant seeks a remedy; (2) delay in asserting
the complainants right, the complainant having had

knowledge or notice of defendants conduct and having been


afforded an opportunity to institute a suit; (3) lack of
knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his
suit; and (4) injury or prejudice to the defendant in the event
that the relief is accorded to the complainant, or the suit is
not held to be barred.
Same; Land Registration; An action to declare the nullity
of a void title does not prescribe and is susceptible to direct, as
well as to collateral, attack.The principle of indefeasibility
of the Torrens title does not protect OCT No. 2150 because
the free patent on which the issuance of the title was based
was null and void. A direct attack as well as a collateral
attack are proper, for, as the Court declared in De Guzman v.
Agbagala, 546 SCRA 278 (2008): x x x. An action to declare
the nullity of a void title does not prescribe and is susceptible
to direct, as well as to collateral, attack. OCT No. P-30187
was registered on the basis of a free patent which the RTC
ruled was issued by the Director of Lands without authority.
The petitioners falsely claimed that the land was public land
when in fact it was not as it was private land previously
owned by Carmen who inherited it from her parents.
PETITION for review on certiorari of a decision of the Court
of Appeals.
The facts are stated in the opinion of the Court.
Ricar N. Vasquez for petitioner.
Palma, Pangan & Ybaez for respondents.
6
6 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez

BERSAMIN,J.:
The ownership of a sizable parcel of land is the subject of
this dispute between the buyer of its recognized owner and
the buyer of the successors-in-interest of the recognized
owner. The land has since been registered under the Torrens
system in the name of the latter buyer who had meanwhile
obtained a free patent on the premise that the land belonged
to the public domain.
The Case
Aznar Brothers Realty Company (Aznar Brothers) is on
appeal to review and undo the adverse decision promulgated
on October 10, 2002,[1] whereby the Court of Appeals (CA)
affirmed the judgment rendered on March 8, 1996 by the
Regional Trial Court (RTC), Branch 10, in Cebu
City[2] insofar as the RTC: (a) dismissed for lack of merit
Aznar Brothers complaint for the declaration of the nullity of
the extrajudicial declaration of heirs with extrajudicial
settlement of estate and deed of absolute sale, and (b)
declared Lot No. 18563 as legally owned by defendants
Spouses Jose and Magdalena Ybaez (Spouses Ybaez), but
modified the decision of the RTC by deleting the awards of
moral and exemplary damages, attorneys fees, litigation
expenses and costs of suit.
Antecedents
On March 21, 1964, Casimiro Ybaez (Casimiro), with the
marital consent of Maria Daclan, executed a Deed of Absolute
Sale in favor of Aznar Brothers conveying for P2,500.00 the
17,575-square-meter unregistered agricultural land planted
_______________

[1] Rollo, pp. 28-36; penned by Associate Justice Hilarion


L. Aquino (retired) and concurred in by Associate Justice
Reyes (now a Member of the Court) and Associate Justice
Mario L. Guaria III (retired).
[2] Id., at pp. 24-27; penned by Judge Leonardo B.
Caares.
7
VOL.722,APRIL21,2014
7
AznarBrothersRealtyCompanyvs.Ybaez
with 17 coconut trees situated in Banika-Bulacao, Pardo,
Cebu City, and covered by Tax Declaration No. IV-00128.
[3]The Deed of Absolute Sale described the property as
bounded on the North by Aznar Brothers; on the East by
Angel Sabellano; on the South by Bernardo Sabellano; and on
the West by Agaton Bacalso. The parties agreed to register
the sale under Act No. 3344.[4]
On February 17, 1967, Saturnino Tanuco sold to Aznar
Brothers for P2,528.00 the 15,760-square-meter parcel of corn
and cogon land planted with 17 coconut trees situated in
Candawawan, Pardo, Cebu City, bounded on the North by
Alfonso Pacaa; on the East by Tecla Cabales; on the South by
Angel Abellana; and on the West by Castor Sabellano. Tax
Declaration No. IV-004787 was issued for the property. The
parties agreed to register the parcel of land under Act No.
3344.[5]
In his affidavit of confirmation executed on April 11, 1967,
Angel Abellana declared that during the lifetime of his
daughter, Rosa, he had given to her husband, Tanuco, a
parcel of land known as Lot No. 18563 with an area of
15,760 square meters located in Pardo, Cebu City; that the
land was bounded on the North by Alfonso Pacaa; on the

East by Tecla Cabales; on the South by Lot No. 5316 of Angel


Abellana; and on the West by Castor Sabellano; that the
property assessed at P300.00 was declared under Tax
Declaration No. IV-004787; and that on February 17, 1967
Tanuco had sold the parcel of land to Aznar Brothers for
P4,728.00.[6]
_______________
[3] Records, p. 6.
[4] An Act to Amend Section One Hundred and NinetyFour of the Administrative Code, as Amended by Act
Numbered Two Thousand Eight Hundred and Thirty-Seven,
Concerning the Recording of Instruments Relating to Land
Not Registered under Act Numbered Four Hundred NinetySix, entitled The Land Registration Act, and Fixing the Fees
to be Collected by the Register of Deeds for Instruments
Recorded under said Act.
[5] Records, p. 158.
[6] Id., at p. 252; Exh. J.
8
8 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
On July 3, 1968, Casimiro died intestate leaving as heirs
his wife Maria, and their children, namely, Fabian and
Adriano, both surnamed Ybaez, and Carmen YbaezTagimacruz, Fe Ybaez-Alison, and Dulcisima YbaezTagimacruz. On August 29, 1977, the heirs of Casimiro
executed a document entitled Extrajudicial Declaration of
Heirs with an Extrajudicial Settlement of Estate of Deceased
Person and Deed of Absolute Sale, whereby they divided and
adjudicated among themselves Lot No. 18563 with an area of
16,050 square meters situated in Banika, Bulacao, Pardo

Cebu City. By the same document, they sold the entire lot for
P1,000.00 to their co-heir, Adriano D. Ybaez (Adriano).[7]
On June 21, 1978, Adriano sold Lot No. 18563 to Jose R.
Ybaez for P60,000.00. Lot No. 18563 is described in their
deed of sale as containing an area of 16,050 square meters,
and was bounded on the North by the lot of Eusebia Bacalso;
on the East by a lot of Aznar Brothers; on the South by a lot
of Angel Abellana; and on the West by a lot of Teofila C.
Leona.[8]
On January 15, 1979, Jose R. Ybaez filed Free Patent
Application No. (VII-I) 18980 in respect of the land he had
bought from Adriano.[9] In due course, on July 20, 1979,
Original Certificate of Title (OCT) No. 2150 was issued to
Jose R. Ybaez. The 16,050-square-meter land is particularly
described in OCT No. 2150 as
situated in the Barrio of Bulacao-Pardo, City of Cebu
x x x. Bounded on the NorthEast, along lines 1-2-3 by
Lot No. 1811, on the SouthEast, along lines 3-4 by Lot
No. 5316; on the SouthWest, along lines 4-5-6-7-8-9-1011 by Lot No. 18565; on the NorthWest, along line 11-12
by Lot No. 18566; along line 12-1 by Lot No. 18114, all
of Cebu City.[10]
_______________
[7] Id., at pp. 36-37.
[8] Id., at p. 20.
[9] Id., at pp. 43 & 44.
[10] Id., at p. 21.
9
VOL.722,APRIL21,2014
9
AznarBrothersRealtyCompanyvs.Ybaez

On May 26, 1989, Aznar Brothers filed in the RTC a


complaint against Jose R. Ybaez claiming absolute
ownership of Lot No. 18563 by virtue of the Deed of Absolute
Sale dated March 21, 1964 executed in its favor by Casimiro
(Civil Case No. CEB-7887). Alleging that the free patent
issued in favor of Jose R. Ybaez covered the same property
already adjudicated as private property, Aznar Brothers
sought judgment to compel Jose R. Ybaez to surrender all
the documents pertaining to the free patent for cancellation,
and to order him to pay attorneys fees of P5,000.00 and
litigation expenses of P3,000.00.[11]
Jose R. Ybaez moved to dismiss the complaint of Aznar
Brothers on the ground of lack of cause of action, lack of
jurisdiction over the nature of the action, and estoppel by
laches.[12] After Aznar Brothers opposed,[13] the RTC
denied the motion to dismiss.[14] Thereafter, Jose R. Ybaez
filed his answer to the complaint.
In his answer, Jose R. Ybaez reiterated the grounds of
his motion to dismiss (i.e., lack of cause of action, lack of
jurisdiction over the nature of the action, and the bar by
estoppel by laches); and prayed that Aznar Brothers be
ordered to pay moral damages of P100,000.00; exemplary
damages in an amount to be determined by the court;
attorneys fees of P20,000.00; and litigation expenses of
P5,000.00, plus costs of suit.[15]
In its reply, Aznar Brothers averred that Jose R. Ybaez
did not present records or certification as to the ownership of
the land at the time of the application for free patent x x x to
prove that the land x x x is not a private land.[16]
_______________

[11] Id., at pp. 1-3.


[12] Id., at pp. 13-18.
[13] Id., at pp. 27-31.
[14] Id., at p. 56.
[15] Id., at pp. 60-66.
[16] Id., at pp. 74-75.
10
10 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
In the course of the case, Aznar Brothers amended its
complaint to allege the sale executed on February 17, 1967 by
Tanuco and confirmed by Angel Abellana on April 11, 1967.
[17]
In his amended answer, Jose R. Ybaez contended that
Aznar Brothers had offered to buy the property from him,
requesting him to update and prepare all the documents
relevant to the sale, but Aznar Brothers later opted to claim
the property as its own when the sale could not be finalized.
[18]
Aznar Brothers amended its complaint a second time to
implead Jose R. Ybaezs wife Magdalena Marcos-Ybaez as
defendant, averring that both defendants held no legal right
nor just title to apply for free patent over the lot in question,
for the land was no longer a public disposable agricultural
land but a private residential land that it already owned;
that the issuance of OCT No. 2150 was erroneous and
without factual and legal bases; that it learned about the
registration of the land in the name of Jose R. Ybaez only
when his agent offered to sell the land to it; that it refused
the offer because it was already the owner of the land; and

that consequently OCT No. 2150 should be cancelled, and


Jose R. Ybaez should be ousted from the land.[19]
Aznar Brothers sought a restraining order or a writ of
preliminary injunction to prevent the Spouses Ybaez from
disposing of the land. It further sought the declaration as
null and void ab initio the Extrajudicial Declaration of Heirs
with Extrajudicial Settlement of Estate of Deceased Person
and Deed of Absolute Sale dated August 29, 1977, and of
the Deed of Absolute Sale dated June 21, 1978; the
cancellation of OCT No. 2150; an order directing the Register
of Deeds to issue another title in its name; the ouster of the
Spouses Ybaez from the property; the permanent injunction
to prevent Spouses Ybaez from interfering with or
disturbing its pos_______________
[17] Id., at pp. 108-110.
[18] Id., at pp. 116-123.
[19] Id., at pp. 150-155.
11
VOL.722,APRIL21,2014
11
AznarBrothersRealtyCompanyvs.Ybaez
session and ownership of Lot No. 18563; and judgment
ordering the Spouses Ybaez to pay moral damages of
P50,000.00, attorneys fees of P30,000.00, and litigation
expenses of P20,000.00.
The Ybaez Spouses opposed the admission of the second
amended complaint, claiming that the cause of action would
thereby be changed from accion publiciana toaccion
reivindicatoria; that while Magdalena Marcos-Ybaez was
thereby
being
impleaded,
the
heirs
named
in
the Extrajudicial Declaration of Heirs with Extrajudicial

Settlement of Estate of Deceased Person and Deed of Absolute


Sale, specifically Adriano, were not being impleaded; and that
the declaration of nullity of OCT No. 2150 was a prohibited
collateral attack on their title to the property.[20]
The RTC admitted the second amended complaint,
emphasizing that the original cause of action of accion
publiciana would not be changed because the second
amended complaint would incorporate additional but related
causes of action, a change permitted only during the pre-trial
stage.[21]
The Ybaez Spouses then amended their answer by
reiterating the allegations in their previous answers, and, in
addition, pleaded that they had religiously paid the taxes on
the land; that the claim of ownership of Aznar Brothers had
been based only on tax declarations; that their application for
free patent had been granted more than ten years prior to
the filing of the complaint by Aznar Brothers, who were all
too aware of the land registration case; that Aznar Brothers
did not question their title within one year from its issuance;
that a decree of registration being binding on the whole
world, the filing of the complaint ten years after the title had
been issued left the complaint without any cause of action;
that the action for recovery of possession constituted a
collateral attack on their title to the property; and that
adverse, notorious
_______________
[20] Id., at pp. 177-178.
[21] Id., at pp. 179-180.
12
12 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez

and continuous possession of the property under a claim of


ownership was ineffective against a Torrens title. They
sought the dismissal of the second amended complaint for
lack of cause of action, lack of jurisdiction, estoppel by laches,
and lack of proper parties; and prayed for moral damages of
P100,000.00; exemplary damages in such amount as the
court would award in the exercise of discretion; attorneys
fees of P20,000.00; and litigation expenses of P5,000.00 plus
costs of suit.[22]
Judgment of the RTC
On March 8, 1996,[23] the RTC rendered judgment after
trial, declaring that the identity of the land sold to Aznar
Brothers by Casimiro and the land sold by the heirs of
Casimiro to Jose R. Ybaez was not an issue anymore
because it was not raised as an issue during the pre-trial
conference; that the issue remaining for resolution concerned
which of the conflicting claims of ownership that of Aznar
Brothers based on Tax Declaration No. GR-07-049-00694 or
that of the Spouses Ybaez based on OCT No. 2150 should
prevail; that the Spouses Ybaez with their OCT No. 2150
should prevail, rendering Aznar Brothers complaint
dismissible for lack of merit; that Lot No. 18563 was legally
owned by the defendants; and Aznar Brothers was liable to
pay the Spouses Ybaez moral damages of P100,000.00,
exemplary damages of P50,000.00, attorneys fees of
P20,000.00, and litigation expenses of P5,000.00, plus costs of
suit.
Decision of the CA
Aznar Brothers appealed to the CA, assailing the
judgment of the RTC for not sustaining the sale by Casimiro

in its favor of Lot No. 18563 despite the sale being registered
under Act No. 3344, as amended; and for awarding moral
damages,
_______________
[22] Id., at pp. 184-191.
[23] Supra note 2.
13
VOL.722,APRIL21,2014
13
AznarBrothersRealtyCompanyvs.Ybaez
exemplary damages, attorneys fees and litigation expenses to
the Spouses Ybaez.
As earlier mentioned, the CA promulgated its adverse
decision on October 10, 2002,[24] decreeing thusly:
WHEREFORE,

premises

considered,

the

Court AFFIRMS the appealed judgment but DELETES the


award of attorneys fees, litigation expenses, costs of the suit,
moral and exemplary damages.
SO ORDERED.
The CA denied the motion for reconsideration of Aznar
Brothers.
Issues
Only Aznar Brothers has come to the Court for review,
raising the following issues for consideration and resolution,
to wit:
1.

THE CONCLUSION OF THE HONORABLE COURT


OF APPEALS THAT PETITIONER IS BARRED BY
ESTOPPEL BY LACHES, IS NOT IN ACCORD WITH
LAW AND/OR WITH APPLICABLE DECISIONS OF THE

SUPREME COURT THEREBY COMMITTING A


REVERSIBLE ERROR OF LAW WHICH IS GRAVELY
PREJUDICIAL TO THE RIGHT OF THE PETITIONER
OVER THE SUBJECT LOT NO. 18563. SAID
CONCLUSION IS NOT SUPPORTED BY FACTS ON
RECORDS (sic).
2.
THE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE DECISION OF THE REGIONAL
TRIAL COURT DECLARING SUBJECT LOT AS
LEGALLY OWNED BY THE RESPONDENTS DESPITE
OF ITS OWN FINDING THAT: RESPONDENTS WERE
BUYERS IN BAD FAITH
_______________
[24] Supra note 1.
14
14 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
AND THAT THEIR SELLERS WERE NOT OWNERS OF
THE PROPERTY IN QUESTION AND THEREFORE,
THERE WAS NOTHING THAT THEY COULD HAVE
SOLD TO THE RESPONDENTS.[25]
Ruling of the Court
The appeal is meritorious.
1.
Identity

of

the

lot in

litis is

no

longer a proper issue herein


The CA and the RTC both held that the identity of the
property in litis was no longer an issue to be considered and
determined because the parties did not raise it at the pre-

trial. The Spouses Ybaez insist herein, however, that the


RTC and the CA should have made such a finding
nonetheless in view of the materiality of whether the land
claimed by Aznar Brothers was different from Lot No. 18563,
the land subject of their OCT No. 2150.
We clarify that although the Spouses Ybaezs non-appeal
barred them from assigning errors for purposes of this
review, they are not prevented from now insisting, if only to
uphold the judgment of the CA against Aznar Brothers,
[26] that the property in litis was not the same as Lot No.
18563, but they would not be accorded any relief upon those
reasons,[27] even if
_______________
[25] Rollo, p. 9.
[26] Bersamin, Appeal and Review in the Philippines,
Central Professional Books, Inc., Quezon City, Second
Edition, p. 197, citingJustice Thurgood Marshall, The Federal
Appeal, in Counsel on Appeal,141, 152: (A. Charpentier, ed.,
1968).
[27] Id., citing Aparri v. Court of Appeals, No. L-15947,
April 30, 1965, 13 SCRA 611; Makati Haberdashery, Inc. v.
NLRC, G.R. Nos. 83380-81, November 15, 1999, 179 SCRA
448; Bella v. Court of Appeals, G.R. No. 105997, September
26, 1997, 279 SCRA 497; Cabral
15
VOL.722,APRIL21,2014
15
AznarBrothersRealtyCompanyvs.Ybaez
the Court should find Aznar Brothers appeal unmeritorious
or utterly frivolous.[28]
Regardless, the holding by both lower courts was proper
and correct. The noninclusion in the pre-trial order barred

the identity of the property in litis as an issue, for it is basic


that any factual issue not included in the pre-trial order will
not be heard and considered at the trial,[29]much less, on
appeal. The parties had the obligation to disclose during the
pre-trial all the issues they intended to raise during the trial,
except those involving privileged or impeaching matters, for
the rule is that the definition of issues during the pre-trial
conference will bar the consideration of others, whether
during trial or on appeal. The basis of the exclusion is that
the parties are concluded by the delimitation of the issues in
the pre-trial order because they themselves agreed to it.[30]
The waiver of the identity of the property in litis as an
issue did not violate the right of any of the parties herein due
to the Rules of Court having forewarned them in Section 7,
Rule
_______________
v. Court of Appeals, G.R. No. 50702, September 29, 1989, 178
SCRA 91;Franco v. Intermediate Appellate Court, G.R. No.
71137, October 5, 1989, 178 SCRA 331.
[28] Id., citing Enecilla v. Magsaysay, L-21568, May 19,
1966, 63 OG 9627.
[29] Section 7, Rule 18, Rules of Court, which states:
Section7.Record of pre-trial.The proceedings in the
pre-trial shall be recorded. Upon the termination thereof, the
court shall issue an order which shall recite in detail the
matters taken up in the conference, the action taken thereon,
the amendments allowed to the pleadings, and the
agreements or admissions made by the parties as to any of
the matters considered. Should the action proceed to
trial, the order shall explicitly define and limit the

issues to be tried. The contents of the order shall


control the subsequent course of the action, unless

modified before trial to prevent manifest injustice. (5a,


R20)
[30] Asian Terminals, Inc. v. Malayan Insurance Co., Inc.,
G.R. No. 171406, April 4, 2011, 647 SCRA 111, 122
citing Villanueva v. Court of Appeals, G.R. No. 143286, April
14, 2004, 427 SCRA 439, 447.
16
16 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
18 of the Rules of Court that should the action proceed to
trial, the pre-trial order would explicitly define and limitthe
issues to be tried, and its contents would control the
subsequent course of the action, unless modified before trial
to prevent manifest injustice.
In reality, the parties could still have reversed the waiver
had they so wanted. Towards that end, they had three
opportunities after the issuance of the pre-trial order to
submit the identity of the property in litis as an issue for
trial and decision. The first was for either of them to seek the
modification of the pre-trial order prior to the trial in order to
prevent manifest injustice,[31] but neither did so. The second
was for either of them to have the trial court consider the
identity of the property in litis as an issue proper for the
trial, but such party must give a special reason to justify the
trial court in doing so. This would have been authorized
under Section 5, Rule 30 of the Rules of Court.[32] Again,
neither of them seized
_______________

[31] Section 7, Rule 18 of the Rules of Court.


[32] Section5.Order of trial.Subject to the provisions
of Section 2 of Rule 31, and unless the court for special
reasons otherwise directs, the trial shall be limited to

the issues stated in the pre-trial orderand shall proceed


as follows:
(a)The plaintiff shall adduce evidence in support of his
complaint;
(b)The defendant shall then adduce evidence in support
of his defense, counterclaim, cross-claim and third-party
complaint;
(c) The third-party defendant, if any, shall adduce
evidence of his defense, counterclaim, cross-claim and fourthparty complaint;
(d)The fourth-party, and so forth, if any, shall adduce
evidence of the material facts pleaded by them;
(e) The parties against whom any counterclaim or crossclaim has been pleaded, shall adduce evidence in support of
their defense, in the order to be prescribed by the court;
(f) The parties may then respectively adduce rebutting
evidence only, unless the court, for good reasons and in the
furtherance of justice, permits them to adduce evidence upon
their original case; and
17
VOL.722,APRIL21,2014
17
AznarBrothersRealtyCompanyvs.Ybaez
such opportunity. And the third was for the Spouses Ybaez
to adduce evidence on Lot No. 18563 being different from the
land claimed by Aznar Brothers. Had they done so, Aznar
Brothers could have either allowed such evidence without

objection, or objected to such evidence on the ground of its not


being relevant to any issue raised in the pleadings or in the
pre-trial order. The RTC could then have proceeded as it
deemed fit, including allowing such evidence. This procedure
would have been authorized by Section 5, Rule 10 of
the Rules of Court, viz.:
Section5.Amendment to conform to or authorize
presentation of evidence.When issues not raised by the
pleadings are tried with the express or implied consent of the
parties, they shall be treated in all respects as if they had
been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to
the evidence and to raise these issues may be made upon
motion of any party at any time, even after judgment; but
failure to amend does not affect the result of the trial of these
issues. If evidence is objected to at the trial on the ground
that it is not within the issues made by the pleadings, the
court may allow the pleadings to be amended and shall do so
with liberality if the presentation of the merits of the action
and the ends of substantial justice will be subserved thereby.
The court may grant a continuance to enable the amendment
to be made. (5a)
Moreover, for the Spouses Ybaez to call upon the Court
now to analyze or weigh evidence all over again upon such a
(g) Upon admission of the evidence, the case shall be
deemed submitted for decision, unless the court directs the
parties to argue or to submit their respective memoranda or
any further pleadings.
If several defendants or third-party defendants, and so
forth, having separate defenses appear by different counsel,

the court shall determine the relative order of presentation of


their evidence. (1a, R30)
18
18 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
factual matter would be impermissible considering that the
Court is not a trier of facts.[33]
There are exceptional instances in which the Court has
held itself competent to make its own appreciation of the
facts, and not be concluded by the findings of fact of the trial
and appellate courts, namely: (1) when the factual findings of
the CA and those of the trial court were contradictory; (2)
when the findings are grounded entirely on speculation,
surmises, or conjectures; (3) when the inference made by the
CA from its findings of fact was manifestly mistaken, absurd,
or impossible; (4) when there is grave abuse of discretion in
the appreciation of facts; (5) when the CA, in making its
findings, went beyond the issues of the case, and such
findings were contrary to the admissions of both appellant
and appellee; (6) when the judgment of the CA was premised
on a misapprehension of facts; (7) when the CA failed to
notice certain relevant facts that, if properly considered,
would justify a different conclusion; (8) when the findings of
facts were themselves conflicting; (9) when the findings of fact
were conclusions without citation of the specific evidence on
which they were based; and (10) when the findings of fact of
the CA were premised on the absence of evidence but such
findings were contradicted by the evidence on record.
[34] None of the aforementioned exceptions obtains in this
case.

Accordingly, the Court, just as the lower courts have been


bound, shall proceed upon the assumption that the
property in litis and Lot No. 18563 were one and the same
realty.
2.
CA
owned

correctly
Lot

No.

concluded
18563;

that

and

Aznar

that

the

Brothers
Spouses

Ybaez were not buyers in good faith


_______________
[33] Heirs of Margarito Pabaus v. Heirs of Amanda
Yutiamco, G.R. No. 164356, July 27, 2011, 654 SCRA 521,
531-532.
[34] E.Y. Industrial Sales, Inc. v. Shen Dar Electricity and
Machinery Co., Ltd., G.R. No. 184850, October 20, 2010, 634
SCRA 363, 382.
19
VOL.722,APRIL21,2014
19
AznarBrothersRealtyCompanyvs.Ybaez
In its assailed judgment, the CA concluded that the RTC
erred in holding in favor of the Spouses Ybaez, observing as
follows:
The trial court however erred when it held:
Nevertheless, from the totality of the evidence adduced by
the parties, there is no preponderant evidence that the
defendants had prior knowledge of the previous sale of
subject property to the plaintiff when they bought the same
from Adriano D. Ybaez on June 21, 1978. And there is
neither any showing that defendant had prior knowledge of
such sale when they applied for and was issued Original
Certificate of Title No. 2150 on August 14, 1979. Thus,

defendants can very well be considered as purchasers to the


protection of the provisions of P.D. 1529. While plaintiff has
shown to have acquired or was issued tax declaration No. GR07-049-00694 and had paid taxes on the property, said tax
declaration and realty tax payments are not conclusive
evidence of ownership (Ferrer-Lopez vs. Court of Appeals, 150
SCRA 393). It cannot prevail over Original Certificate of Title
No. 2150 in the name of the defendants, as a torrens title
concludes all controversies over ownership of land covered by
a final decree of registration (PNB vs. Court of Appeals, 153
SCRA 435).
The Deed of Absolute Sale (Exhibit F) in favor of plaintiffappellant Aznar was registered under Act 3344, as amended
on March 23, 1964 with the Register of Deeds of Cebu City.
The registration of said deed gave constructive notice to the
whole world including defendant-appellees of the existence of
said deed of conveyance. (Gerona v. Guzman, 11 SCRA
153) Defendant-appellees cannot, therefore, claim to be
buyers in good faith of the land in question. Resultantly, they
merely stepped into the shoes of their sellers vis--vis said
land. Since their sellers were not owners of the property in
question, there was nothing that they could have sold to
defendant-appellees.[35]
_______________
[35]Supra note 1 at p. 33.
20
20 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
We sustain the CAs conclusion that the Spouses Ybaez
were guilty of bad faith, and that they acquired Lot No. 18563

from sellers who were not the owners. Accordingly, we resolve


the second error raised herein in favor of Aznar Brothers.
The records and evidence fully substantiated the CAs
conclusion. The Spouses Ybaez acquired Lot No. 18563
through the deed of sale executed on June 21, 1978 by
Adriano in favor of Jose R. Ybaez. Together with his siblings
Fabian Ybaez, Carmen Ybaez-Tagimacruz, Fe YbaezAlison, and Dulcisima Ybaez-Tagimacruz, Adriano had
supposedly inherited Lot No. 18563 from Casimiro, their
father, who had died intestate on July 3, 1968. Holding
themselves as the heirs and successors-in-interest of
Casimiro, they had then executed on August 29, 1977
the Extrajudicial Declaration of Heirs with anExtrajudicial
Settlement of Estate of Deceased Person and Deed of Absolute
Sale, whereby they divided and adjudicated Lot No. 18563
among themselves, and then sold the entire lot to Adriano.
But, as the CA correctly found, the Spouses Ybaez held
no right to Lot No. 18563 because Adriano, their seller, and
his siblings were not the owners of Lot No. 18563. Indeed,
Casimiro had absolutely conveyed his interest in Lot No.
18563 to Aznar Brothers under the Deed of Absolute Sale of
March 21, 1964 with the marital consent of Maria Daclan,
Casimiros surviving spouse and the mother of Adriano and
his siblings. Considering that such conveyance was effective
and binding on Adriano and his siblings, there was no valid
transmission of Lot No. 18563 upon Casimiros death to any
of said heirs, and they could not legally adjudicate Lot No.
18563 unto themselves, and validly transfer it to Adriano.
The conveyance by Adriano to Jose R. Ybaez on June 21,
1978 was absolutely void and ineffectual.

There is also no question that the Spouses Ybaez were


aware of the conveyance of Lot No. 18563 by Casimiro to
Aznar Brothers considering that the Deed of Absolute Saleof
March 21, 1964 between Casimiro and Aznar Brothers was
21
VOL.722,APRIL21,2014
21
AznarBrothersRealtyCompanyvs.Ybaez
registered in the book of registry of unregistered land on the
same day pursuant to their agreement. Such registration
constituted a constructive notice of the conveyance on the
part of the Spouses Ybaez pursuant to Section 194 of
the Revised Administrative Code of 1917, as amended by Act
No. 3344, which provided as follows:
Section194.Recording of instruments or deeds
relating to real estate not registered under Act
Numbered Four hundred and ninety-six or under the
Spanish

Mortgage

Law.No

instrument

or

deed establishing, transmitting, acknowledging, modifying

or extinguishing rights with respect to real estate not


registered under the provisions of Act Numbered Four
hundred and ninety-six, entitled The Land Registration
Act, and its amendments, or under the Spanish Mortgage
Law,shall be valid, except as between the parties
thereto, until such instrument or deed has been

registered, in the manner hereinafter prescribed, in


the office of the register of deeds for the province or
city where the real estate lies.
It shall be the duty of the register of deeds for each
province or city to keep a day book and a register book of
unregistered real estate, in accordance with a form to be

prepared by the Chief of the General Land Registration


Office, with the approval of the Secretary of Justice. The day
book shall contain the names of the parties, the nature of the
instrument or deed for which registration is requested, the
hour and minute, date and month of the year when the
instrument was received. The register book shall contain,
among other particulars, the names, age, civil status, and the
residences of the parties interested in the act or contract
registered and in case of marriage, the name of the wife, or
husband, as the case may be, the character of the contract
and its conditions, the nature of each piece of land and its
improvements only, and not any other kind of real estate or
properties, its situation, boundaries, area in square meters,
whether or not the boundaries of the property are visible on
the land by means of monuments or otherwise, and in the
affirma22
22 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
tive case, in what they consist; the permanent improvements
existing on the property; the page number of the assessment
of each property in the year when the entry is made, and the
assessed value of the property for that year; the notary or the
officer who acknowledged, issued, or certified the instrument
or deed; the name of the person or persons who, according to
the instrument, are in present possession of each property; a
note that the land has not been registered under Act
Numbered Four hundred and ninety-six nor under the
Spanish Mortgage Law; that the parties have agreed to
register said instrument under the provisions of this Act, and
that the original instrument has been filed in the office of the

register of deeds, indicating the file number, and that the


duplicate has been delivered to the person concerned; the
exact year, month, day, hour, and minute when the original of
the instrument was received for registration, as stated in the
day book. It shall also be the duty of the register of deeds to
keep an index-book of persons and an index-book of estates,
respectively, in accordance with a form to be also prepared by
the Chief of the General Land Registration Office, with the
approval of the Secretary of Justice.
Upon presentation of any instrument or deed relating to
real estate not registered under Act Numbered Four hundred
and ninety-six and its amendments or under the Spanish
Mortgage Law, which shall be accompanied by as many
duplicates as there are parties interested, it shall be the duty
of the register of deeds to ascertain whether said instrument
has all the requirements for proper registration. If the
instrument is sufficient and there is no legitimate objection
thereto, or in case of there having been one, if the same has
been dismissed by final judgment of the courts, and if there
does not appear in the register any valid previous entry that
may be affected wholly or in part by the registration of the
instrument or deed presented, and if the case does not come
under the prohibition of section fourteen hundred and fiftytwo of Act Numbered Twenty-seven hundred and eleven, the
register of deeds shall register the instrument in the proper
book. In case the instrument or
23
VOL.722,APRIL21,2014
23
AznarBrothersRealtyCompanyvs.Ybaez
deed presented has defects preventing its registration, said
register of deeds shall refuse to register it until the defects

have been removed, stating in writing his reasons for


refusing to record said instrument as requested. Any
registration

made

under

this

section

shall

be

understood to be without prejudice to a third-party


with a better right.

The register of deeds shall be entitled to collect in advance


as fees for the services to be rendered by him in accordance
with this Act, the same fees established for similar services
relating to instruments or deeds in connection with real
estate in section one hundred fourteen of Act Numbered Four
hundred ninety-six entitled The Land Registration Act, as
amended by Act Numbered Two thousand eight hundred and
sixty-six. (Emphasis in the original; bold italics supplied.)
Although a deed or instrument affecting unregistered
lands would be valid only between the parties thereto, third
parties would also be affected by the registered deed or
instrument on the theory of constructive notice once it was
further registered in accordance with Section 194, i.e., the
deed or instrument was written or inscribed in the day book
and the register book for unregistered lands in the Office of
the Register of Deeds for the province or city where the realty
was located. As ruled in Gutierrez v. Mendoza-Plaza:[36]
The non-registration of the aforesaid deed does not also
affect the validity thereof. Registration is not a requirement
for validity of the contract as between the parties, for the
effect of registration serves chiefly to bind third persons. The
principal purpose of registration is merely to notify
other persons not parties to a contract that a

transaction involving the property has been entered


into. The conveyance of unregistered

_______________
[36] G.R. No. 185477, December 4, 2009, 607 SCRA 807,
817, citing Heirs of Eduardo Manlapat v. Court of Appeals,
G.R. No. 125585, June 8, 2005, 459 SCRA 412, 416.
24
24 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
land shall not be valid against any person unless registered,
except (1) the grantor, (2) his heirs and devisees, and (3) third
persons having actual notice or knowledge thereof. As held by
the Court of Appeals, petitioners are the heirs of Ignacio, the
grantor of the subject property. Thus, they are bound by the
provisions of the deed of donation inter vivos.
The effect on third parties of the constructive notice by
virtue of the registration of the deed or instrument was aptly
illustrated in Bautista v. Fule,[37] where the Court
pronounced that the subsequent buyer of unregistered land
sold at an execution sale, which the purchaser at the public
auction registered under Act No. 3344 seven days after that
sale, was deemed to have constructive notice of the sale,
and, therefore, could not be entitled to the rights of a
purchaser in good faith. The Court emphasized that as to
lands not registered under either the Spanish Mortgage
Law or the Land Registration Act, the registration under Act
No. 3344 should produce its effects against third persons if
the law was to have utility at all.[38]
It is worth mentioning that Act No. 3344 (approved on
December 8, 1926) was the governing law at the time of the
execution of the deed of absolute sale of March 21, 1964
between Casimiro and Aznar Brothers, and the deed of
absolute sale of February 17, 1967 between Tanuco and

Aznar Brothers. Both deeds were registered pursuant to


Section 194; while, on the other hand, the sale between
Adriano and Jose R. Ybaez on June 21, 1978 was covered by
the P.D. No. 1529, also known as the Property Registration
Decree (whose effectivity was upon its approval on June 11,
1978).[39]
_______________
[37] No. L-1577, 85 Phil. 391, 393 (1950).
[38] Id., at pp. 393-394.
[39] However, to conform with the pronouncement of
the Court inTaada v. Tuvera, No. L-63915, April 24, 1985,
136 SCRA 27 & No. L-63915, December 29, 1986, 146 SCRA
446, to the effect that all laws should be published in full in
the Official Gazette immediately
25
VOL.722,APRIL21,2014
25
AznarBrothersRealtyCompanyvs.Ybaez
Section 3 of P.D. No. 1529, albeit expressly discontinuing
the system of registration under the Spanish Mortgage Law,
has considered lands recorded under that system as
unregistered land that could still be recorded under Section
113 of P.D. No. 1529 until the land shall have been brought
under the operation of the Torrens system; and has provided
that [t]he books of registration for unregistered lands
provided under Section 194 of the Revised Administrative
Code, as amended by Act No. 3344, shall continue to remain
in force; provided, that all instruments dealing with
unregistered lands shall henceforth be registered under
Section 113 of this Decree. It is clear, therefore, that even
with the effectivity of P.D. No. 1529, all unregistered lands
may still be registered pursuant to Section 113 of P.D. No.

1529, which essentially replicates Section 194, as amended


by Act No. 3344, to the effect that a deed or instrument
conveying real estate notregistered under the Torrens
system[40] should affect only the
_______________
upon their approval, P.D. No. 1529 became effective 15 days
from its publication in the January 8, 1979 issue of the
Official Gazette (75 O.G. No. 2, 185) as required under Article
2, Civil Code.
[40] It is jurisprudentially settled, however, that
registration
under
Act
No.
3344
of
real
estate registered under the Torrens system does not
constitute constructive notice to the whole world. In MactanCebu International Airport Authority v. Tirol(G.R. No.
171535, June 5, 2009, 588 SCRA 635, 649), the Court held
that the registration of instruments must be done in the
proper registry in order to effect and bind the land. Prior to
the Property Registration Decree of 1978, Act No. 496 (or the
Land Registration Act) governed the recording of
transactions

involvingregistered land, i.e.,

land

with

Torrens title. On the other hand, Act No. 3344, as amended,


provided for the system of recording of transactions
over unregisteredreal estate without prejudice to a third
party with a better right. Accordingly, if a parcel of land
covered by a Torrens title is sold, but the sale is
registered under Act No. 3344 and not under the Land

Registration Act, the sale is not considered registered


and the registration of the deed does not operate as

constructive notice to the whole world. (Bold italics


supplied)

26
26 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
parties thereto unless the deed or instrument was registered
in accordance with the same section.[41]
The only exception to the rule on constructive notice by
registration of the deed or instrument affecting unregistered
_______________[41] The Property Registration Decree states:
Section113.Recording of instruments relating to
unregistered lands.No deed, conveyance, mortgage,
lease, or other voluntary instrument affecting land not
registered under the Torrens system shall be valid,

except as between the parties thereto, unless such


instrument shall have been recorded in the manner
herein prescribed in the office of the Register of Deeds
for the province or city where the land lies.
(a) The Register of Deeds for each province or city shall
keep a Primary Entry Book and a Registration Book. The
Primary Entry Book shall contain, among other particulars,
the entry number, the names of the parties, the nature of the
document, the date, hour and minute it was presented and
received. The recording of the deed and other instruments
relating to unregistered lands shall be effected by any of
annotation on the space provided therefor in the Registration
Book, after the same shall have been entered in the Primary
Entry Book.
(b) If, on the face of the instrument, it appears that it is
sufficient in law, the Register of Deeds shall forthwith record
the instrument in the manner provided herein. In case the
Register of Deeds refuses its admission to record, said official

shall advise the party in interest in writing of the ground or


grounds for his refusal, and the latter may appeal the matter
to the Commissioner of Land Registration in accordance with
the provisions of Section 117 of this Decree. It shall be

It thus appears that the better right referred to in Act


No. 3344 is much more than the mere prior deed of sale in
favor of the first vendee. In the Lichauco case just
mentioned, it was the prescriptive right that had

understood that any recording made under this

supervened. Or, as also suggested in that case, other facts

with a better right.

of sale, the first vendee can be said to have better right

c)After recording on the Record Book, the Register of


Deeds shall endorse, among other things, upon the original of
the recorded instruments, the file number and the date as
well as the hour and minute when the document was received
for recording as shown in the Primary Entry Book, returning
to the registrant or person in interest the duplicate of the
instrument, with appropriate annotation, certifying that he
has recorded the instrument after reserving
27
VOL.722,APRIL21,2014
27
AznarBrothersRealtyCompanyvs.Ybaez
realty exists in favor of a third party with a better right.
This exception is provided in Section 194, as amended by Act
No. 3344, to the effect that the registration shall be
understood to be without prejudice to a third party with a
better right; and in paragraph (b) of Section 113 of P.D. No.
1529, to the effect that any recording made under this
section shall be without prejudice to a third party with a
better right. As to who is a third party with better right
under these provisions is suitably explained in Hanopol v.
Pilapil,[42] a case where the sale of unregistered land was
registered under Act No. 3344 but the land was sold twice, as
follows:

_______________
one copy thereof to be furnished the provincial or city
assessor as required by existing law.
(d)Tax sale, attachment and levy, notice of lis pendens,
adverse claim and other instruments in the nature of
involuntary dealings with respect to unregistered lands, if
made in the form sufficient in law, shall likewise be
admissible to record under this section.
(e)For the services to be rendered by the Register of
Deeds under this section, he shall collect the same amount of
fees prescribed for similar services for the registration of
deeds or instruments concerning registered lands. (Italics in
the original; emphasis supplied)
[42] No. L-19248, February 28, 1963, 7 SCRA 452.
[43] Id., at p. 456.
28
28 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
The Court also observes in Sales v. Court of Appeals,[44] a
case involving parties to a deed of donation who had agreed
to register the instrument under Act No. 3344 but failed to do
so, that the better right of a third party relates to other

section shall be without prejudice to a third party

and circumstances exist which, in addition to his deed


than the second purchaser.[43] (Bold emphasis supplied.)

titles which a party might have acquired independently of the


unregistered deed such as title by prescription.[45] But the
exception does not obviously apply to the Spouses Ybaez
because they acquired their right from Adriano who did not
hold any legal or equitable interest in Lot No. 18563 that he
could validly transfer to the Spouses Ybaez.
3.
Estoppel

by

laches

did

not

bar

Aznar Brothers right over Lot No. 18563


Unexpectedly, the CA disregarded its aforecited correct
conclusion on Aznar Brothers ownership of Lot No. 18563,
and instead ruled that estoppel by laches had already barred
Aznar Brothers dominical claim over Lot No. 18563. It
ratiocinated thusly:
But then, there were pre-existing and supervening
circumstances which effectively quashed the dominical claim
of plaintiff-appellant over the subject land. Plaintiff-appellant
was never in possession of the land which it bought. Even
after buying the land from Casimiro Ybaez, plaintiffappellant did not take possession of it. On the other hand, the
heirs of Casimiro Ybaez took possession of said land upon
the latters death. Said heirs sold their shares on said land to
one of their co-heirs, Adriano Ybaez, who in turn, sold the
whole land to defendant appellees, the spouses Jose and
Magdalena Ybaez. The latter continued possessing said
land, tax declared it, paid realty taxes thereon and finally
secured a free patent and title over it. Up to the present,
defen_______________
[44] G.R. No. 40145, July 29, 1992, 211 SCRA 858.

[45] Id., at pp. 866-867.


29
VOL.722,APRIL21,2014
29
AznarBrothersRealtyCompanyvs.Ybaez
dant-appellees are in possession of the land as owners
thereof.
There is absolutely no doubt that in law, plaintiffappellant had lost its dominical and possessory claim over
the land for its inaction from 1964 when it bought the land
up to 1989 when it filed the Complaint in the trial court or
a long period of 25 years. This is called estoppel by laches.
[46]
Aznar Brothers now assails this adverse ruling under its
first assigned error by pointing out that the CA erred in
relying on estoppel by laches, a rule of equity, to bar its
dominical claim over Lot No. 18563. It insists that its action
to declare the nullity of the Extrajudicial Declaration of
Heirs with Extrajudicial Settlement of Estate of Deceased
Person and Deed of Absolute Sale dated August 29, 1977, and
the Deed of Absolute Sale of June 21, 1978 was
imprescriptible under Article 1410 of the Civil Code; and that
on the assumption that accion publiciana would prescribe in
ten years, its filing of the original complaint on May 26, 1989
was done within the 10-year period counted from August 14,
1979, the date of the issuance of OCT No. 2150 in the name of
Jose R. Ybaez.
The Spouses Ybaez counter that the CA was correct
because Aznar Brothers did not assert possession and
ownership over the land for 25 years; that it brought its
complaint only in 1989 after they had undergone the

proceedings in rem for the issuance of OCT No. 2150; that it


did not challenge their application for the free patent or the
proceedings for the issuance of OCT No. 2150; that it did not
also oppose the conduct of the survey of the land relevant to
the application for the free patent despite the notice of the
survey given by the surveying engineer to the adjoining lot
owners; that during the hearing of the case, Jose R. Ybaez
testified that only three hectares of the land originally owned
by Casimiro had been sold to it, the rest having been retained
by Casimiro that
_______________
[46] Supra note 1 at pp. 33-34.
30
30 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
became the subject of the extrajudicial settlement by his
heirs, who had then sold that retained portion to Jose R.
Ybaez; that the tax declarations presented by it described
property distinct from that covered by OCT No. 2150,
although it claimed that the same property had been sold to
it twice by Casimiro and Tanuco; and that on at least three
occasions, it had attempted to buy the lot from them but the
negotiations did not push through.

stale demand. Laches is based on grounds of public policy


that requires, for the peace of society, the discouragement of
stale claims and, unlike the statute of limitations, is not a
mere question of time but is principally a question of the
inequity or unfairness of permitting a right or claim to be
enforced or asserted.[48] Tempus enim modus tollendi
obligationes et actiones, quia tempus currit contra desides et
sui juris contemptores (For time is a means of dissipating
obligations and actions, because time runs against the
slothful and careless of their own rights).[49] Truly, the law
serves those who are vigilant and diligent, not those who
sleep when the law requires them to act.[50]
_______________
[47] La Campana Food Products, Inc. v. Court of
Appeals, G.R. No. 88246, June 4, 1993, 223 SCRA 151, 158.
[48] Pangilinan v. Court of Appeals, G.R. No. 83588,
September 29, 1997, 279 SCRA 590, 601.
[49] Id.
[50] Marcelino v. Court of Appeals, G.R. No. 94423, June
26, 1992, 210 SCRA 444, 447.
31
VOL.722,APRIL21,2014
31
AznarBrothersRealtyCompanyvs.Ybaez

We hold and declare that the CAs ruling in favor of the


Spouses Ybaez was devoid of legal and factual support, and
should be rightfully reversed.

For laches to bar a claim, four elements must be shown,


namely: (1) conduct on the part of the defendant, or one
under whom he claims, giving rise to a situation of which a
complaint is made and for which the complainant seeks a
remedy; (2) delay in asserting the complainants right, the
complainant having had knowledge or notice of defendants
conduct and having been afforded an opportunity to institute

Laches is the failure or neglect for an unreasonable and


unexplained length of time to do that which by exerting due
diligence a party could and should have done earlier.[47] A
suit that is barred on the ground of laches is also called a

a suit; (3) lack of knowledge or notice on the part of the


defendant that the complainant would assert the right on
which he bases his suit; and (4) injury or prejudice to the
defendant in the event that the relief is accorded to the
complainant, or the suit is not held to be barred.[51]
The CA incorrectly barred the claim of Aznar Brothers to
Lot No. 18563 because of laches. For one, Aznar Brothers
immediately registered the purchase in accordance with Act
No. 3344, the law then governing the registration of
unregistered land. Its action in that regard ensured the
protection of the law as to its ownership of the land, and
evinced that it did not abandon its ownership. Verily, its
maintaining Lot No. 18563 as an unregistered land from then
on should not prejudice its rights; otherwise, its registration
pursuant to law would be set at naught. Secondly, the
supposed acts of possession of Lot No. 18563 exercised by the
Spouses Ybaez from the time of their purchase from
Adriano, including causing it to be surveyed for purposes of
the application for free patent, did not prejudice Aznar
Brothers interest because the registration under Act No.
3344 had given constructive notice to the Spouses Ybaez of
its prior acquisition of the land. Thereby, the Spouses Ybaez
became bound by the sale from Casimiro to Aznar Brothers,
and rendered them incapable of acquiring the land in good
faith from Adriano. Consequently, Jose R. Ybaezs
intervening application for the free patent, the grant of the
free patent and the issuance of OCT No. 2150 thereafter did
not supplant the superior rights and interest of
_______________

[51] Go Chi Gun v. Co Cho, 96 Phil. 622, 637


(1955); Maneclang v. Baun, G.R. No. 27876, April 22, 1992,
208 SCRA 179, 193.
32
32 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
Aznar Brothers in Lot No. 18563. And, lastly, the Spouses
Ybaez would not suffer any prejudice should Aznar Brothers
prevail herein, for Adriano, their predecessor-in-interest, did
not transmit to them any kind or degree of right or interest in
Lot No. 18563.
4.
Lot

No.

18563,

not

being

land

of

the

public domain, was not subject to the free patent


issued to the Spouses Ybaez
The Spouses Ybaezs position rests on their having been
issued the free patent and OCT No. 2150.
The records do not support the position of the Spouses
Ybaez. Although Jose R. Ybaez declared in paragraph 4 of
his application for the free patent that Lot No. 18563 was
public land, and was not then claimed or occupied by any
other person;[52] and further declared under oath in the
affidavit submitted to support his application for the free
patent that he recognize(d) Lot No. 18563 as public land,
his declarations did not establish that Lot No. 18563 was
land of the public domain. Nor did the Spouses Ybaez show
that Jose R. Ybaez had acted in good faith in applying for
the free patent pursuant to Commonwealth Act No. 141 (The
Public Land Act), as amended. Instead, they were fully aware
of the nature and character of the land as private. In

the Deed of Absolute Sale dated June 21, 1978, Adriano


stated that he had been the absolute owner in fee simple free
from all liens
_______________
[52] Records, p. 311 (Exhibit M), to wit:
xxxx
4.The land described and applied for is not claimed or

land already in private ownership.[56] The invalidity of the


free patent necessarily left OCT No. 2150 a patent nullity. As
ruled in Heirs of Simplicio Santiago v. Heirs of Mariano E.
Santiago:[57]
The settled rule is that a free patent issued over a private
land is null and void, and produces no legal effects
whatsoever.Private ownership of land as when there

occupied by any other person, but is public land. I

is a prima facie proof of ownership like a duly

entered upon and began cultivation of the same on the 21 day


of June 1978, and since that date I have continuously
cultivated the land, and have made thereon the following
improvements, viz.: coconuts, fruit trees and seasonal crops.
xxxx
33
VOL.722,APRIL21,2014
33
AznarBrothersRealtyCompanyvs.Ybaez
and encumbrances whatsoever of Lot No. 18563; and that he
(Adriano) had held the perfect right to convey the same (as)
the purchaser of the same as per Extrajudicial Declaration of
Heirs with extrajudicial settlement of estate of deceased
person and deed of absolute sale.[53] In view of the privity
between Adriano and the Spouses Ybaez as to the land, the
formers statements concluded the latter.[54]
In contrast, Aznar Brothers acquired Lot No. 18563 as the
private land of Casimiro. In their Deed of Absolute Saleof
March 21, 1964, Casimiro expressly warranted that the land
was his own exclusive property.[55] With the ownership of
Aznar Brothers being thus established, the free patent issued
to Jose R. Ybaez by the Government was invalid for the
reason that the Government had no authority to dispose of

registered possessory information or a clear showing


of

open,

continuous,

exclusive,

and

notorious

possession, by present or previous occupants is not


affected by the issuance of a free patent over the same

land, because the Public Land Law applies only to


lands of the public domain. The Director of Lands has
no authority to grant free patent

_______________
[53] Records, p. 290 (Exhibit 2).
[54] Rule 130, Rules of Court, states:
Section31.Admission by privies.Where one derives
title to property from another, the act, declaration, or
omission of the latter, while holding the title, in relation to
the property, is evidence against the former.
[55] Exhibit F.
[56] Magistrado v. Esplana, G.R. No. 54191, May 8, 1990,
185 SCRA 104, 109.
[57] G.R. No. 151440, June 17, 2003, 404 SCRA 193, 199.
34
34 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez

to lands that have ceased to be public in character and


have passed to private ownership. Consequently, a

certificate of title issued pursuant to a homestead


patent partakes of the nature of a certificate issued in
a judicial proceeding only if the land covered by it is
really a part of the disposable land of the public
domain. (Bold emphasis supplied)

To the same effect was Agne v. Director of Lands,[58]where


the Court declared that if land covered by free patent was
already the private property of another and, therefore, not
part of the disposable land of the public domain, the patentee
did not acquire any right or title to the land.
The principle of indefeasibility of the Torrens title does not
protect OCT No. 2150 because the free patent on which the
issuance of the title was based was null and void. A direct
attack as well as a collateral attack are proper, for, as the
Court declared in De Guzman v. Agbagala:[59]
x x x. An action to declare the nullity of a void title does not
prescribe and is susceptible to direct, as well as to collateral,
attack. OCT No. P-30187 was registered on the basis of a free
patent which the RTC ruled was issued by the Director of
Lands without authority. The petitioners falsely claimed that
the land was public land when in fact it was not as it was
private land previously owned by Carmen who inherited it
from her parents. x x x.
Nonetheless, it appears that Aznar Brothers actually
mounted a direct attack on the title of the Spouses Ybaez.
In the original complaint, Aznar Brothers sought judgment
or_______________

[58] G.R. No. 40399, February 6, 1990, 181 SCRA 793,


807; citingDirector of Lands v. Sisican, Nos. L-20003-05,
March 31, 1965, 13 SCRA 516.
[59] G.R. No. 163566, February 19, 2008, 546 SCRA 278,
285.
35
VOL.722,APRIL21,2014
35
AznarBrothersRealtyCompanyvs.Ybaez
dering them to [s]urrender all the documents pertaining to
the Free Patent for cancellation. Such relief was predicated
on the allegation that the land in question was already
adjudicated as private property of the plaintiff through
the Deed of Absolute Sale of March 21, 1964. Aznar Brothers
reiterated the relief in the amended complaint. In its second
amended complaint, it expressly prayed for the cancellation
and annulment of OCT No. 2150. By such pleadings, it
directly attacked OCT No. 2150, because their object was to
nullify the title, and thus challenge the judgment or
proceeding pursuant to which the title was decreed.[60]
WHEREFORE,

the

Court REVERSES and SETS

ASIDE the decision promulgated on October 10, 2002 by the


Court of Appeals partially affirming the judgment rendered
on March 8, 1996 by the Regional Trial Court, Branch 10, in
Cebu

City; DECLARES petitioner AZNAR

BROTHERS

REALTY COMPANY the sole and exclusive owner of the

unregistered parcel of land known and described as Lot No.


18563; CANCELS and NULLIFIESFree Patent No. VII1118514 and Original Certificate of Title No. 2150 of the
Registry of Deeds of the Province of Cebu in the name of

respondent Jose R. Ybaez, married to Magdalena Marcos;


and ORDERS respondents to pay the costs of suit.
SO ORDERED.

Sereno (CJ., Chairperson), Leonardo-De Castro, Villarama,


Jr. and Perez,** JJ., concur.
Judgment reversed and set aside.
_______________
[60] Heirs of Simplicio Santiago v. Heirs of Mariano E.
Santiago, supranote 57 at p. 203.
** Vice Associate Justice Bienvenido L. Reyes, who took
part in the Court of Appeals, per the raffle of January 22,
2014.
36
36 SUPREMECOURTREPORTSANNOTATED
AznarBrothersRealtyCompanyvs.Ybaez
Notes.A.M. No. 03-1-09-SC states that within five (5)
days from date of filing of the reply, the plaintiff must
promptly move ex parte that the case be set for pre-trial
conference; If the plaintiff fails to file said motion within the
given period, the Branch COC shall issue a notice of pre-trial.
(Polanco vs. Cruz, 579 SCRA 489 [2009])
Although a pre-trial order is not meant to catalogue each
issue that the parties may take up during the trial, issues not
included in the pre-trial order may be considered only if they
are impliedly included in the issues raised or inferable from
the issues raised by necessary implication. (LICOMCEN, Inc.
vs. Abainza, 691 SCRA 158 [2013])
o0o
Copyright 2015 Central Book Supply, Inc. All rights reserved.

G.R. No. 171286.June 2, 2014.*


DOLORES CAMPOS, petitioner, vs. DOMINADOR ORTEGA,
SR.[1] and JAMES SILOS, respondents.
Civil Law; Property; Public Lands; One of the
requirements before an entitlement to an award of the
government-owned lot is that they must own the subject house.
Neither does petitioner have a cognizable right respecting
the lot in question. Notably, she readily admitted not
exercising their option to buy Boloys property despite the
knowledge that one of the requirements before an
entitlement to an award of the government-owned lot is that
they must own the subject house.
Remedial Law; Civil Procedure; Appeals; Petition for
Review on Certiorari; As a general rule, only questions of law
may be raised in a petition for review on certiorari filed with
this Court.The presence or absence of fraud is a factual
issue. As a general rule, only questions of law may be raised
in a petition for review on certiorari filed with this Court and
factual findings of the trial courts, when adopted and
confirmed by the CA, are final and conclusive on this Court,
except when the CA judgment is based on a misapprehension
of facts or the factual inferences are manifestly incorrect or
when that court overlooked certain relevant facts which, if
properly considered, would justify a different conclusion.
Civil Law; Land Titles; Collateral Attack; Direct Attack;
A collateral attack transpires when, in another action to
obtain a different relief and as an incident to the present
action, an attack is made against the judgment granting the
title while a direct attack (against a judgment granting the

title) is an action whose main objective is to annul, set aside,


or enjoin the enforcement of such judgment if not yet
implemented, or to seek recovery if the property titled under
the
_______________
* THIRD DIVISION.
[1] Dominador Ortega, Sr. died on April 14, 2003 while
the case was pending before the Court of Appeals. He was
survived by his wife Teodora T. Ortega and children
Dominador T. Ortega, Jr., Jennifer T. Ortega, and Janette T.
Ortega (CARollo, pp. 63-65).
241
VOL.724,JUNE2,2014
241
Camposvs.Ortega,Sr.
judgment had been disposed of.We agree with the CA
that the case for specific performance with damages
instituted by petitioner effectively attacks the validity of
respondents Torrens title over the subject lot. It is evident
that, ultimately, the objective of such claim is to nullify the
title of respondents to the property in question, which, in
turn, challenges the judgment pursuant to which the title
was decreed. This is a collateral attack that is not permitted
under the principle of indefeasibility of Torrens title. Section
48 of Presidential Decree No. 1529, otherwise known as the
Property Registration Decree, unequivocally states:
SEC. 48. Certificate not subject to collateral attack.A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law. A collateral attack
transpires when, in another action to obtain a different relief
and as an incident to the present action, an attack is made

against the judgment granting the title while a direct attack


(against a judgment granting the title) is an action whose
main objective is to annul, set aside, or enjoin the
enforcement of such judgment if not yet implemented, or to
seek recovery if the property titled under the judgment had
been disposed of. The issue on the validity of
title, i.e., whether or not it was fraudulently issued, can only
be raised in an action expressly instituted for that purpose.
Same; Trusts; Reconveyance; Under the principle of
constructive trust, registration of property by one person in his
name, whether by mistake or fraud, the real owner being
another person, impresses upon the title so acquired the
character of a constructive trust for the real owner, which
would justify an action for reconveyance.Under the
principle of constructive trust, registration of property by one
person in his name, whether by mistake or fraud, the real
owner being another person, impresses upon the title so
acquired the character of a constructive trust for the real
owner, which would justify an action for reconveyance. In the
action for reconveyance, the decree of registration is
respected as incontrovertible but what is sought instead is
the transfer of the property wrongfully or erroneously
registered in anothers name to its rightful owner or to one
with a better right. If the registration of the land is
fraudulent, the person in whose name the land is registered
holds it as a mere trustee, and the real owner is entitled to
file an action for reconveyance of the property.242
2
SUPREMECOURTREPORTSANNOTATED
42
Camposvs.Ortega,Sr.

Same; Reconveyance; Prescription; In effect, the action for


reconveyance is an action to quiet title to the property, which
does not prescribe.An action for reconveyance resulting
from fraud prescribes four years from the discovery of the
fraud, which is deemed to have taken place upon the issuance
of the certificate of title over the property, and if based on an
implied or a constructive trust it prescribes ten (10) years
from the alleged fraudulent registration or date of issuance of
the certificate of title over the property. However, an action
for reconveyance based on implied or constructive trust is
imprescriptible if the plaintiff or the person enforcing the
trust is in possession of the property. In effect, the action for
reconveyance is an action to quiet title to the property, which
does not prescribe.
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Pajares, Asual & Adaci Law Offices for petitioner.
Celso A. Tabobo, Jr. for respondents.
PERALTA,J.:
This petition for review on certiorari under Rule 45 of the
1997 Revised Rules on Civil Procedure (Rules) seeks the
reversal of the August 12, 2005 Decision[2] and January 17,
2006 Resolution[3] of the Court of Appeals (CA) in C.A.-G.R.
CV No. 76994, which set aside the November 12, 2002
Decision[4] of the Mandaluyong City Regional Trial Court,
Branch 213 (RTC) and, in effect, dismissed petitioners
complaint for specific performance and damages.

On August 17, 1999, petitioner Dolores Campos, through


her attorney-in-fact, Salvador Pagunsan (Pagunsan), filed a
_______________
[2] Penned by Associate Justice Rebecca De Guia-Salvador,
with Associate Justices Conrado M. Vasquez, Jr. and Jose C.
Mendoza (now a member of the Court), concurring; Rollo, pp.
27-40.
[3] Rollo, pp. 41-43.
[4] CA Rollo, pp. 31-35.
243
VOL.724,JUNE2,2014
243
Camposvs.Ortega,Sr.
case for specific performance with damages against
respondents Dominador Ortega, Sr. (Ortega, Sr.) and James
Silos (Silos). The Petition stated, among others, that:
2.Plaintiff, and her husband [Ernesto Campos], along
with their family, occupied the entire second level as well as
the front portion of the ground level of a residential structure
located at No. 208[5] F. Blumentritt Street, Mandaluyong
City. The lot on which the said structure is standing is owned
by the government, while the structure itself is owned by
[Dominga Boloy] from whom plaintiff leased the same
beginning in 1966;
2.1Plaintiff had, in fact, paid the real
estate taxes in behalf of Dominga Boloy in
1987, including the arrearages that
accumulated from 1979 in view of the
apparent abandonment by Dominga Boloy
on these obligations x x x;

3.In 1977, under and pursuant to the ZonalImprovement


Program [ZIP] of the then Metro Manila Commission,[6] in
coordination with the Local Government of Mandaluyong, a
census of the Hulo estate, where plaintiffs dwelling is
located, was conducted wherein plaintiff was among those
censused and qualified as a bona fide occupant x x x;
4.As a consequence of having qualified, plaintiff was
assigned an identifying house tag number 77-00070-08 on
August 20, 1977 x x x;
5.In 1979, after the death of the owner Dominga Boloy,
plaintiff had a verbal understanding with Clarita Boloy,
daughter-in-law of the former, to allow plaintiff to introduce
improvements and renovations on the structure, in which she
incurred expenses amounting to aboutP10,000.00. It was
further agreed that said amount shall be accordingly applied
to their monthly rentals. x x x.
_______________
[5] Formerly 600 (TSN, July 23, 2001, pp. 6-7).
[6] The predecessor of the Metropolitan Manila
Development Authority (MMDA).
244
244
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
The foregoing agreement, however, was never followed and
plaintiff was made to continue paying the monthly
obligations because of the assurance of Clarita Boloy that the
expenses incurred by plaintiff will just be reimbursed in full,
but even this latter agreement never materialized;
6.In 1987, Walter Boloy stepped into the situation and
thru counsel demanded from the plaintiff and family the

immediate vacation of the subject premises. An ejectment


suit was eventually filed against plaintiff but [it] was later
dismissed by the Metropolitan Trial Court (Branch 59,
Mandaluyong City) in its February 12, 1986 decision x x x;
7.After receiving the said decision, and after having
verified her husbands status as a bona fide [occupant],
plaintiff forthwith authorized [her] nephew Salvador
Pagunsan to follow up with the NHA the matter concerning
the award of lot to them in line with the [ZIP], more
particularly after learning that all bona fide occupants may
be allowed to buy the structure if the owner has already died;
8.In the course of [the follow up], Salvador Pagunsan
was informed by one Antonio Fernando thru a letter of July
20, 1987, that if Ernesto Campos, who was duly censused as
a bona fide occupant, may be able to buy the property from
Mr. Walter Boloy, Ernesto Campos may be awarded the lot on
which the structure is located;
9.On November 19, 1987, plaintiffs attorney-in-fact,
Salvador Pagunsan attended the meeting scheduled by the
Arbitration and Awards Committee [AAC] held at the Budget
Office of the Mandaluyong Municipal Hall x x x but[,] except
for Atty. Eddie Fernandez, who represented the Local
Government of Mandaluyong, no other representative from
the NHA came. In said meeting, Atty. Fernandez gave
plaintiff one month, or until December 19, 1987, to buy the
property denominated as Lot 17, Block 7, Phase III, of the
Hulo estate;
10.Plaintiff did not accede to the offer since the lot
occupied by them and where they were duly censused
245

VOL.724,JUNE2,2014
Camposvs.Ortega,Sr.

245

as occupants is Lot 18, Block 7, whereas the one offered to be


sold is Lot 17, which pertains to a different owner;
11.Another meeting was set on December 17, 1987, this
time at the Administrators Office of the Mandaluyong
Municipal Hall x x x. Again, nobody attended from the NHA.
On February 4, 1988, yet another meeting was set, and the
same result happened;
12.But it was learned by plaintiff, however (sic), that on
the same date, February 4, 1988, the property [was already]
awarded to James Silos and Dominador Ortega, [Sr.], and
that on November 23, 1987, just four days after the initial
meeting scheduled by the [AAC] of the NHA (on November 19,
1987, paragraph [9], supra) a Deed of Absolute Sale [was]
executed by and between Clarita Boloy (in representation of
Helen Telos Boloy Williams) and Dominador Ortega, [Sr.]
over Lot 17, Block 7 x x x. This despite the fact that during

the said initial meeting,plaintiff was given one month to


exercise the option of buying the property;
13.In paragraph 5 of the aforementioned deed, the x x x
[V]endor warrants her legal and absolute ownershipof the
aforesaid semi-apartment house ..., which is highly
disputable considering that no due transfer whatsoever was
made by the structure owner Dominga Boloy who was still
single at the time of her death and who died without issue.
Moreover, in the earlier ejectment suit filed by Walter Boloy
(paragraph [6], supra), his relation [to] Dominga Boloy was
never proven[;] hence, his claim of any authority, and that of

her daughter Helen Telos Boloy Williams, to deal with the


property in any manner is completely baseless and a sham;
14.On February

19,

1988,

similar,

or

almost

identical, Deed of Absolute Sale x x x was executed by and


between the same parties in the instrument executed on
November 23, 1987, only that this time, in [comparison] with
the first deed of sale, it is very noticeable that the name of
plaintiff Dolores Campos which was mentioned in paragraph
3 of the first deed as one of the renters and as a home-lot
applicant was omitted in this second deed;
246
246
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
15.Plaintiff, thru her representative, inquired with the
NHA and questioned the award of the lot to defendants who
are disqualified for not having been duly censused either as
renters or sharers, and also the matter regarding the
alteration the lot number actually being occupied by plaintiff.
But the NHA could not offer a satisfactory explanation to the
seemingly irregular process. A certain Ms. Myrna Cuarin of
the Legal Department refused to show the book containing
the list of the qualified occupants and their respective true
house tag number;
16.Plaintiff only came to know later that a Transfer
Certificate of Title [was already] issued to Dominador
Ortega, [Sr.] and James Silos over the lot despite the appeal
made by plaintiff with the NHA, much to her damage and
prejudice;
17.Defendants Dominador Ortega, Sr. and James Silos
are disqualified to become lot owners since they were not duly

censused as renters or sharers, pursuant to the ZIP


Guideline Circular No. 1 dated [September 16, 1977] of the
NHA x x x. Moreover, only those who have been actually
residing in
the
ZIP
Project
area before
August 15, 1975 shall be considered to qualify as
beneficiaries, but herein defendants have commenced their
residence only after the said date[;] hence, they are not
qualified beneficiaries, but just the same the lot was awarded
by the NHA to them;
18.The promptitude of the award by the NHA to herein
defendants was maneuvered (sic) by the latter in
circumvention of the real right that has already accrued to
plaintiff as a bona fide applicant who has duly qualified as a
beneficiary. In fact, she had been given the right to purchase
the structure only to find out that it had been already
transferred to another in complete disregard of herein
plaintiffs right (see paragraph 12, supra);
19.As a result of the bypassing of plaintiffs right[,] she
was dislocated, [has] suffered sleepless nights, mental
anguish, wounded feelings, and undue embarrassment,
among others, the assessment of which in pe247
VOL.724,JUNE2,2014
247
Camposvs.Ortega,Sr.
cuniary terms is left to the sound discretion of this Honorable
Court.
WHEREFORE, in view of the foregoing premises, it is
most respectfully prayed of this Honorable Court that after
due hearing a judgment be rendered declaring the acquisition
by defendants of Lot 18, Block 7 of the Hulo Estate void for

being in fraud of herein plaintiff; directing the defendants to


surrender their title to the [NHA]; and directing the
[NHA] to recognize plaintiffs right to purchase the structure
and giving her reasonable opportunity to exercise said right.
[7]
Respondents countered that the complaint stated no cause
of action, and that, if any, such cause of action is already
barred by prior judgment. They noted petitioners admission
in the Verification that an action for recovery of possession
was commenced against her by respondents before the Pasig
City RTC, Branch 153, involving the same property; that it
was resolved in respondents favor on October 12, 1992; and
that such decision was affirmed by the CA on May 30, 1996
and became final and executory on September 14, 1996.
Respondents also contended that the case was prematurely
filed since there was no prior recourse to the barangay
conciliation as required by Section 412 of the
Revised Katarungang PambarangayLaw. Lastly, respondents
argued that they are registered owners of the land in
question as well as the house built thereon by virtue of
Transfer Certificate of Title (TCT) No. 13342 and tax
declarations, and that the Torrens title cannot be altered,
modified or cancelled except through a direct proceeding.
Trial ensued. Presented as witnesses for the plaintiff were
petitioner herself, Pagunsan, and Dolores Abad Juan, who
claimed to be a bookkeeper of the NHA and a member of its
census team in 1977.[8] Only Ortega, Sr. testified for and in
behalf of the defendants.
_______________

[7] Records, pp. 2-6. (Emphasis in the original)


[8] Exhibit L, Evidence Folder p. 12; TSN, September 3,
2001, p. 5.
248
248
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
On November 12, 2002, the RTC ruled in favor of
petitioner. The dispositive portion of the Decision reads:
WHEREFORE,
accordingly
the
acquisition
of
[DOMINADOR] V. ORTEGA and JAMES SILOS of Lot 18
Block 7 of the Hulo estate is hereby declared VOID for being
violative of the right of the plaintiff. Herein defendants are
hereby ordered to surrender their title to the National
Housing Authority (NHA). Finally, the [NHA] is hereby
ordered to recognize plaintiffs right to purchase the structure
and give her reasonable time within which to exercise said
right.
No pronouncement as to cost.
SO ORDERED.[9]
For lack of clear and convincing proof, the RTC rejected
the allegation that respondents are guilty of committing
fraud and, consequently, denied petitioners claim for
damages. Despite this, it held that the principle of res
judicata is inapplicable and that petitioner has a vested right
over the subject property. The trial court opined:
x x x The case being referred to by defendants is for
the recovery of possession filed in Pasig City Court, which
judgment was confirmed by the Honorable Court of Appeals.
In that case, the appellate [court] ruled that the defendants
in this case [have] better rights over the said property, it
being titled under their names. Therefore, the cause of action

in the previous case involves the right of possession over the


disputed property. In the instant case, the cause of action is
the violation of the plaintiffs right to exercise their right to
buy the property in dispute within the period given by the
Arbitration and Awards Committee of the National Housing
Authority in [coordination] with the Local Government of
Mandaluyong City. Thus, this court was never swayed by the
[defendants] argument that res judicata is present. There is
no iden_______________
[9] CA Rollo, pp. 34-35.
249
VOL.724,JUNE2,2014
249
Camposvs.Ortega,Sr.
tity of the cause of action between the Pasig case and the
instant case.
Under the Zonal Improvement Program Guideline
Circular No. 1 dated September 16, 1977 of the National
Housing [Authority], plaintiff is a qualified beneficiary of
NHAs Zonal Improvement Program[,] she being in the
premises since 1966 as lessee of a residential structure.
According to the aforementioned circular, only occupants who
have been actually residing in the ZIP project area either as
sharer or renter before August 15, 1975 are qualified
beneficiaries under this NHA program. The plaintiff was
given until December 19, 1987 within which to buy the
property located at Lot 17, Block 7[,] Phase III of the Hulo
estate but did not exercise her right because the property
involved is different from what she had been occupying since
1966 until they left. Before any clarification was made on this
matter and before plaintiff could exercise [her] right to

purchase, [she] learned that the property, Lot 18, Block [7],
Phase III of Hulo estate was already sold to herein
defendants in violation of her right. The court is convinced
that plaintiff has acquired a vested right over the subject
property. Such right is protected by law and a violation of
said right will give rise to a valid cause of action.[10]
Upon appeal by respondents, the CA reversed the trial
courts decision. In ruling that petitioner has no vested right
over the subject parcel of land and the residential structure
standing thereon, the appellate court pronounced:
To our mind, [respondents] correctly underscore the fact
that, even from the testimonial evidence proffered by
[petitioner], there is no gainsaying [of] their lease of the first
floor of the residential structure owned by Dominga Boloy.
Although the commencement of their contract with the latter
had, admittedly, not been exactly established, the record
ineluctably shows that both [respondents] had attended the
meetings conducted by the NHA
_______________
[10] Id., at pp. 33-34. (Emphasis in the original)
250
250
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
Arbitration Committee for the purpose of awarding the lots
covered by the ZIP. Even more significantly, [respondent]
[Ortega, Sr.] was also included in the NHAs [1977] survey of
the Hulo Estate and was, in fact, issued a separate
identifying house tag alongside [petitioners] husband.
In contrast, [petitioners] lease of the second floor since
1966 clearly qualified her as a beneficiary under the ZIP
Guideline Circular No. 1 which employs the term to refer to

those who permanently reside in the project site either as


owners of residential structures or renters/sharers thereof
before August 15, 1975 up to the time that the area has been
adopted as a slum-upgrading site. Unlike [respondents] who
immediately availed of the opportunity they were afforded to
purchase their own residential lot, however, it appears that
[petitioner] demurred when the NHA offered her the chance
of buying Lot 17, Block [7] of the Hulo Estate until December
[19], 1987. On this score alone, we find that [petitioner]
cannot be presently heard to complain that she had been
unjustifiably deprived of her right as a qualified beneficiary
under the aforesaid program.
[Petitioner] had, of course, impressed upon the trial court
that the reason for her refusal was the fact that, as occupant
of the residential structure on Lot 18, Block 7, she had been
offered the wrong lot by the NHA. It bears emphasizing,
however, that ZIP Guideline Circular No. 1 does not give
renters or sharers a preferential right to purchase a
particular lot within the ZIP project site. While actual owners
of structures are thereunder given priority to stay in the
project site, house renters or [sharers] like [petitioner] are
only entitled to accommodation in a relocation site, if one is
available, or allowed to continue within the project area,
together with the owner of the structures they are renting.
In this particular regard, even [petitioner] conceded that she
could have acquired the subject lot had she purchased the
residential structure owned by Dominga Boloy or, at least,
her allotted 1/3 portion thereof.251
VOL.724,JUNE2,2014
251
Camposvs.Ortega,Sr.

Viewed in the foregoing light, it would appear that


[respondents] further acquisition of the subject residential
structure from the successors-in-interest of Dominga Boloy
should have likewise militated against [petitioners] cause.
Indeed, the record shows that [respondent] [Ortega, Sr.]
initially purchased 1/3 of said residential structure in the
November 23, 1987 Deed of Absolute Sale[,] which, in
recognition of their co-occupancy, also gave both [respondent]
Silos and [petitioner] the option to buy their respective 1/3
portion thereof. After the conclusion of the meetings called by
the NHA Arbitration Committee and upon [petitioners]
failure to exercise said option, the entire structure was,
finally, sold in favor of both [respondents] thru the Deed of
Sale dated February 19, 1988.[11]
The CA also gave credit to respondents for causing the
titling of the subject lot in their names, declaring it for
taxation purposes, and paying the realty taxes due thereon.
While petitioners tax declarations are considered as
goodindicia of possession in the concept of the owner, the
appellate court ruled that respondents certificate of title is
indefeasible and cannot be subject of a collateral attack like
petitioners present complaint for specific performance and
damages. Even if a transfer of title that is replete with
badges of fraud and irregularities renders nugatory and
inoperative the existing doctrines on land registration and
land titles, the CA opined that petitioner lost sight of the fact
that the trial court discounted the existence of fraud which
she imputed against respondents acquisition of the subject
parcel and the fact that she did not appeal such finding. In
the end, for petitioners failure to present clear and

convincing evidence to the contrary, the appellate court


upheld the presumption of regularity of official acts and
resolved not to disturb the NHAs award in favor of
respondents.
_______________
[11] Id., at pp. 86-88.
252
252
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
Petitioner moved for reconsideration, but it was denied.
Now before Us, the following issues for resolution were
raised:
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS ERRED IN REVERSING THE DECISION OF
THE REGIONAL TRIAL COURT, PARTICULARLY, IN
FAILING TO RECOGNIZE THAT PETITIONER HAS
ALREADY ACQUIRED A VESTED AND COGNIZABLE
RIGHT RESPECTING THE PROPERTY.
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS ERRED IN UPHOLDING THE PRESUMPTION
OF REGULARITY OF OFFICIAL ACTS RESPECTING THE
PROCESS OF AWARD OF THE PROPERTY MADE TO THE
RESPONDENTS, AND RULE OUT THE ATTENDANT
IRREGULARITIES AS INSUFFICIENT TO OVERCOME
THE SAID PRESUMPTION.[12]
The Court is unimpressed.
Like in petitioners case, one of the issues raised
inMagkalas v. National Housing Authority[13] was whether
the demolition or relocation of Caridad Magkalas structure

would violate her vested rights over the subject property


under the social justice provisions of the 1987 Constitution on
the ground that she had been in its possession for forty (40)
years. Resolving that a censused owner with assigned NHA
tag number acquired no vested right over the subject
property, We held:
Neither can it be successfully argued that petitioner had
already acquired a vested right over the subject property
when the NHA recognized her as the censused owner by
assigning to her a tag number (TAG No. 77-0063). We quote
with approval the trial courts pertinent findings on the
matter:
_______________
[12] Rollo, p. 96.
[13] 587 Phil. 152; 565 SCRA 379 (2008).
253
VOL.724,JUNE2,2014
253
Camposvs.Ortega,Sr.
Plaintiffs structure was one of those
found existing during the census/survey of
the area, and her structure was assigned
TAG No. 77-0063. While it is true that NHA
recognizes plaintiff as the censused owner of
the structure built on the lot, the issuance
of the tag number is not a guarantee for lot
allocation. Plaintiff had petitioned the NHA
for the award to her of the lot she is
occupying. However, the census, tagging,
and plaintiffs petition, did not vest upon
her a legal title to the lot she was occupying,

but a mere expectancy that the lot will be


awarded to her. The expectancy did not
ripen into a legal title when the NHA,
through Ms. Ines Gonzales, sent a letter
dated March 8, 1994 informing her that her
petition for the award of the lot was denied.
Moreover, the NHA, after the conduct of
studies and consultation with residents, had
designated Area 1, where the lot petitioned
by plaintiff is located, as an Area Center.
A vested right is one that is absolute, complete and
unconditional and no obstacle exists to its exercise. It is
immediate and perfect in itself and not dependent upon any
contingency. To be vested, a right must have become a title
legal or equitable to the present or future enjoyment of
property.
Contrary to petitioners position, the issuance of a tag
number in her favor did not grant her irrefutable rights to
the subject property. The tagging of structures in
the Bagong Barrio area was conducted merely to determine
the qualified beneficiaries andbona fide residents within the
area. It did not necessarily signify an assurance that the
tagged structure would be awarded to its occupant as there
were locational and physical considerations that must be
taken into account, as in fact, the area where petitioners
property was located had been classified as Area Center
(open space). The assignment of a tag number was a mere
expectant or contingent right and could not have ripened into
a vested right
254

254
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
in favor of petitioner. Her possession and occupancy of the
said property could not be characterized as fixed and
absolute. Assuch, petitioner cannot claim that she was
deprived of her vested right when the NHA ordered her
relocation to another area.[14]
Neither does petitioner have a cognizable right
respecting the lot in question. Notably, she readily admitted
not exercising their option to buy Boloys property despite the
knowledge that one of the requirements before an
entitlement to an award of the government-owned lot is that
they must own the subject house.[15]
Petitioner argues that what prompted her refusal to
purchase was not a matter of whimsical preference, not really
insisting on any preferential right, but on imminent
apprehension that the house that was being sold by Boloy is
situated at Lot 17 while they were occupying Lot 18; that the
particular lot number is different from what she is applying;
and that said lot is actually occupied by another person who
too may have already qualified as a ZIP beneficiary, resulting
in conflict of award. She contends that she could not be
compelled to suddenly become particularly interested in a lot
that is completely different from the one where the house
structure she occupies is situated and that the structure
owner in Lot 17 may not be willing to sell the same.
The argument is untenable. Petitioner is certainly
confused. There should be no doubt that the object of the sale
is a determinate thing, a semi-apartment house owned by
Boloy and not the specific lot on which it was built. Thus, it is

totally immaterial if the land on which the structure stood


was indicated as Lot 17 or Lot 18. It should not have been a
source of needless concern on the part of petitioner mainly
because the lots in the Hulo estate were at the time owned by
the
_______________
[14] Magkalas v. National Housing Authority, supra, at pp.
161-162; pp. 388-389 (2008).
[15] TSN, July 23, 2001, pp. 31-32.
255
VOL.724,JUNE2,2014
255
Camposvs.Ortega,Sr.
government prior to the actual award to qualified
beneficiaries. Likewise, petitioner has not shown that Boloy,
or another specific person, actually owned a housing
structure in Lot 17 aside from the one they were leasing in
Lot 18.
Petitioner next alleges that the entire process was pockmarked with irregularities too nagging to be ignored, and
collectively outweighed the presumption of regularity; that
the meetings only proved to be farcical, even embarrassing;
and that the repetitive absence of the persons necessary
forthose meetings could not have been trifling or insignificant
since, as what later proved to have transpired, the execution of
a deed of conveyance for the property was already taking place
while petitioner was still unsuspectingly relying on the
prospects of the scheduled meetings. Particularly, she
maintains that the brazen irregularity took place just four
days after the initial meeting on November 19, 1987 with the
execution of the Deed of Absolute Sale on November 23, 1987
in favor of respondents who surreptitiously and effectively

preempted the option given her to purchase the residential


structure, easing her out from the race, so to speak. These fail
to convince.
The presence or absence of fraud is a factual issue.[16]As a
general rule, only questions of law may be raised in a petition
for review on certiorari filed with this Court and factual
findings of the trial courts, when adopted and confirmed by
the CA, are final and conclusive on this Court, except when
the CA judgment is based on a misapprehension of facts or
the factual inferences are manifestly incorrect or when that
court overlooked certain relevant facts which, if properly
considered, would justify a different conclusion.[17]
In this case, petitioner, as the party alleging fraud in the
transaction and the one who bears the burden of proof,
[18]mis_______________
[16] Republic of the Philippines v. Guerrero, 520 Phil. 296,
306; 485 SCRA 424, 434 (2006).
[17] Id.
[18] Id., at p. 310; p. 438.
256
256
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
erably failed to demonstrate that respondents committed
fraud or that they connived with government officials and
employees to cause undue damage or prejudice to petitioner.
Petitioner did not present even a single evidence to support
the view that the repetitive absences of the persons necessary
for the meetings before the Arbitration and Awards
Committee were intentional or done with malicious intent.
Also, as the CA found, records would show that respondent

Ortega, Sr. initially purchased 1/3 of the residential structure


on November 23, 1987, per Deed of Absolute Sale, which,
recognizing his co-occupancy with others, also gave
respondent Silos and petitioner the similar option to buy
their respective 1/3 portion. Petitioner did not exercise the
option given. Hence, upon such failure, the entire structure
was eventually sold to bothrespondents through the Deed of
Sale dated February 19, 1988.
We agree with the CA that the case for specific
performance with damages instituted by petitioner effectively
attacks the validity of respondents Torrens title over the
subject lot. It is evident that, ultimately, the objective of such
claim is to nullify the title of respondents to the property in
question, which, in turn, challenges the judgment pursuant
to which the title was decreed. This is a collateral attack that
is not permitted under the principle of indefeasibility of
Torrens title. Section 48 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree,
unequivocally states:
SEC.48.Certificate not subject to collateral attack.A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law.
A collateral attack transpires when, in another action to
obtain a different relief and as an incident to the present
action, an attack is made against the judgment granting the
title while a direct attack (against a judgment granting the
title) is an action whose main objective is to annul, set aside,
or enjoin the enforcement of such judgment if not yet

implemented, or to seek recovery if the property titled under


the
257
VOL.724,JUNE2,2014
257
Camposvs.Ortega,Sr.
judgment had been disposed of.[19] The issue on the validity
of title, i.e., whether or not it was fraudulently issued, can
only be raised in an action expressly instituted for that
purpose.[20]
The appropriate legal remedy that petitioner should have
availed is an action for reconveyance. Proof of actual fraud is
not required as it may be filed even when no fraud intervened
such as when there is mistake in including the land for
registration.
Under the principle of constructive trust, registration of
property by one person in his name, whether by mistake or
fraud, the real owner being another person, impresses upon
the title so acquired the character of a constructive trust for
the real owner, which would justify an action for
reconveyance. In the action for reconveyance, the decree of
registration is respected as incontrovertible but what is
sought instead is the transfer of the property wrongfully or
erroneously registered in anothers name to its rightful owner
or to one with a better right. If the registration of the land is
fraudulent, the person in whose name the land is registered
holds it as a mere trustee, and the real owner is entitled to
file an action for reconveyance of the property.[21]
An action for reconveyance resulting from fraud prescribes
four years from the discovery of the fraud, which is deemed to
have taken place upon the issuance of the certificate of title

over the property, and if based on an implied or a


constructive trust it prescribes ten (10) years from the
alleged fraudulent registration or date of issuance of the
certificate of title over the property.[22] However, an action
for reconveyance based on implied or constructive trust is
imprescriptible if the plaintiff
_______________
[19] Urieta Vda. de Aguilar v. Alfaro, G.R. No. 164402,
July 5, 2010, 623 SCRA 130, 143-144.
[20] Id., at p. 145.
[21] Pasio v. Dr. Monterroyo, 582 Phil. 703, 715-716; 560
SCRA 739, 751 (2008).
[22] Philippine Economic Zone Authority (PEZA) v.
Fernandez, 411 Phil. 107, 119; 358 SCRA 489, 498 (2001).
258
258
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
or the person enforcing the trust is in possession of the
property.[23] In effect, the action for reconveyance is an
action to quiet title to the property, which does not prescribe.
[24] We said in Yared v. Tiongco:[25]
The Court agrees with the CAs disquisition that an action for
reconveyance can indeed be barred by prescription. In a long
line of cases decided by this Court, we ruled that an action for
reconveyance based on implied or constructive trust must
perforce prescribe in ten (10) years from the issuance of the
Torrens title over the property.
However, there is an exception to this rule. In the case
of Heirs of Pomposa Saludares v. Court of Appeals, the Court,
reiterating the ruling in Millena v. Court of Appeals, held

that there is but one instance when prescription cannot be


invoked in an action for reconveyance, that is, when the
plaintiff is in possession of the land to be reconveyed.
In Heirs of Pomposa Saludares, this Court explained that the
Court, in a series of cases, has permitted the filing of an
action for reconveyance despite the lapse of more than ten
(10) years from the issuance of title to the land and declared
that said action, when based on fraud, is imprescriptible as
long as the land has not passed to an innocent buyer for
value. But in all those cases, the common factual backdrop
was that the registered owners were never in possession of
the disputed property. The exception was based on the theory
that registration proceedings could not be used as a shield for
fraud or for enriching a person at the expense of another.
In Alfredo v. Borras, the Court ruled that prescription does
not run against the plaintiff in actual possession of the
disputed land because such plaintiff has a right to wait until
his possession is disturbed or his title is questioned before
initiating an action to vindicate his
_______________
[23] Id.
[24] Id.
[25] G.R. No. 161360, October 19, 2011, 659 SCRA 545.
259
VOL.724,JUNE2,2014
259
Camposvs.Ortega,Sr.
right. His undisturbed possession gives him the continuing
right to seek the aid of a court of equity to determine the
nature of the adverse claim of a third party and its effect on
his title. The Court held that where the plaintiff in an action

for reconveyance remains in possession of the subject land,


the action for reconveyance becomes in effect an action to
quiet title to property, which is not subject to prescription.
The Court reiterated such rule in the case of Vda. de
Cabrera v. Court of Appeals, wherein we ruled that the
imprescriptibility of an action for reconveyance based on
implied or constructive trust applies only when the plaintiff
or the person enforcing the trust is not in possession of the
property. In effect, the action for reconveyance is an action to
quiet the property title, which does not prescribe.
Similarly, in the case of David v. Malay, the Court held
that there was no doubt about the fact that an action for
reconveyance based on an implied trust ordinarily prescribes
in ten (10) years. This rule assumes, however, that there is an
actual need to initiate that action, for when the right of the
true and real owner is recognized, expressly or implicitly such
as when he remains undisturbed in his possession, the
statute of limitation would yet be irrelevant. An action for
reconveyance, if nonetheless brought, would be in the nature
of a suit for quieting of title, or its equivalent, an action that
is imprescriptible. In that case, the Court reiterated the
ruling in Faja v. Court of Appeals which we quote:
x x x There is settled jurisprudence that one
who is in actual possession of a piece of land
claiming to be owner thereof may wait until
his possession is disturbed or his title is
attacked before taking steps to vindicate his
right, the reason for the rule being, that his
undisturbed possession gives him a
continuing right to seek the aid of a court of

equity to ascertain and determine the


nature of the adverse claim of a third party
and its effect on his own title, which right
can be claimed only
260
260
SUPREMECOURTREPORTSANNOTATED
Camposvs.Ortega,Sr.
by one who is in possession. No better
situation can be conceived at the moment
for Us to apply this rule on equity than that
of herein petitioners whose mother, Felipa
Faja, was in possession of the litigated
property for no less than 30 years and was
suddenly confronted with a claim that the
land she had been occupying and cultivating
all these years, was titled in the name of a
third person. We hold that in such a
situation the right to quiet title to the
property, to seek its reconveyance and annul
any certificate of title covering it, accrued
only from the time the one in possession
was made aware of a claim adverse to his
own, and it is only then that the statutory
period of prescription commences to run
against such possessor.[26]
In this case, petitioner, taking into account Article 1155 of
the Civil Code[27] and jurisprudence[28] on the matter,
should be guided by the following facts in enforcing her legal
remedy/ies, if still any: (1) her judicial admission that they no
longer possess the subject lot, claiming that they stayed

therein from 1966 until 1997 when they were ejected by the
sheriff of Pasig RTC;[29] (2) TCT No. 13342 was issued on
De_______________
[26] Yared v. Tiongco, supra note 25 at pp. 552-554.
[27] ART. 1155.The prescription of actions in
interrupted when they are filed before the court, when there
is a written extrajudicial demand by the creditors, and when
there is any written acknowledgement of the debt by the
debtor.
[28] See Ampeloquio, Sr. v. Napiza, 536 Phil. 1102; 506
SCRA 396 (2006); Permanent Savings and Loan Bank v.
Velarde, G.R. No. 140608, September 23, 2004, 439 SCRA
1; Ledesma v. Court of Appeals, G.R. No. 106646, June 30,
1993, 224 SCRA 175; Philippine National Railways
v.National Labor Relations Commission, 258 Phil. 552; 177
SCRA 740 (1989); and The Overseas Bank of Manila v.
Geraldez, 183 Phil. 493; 94 SCRA 937 (1979).
[29] TSN, July 23, 2001, pp. 7, 33-34, 36-37.
261
VOL.724,JUNE2,2014
261
Camposvs.Ortega,Sr.
cember 9, 1997; and (3) the instant case for specific
performance with damages was filed on August 17, 1999.
WHEREFORE, premises

considered,

the

Petition

isDENIED. The August 12, 2005 Decision and January 17,


2006 Resolution of the Court of Appeals in C.A.-G.R. CV No.
76994, which dismissed petitioners complaint for specific
performance and damages docketed as Civil Case No. MC99-

826 before the Mandaluyong City Regional Trial Court,


Branch 213, are hereby AFFIRMED.
SO ORDERED.

Velasco, Jr. (Chairperson), Del Castillo,** Villarama,


Jr.*** and Leonen, JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.An action for reconveyance based on an implied or
constructive trust prescribes in 10 years from the time the
right of action accrues. (Mercado vs. Espinocilla, 664
SCRA 724 [2012])
The certificate of title issued pursuant to any grant or
patent involving public lands is as conclusive and
indefeasible as any other certificate of title issued to private
lands in the ordinary or cadastral registration proceedings. It
is not subject to collateral attack. (Republic vs. Bellate, 703
SCRA 210 [2013])
o0o
_______________
** Designated additional member in lieu of Associate
Justice Jose Catral Mendoza, per Raffle dated June 2, 2014.
*** Designated acting member, per Special Order No. 1691
dated May 22, 2014.
Copyright 2015 Central Book Supply, Inc. All rights reserved.
Republic
SUPREME
Manila
THIRD DIVISION

of

the

Philippines
COURT

G.R. No. 205065

June 4, 2014

VERGEL PAULINO AND CIREMIA PAULINO, Petitioners,


vs.
COURT OF APPEALS AND REPUBLIC OF THE
PHILIPPINES, represented by the DMINISTRATOR of the
LAND REGISTRATION AUTHORITY, Respondents.
x-----------------------x
G.R. No. 207533
SPOUSES DR. VERGEL L. PAULINO & DR. CIREMIA G.
PAULINO, Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, represented by the
ADMINISTRATOR
of
the
LAND
REGISTRATION
AUTHORITY, Respondent.
DECISION
MENDOZA, J.:
These consolidated petitions assail 1] the September 24, 2012
Resolution1 of the Court of Appeals (CA) ordering the issuance
of a writ of preliminary injunction restraining the execution of the
July 20, 2010 Decision2 of the Regional Trial Court, Branch 83,
Quezon City, (RTC), Judge Ralph Lee presiding, which ordered
the reconstitution of a supposedly lost title; and 2] its March 5,
2013 Decision3 annulling the said RTC decision.
Specifically, G.R. No. 205065 is a petition for certiorari under
Rule 65of the Rules of Court seeking to annul the September
24, 2012 and December 20, 2012 Resolutions issued by the
respondent CA, granting the public respondents prayer for the
issuance of a writ of preliminary injunction enjoining the RTC
from enforcing and implementing its July 20, 2010 decision,
which ordered the Land Registration Authority (LRA) to
reconstitute the petitioners certificate of title, Transfer of

Certificate Title (TCT) No. 301617 of the Registry of Deeds of


Quezon City (QCRD).
On the other hand, G.R. No. 207533is a petition for review on
certiorari under Rule 45of the Rules of Court seeking to reverse
and set aside the March 5, 2013 Decision and June 6, 2013
Resolution of the CA, which granted the petition for annulment
and setting aside of the July 20, 2010 RTC Decision, which
ordered the LRA to reconstitute petitioners certificate of title.
The Facts:
On December 14, 2007, the late Celso Fernandez purchased, in
a public auction conducted by the Quezon City government, a
real property owned and registered in the name of Lolita G.
Javier (Javier),married to Pedro Javier, as evidenced by a
certificate of sale of delinquent property. The subject property
appeared to be covered by an owners duplicate of TCT No.
301617 of the QCRD.
After his death, the surviving heirs of Celso Fernandez executed
an Extra-Judicial Settlement of Estate with Absolute Sale
covering the subject property, selling it in favor of the petitioners,
spouses Vergel L. Paulino and Ciremia Paulino (Spouses
Paulino),for a consideration of P1,805,000.00.
On June 11, 1988, a fire broke out in the Quezon City Hall which
burned a portion thereof which included the office of the QCRD.
Consequently, on March 9, 2010, Spouses Paulino filed a
petition for reconstitution of the original copy of TCT No. 301617
with the RTC, alleging that its original copy was among those
titles that were razed during the fire. Upon receipt, the RTC
directed the publication and posting of the scheduled hearing of
case. After the jurisdictional facts were established, a hearing
officer was designated to receive the evidence ex parte.
On June 20, 2010, the RTC directed the LRA to submit a report
within five (5) days from notice. Without awaiting the LRA

Report, the RTC rendered the assailed July 20, 2010 Decision,
granting the petition for reconstitution and ordering the Registrar
of Deeds of the QCRD to reconstitute the original copy of TCT
No. 301617. The dispositive portion of the decision reads:
WHEREFORE, the Register of Deeds for Quezon City is hereby
directed to reconstitute in the files of his office the original copy
of Transfer Certificate Title No. 301617 in exactly the same
terms and conditions on the basis of Owners Duplicate
Certificate of said Transfer Certificate of Title No. 301617 and
other available supporting documents submitted to your office
and once accomplished, the said Register of Deeds is further
ordered to issue new owners duplicate copy of the said
Certificate of Title after payment of the prescribed fees.
SO ORDERED.4
On August 16, 2010, the RTC issued the Certificate of
Finality,5 there being no motion for reconsideration or appeal
filed by any of the interested parties.
Meanwhile, on August 17, 2010, the RTC received the LRA
Report,6 stating that TCT No. 301617was registered in the name
of a certain Emma B. Florendo (Florendo)and that it was
previously the subject of an application for administrative
reconstitution. It was also discovered that the original copy of
the title on file in the Registry of Deeds was among those saved
titles from the fire that gutted the office of QCRD on June 11,
1988. In addition, when the technical description of the subject
property was plotted, it was identical with Lot 939,Piedad Estate
covered by TCT No. RT-55869 (42532), in the name of Magnolia
W. Antonino (Antonino).
On December 3, 2010, Spouses Paulino filed with the QCRD an
application for registration of the judicial reconstitution of TCT
No. 301617 based on the RTC decision. The Registrar of
Deeds, Atty. Elbert T. Quilala (Atty. Quilala),and other officials of
the QCRD refused to reconstitute the original copy of the TCT.
Hence, Spouses Paulino filed a petition for indirect contempt.

Subsequently, the RTC found Atty. Quilala guilty of indirect


contempt in its Decision,7 dated December 2, 2011.
On July 13, 2012, respondent Republic of the Philippines,
represented by the Administrator of the LRA, filed its Petition for
Annulment of Judgment with Urgent Prayer for Issuance of
Temporary Restraining Order and/or Writ of Preliminary
Injunction8 assailing 1] the July 20, 2010 RTC decision granting
the petition for reconstitution of the original title; and 2] the
December 2, 2011 RTC decision, finding the officials of the
QCRD guilty of indirect contempt for failing to reconstitute TCT
No. 301617.
On September 24, 2012, the CA issued the assailed resolution,
granting the prayer for the issuance of a writ of preliminary
injunction. The decretal portion reads:

Spouses Paulino filed a motion for reconsideration of the said


resolution, but it was denied in the assailed December 20, 2012
Resolution.
On January 17, 2013, Spouses Paulino filed the special civil
action for certiorari under Rule 65, docketed as G.R. No.
205065,seeking to annul the CA resolutions, which granted the
preliminary injunction, citing the commission of a grave abuse of
discretion.
On March 5, 2013, the CA promulgated its decision on the
merits of the petition for annulment of judgment, granting LRAs
petition, thereby annulling and setting aside the RTC decisions,
dated July 20, 2010 and December 2, 2011. The fallo reads:

WHEREFORE, let a Writ of Preliminary Injunction ISSUE


enjoining public respondent Regional Trial Court, Branch 83,
Quezon City, or any person acting under its authority, from
enforcing and implementing the Decisions dated July 20, 2010
and December 2, 2011. The filing of a bond is not required
pursuant to Section 22, Rule 141 of the Rules of Court.

WHEREFORE, premises considered, the instant Petition for


Annulment of Judgment is hereby GRANTED. The assailed
Decisions dated July 20, 2010 and December 2, 2011 of the
Regional Trial Court, Branch 83, Quezon City are ANNULLED
and SET ASIDE. Accordingly, the Petition for Reconstitution of
Original Copy of TCT No. 301617 and the Petition for Indirect
Contempt filed by private respondent spouses Vergel Paulino
and Ciremia G. Paulino are DISMISSED.

SO ORDERED.9

SO ORDERED.11

Taking into account that the case was still in its completion stage
and it appearing that the immediate execution and satisfaction
of the assailed Decisions, dated July 20, 2010 and December 2,
2011, would probably result in manifest injustice and irreparable
injury against petitioner Republic of the Philippines (now
respondent LRA), the CA found merit in its prayer for the
issuance of a writ of preliminary injunction. It explained that it
was in the best interest of all the parties to maintain the status
quo until it had resolved the merits of the issues raised in the
petition, adding that to deny the prayer would render ineffective
any judgment that may be rendered in the case.10

The CA ruled that the RTC lacked jurisdiction to order the


reconstitution of the original copy of TCT No. 301617, there
being no lost or destroyed title. In fact, on the basis of the LRA
Report and other evidence on record, the subject lot specified
on TCT No. 301617 had the same technical description and was
identical to Lot 939, Piedad Estate covered by TCT No. RT55869 (45532) in the name of Antonino, which title was already
cancelled by TCT Nos. 296725 to 296728 in the name of
Magnolia Antonino. Morever, TCT No. 301617 existed but it was
registered in the name of a different owner, Florendo, and
pertained to a different real property located in Quirino District,
Quezon City, registered in the year 1907. The records further
reveal that TCT No. 301617 was previously the subject of

another petition for reconstitution filed by one Lolita Javier which


was also dismissed by the RTC, Branch 77, Quezon City.12

constitute collateral attack on the fake and spurious TCT


No. RT-55869 (42532) in the name of Magnolia Antonino.

Spouses Paulino filed a motion for reconsideration, but it was


denied by the CA in its June 6, 2013 Resolution. Consequently,
they filed a petition for review on certiorari with this Court under
Rule 45, docketed as G.R. No. 207533.

4. Whether the Court of Appeals committed grave error of


law in ruling that TCT NO. 301617 in the name of Lolita
Javier cannot be reconstituted because TCT No. 301617
existed in the name of Emma Florendo and pertained to a
different property.

Eventually, the Court issued a resolution ordering the


consolidation of G.R. No. 207533 with G.R. No. 205065, as both
cases essentially involve the same set of facts, parties and
issues.
Issues and Arguments:

5. The Court of Appeals committed graver error of law


when it annulled the July 20, 2010 Decision of the
Regional Trial Court based on factual issues despite the
fact that the Regional Trial Court of Quezon City has
jurisdiction over the reconstitution and that it was proven
that TCT No. 301617 existed and the same was lost. 14

G.R. No. 205065


1. Whether the Court of Appeals committed an error of
law and grave abuse of discretion amounting to lack or
excess of jurisdiction.13
G.R. No. 207533
1. Whether the Court of Appeals committed grave error of
law in not dismissing the petition for annulment of
judgment notwithstanding the fact that the respondent
failed to resort to the ordinary remedies of new trial,
appeal, petition for relief or other appropriate remedies
despite opportunity to do so.
2. Whether the Court of Appeals committed grave error of
law when it disregarded the rule on evidence in giving
credence to the Report that was lately submitted by the
Land Registration Authority and obviously executed for
the interest of other persons and to protect a fake and
spurious title.
3. Whether the Court of Appeals committed grave error of
law in ruling that reconstitution of TCT No. 301617 would

Considering that the annulment case in the CA was already


decided and the petitions were consolidated, the Court will just
treat the cases as one case as they essentially involve the same
issues.
From the foregoing, it appears that the ruling of the Court hinges
on the resolution of these two key issues: first, whether CA
properly availed of Rule 47 of the 1997 Rules of Civil Procedure
to assail the final RTC decision; and second, whether the RTC
lacked jurisdiction over the petition for reconstitution.
Procedural
Issue:
for Annulment of Judgment

Propriety

of

Petition

Spouses Paulino argue that under Rule 47 of the 1997 Rules of


Civil
Procedure, it is crystal clear that annulment of judgments may
only be availed of when the ordinary remedies of new trial,
appeal, petition for relief, or other appropriate remedies are no
longer available through no fault of the petitioner. They insist on
the dismissal of the petition for annulment on the ground that the
LRA is already in estoppel and not entitled to the relief prayed

for because the July20, 2010 and December 2, 2011 RTC


decisions became final and executory through their fault as they
failed to resort to other remedies despite opportunities to do so.
In support thereof, Spouses Paulino cite Republic vs.
Castro,15 where the Court ruled that annulment of judgment is
never resorted to as a substitute for a partys own neglect in not
promptly availing of the ordinary or other appropriate remedies.
In Republic vs. TAFPA Inc.,16 it was held that, whether through
inadvertence or negligence of its deputized counsel or the OSG
itself, the decision had already become final and executory and
could not be annulled. To conclude otherwise would run counter
to the basic principles of fair play. Besides, there would be no
end to litigations if the parties, who unsuccessfully availed
themselves of any of the appropriate remedies or lost them
through their fault or inadvertence, could have unfavorable
decisions annulled by simply bringing an action for annulment of
judgment.
The Court finds the petitions devoid of merit.
Under Section 2 of Rule 47, the only grounds for annulment of
judgment are extrinsic fraud and lack of jurisdiction. Lack of
jurisdiction as a ground for annulment of judgment refers to
either lack of jurisdiction over the person of the defending party
or over the subject matter of the claim. In case of absence, or
lack, of jurisdiction, a court should not take cognizance of the
case.
In these cases, the petition for annulment was based on lack of
jurisdiction over the subject matter. The rule is that where there
is want of jurisdiction over a subject matter, the judgment is
rendered null and void. A void judgment is in legal effect no
judgment, by which no rights are divested, from which no right
can be obtained, which neither binds nor bars any one, and
under which all acts performed and all claims flowing out are
void. It is not a decision in contemplation of law and, hence, it
can never become executory. It also follows that such a void

judgment cannot constitute a bar to another case by reason of


res judicata.17
Accordingly, the Court agrees with the CA that LRA was not
estopped from assailing the July 20, 2011 RTC Decision
because it never attained finality for being null and void, having
been rendered by a court without jurisdiction over the
reconstitution proceedings.
As early as the case of Strait Times, Inc. v. CA, 18 the Court has
held that when the owners duplicate certificate of title has not
been lost, but is, in fact, in the possession of another person,
then the reconstituted certificate is void, because the court that
rendered the decision had no jurisdiction. Reconstitution can be
validly made only in case of loss of the original certificate. 19 This
rule was reiterated in the cases of Villamayor v. Arante, 20 Rexlon
Realty Group, Inc. v. Court of Appeals,21 Eastworld Motor
Industries Corporation v. Skunac Corporation, 22 Rodriguez v.
Lim,23Villanueva v. Viloria,24 and Camitan v. Fidelity Investment
Corporation.25 Thus, with evidence that the original copy of the
TCT was not lost during the conflagration that hit the Quezon
City Hall and that the owners duplicate copy of the title was
actually in the possession of another, the RTC decision was null
and void for lack of jurisdiction.
For the aforecited reason, the Court agrees that the public
respondent correctly availed of the remedy of petition for
annulment of judgment under Rule 47 without need of
exhausting other ordinary remedies of new trial, appeal, petition
for relief, or other appropriate remedies because the RTC
judgment was null and void.
Indeed, where a petition for annulment of a judgment or a final
order of the RTC filed under Rule 47 of the Rules of Court is
grounded on lack of jurisdiction over the person of the
respondent or over the nature or subject of the action, the
petitioner need not allege in the petition that the ordinary
remedy of new trial or reconsideration of the final order or
judgment or appeal therefrom is no longer available through no

fault of his own, precisely because the judgment rendered or the


final order issued by the RTC without jurisdiction is null and void
and may be assailed any time either collaterally or in a direct
action or by resisting such judgment or final order in any action
or proceeding whenever it is invoked, unless barred by laches. 26
Substantive
Issue:
Jurisdiction
in the Reconstitution Proceedings

of

RTC

The governing law for judicial reconstitution of title is R.A. No.


26. Sec. 15 thereof provides when an order for reconstitution
should issue, as follows:
Section 15. If the court, after hearing, finds that the documents
presented, as supported by parole evidence or otherwise, are
sufficient and proper to warrant the reconstitution of the lost or
destroyed certificate of title, and that petitioner is the registered
owner of the property or has an interest therein, that the said
certificate of title was in force at the time it was lost or
destroyed, and that the description, area and boundaries of the
property are substantially the same as those contained in the
lost or destroyed certificate of title, an order of reconstitution
shall be issued. The clerk of court shall forward to the register of
deeds a certified copy of said order and all the documents
which, pursuant to said order, are to be sued as the basis of the
reconstitution. If the court finds that there is no sufficient
evidence or basis to justify the reconstitution, the petition shall
be dismissed, but such dismissal shall not preclude the right of
the party or parties entitled thereto to file an application for
confirmation of his or their title under the provisions of the Land
Registration Act. (Emphasis and underscoring supplied)
From the foregoing, the following must be present for an order
for reconstitution to issue: (a) that the certificate of title had been
lost or destroyed; (b) that the documents presented by petitioner
are sufficient and proper to warrant the reconstitution of the lost
or destroyed certificate of title; (c) that the petitioner is the
registered owner of the property or had an interest therein; (d)
that the certificate of title was in force at the time it was lost and

destroyed; and (e) that the description, area and boundaries of


the property are substantially the same as those contained in
the lost or destroyed certificate of title.27
In reconstitution proceedings, the Court has repeatedly ruled
that before jurisdiction over the case can be validly acquired, it
is a condition sine quo non that the certificate of title has not
been issued to another person. If a certificate of title has not
been lost but is in fact in the possession of another person, the
reconstituted title is void and the court rendering the decision
has not acquired jurisdiction over the petition for issuance of
new title. The courts simply have no jurisdiction over petitions by
(such) third parties for reconstitution of allegedly lost or
destroyed titles over lands that are already covered by duly
issued subsisting titles in the names of their duly registered
owners. The existence of a prior title ipso facto nullifies the
reconstitution proceedings. The proper recourse is to assail
directly in a proceeding before the regional trial court the validity
of the Torrens title already issued to the other person. 28
In the case at bench, the CA found that the RTC lacked
jurisdiction to order the reconstitution of the original copy of TCT
No. 301617, there being no lost or destroyed title over the
subject real property, the respondent having duly proved that
TCT No. 301617 was in the name of a different owner, Florendo,
and the technical description appearing on that TCT No. 301617
was similar to the technical description appearing in Lot 939,
Piedad Estate covered by TCT No. RT-55869 (42532) in the
name of Antonino. In fact, TCT No. RT-55869 (42532) was
already cancelled by TCT Nos. 296725 to 296728 also in the
name of Antonino.
Pertinent portions of the LRA Report, which the RTC did not wait
for, read:
xxx
2.1 When the technical description of Lot No. 804-New-B, Psd2341, appearing on the reproduction of Transfer Certificate of

Title No. 301617, was plotted on the Municipal Index Map No.
5708, it appears that the aforesaid lot is identical to Lot 939,
Piedad Estate covered by TCT No. RT-55869 (42532) in the
name of Magnolia W. Antonino, which title is already totally
cancelled and issuing in lieu thereof TCT Nos. 296725 to
296728inclusive all in the name of Magnolia Antonino, covering
Lots 939-A to 939-D of subdivision plan Psd-00-065898.
xxx
2.3. TCT No. 301617 was previously the subject of a petition for
judicial reconstitution under LRC Case No. Q-3796 (90) in
Regional Trail Court, Branch 77, wherein this Authority rendered
a Report dated August 20, 1991. The said petition was
dismissed on September 23, 1997 by then Presiding Judge
Normandie B. Pizarro, on the grounds that the submitted basis
for reconstitution are fabricated and that an earlier title was
issued covering the same property.
2.4 The real TCT No. 301617 covers Lot 17, Blk. 83 of the
subdivision plan Psd-57970, containing an area of 182.80
square meters, in the name of Emma B. Florendo. The same
was applied for administrative reconstitution but it was found
that the original copy of title on file in the Registry of Deeds, is
among the saved titles from the fire that gutted the registry on
June 11, 1988, reproduction of which is hereto attached.
The Court, thus, finds no reversible error in the findings of the
CA.1wphi1 It is clear from the records that the subject TCT No.
301617 is in the name of a different owner, Florendo, and the
technical description appearing therein pertains to a parcel of
land covered by TCT No. RT-55869 (42532) in the name of one
Antonino.
It must be remembered that the reconstitution of a certificate of
title denotes restoration in the original form and condition of a
lost or destroyed instrument attesting the title of a person to a
piece of land. The purpose of the reconstitution of title is to
have, after observing the procedures prescribed by law, the title

reproduced in exactly the same way it has been when the loss
or
destruction
occurred.29 Reconstitution
apparently
presupposes the existence of an original certificate of title which
was lost or destroyed. If there was no loss or destruction like in
the case at bench, there is actually nothing to reconstitute. The
same rule applies if in fact there is an earlier valid certificate of
title in the name and in the possession of another person and
said title is existing. Accordingly, the RTC never acquired
jurisdiction over the same, and its judgment rendered thereafter
is null and void, which may be attacked anytime.
With respect to the contention of Spouses Paulino that the LRA
Report is inadmissible because it was not presented and
identified in open court and admitted in evidence, suffice it is to
say that they are estopped from questioning it. The admissibility
of the LRA report was not challenged during the proceedings of
the petition for annulment in the CA. Its admissibility was only
questioned in these petitions. They are deemed to have waived
their right to question its genuineness and authenticity.
Further, records show that the CA gave credence to the LRA
Report, which was submitted in compliance to its resolution,
dated July 26, 2012. The LRA Report is a certified photocopy
from the records duly signed by the Branch Clerk of Court.
Accordingly, the LRA report is deemed to form part of the
records which may be used in resolving the present controversy.
It need not be emphasized that the RTC hastily acted on the
petition for reconstitution because it did not wait for the LRA
Report. If there was no haste, the LRA Report would have
shown that the RTC had no jurisdiction over the case because
there was already an existing title.
In addition, Spouses Paulino also raised the irregularity in the
issuance of TCT No. RT-558969 (42532), arguing that a
reconstitution would not constitute a collateral attack on a title
that was irregularly and illegally issued in the first place. They
argued that it was an error on the part of the CA to deny their
right to have their title reconstituted based on the fake title of
Antonino. They assert that the rule, that a title issued under the

Torrens System is presumed valid and, hence, is the best proof


of ownership of a piece of land, does not apply where the
certificate itself is faulty as to its purported origin.
The Court, however, finds the argument of Spouses Paulino
specious and misplaced.1wphi1 It is a well settled rule that a
certificate of title, once registered, cannot be impugned, altered,
changed, modified, enlarged or diminished except in a direct
proceeding permitted by law.30 The validity of the certificate of
title can be threshed out only in a direct proceeding filed for the
purpose. A Torrens title cannot be attacked collaterally.
It is also a well-known doctrine that the issue as to whether the
title was procured by falsification or fraud as advanced by
Spouses Paulino can only be raised in an action expressly
instituted for the purpose. A Torrens title can be attacked only for
fraud, within one year after the date of the issuance of the
decree of registration. Such attack must be direct, and not by a
collateral proceeding. The title represented by the certificate
cannot be changed, altered, modified, enlarged, or diminished in
a collateral proceeding.31
Indeed, the reconstitution proceeding constituted a collateral
attack on the Torrens title of Antonino. The proper recourse of
the Spouses Paulino to contest the validity of the certificate of
title is not through the subject petition for reconstitution, but in a
proper proceeding instituted for such purpose. Even if their
arguments of fraud surrounding the issuance of the title of
Antonino is correct, such allegation must be raised m a proper
proceeding which is expressly instituted for that purpose.
Needless to state, the CA did not commit any grave abuse of
discretion in issuing the writ of preliminary injunction questioned
in G.R. No. 205065.
WHEREFORE, the petitions in both cases are DENIED.
SO ORDERED.

JOSE
Associate Justice

CATRAL

MENDOZA

G.R. No. 194066.June 4, 2014.*


REPUBLIC
OF
THE
PHILIPPINES,
petitioner, vs.FRANKLIN M. MILLADO, respondent.
Civil Law; Property; Reconstitution of Titles; Judicial
Reconstitution; The nature of judicial reconstitution
proceedings is the restoration of an instrument which is
supposed to have been lost or destroyed in its original form
and condition.The nature of judicial reconstitution
proceedings is the restoration of an instrument which is
supposed to have been lost or destroyed in its original form
and condition. The purpose of the reconstitution of title or
any document is to have the same reproduced, after proper
proceedings in the same form they were when the loss or
destruction occurred.
_______________
* FIRST DIVISION.
26
2
SUPREMECOURTREPORTSANNOTATED
6
Republicvs.Millado
Same; Same; Same; Same; Notice of Hearing; It is settled
that the actual notice requirement in Section 13 in relation to
Section 12 of Republic Act (R.A.) No. 26 is mandatory and
jurisdictional.The registered owners appearing in the title
sought to be reconstituted, or in this case, their surviving
heirs, are certainly interested parties who should be notified
of reconstitution proceeding under Section 12 in relation to

Section 13 of R.A. 26. Indeed, for petitions based on sources


enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and
3(f), Section 13 adds another requirement aside from
publication and posting of notice of hearing: that the notice
be mailed to occupants, owners of adjoining lots, and all
other persons who may have an interest in the property.
Notwithstanding the sale supposedly effected by vendors
claiming to be heirs of the registered owners, they remain as
interested parties entitled to notice of judicial reconstitution
proceedings. It is settled that the actual notice requirement
in Section 13 in relation to Section 12 of R.A. 26 is
mandatory and jurisdictional. In the early case of Manila
Railroad Company v. Hon. Moya, et al., 14 SCRA 358
(1965), this Court categorically declared: It is clear from
section 13 of Republic Act No. 26 that notice by publication is
not sufficient under the circumstances.Notice must be
actually sent or delivered to parties affected by the
petition

for

reconstitution.

The

order

of

reconstitution, therefore, having been issued without

compliance with the said requirement, has never


become final as it was null and void. The Manila
Railroad cannot then complain that the motion to set aside
was filed beyond the reglementary period.
Same; Same; Same; Same; Same; Notwithstanding
compliance with the notice publication, the requirement of
actual notice to the occupants and the owners of the adjoining
property under Sections 12 and 13 of Republic Act (R.A.) No.
26 is itself mandatory to vest jurisdiction upon the court in a
petition for reconstitution of title and essential in order to
allow said court to take the case on its merits.Where the

authority to proceed is conferred by a statute and the manner


of obtaining jurisdiction is mandatory, the same must be
strictly complied with, or the proceedings will be void. As
such, the court upon which the petition for reconstitution of
title is filed is duty-bound to examine thoroughly the petition
for reconstitution of title and review the record and the legal
provisions laying down the germane jurisdictional
requirements. Thus, we have held that notwithstanding
compliance with the notice publication, the require27
VOL.752,JUNE4,2014
2
7
Republicvs.Millado
ment of actual notice to the occupants and the owners of
the adjoining property under Sections 12 and 13 of R.A. 26 is
itself mandatory to vest jurisdiction upon the court in a
petition for reconstitution of title and essential in order to
allow said court to take the case on its merits. The
nonobservance of the requirement invalidates the whole
reconstitution proceedings in the trial court.
PETITION for review on certiorari of a decision of the Court
of Appeals.
The facts are stated in the opinion of the Court.
The Solicitor General for petitioner.
Jose Torres Pacis for respondent.
VILLARAMA, JR.,J.:
Before the Court is a petition for review under Rule
45which seeks to reverse and set aside the Decision[1] dated
October 13, 2010 of the Court of Appeals (CA) in C.A.-G.R.
CV No. 93056. The CA affirmed the Decision[2] dated
January 14, 2009 of the Regional Trial Court (RTC) of Iba,

Zambales, Branch 71 granting the petition for reconstitution


in L.R.A. Case No. RTC-237-I.
On February 7, 2007, Franklin M. Millado (respondent)
filed a petition[3] for reconstitution of Original Certificate of
Title (OCT) No. 2108 issued in favor of the following, in
undivided equal shares: Isabel Bautista, single; Sixto
Bautista, married to Elena Ela; and Apolonia Bautista,
single. Respondent alleged that he and his wife are the
vendees of the prop_______________
[1] Rollo, pp. 21-34. Penned by Associate Justice Josefina
Guevara-Salonga with Associate Justices Mariflor P.
Punzalan Castillo and Franchito N. Diamante, concurring.
[2] Records, pp. 98-101. Penned by Presiding Judge
Consuelo Amog-Bocar.
[3] Id., at pp. 2-4.
28
28 SUPREMECOURTREPORTSANNOTATED
Republicvs.Millado
erty covered by the said title, by virtue of a Deed of ExtraJudicial Settlement of Estate with Sale[4] executed by the
heirs of spouses Sixto and Elena Bautista on December 29,
2006. He further averred that the owners duplicate of OCT
No. 2108 was in his possession while he was securing
clearances for the transfer of title in their names but he
either left or misplaced the same.
Respondent claimed that despite efforts he exerted to
locate the owners duplicate of OCT No. 2108, he was unable
to find it. Upon verification with the Registry of Deeds, the
original copy of OCT No. 2108 was likewise not found in the

files of said office, as per the certification[5]issued by the


Register of Deeds for the Province of Zambales stating that
said title was declared missing as per Inventory dated Dec.
17, 1981 and that despite d[i]ligent effort to locate it, the
same could not be found.
On March 13, 2007, the trial court ordered respondent to
submit the names and addresses of the occupants or persons
in possession of the property, the owners of the adjoining
properties and all persons who may have any interest in the
property. In compliance, respondent submitted only the
names and addresses of the owners/actual occupants of the
adjoining lots. Thereupon, the trial court issued an Order
setting the hearing of the petition on September 11, 2007.[6]
Considering that the National Printing Office could no
longer accommodate the publication of the notice for the
scheduled hearing date,[7] the trial court issued an Amended
Order[8] on August 28, 2007 setting a new hearing date for
the petition, December 13, 2007, and directing that (a) the
notice/order be published twice in the successive issues of the
______________
[4] Id., at pp. 7-8.
[5] Id., at p. 9.
[6] Id., at pp. 11-12, 14.
[7] Id., at p. 22.
[8] Id., at p. 24.
29
VOL.752,JUNE4,2014
29
Republicvs.Millado
Official Gazette, posted in the premises of the subject
property, the main entrance of the Provincial Capitol and at
the entrance of the municipal building of San Narciso,

Zambales; (b) copies of the notice/order together with the


petition be sent to the Office of the Solicitor General (Makati
City), the Provincial Prosecutor (Iba, Zambales), the Register
of Deeds for the Province of Zambales, the Land Registration
Authority (National Land Titles and Deeds, LRA), Atty. Jose
T. Pacis (Palanginan, Iba, Zambales), Engr. Franklin M.
Millado and the adjoining lot owners, namely; Remedios
Fernandez and Pascual Fernandez (San Vicente, San
Narciso, Zambales), Letecia Mariano (San Juan, San Narciso,
Zambales) and Harris Fogata (Candelaria, San Narciso,
Zambales); (c) the LRA thru its Records Section submit its
report within 30 days from receipt of the order/notice,
pursuant to Sections 10 and 12 of LRC Circular No. 35; and
(d) the Register of Deeds to submit her verification in
accordance with the aforesaid rule, within 30 days from
receipt of notice/order.
At the hearing, Jovito Calimlim, Jr., Records Officer of the
Registry of Deeds of Zambales, testified that based on the
inventory files of titles in their office, OCT No. 2108 was
declared missing as of December 17, 1981, with no pending
transaction, per verification from the Primary Entry Book.
Upon being notified that the owners duplicate copy of said
title was likewise lost, they advised respondent to file a
petition for reconstitution with the court. No opposition to the
petition was filed by their office and the LRA. As to the basis
of the existence of OCT No. 2108, he said that their office
relied on the decree of registration issued by the LRA.
However, he is not aware of the circumstances of the loss of
said title in their office.[9]

Respondent also took the witness stand and confirmed the


loss of the owners duplicate copy of OCT No. 2108 sometime
_______________
[9] Id., at pp. 50, 52; TSN, April 8, 2008, pp. 2-8 (Records,
pp. 56-62).
30
30 SUPREMECOURTREPORTSANNOTATED
Republicvs.Millado
in February or March 2007 while he was securing clearances
from the Bureau of Internal Revenue for the payment of
capital gains tax. He said that at that time he had a bunch of
documents in an envelope but he forgot about it. He went
back to the said office looking for the envelope but there were
many people going in and out of said office. He secured a
certification from the Register of Deeds on the lost or missing
original OCT No. 2108 in their files, and also a certification
from the LRA regarding the issuance of the decree of
registration.[10]
After the formal offer of documentary evidence showing
compliance with publication and posting of notice
requirements, and receipt of the Report from the LRA, the
case was submitted for decision. The LRA Report stated that:
(1) based on the Record Book of Cadastral Lots on file at the
Cadastral Decree Section, it appears that Decree No. 295110
was issued for Lot No. 4616, San Narciso Cadastre on
October 8, 1927 in Cadastral Case No. 9, GLRO Cad. Rec. No.
371, and as per copy of said decree on file at the Vault
Section, Docket Division, the decree was issued in favor of
Isabel, Sixto and Apolonia, all surnamed Bautista, in
undivided equal shares; (2) the technical description of the
property does not appear to overlap previously

plotted/decreed properties in the area; and (3) an


authenticated copy of Decree No. 295110 which can be
secured from the LRA may be used as a source of
reconstitution pursuant to Section 2(d) of Republic Act No. 26
(R.A. 26).[11]
On January 14, 2009, the trial court rendered its decision
granting the petition for reconstitution, as follows:
WHEREFORE, the Register of Deeds of Zambales is
directed to reconstitute Original Certificate of Title No. 2108.
_______________
[10] Id., at p. 64; TSN, May 22, 2008, pp. 3-13 (id., at pp.
70-A to 80).
[11] Id., at pp. 82-90, 94-97.
31
VOL.752,JUNE4,2014
31
Republicvs.Millado
Let copies of this decision be furnished the Register of
Deeds of Zambales, the Land Registration Authority, Quezon
City, the Solicitor General, Makati City, the Provincial
Prosecutor, Iba, Zambales, Atty. Jose T. Pacis and the
petitioner.
SO ORDERED.[12]
The Republic of the Philippines (petitioner) thru the
Solicitor General, appealed to the CA, arguing that the trial
court gravely erred in granting the petition for reconstitution
despite noncompliance with all the jurisdictional requisites.
It pointed out that respondent failed to notify all the
interested parties, particularly the heirs of the registered
owners.[13]

By Decision dated October 13, 2010, the CA dismissed


petitioners appeal and affirmed the trial courts ruling. It
held that the respondent had satisfactorily complied with the
statutory notice requirements so that the adjoining owners
and any other persons who may have an interest in the
property may be duly notified of the proceedings and given
the opportunity to oppose the petition.
Petitioner is now before this Court assailing the CA in not
ruling that respondent failed to comply with all the
jurisdictional requisites for reconstitution of title.
The appeal is meritorious.
The nature of judicial reconstitution proceedings is the
restoration of an instrument which is supposed to have been
lost or destroyed in its original form and condition.[14]The
purpose of the reconstitution of title or any document is to
have the same reproduced, after proper proceedings in the
same form they were when the loss or destruction occurred.
[15]
_______________
[12] Id., at pp. 100-101.
[13] CA Rollo, pp. 25-29.
[14] Heirs of Susana De Guzman Tuazon v. Court of
Appeals, 465 Phil. 114, 126; 420 SCRA 219, 228 (2004).
[15] Puzon v. Sta. Lucia Realty and Development, Inc., 406
Phil. 263, 277; 353 SCRA 699, 710 (2001).
32
32 SUPREMECOURTREPORTSANNOTATED
Republicvs.Millado
R.A. 26 provides for the special procedure and requirements
for the reconstitution of Torrens certificates of title.

Section 2 of R.A. 26, which governs reconstitution


oforiginal certificates of title, provides:
SEC.2.Original
certificates
of
title
shall
be
reconstituted from such of the sources hereunder enumerated
as may be available, in the following order:
(a)The owners duplicate of the certificate of title;
(b)The co-owners, mortgagees, or lessees duplicate of
the certificate of title;
(c)A certified copy of the certificate of title, previously
issued by the register of deeds or by a legal custodian thereof;
(d)An authenticated copy of the decree of registration or
patent, as the case may be, pursuant to which the original
certificate of title was issued;
(e)A document, on file in the registry of deeds, by which
the property, the description of which is given in said
document, is mortgaged, leased or encumbered, or an
authenticated copy of said document showing that its original
had been registered; and
(f)Any other document which, in the judgment of the
court, is sufficient and proper basis for reconstituting the lost
or destroyed certificate of title.
In order for the court to acquire jurisdiction over the
petition for reconstitution, the following provisions must be
observed, to wit:
SEC.12.Petitions for reconstitution from sources
enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e),
and/or 3(f) of this Act, shall be filed with the proper Court of
First Instance, by the registered owner, his assigns, or any
person having an interest in the property. The petition shall

state or contain, among other things, the following: (a) that


the owners duplicate of the certificate of title had been lost
or destroyed; (b) that no co33
VOL.752,JUNE4,2014
33
Republicvs.Millado
owners, mortgagees or lessees duplicate had been issued, or,
if any had been issued, the same had been lost or destroyed;
(c) the location, area and boundaries of the property; (d) the
nature and description of the buildings or improvements, if
any, which do not belong to the owner of the land, and the
names and addresses of the owners of such buildings or
improvements;

(e) the

names

and

addresses of

the

occupants or persons in possession of the property, of the


owners of the adjoining properties and of all persons who
may have any interest in the property; (f) a detailed
description of the encumbrances, if any, affecting the
property; and (g) a statement that no deeds or other
instruments affecting the property have been presented for
registration, or, if there be any, the registration thereof has
not been accomplished, as yet. All the documents, or
authenticated copies thereof, to be introduced in evidence in
support of the petition for reconstitution shall be attached
thereto and filed with the same: Provided, That in case the
reconstitution is to be made exclusively from sources
enumerated in Section 2(f) or 3(f) of this Act, the petition
shall be further accompanied with a plan and technical
description of the property duly approved by the Chief of the
General Land Registration Office, [now Commission of Land

Registration] or with a certified copy of the description taken


from a prior certificate of title covering the same property.
SEC.13.The court shall cause a notice of the petition,
filed under the preceding section, to be published, at the
expense of the petitioner, twice in successive issues of the
Official Gazette, and to be posted on the main entrance of the
provincial building and of the municipal building of the
municipality or city in which the land is situated, at least
thirty days prior to the date of hearing.The court shall
likewise cause a copy of the notice to be sent, by

registered mail or otherwise, at the expense of the


petitioner, to every person named therein whose address is
known, at least thirty days prior to the date of hearing. Said
notice shall state, among other things, the number of the
lost or destroyed Certificate of Title, if known, the name of
the registered owner, the
34
34 SUPREMECOURTREPORTSANNOTATED
Republicvs.Millado
names of the occupants or persons in possession of the

property, the owners of the adjoining properties and all


other interested parties, the location, area and boundaries
of the property, and the date on which all persons having any
interest therein must appear and file their claim or objections
to the petition. The petitioner shall, at the hearing, submit
proof of the publication, posting and service of the notice as
directed by the court.[16](Emphasis supplied)
In this case, the source of reconstitution is an
authenticated copy of Decree No. 295110 under Section 2(d),
which as certified by the LRA, was issued on October 8, 1927

in favor of Isabel, Sixto and Apolonia, all surnamed Bautista,


covering Lot 4616, San Narciso Cadastre in Cad. Case No. 9,
GLRO Cad. Record No. 371. The said co-ownerspro
indiviso are supposedly the registered owners named in OCT
No. 2108. The Deed of Extra-Judicial Settlement of Estate
with Sale stated that Apolonia and Isabel died single and
without any children and only the alleged heirs of spouses
Sixto and Elena Bautista executed the said document
conveying the 7,594-square meter lot to respondent. These
supposed vendors claiming to be heirs of one of the registered
owners were not notified of the judicial reconstitution
proceedings.
The registered owners appearing in the title sought to be
reconstituted, or in this case, their surviving heirs, are
certainly interested parties who should be notified of
reconstitution proceeding under Section 12 in relation to
Section 13 of R.A. 26. Indeed, for petitions based on sources
enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and
3(f), Section 13 adds another requirement aside from
publication and posting of notice of hearing: that the notice
be mailed to occupants, owners of adjoining lots, and all
other persons who may have
_______________
[16] Cited in Republic of the Phil. v. Court of Appeals, 368
Phil. 412, 422-423; 309 SCRA 110, 120-121 (1999).
35
VOL.752,JUNE4,2014
35
Republicvs.Millado
an interest in the property.[17] Notwithstanding the sale
supposedly effected by vendors claiming to be heirs of the

registered owners, they remain as interested parties entitled


to notice of judicial reconstitution proceedings.
It is settled that the actual notice requirement in Section
13 in relation to Section 12 of R.A. 26 is mandatory and
jurisdictional.[18] In the early case of Manila Railroad
Company v. Hon. Moya, et al.,[19] this Court categorically
declared:
It is clear from Section 13 of Republic Act No. 26 that
notice by publication is not sufficient under the
circumstances. Notice must be actually sent or
delivered to parties affected by the petition for
reconstitution. The order of reconstitution, therefore,
having been issued without compliance with the said

requirement, has never become final as it was null and


void. The Manila Railroad cannot then complain that the
motion to set aside was filed beyond the reglementary period.
(Emphasis and underscoring supplied)
Where the authority to proceed is conferred by a statute
and the manner of obtaining jurisdiction is mandatory, the
same must be strictly complied with, or the proceedings will
be void. As such, the court upon which the petition for
reconstitution of title is filed is duty-bound to examine
thoroughly the petition for reconstitution of title and review
the record
_______________
[17] Puzon v. Sta. Lucia Realty and Development,
Inc., supra note 15 at p. 275; p. 709; Republic of the Phils. v.
Sps. Sanchez, 527 Phil. 571, 588; 495 SCRA 248, 264 (2006).
[18] Republic of the Phils. v. Sps. Sanchez, id., at p. 595; p.
264, citingDirector of Lands v. Court of Appeals, 190 Phil.

311, 369; 102 SCRA 370, 438 (1981). See also Ortigas &
Company Limited Partnership v. Velasco, G.R. Nos. 109645 &
112564, July 25, 1994, 234 SCRA 455, 482 and Subido
v. Republic of the Philippines, 522 Phil. 155, 165; 488 SCRA
178, 187 (2006).
[19] 121 Phil. 1122, 1128; 14 SCRA 358, 363-364 (1965).
36
36 SUPREMECOURTREPORTSANNOTATED
Republicvs.Millado
and the legal provisions laying down the germane
jurisdictional requirements.[20] Thus, we have held that
notwithstanding compliance with the notice publication, the
requirement of actual notice to the occupants and the owners
of the adjoining property under Sections 12 and 13 of R.A. 26
is itself mandatory to vest jurisdiction upon the court in a
petition for reconstitution of title and essential in order to
allow said court to take the case on its merits. The
nonobservance of the requirement invalidates the whole
reconstitution proceedings in the trial court.[21]
For noncompliance with the actual notice requirement to
all other persons who may have interest in the property, in
this case the registered owners and/or their heirs, in
accordance with Section 13 in relation to Section 12 of R.A.
26, the trial court did not acquire jurisdiction over L.R.A.
Case No. RTC-237-I. The proceedings therein were therefore
a nullity and the January 14, 2009 Decision was void.
WHEREFORE,

the

petition

for

review

on certiorari isGRANTED. The Decision dated October 13,


2010 of the Court of Appeals in C.A.-G.R. CV No. 93056 is
hereby SET ASIDE. We ENTER a new judgment declaring

the reconstitution proceedings in L.R.A. Case No. RTC-237-I,


as well as the January 14, 2009 Decision of the Regional
Trial Court of Iba, Zambales, Branch 71 granting the petition
for reconstitution, NULL and VOID.
Let a copy of this Decision be served on the Register of
Deeds for the Province of Zambales.
No pronouncement as to costs.
_______________
[20] Heirs of Marcela Navarro v. Go, 577 Phil. 523, 532;
554 SCRA 658, 667 (2008), citing The Government of the
Philippines v. Aballe, 520 Phil. 181, 191-192; 485 SCRA 308,
319 (2006).
[21] Republic of the Phil. v. Court of Appeals, supra note 16
at p. 424; pp. 121-122.
37
VOL.752,JUNE4,2014
37
Republicvs.Millado
SO ORDERED.
Sereno (CJ., Chairperson), Leonardo-De Castro,
Bersamin and Reyes, JJ., concur.
Petition granted, judgment set aside.
Notes.A tax declaration can only be prima facieevidence
of claim of ownership, which, however, is not the issue in a
reconstitution proceeding a reconstitution of title does not
pass upon the ownership of land covered by the lost or
destroyed title but merely determines whether a re-issuance
of such title is proper. (Republic of the Phils. vs. Heirs of Julio
Ramos, 613 SCRA 314 [2010])
Republic Act No. 26 provides two procedures and sets of
requirements in the reconstitution of lost or destroyed

certificates of title depending on the source of the petition for


reconstitution. (Republic vs. Domingo, 683 SCRA 604 [2012])
o0o

Copyright 2015 Central Book Supply, Inc. All rights reserved.

G.R. No. 184148.June 9, 2014.*


NORA B. CALALANG-PARULAN and ELVIRA B.
CALALANG,
petitioners, vs.
ROSARIO
CALALANGGARCIA, LEONORA CALALANG-SABILE, and CARLITO
S. CALALANG, respondents.
Remedial Law; Civil Procedure; Question of Fact; What is
involved is indeed a question of fact which is generally beyond
the jurisdiction of the Supreme Court (SC) to resolve in a
petition for review on certiorari. However, a recognized
exception to the rule is when the Regional Trial Court (RTC)
and Court of Appeals (CA) have conflicting findings of fact.
Preliminarily, we note that the resolution of the issue in this
case requires a reevaluation of the probative value of the
evidence presented by the parties in order to trace the title of
the disputed property. What is involved is indeed a question
of fact which is generally beyond the jurisdiction of this Court
to resolve in a petition for review oncertiorari. However, a
recognized exception to the rule is when the RTC and CA
have conflicting findings of fact as in this case. Here, while
the trial court ruled that the disputed property belonged to
the conjugal partnership of the first marriage of Pedro

Calalang with Encarnacion Silverio, the court a quo declared


that the evidence proved the sole and exclusive ownership of
the disputed property of Pedro Calalang.
Civil Law; The phrase Pedro Calalang, married to
Elvira Berba [Calalang] merely describes the civil status and
identifies the spouse of the registered owner Pedro Calalang.
A plain reading of the above provision would clearly reveal
that the phrase Pedro Calalang, married to Elvira Berba
[Calalang] merely describes the civil status and identifies
the spouse of the registered owner Pedro Calalang. Evidently,
this does not mean that the property is conjugal. In Litam v.
Rivera, 100 Phil. 364 (1956), we declared: Further strong
proofs that the properties in question are the paraphernal
properties of Marcosa Rivera, are the very Torrens Titles
covering said properties. All the said properties are
registered in the name of Marcosa Rivera, married to Rafael
Litam. This circumstance indicates that the properties in
question belong to the registered owner,
_______________
* FIRST DIVISION.
403
VOL.725,JUNE9,2014
403
CalalangParulanvs.CalalangGarcia
Marcosa Rivera, as her paraphernal properties, for if
they were conjugal, the titles covering the same should have
been issued in the names of Rafael Litam and Marcosa
Rivera. The words married to Rafael Litam written after
the name of Marcosa Rivera, in each of the abovementioned
titles are merely descriptive of the civil status of Marcosa

Rivera, the registered owner of the properties covered by said


titles.
Same; Succession; It is hornbook doctrine that
successional rights are vested only at the time of death.It is
hornbook doctrine that successional rights are vested only at
the time of death. Article 777 of the New Civil Code provides
that [t]he rights to the succession are transmitted from the
moment of the death of the decedent. In Butte v. Manuel Uy
and Sons, Inc., 4 SCRA 526 (1962), we proclaimed the
fundamental tenets of succession: The principle of
transmission as of the time of the predecessors death is basic
in our Civil Code, and is supported by other related articles.
Thus, the capacity of the heir is determined as of the time the
decedent died (Art. 1034); the legitime is to be computed as of
the same moment (Art. 908), and so is the inofficiousness of
the donation inter vivos (Art. 771). Similarly, the legacies of
credit and remission are valid only in the amount due and
outstanding at the death of the testator (Art. 935), and the
fruits accruing after that instant are deemed to pertain to
the legatee (Art. 948).
Remedial Law; Evidence; Clear and Convincing
Evidence; Fraud; Fraud must be established by clear and
convincing evidence. Mere preponderance of evidence is not
even adequate to prove fraud.It is only upon the death of
Pedro Calalang on December 27, 1989 that his heirs acquired
their respective inheritances, entitling them to their pro
indiviso shares to his whole estate. At the time of the sale of
the disputed property, the rights to the succession were not
yet bestowed upon the heirs of Pedro Calalang. And absent

clear and convincing evidence that the sale was fraudulent or


not duly supported by valuable consideration (in effect an
inofficious donation inter vivos), the respondents have no
right to question the sale of the disputed property on the
ground that their father deprived them of their respective
shares. Well to remember, fraud must be established by clear
and convincing evidence. Mere preponderance of evidence is
not even adequate to prove fraud. The Complaint for
Annulment of Sale and Reconveyance of Property must
therefore be dismissed.
404
404
SUPREMECOURTREPORTSANNOTATED
CalalangParulanvs.CalalangGarcia
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals, Thirteenth Division.
The facts are stated in the opinion of the Court.
Arceo Law Office for petitioners.
Macarius S. Galutera for respondents.
VILLARAMA, JR.,J.:
Before us is a petition for review on certiorari assailing the
Decision[1] dated December 21, 2007 and Resolution[2]dated
July 25, 2008 of the Thirteenth Division of the Court of
Appeals (CA) in C.A.-G.R. CV No. 72531. The CA modified
the Decision[3] dated July 10, 2001 of the Regional Trial
Court (RTC), Branch 21, of Malolos, Bulacan, in Civil Case
No. 370-M-91.
The facts, as culled from the records, follow:
In a Complaint[4] for Annulment of Sale and
Reconveyance of Property filed with the RTC of Malolos,
Bulacan on June 10, 1991, the respondents Rosario CalalangGarcia, Leonora Calalang-Sabile, and Carlito S. Calalang

asserted their ownership over a certain parcel of land against


the petitioners Nora B. Calalang-Parulan and Elvira B.
Calalang. The said lot with an area of 1,266 square meters
and specifically identified as Lot 1132, Cad. 333, Bigaa
Cadastre situated in Brgy. Burol 2nd, Municipality of
Balagtas, Province of Bulacan, was allegedly acquired by the
respondents from their mother Encarnacion Silverio, through
succession as the latters compulsory heirs.
_______________
[1] Rollo, pp. 25-34. Penned by Associate Justice Marlene
Gonzales-Sison, with Associate Justices Juan Q. Enriquez,
Jr. and Vicente S. E. Veloso, concurring.
[2] Id., at pp. 35-37.
[3] Id., at pp. 54-60. Penned by Judge Cesar M. Solis.
[4] Records, pp. 3-7.
405
VOL.725,JUNE9,2014
405
CalalangParulanvs.CalalangGarcia
According to the respondents, their father, Pedro Calalang
contracted two marriages during his lifetime. The first
marriage was with their mother Encarnacion Silverio.
During the subsistence of this marriage, their parents
acquired the abovementioned parcel of land from their
maternal grandmother Francisca Silverio. Despite enjoying
continuous possession of the land, however, their parents
failed to register the same. On June 7, 1942, the first
marriage was dissolved with the death of Encarnacion
Silverio.
On November 6, 1967, Pedro Calalang entered into a
second marriage with Elvira B. Calalang who then gave birth
to Nora B. Calalang-Parulan and Rolando Calalang.

According to the respondents, it was only during this time


that Pedro Calalang filed an application for free patent over
the parcel of land with the Bureau of Lands. Pedro Calalang
committed fraud in such application by claiming sole and
exclusive ownership over the land since 1935 and concealing
the fact that he had three children with his first spouse. As a
result, on September 22, 1974, the Register of Deeds of
Bulacan issued Original Certificate of Title (OCT) No. P2871[5] in favor of Pedro Calalang only.
On February 17, 1984, Pedro Calalang sold the said parcel
of land to Nora B. Calalang-Parulan as evidenced by a Deed
of Sale[6] executed by both Pedro Calalang and Elvira B.
Calalang. Accordingly, the Register of Deeds of Bulacan
cancelled OCT No. P-2871 and issued Transfer Certificate of
Title (TCT) No. 283321 in the name of Nora B. CalalangParulan. On December 27, 1989,[7] Pedro Calalang died.
The respondents assailed the validity of TCT No. 283321
on two grounds. First, the respondents argued that the sale of
the land was void because Pedro Calalang failed to obtain the
consent of the respondents who were co-owners of the same.
_______________
[5] Id., at p. 8.
[6] Id., at p. 9.
[7] 1990 in the Complaint but see Records, pp. 32 and 648.
406
406
SUPREMECOURTREPORTSANNOTATED
CalalangParulanvs.CalalangGarcia
As compulsory heirs upon the death of Encarnacion Silverio,
the respondents claimed that they acquired successional
rights over the land. Thus, in alienating the land without
their consent, Pedro Calalang allegedly deprived them of

their pro indiviso share in the property.Second, the


respondents claimed that the sale was absolutely simulated
as Nora B. Calalang-Parulan did not have the capacity to pay
for the consideration stated in the Deed of Sale.
In their Answer,[8] the petitioners argued that the parcel
of land was acquired during the second marriage of Pedro
Calalang with Elvira B. Calalang. They stressed that OCT
No. P-2871 itself stated that it was issued in the name of
Pedro Calalang, married to Elvira Berba [Calalang]. Thus,
the property belonged to the conjugal partnership of the
spouses Pedro Calalang and Elvira B. Calalang. The
petitioners likewise denied the allegation that the sale of the
land was absolutely simulated as Nora B. Calalang-Parulan
was gainfully employed in Spain at the time of the sale.
Moreover, they alleged that the respondents did not have a
valid cause of action against them and that their cause of
action, if any, was already barred by laches, estoppel and
prescription. By way of counterclaim, the petitioners also
sought the payment to them of moral and exemplary
damages plus costs of suit for the filing of the clearly
unfounded suit.
On July 10, 2001, the trial court rendered decision in favor
of the respondents. The dispositive portion of the RTC
decision reads as follows:
WHEREFORE, judgment is hereby rendered in favor of
the plaintiffs and against the defendants in the following
manner:
1.Ordering the defendants to reconvey in favor of the
plaintiffs, their rightful share to three-fourth (3/4) of one-half

(1/2) or a total of 474.75 square meters at 158.25 square


meters for each of the three plaintiffs, namely:
_______________
[8] Records, pp. 32-34.
407
VOL.725,JUNE9,2014
407
CalalangParulanvs.CalalangGarcia
Rosario, Leonora, and Juanito all surname[d] Calalang, of
the real property covered by TCT No. 283321 of the Registry
of Deeds of Bulacan corresponding to their shares in the
conjugal estate of the late Encarnacion S. Calalang [sic];
2.Ordering defendants to pay plaintiffs the amount of
P50,000.00 for moral damages; P50,000.00 for attorneys fees
and another P50,000.00 for litigation expenses.
3.Dismissing the defendants counterclaims.
With costs against the defendants.
SO ORDERED.[9]
The trial court declared that the parcel of land was jointly
acquired by the spouses Pedro Calalang and Encarnacion
Silverio from the parents of the latter. Thus, it was part of
the conjugal property of the first marriage of Pedro Calalang.
When this marriage was dissolved upon the death of
Encarnacion Silverio on June 7, 1942, the corresponding
shares to the disputed property were acquired by the heirs of
the decedent according to the laws of succession. In
particular, the trial court allocated half of the disputed
property to Pedro Calalang as his share in the conjugal
partnership and allocated the other half to the three
respondents and Pedro Calalang to be divided equally among
them. The trial court then ordered all of Pedros share to be
given to Nora B. Calalang-Parulan on account of the sale.

The trial court also ruled that because the application for
free patent filed by Pedro Calalang was attended by fraud
and misrepresentation, Pedro Calalang should be considered
as a trustee of an implied trust.
Aggrieved by the adverse ruling, the petitioners appealed
the case to the CA which rendered the assailed Decision on
_______________
[9] Rollo, pp. 59-60.
408
408
SUPREMECOURTREPORTSANNOTATED
CalalangParulanvs.CalalangGarcia
December 21, 2007. The dispositive portion of the CA decision
reads,
WHEREFORE, in light of the foregoing premises,

theDecision dated July 10, 2001 of the Regional Trial Court


of Malolos, Bulacan is hereby MODIFIED to read as follows:
WHEREFORE, judgment is hereby
rendered in favor of the plaintiffs, and
against the defendants in the following
manner:
1.Ordering the defendants to reconvey
in favor of the plaintiffs, their rightful share
to the property owned by their common
father Pedro Calalang, equivalent to onehalf (1/2) portion of the whole area or 633
square meters to be divided equally by the
three plaintiffs, namely: Rosario, Leonora
and Carlito, all surnamed Calalang, each
getting an area of 211 square meters of the
property covered by TCT No. 2883321 of the

Registry of Deeds of Bulacan corresponding


to their shares in the property of their late
father Pedro Calalang;
2.Ordering defendants to pay plaintiffs
the amount of P50,000.00 for moral
damages; P50,000.00 for attorneys fees and
another P50,000.00 for litigation expenses;
3.Dismissing
counterclaims.

the

defendants

With costs against the defendants.


SO ORDERED.
SO ORDERED.[10]
The CA reversed the factual findings of the trial court and
held that Pedro Calalang was the sole and exclusive owner of
_______________
[10] Id., at p. 33.
409
VOL.725,JUNE9,2014
409
CalalangParulanvs.CalalangGarcia
the subject parcel of land. Firstly, it held that there was
insufficient evidence to prove that the disputed property was
indeed jointly acquired from the parents of Encarnacion
Silverio during the first marriage. Secondly, the CA upheld
the indefeasibility of OCT No. P-2871. It held that although
the free patent was issued in the name of Pedro Calalang,
married to Elvira Berba [Calalang] this phrase was merely
descriptive of the civil status of Pedro Calalang at the time of
the registration of the disputed property. Thus, contrary to
the ruling of the trial court, upon the death of Encarnacion
Silverio on June 7, 1942, the respondents did not acquire any

successional rights to the parcel of land which was


exclusively owned by Pedro Calalang. However, applying the
rules of succession, Pedros heirs namely, Rosario CalalangGarcia, Leonora Calalang-Sabile, Carlito Calalang, Nora B.
Calalang-Parulan, Elvira B. Calalang, and Rolando Calalang,
succeeded Pedro to the land in equal shares upon his death.
Thus, the CA ordered the petitioners to reconvey in favor of
the respondents their rightful shares to the land. The CA
ruled that the sale by Pedro Calalang to Nora B. CalalangParulan was fraudulent and fictitious as the vendee was in
bad faith and the respondents were unlawfully deprived of
their pro indiviso shares over the disputed property. As
regards the issue of prescription, the CA ruled that the
prescriptive period for reconveyance of fraudulently
registered real property is ten years. Since the property was
registered in the name of Nora in 1984 and the action for
reconveyance was filed in 1991, the action has not yet
prescribed.
On January 23, 2008, petitioners filed their Motion for
Reconsideration. The CA, however, denied their motion in its
Resolution dated July 25, 2008.
Hence, this petition raising the sole issue:
Whether or not the court a quo gravely erred in rendering
its December 21, 2007 Decision modifying the July 10, 2001
Decision of the trial court, and in issuing
410
410
SUPREMECOURTREPORTSANNOTATED
CalalangParulanvs.CalalangGarcia
its July 25, 2008 Resolution denying petitioners Motion for
Reconsideration dated January 23, 2008.[11]

Essentially, the only issue in this case is whether Pedro


Calalang was the exclusive owner of the disputed property
prior to its transfer to his daughter Nora B. CalalangParulan.
The petitioners argue that the disputed property belonged
to the conjugal partnership of the second marriage of Pedro
Calalang with Elvira B. Calalang as evidenced by OCT No. P2871 which was issued to Pedro Calalang during the
subsistence of his marriage to Elvira B. Calalang. On the
other hand, the respondents claim that the disputed property
was transferred by their maternal grandmother, Francisca
Silverio, to their parents, Pedro Calalang and Encarnacion
Silverio, during the latters marriage. Thus, the respondents
argue that it belonged to the conjugal partnership of the first
marriage of Pedro Calalang with Encarnacion Silverio.
The petition is meritorious.
Preliminarily, we note that the resolution of the issue in
this case requires a reevaluation of the probative value of the
evidence presented by the parties in order to trace the title of
the disputed property. What is involved is indeed a question
of fact which is generally beyond the jurisdiction of this Court
to resolve in a petition for review on certiorari.[12] However, a
recognized exception to the rule is when the RTC and CA
have conflicting findings of fact as in this case.[13] Here,
while the trial court ruled that the disputed property
belonged to the conjugal partnership of the first marriage of
Pedro Calalang with Encarnacion Silverio, the court a
quo declared that
_______________
[11] Id., at p. 16.

[12] See Latorre v. Latorre, G.R. No. 183926, March 29,


2010, 617 SCRA 88, 98-99.
[13] Canadian Opportunities Unlimited, Inc. v. Dalangin,
Jr., G.R. No. 172223, February 6, 2012, 665 SCRA 21, 31.
411
VOL.725,JUNE9,2014
411
CalalangParulanvs.CalalangGarcia
the evidence proved the sole and exclusive ownership of the
disputed property of Pedro Calalang.
We have carefully reviewed the records of this case and
sustain the finding of the CA that Pedro Calalang is the sole
and exclusive owner of the disputed property.
The trial court ruled that the respondents were able to
establish that Lot 1132, Cad. 333 originated from the parents
of Encarnacion, and therefore said property either became
property of Encarnacion in her own right or jointly with her
husband Pedro Calalang in 1936. In so ruling, the trial
court relied on the testimony of Rosario Calalang-Garcia that
her parents built a nipa house on the subject lot and lived
there before and after World War II. The trial court further
noted that Rosarios testimony was corroborated by her
cousin and adjacent neighbor Manolo Calalang.[14]
However, as correctly pointed out by the CA, a close
perusal of the records of this case would show that the
records are bereft of any concrete proof to show that the
subject property indeed belonged to respondents maternal
grandparents. The evidence respondents adduced merely
consisted of testimonial evidence such as the declaration of
Rosario Calalang-Garcia that they have been staying on the
property as far as she can remember and that the property
was acquired by her parents through purchase from her

maternal grandparents. However, she was unable to produce


any document to evidence the said sale, nor was she able to
present any documentary evidence such as the tax
declaration issued in the name of either of her parents.
Moreover, we note that the free patent was issued solely in
the name of Pedro Calalang and that it was issued more than
30 years after the death of Encarnacion and the dissolution of
the conjugal partnership of gains of the first marriage. Thus,
we cannot subscribe to respondents submission that the
subject property originally belonged to
_______________
[14] Rollo, p. 57.
412
412
SUPREMECOURTREPORTSANNOTATED
CalalangParulanvs.CalalangGarcia
the parents of Encarnacion and was acquired by Pedro
Calalang and Encarnacion.
We likewise cannot sustain the argument of the petitioners
that the disputed property belongs to the conjugal
partnership of the second marriage of Pedro Calalang with
Elvira B. Calalang on the ground that the title was issued in
the name of Pedro Calalang, married to Elvira Berba
[Calalang].
The contents of a certificate of title are enumerated by
Section 45 of Presidential Decree No. 1529, otherwise known
as the Property Registration Decree:
SEC.45.Statement of personal circumstances in the
certificate.Every certificate of title shall set forth the full
names of all persons whose interests make up the full
ownership in the whole land, including their civil status, and
the names of their respective spouses, if married, as well as

their citizenship, residence and postal address. If the


property covered belongs to the conjugal partnership, it shall
be issued in the names of both spouses.
A plain reading of the above provision would clearly reveal
that the phrase Pedro Calalang, married to Elvira Berba
[Calalang] merely describes the civil status and identifies
the spouse of the registered owner Pedro Calalang. Evidently,
this does not mean that the property is conjugal. In Litam v.
Rivera,[15] we declared:
Further strong proofs that the properties in question are
the paraphernal properties of Marcosa Rivera, are the very
Torrens Titles covering said properties. All the said
properties are registered in the name of Marcosa Rivera,
married to Rafael Litam. This circumstance indicates that
the properties in question belong to the registered owner,
Marcosa Rivera, as her paraphernal properties, for if they
were conjugal, the titles covering
_______________
[15] 100 Phil. 364, 376 (1956).
413
VOL.725,JUNE9,2014
413
CalalangParulanvs.CalalangGarcia
the same should have been issued in the names of Rafael
Litam and Marcosa Rivera. The words married to Rafael
Litam written after the name of Marcosa Rivera, in each of
the abovementioned titles are merely descriptive of the civil
status of Marcosa Rivera, the registered owner of the
properties covered by said titles.
It must likewise be noted that in his application for free
patent,[16] applicant Pedro Calalang averred that the land
was first occupied and cultivated by him since 1935 and that

he had planted mango trees, coconut plants, caimito trees,


banana plants and seasonal crops and built his house on the
subject lot. But he applied for free patent only in 1974 and
was issued a free patent while already married to Elvira B.
Calalang. Thus, having possessed the subject land in the
manner and for the period required by law after the
dissolution of the first marriage and before the second
marriage, the subject property ipso jure became private
property and formed part of Pedro Calalangs exclusive
property.[17] It was therefore excluded from the conjugal
partnership of gains of the second marriage.[18]
As the sole and exclusive owner, Pedro Calalang had the
right to convey his property in favor of Nora B. CalalangParulan by executing a Deed of Sale on February 17, 1984.
The CA therefore erred in ruling that Pedro Calalang
deprived his heirs of their respective shares over the disputed
property when he alienated the same.
It is hornbook doctrine that successional rights are vested
only at the time of death. Article 777 of the New Civil
Code provides that [t]he rights to the succession are
transmitted from the moment of the death of the decedent.
In Butte v.
_______________
[16] Records, p. 209.
[17] See Susi v. Razon, 48 Phil. 424, 428 (1925).
[18] NEW CIVIL CODE, Art. 148.
414
414
SUPREMECOURTREPORTSANNOTATED
CalalangParulanvs.CalalangGarcia
Manuel Uy and Sons, Inc.,[19] we proclaimed the
fundamental tenets of succession:

The principle of transmission as of the time of the


predecessors death is basic in our Civil Code, and is
supported by other related articles. Thus, the capacity of the
heir is determined as of the time the decedent died (Art.
1034); the legitime is to be computed as of the same moment
(Art. 908), and so is the inofficiousness of the donation inter
vivos (Art. 771). Similarly, the legacies of credit and
remission are valid only in the amount due and outstanding
at the death of the testator (Art. 935), and the fruits accruing
after that instant are deemed to pertain to the legatee (Art.
948).
Thus, it is only upon the death of Pedro Calalang on
December 27, 1989 that his heirs acquired their respective
inheritances, entitling them to their pro indiviso shares to
his whole estate. At the time of the sale of the disputed
property, the rights to the succession were not yet bestowed
upon the heirs of Pedro Calalang. And absent clear and
convincing evidence that the sale was fraudulent or not duly
supported by valuable consideration (in effect an inofficious
donation inter vivos), the respondents have no right to
question the sale of the disputed property on the ground that
their father deprived them of their respective shares. Well to
remember, fraud must be established by clear and convincing
evidence. Mere preponderance of evidence is not even
adequate to prove fraud.[20] The Complaint for Annulment of
Sale and Reconveyance of Property must therefore be
dismissed.
WHEREFORE, the
petition
for
review
on certiorari isGRANTED. The Decision dated December 21,
2007 and Resolution dated July 25, 2008 of the Thirteenth

Division of the Court of Appeals in C.A.-G.R. CV No. 72531


are RE_______________
[19] 114 Phil. 443, 448-449; 4 SCRA 526, 530 (1962).
[20] Maestrado v. Court of Appeals, 384 Phil. 418, 435; 327
SCRA 678, 694 (2000).
415
VOL.725,JUNE9,2014
415
CalalangParulanvs.CalalangGarcia
VERSED and SET ASIDE. Civil Case No. 370-M-91, or the
Complaint for Annulment of Sale and Reconveyance of
Property filed by the respondents with the Regional Trial
Court, Branch 21 of Malolos, Bulacan, on June 10, 1991, is
hereby DISMISSED for lack of merit.
No pronouncement as to costs.
SO ORDERED.
Sereno (CJ., Chairperson), Leonardo-De Castro,
Bersamin and Reyes, JJ., concur.
Petition granted, judgment and resolution reversed and set
aside.
Notes.It is well-settled that in order for an action for
reconveyance based on fraud to succeed, the party seeking
reconveyance must prove by clear and convincing evidence his
title to the property and the fact of fraud. (Heirs of Bernardo
Ulep vs. Ducat, 577 SCRA 6 [2009])
The rights to a persons succession are transmitted from
the moment of his death; The inheritance of a person consists
of the property and transmissible rights and obligations
existing at the time of his death as well as those which have

accrued thereto since the opening of the succession. (Balus


vs. Balus, 610 SCRA 178 [2010])
o0o
Copyright 2015 Central Book Supply, Inc. All rights reserved.
Republic
SUPREME
Manila

of

the

Philippines
COURT

FIRST DIVISION
G.R. No. 183448

June 30, 2014

SPOUSES
DOMINADOR
PERALTA
PERALTA, Petitioners,
vs.
HEIRS OF BERNARDINA ABALON,
MANSUETO ABALON, Respondents.

AND

OFELIA

represented

by

x-----------------------x
G.R. No. 183464
HEIRS OF BERNARDINA ABALON, represented by
MANSUETO
ABALON, Petitioners,
vs.
MARISSA ANDAL, LEONIL AND AL, ARNEL AND AL,
SPOUSES DOMINDOR PERALTA AND OFELIA PERALTA,
and HEIRS of RESTITUTO RELLAMA, represented by his
children ALEX, IMMANUEL, JULIUS and SYLVIA, all
surnamed RELLAMA.
DECISION
SERENO, CJ:

Before us are the consolidated Petitions for Review on Certiorari


under Rule 45 of the Rules of Court assailing the 30 May 2007
Decision1 of the Court of Appeals (CA) Seventeenth Division in
CA-G.R. CV No. 85542. The CA had reversed the 14 April 2005
Decision2 of the Regional Trial Court (RTC), Fifth Judicial
Region of Legaspi City, Branch 5, in Civil Case No. 9243.
The civil case before the RTC of Legaspi City involved a parcel
of land registered under the name of Bernardina Abalon and
fraudulently transferred to Restituto Rellama and who, in turn,
subdivided the subject property and sold it separately to the
other parties to this case Spouses Dominador and Ofelia
Peralta; and Marissa, Leonil and Arnel, all surnamed Andal.
Thereafter, Spouses Peralta and the Andals individually
registered the respective portions of the land they had bought
under their names. The heirs of Bernardina were claiming back
the land, alleging that since it was sold under fraudulent
circumstances, no valid title passed to the buyers. On the other
hand, the buyers, who were now title holders of the subject
parcel of land, averred that they were buyers in good faith and
sought the protection accorded to them under the law.
THE FACTS
The RTC and the CA have the same findings of fact, but differ in
their legal conclusions. There being no factual issues raised in
the Petitions, we adopt the findings of fact of the CA in CA-G.R.
No. 85542, as follows:
The subject parcel of land, described as Lot 1679 of the
Cadastral Survey of Legaspi, consisting of 8,571 square meters,
was originally covered by Original Certificate of Title (OCT) No.
(O) 16 and registered in the name of Bernardina Abalon
(Abalon). It appears that a Deed of Absolute Sale was executed
over the subject property in favor of Restituto M. Rellama
(Rellama) on June 10, 1975. By virtue of such conveyance OCT
No. (O) 16 was cancelled and in lieu thereof Transfer Certificate
of Title (TCT) No. 42108 was issued in the name of Rellama.
The subject property was then subdivided into three (3) portions:

Lot 1679-A, Lot 1679-B, Lot 1679-C. Lot 1679-A was sold to
Spouses Dominador P. Peralta, Jr. and Ofelia M. Peralta
(Spouses Peralta) for which reason TCT No. 42254 was issued
in their names. Lot 1679-B, on the other hand, was first sold to
Eduardo Lotivio (Lotivio) who thereafter transferred his
ownership thereto to Marissa Andal, Arnel Andal, and Leonil
Andal (the Andals) through a Deed of Absolute Sale dated
October 9, 1995. On even date, TCT No. 42482 was issued in
the name of the Andals. The Andals likewise acquired Lot 1679C as evidenced by the issuance of TCT No. 42821 in their favor
on December 27, 1995.
Claiming that the Deed of Absolute Sale executed by Abalon in
favor of Rellama was a forged document, and claiming further
that they acquired the subject property by succession, they
being the nephew and niece of Abalon who died without issue,
plaintiff-appellees Mansueta Abalon and Amelia Abalon filed the
case below against Rellama, Spouses Peralta, and the Andals,
the herein defendants-appellants and the Bank of the
Philippines [sic] Islands which was later dropped as a party
defendant.
It was alleged in their Complaint and subsequent Amended
Complaint, under five separate causes of action, that Rellama
was able to cause the cancellation of OCT No. (O) 16, and in
lieu thereof the issuance of TCT No. 42108 in his own name
from which the defendants-appellants derived their own titles,
upon presentation of a xerox copy of the alleged forged deed of
absolute sale and the order granting the issuance of a second
owners duplicate copy of OCT No. (O) 16 in his favor in
Miscellaneous Cadastral Case No. 10648, which he had filed on
the pretext that Lot 1679 covered by OCT No. (O) 16 was sold
to him and that the owners duplicate copy of the said title got
lost in 1976 after the same was delivered to him. They averred
that the owners duplicate copy of Oct NO. (O) 16 had always
been with Abalon and that upon her death, it was delivered to
them. Likewise, they alleged that Abalon had always been in
possession of the subject property through her tenant Pedro
Bellen who was thereafter succeeded by his wife, Ruperta

Bellen, and then his son, Godofredo Bellen. On the other hand,
they said that Rellama had never set foot on the land he was
claiming. They further alleged that after the ownership over the
subject property was transferred to them upon the death of
Abalon, they took possession thereof and retained Godofredo
as their own tenant. However, they averred that in 1995 the
defendants-appellants were able to wrest possession of the
subject property from Godofredo Bellen. They alleged that the
defendants-appellants are not buyers in good faith as they were
aware that the subject land was in the possession of the
plaintiffs-appellees at the time they made the purchase. They
thus claim that the titles issued to the defendants-appellants are
null and void.

was a mere forgery. On the other hand, the court a quo noted
that the duplicate copy of OCT No. (O) 16 in the hands of the
plaintiffs-appellees bears [sic] the perforated serial number B
221377, which it held is a convincing proof of its authenticity and
genuineness. It thus stated that "Miscellaneous Cadastral Case
No. 10648 is a (mere) strategem [sic] fraudulently concocted ...
for the issuance of a fabricated (second) owners duplicate
certificate of Oct No. (O) 16" since the owners duplicate copy of
OCT No. (O) 16 has not been lost at all. It said that any
subsequent registration procured by the presentation of such
forged instrument is null and void. The dispositive portion of the
court a quos decision reads: WHEREFORE, [p]remises
[c]onsidered, judgment is rendered as follows, to wit:

In his answer, Rellama alleged that the deed of absolute sale


executed by Abalon is genuine and that the duplicate copy of
OCT No. (O) 16 had been delivered to him upon the execution
of the said deed of transfer.

1. Ordering the restoration of Original Certificate of Title


No. (O) 16 embracing Lot 1679 in the name of
Bernardina Abalon into the official files of the Registry of
Deeds of Legaspi City a copy of the owners duplicate
certificate embodying the technical description of Lot
1679 forming official part of the record as Exhibit "D" as
well as ordering the cancellation of any and all transfer
certificates of title succeeding Original Certificate of title
No. (O) 16 including Transfer Certificates (sic) of Title
Nos. 42108, 42254, 42255, 42256, 42821 [,] and 42482;

As for Spouses Peralta and the Andals, who filed their separate
answers to the complaint, they mainly alleged that they are
buyers in good faith and for value.
During the trial, Rellama passed away. He was substituted by
his heirs.
After the plaintiffs-appellees rested their case, instead of
presenting their own evidence, the defendants-appellants and
the Heirs of Restituto Rellama, on different occasions, filed a
demurrer to evidence.
On April 14, 2005, the court a quo rendered judgment in favor of
the plaintiffs-appellees and ordered the restoration of OCT No.
(O) 16 in the name of Abalon and the cancellation of the titles
issued to the defendants-appellants. The fact that only a xerox
copy of the purported deed of sale between Rellama and Abalon
was presented before the Register of Deeds for registration and
the absence of such xerox copy on the official files of the said
Office made the court a quo conclude that the said document

2. Ordering the defendants Marissa Andal, Leonil Andal,


Arnel Andal[,] and the spouses Dominador and Ofelia
Peralta to vacate Lot 1679 and to peacefully surrender
such lot to the plaintiffs;
3. Ordering the defendants to pay the plaintiffs the
amount of P50,000.00 as litigation expenses; and
4. Ordering the defendants to pay the costs of suit.
The counterclaims by [sic] the defendants are all dismissed.
SO ORDERED.

Spouses Peralta and the Andals filed their separate Notices of


Appeal and thereafter, upon approval, filed their respective
Defendants-Appellants Briefs. The Heirs of Rellama, on the
other hand, opted not to challenge the ruling of the lower court. 3
The Andals and Spouses Peralta appellants in CA-G.R. CV
No. 85542 raised several issues, which the CA summarized as
follows:
1. Whether the Deed of Absolute Sale executed by
Abalon in favor of Rellama was spurious
2. Whether the Andals and Spouses Peralta were buyers
in good faith and for value
3. Who among the parties were entitled to their claims for
damages.4
THE RULING OF THE COURT OF APPEALS
On 30 May 2007, the Seventeenth Division of the Court of
Appeals promulgated its assailed judgment setting aside the
RTC Decision. The CA ruled that the circumstances surrounding
the sale of the subject property showed badges of fraud or
forgery against Rellama. It found that Abalon had not parted with
her ownership over the subject property despite the claim of
Rellama that they both executed a Deed of Absolute Sale. As
proof, the CA pointed out the existence of a notarized contract of
leasehold executed by Abalon with Ruperta Bellen on 11 June
1976. The genuineness and due execution of the said leasehold
agreement was uncontroverted by the parties. On this basis, the
appellate court concluded that Abalon could not have leased the
subject parcel of land to Bellen if the former had parted with her
ownership thereof.5
The CA also found no evidence to show that Rellama exercised
dominion over the subject property, because he had not
introduced improvements on the property, despite claiming to
have acquired it in 1975.6 Further, the CA noted that he did not

cause the annotation of the Deed of Sale, which he had


executed with Abalon, on OCT No. (O) 16. It observed that
when the original copy of OCT No. (O) 16 was allegedly lost in
1976, while Rellama was on his way to Legaspi City to register
the title to his name, it took him almost 20 years to take steps to
judicially reconstitute a copy thereof. To the appellate court,
these circumstances cast doubt on the veracity of Rellamas
claim of ownership over such a significant property, which was
almost a hectare.7
The CA also ruled that the heirs of Bernardina Abalon had the
legal standing to question the sale transaction between Rellama
and their predecessor-in-interest. It concluded that the heirs of
Abalon had acquired the subject property by ordinary acquisitive
prescription and thus had every right to attack every document
that intended to divest them of ownership thereof, 8 which in this
case was the Deed of Sale that Bernardina executed in favor of
Rellama. Lastly, the appellate court considered the Spouses
Peralta as buyers in bad faith for relying on a mere photocopy of
TCT No. 42108 when they bought the property from
Rellama.9 On the other hand, it accorded the Andals the
presumption of good faith, finding no evidence that would rebut
this presumption.10
The dispositive portion of the assailed CA Decision in CA-G.R.
CV No. 85542 is as follows:
WHEREFORE, the assailed decision is SET ASIDE and a new
judgment is rendered as follows:
1. Transfer Certificate of Title No. 42482 and Transfer
Certificate of Title No. 42821, both in the names of
Andals, are held legal and valid.
2. Transfer Certificate of Title No. 42254 registered in the
names of Spouses Peralta is cancelled for being null and
void. Hence, they are ordered to vacate the land covered
thereby and to surrender possession thereof in favor of
the plaintiffs-appellees.

SO ORDERED.11
The heirs of Abalon filed a Motion for Reconsideration of the 30
May 2007 Decision, insofar as the CA declared the Andals to be
buyers in good faith of the subject property and, thus, that the
land title issued in their favor was valid. Spouses Peralta, for
their part, filed a Motion for Partial Reconsideration of the said
CA Decision pertaining to the portion that declared them as
buyers in bad faith which accordingly nullified the title issued to
them.
On 10 June 2008, the CA denied the Motions for Partial
Reconsideration of the movants for lack of merit.12
On 11 August 2008, Spouses Peralta filed with this Court a
Petition for Review under Rule 45 of the Rules of Court assailing
the 30 May 2007 Decision in CA-G.R. CV No. 85542. 13 On the
same day, the heirs of Bernardina Abalon, represented by
Mansueto Abalon, filed a similar Petition questioning the portion
of the mentioned CA Decision declaring the validity of the title
issued to the Andals, who were adjudged by the appellate court
as buyers in good faith.14 THE ISSUES
The Petition filed by Spouses Peralta, docketed as G.R. No.
183448, lists the following issues:
a) The case for annulment should have been dismissed
because the purported Deed of Sale executed by Abalon
and Rellama was not introduced in evidence and thus,
forgery was not proven.
b) The heirs of Abalon are notforced heirs of Bernardina
Abalon; hence, they do not have the legal personality to
file the action to annul the subject Deed of Sale.
c) The heirs of Abalon failed to prove that they had
inherited the subject property.

d) Spouses Peralta are buyers in good faith and, thus title


to their portion of the subject property must be upheld 15
As for the heirs of Abalon, their Petition, docketed as G.R. No.
183464, raises the following issues:
a) The Andals cannot be considered as buyers in good
faith by simply applying the ordinary presumption in the
absence of evidence showing the contrary.
b) The CA erred in applying in favor of the Andals, the
doctrine that a forged instrument may become the root of
a valid title in the hands of an innocent purchaser for
value, because Abalon never parted with her possession
of the valid and uncancelled title over the subject property
c) The CA erred in declaring the validity of the title issued
in the names of the Andals, because Rellama was bereft
of any transmissible right over the portion of the property
he had sold to them.16
THE COURTS RULING
We deny the Petitions and affirm the ruling of the CA.
The main issue to be resolved in this case is whether a forged
instrument may become the root of a valid title in the hands of
an innocent purchaser for value, even if the true owner thereof
has been in possession of the genuine title, which is valid and
has not been cancelled.
It is well-settled that "a certificate of title serves as evidence of
an indefeasible and incontrovertible title to the property in favor
of the person whose name appears therein. The real purpose of
the Torrens system of land registration is to quiet title to land
and put a stop forever to any question as to the legality of the
title."17

In Tenio-Obsequio v. Court of Appeals, 18 we explained the


purpose of the Torrens system and its legal implications to third
persons dealing with registered land, as follows:
The main purpose of the Torrens system is to avoid possible
conflicts of title to real estate and to facilitate transactions
relative thereto by giving the public the right to rely upon the
face of a Torrens certificate of title and to dispense with the need
of inquiring further, except when the party concerned has actual
knowledge of facts and circumstances that should impel a
reasonably cautious man to make such further inquiry. Where
innocent third persons, relying on the correctness of the
certificate of title thus issued, acquire rights over the property,
the court cannot disregard such rights and order the total
cancellation of the certificate. The effect of such an outright
cancellation would be to impair public confidence in the
certificate of title, for everyone dealing with property registered
under the Torrens system would have to inquire in every
instance as to whether the title has been regularly or irregularly
issued by the court. Every person dealing with registered land
may safely rely on the correctness of the certificate of title
issued therefor and the law will in no way oblige him to go
beyond the certificate to determine the condition of the property.
The Torrens system was adopted in this country because it was
believed to be the most effective measure to guarantee the
integrity of land titles and to protect their indefeasibility once the
claim of ownership is established and recognized. If a person
purchases a piece of land on the assurance that the seller's title
thereto is valid, he should not run the risk of being told later that
his acquisition was ineffectual after all. This would not only be
unfair to him. What is worse is that if this were permitted, public
confidence in the system would be eroded and land transactions
would have to be attended by complicated and not necessarily
conclusive investigations and proof of ownership. The further
consequence would be that land conflicts could be even more
numerous and complex than they are now and possibly also
more abrasive, if not even violent. The Government, recognizing
the worthy purposes of the Torrens system, should be the first to

accept the validity of titles issued thereunder once the


conditions laid down by the law are satisfied.
The Torrens system was intended to guarantee the integrity and
conclusiveness of the certificate of registration, but the system
cannot be used for the perpetration of fraud against the real
owner of the registered land. The system merely confirms
ownership and does not create it. It cannot be used to divest
lawful owners of their title for the purpose of transferring it to
another one who has not acquired it by any of the modes
allowed or recognized by law. Thus, the Torrens system cannot
be used to protect a usurper from the true owner or to shield the
commission of fraud or to enrich oneself at the expense of
another.19
It is well-established in our laws and jurisprudence that a person
who is dealing with a registered parcel of land need not go
beyond the face of the title. A person is only charged with notice
of the burdens and claims that are annotated on the title. 20 This
rule, however, admits of exceptions, which we explained in
Clemente v. Razo:21
Any buyer or mortgagee of realty covered by a Torrens
certificate of title, in the absence of any suspicion, is not
obligated to look beyond the certificate to investigate the titles of
the seller appearing on the face of the certificate. And, he is
charged with notice only of such burdens and claims as are
annotated on the title.
We do acknowledge that the rule thus enunciated is not cast in
stone. For, indeed, there are exceptions thereto. Thus, in
Sandoval vs. CA, we made clear the following:
The aforesaid principle admits of an unchallenged exception:
that a person dealing with registered land has a right to rely on
the Torrens certificate of title and to dispense with the need of
inquiring further except 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 ofa 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. The
presence of anything which excites or arouses suspicion should
then prompt the vendee to look beyond the certificate and
investigate the title of the vendor appearing on the face of said
certificate. One who falls within the exception can neither be
denominated an innocent purchaser for value nor a purchaser in
good faith; and hence does not merit the protection of the law.22
Thus, the determination whether one is a buyer in good faith or
can be considered an innocent purchaser for value becomes
imperative. Section 55 of the Land Registration Act provides
protection to an innocent purchaser for value 23 by allowing him
to retain the parcel of land bought and his title is considered
valid. Otherwise, the title would be cancelled and the original
owner of the parcel of land is allowed to repossess it.
Jurisprudence has defined an innocent purchaser for value as
one who buys the property of another without notice that some
other person has a right to or interest therein and who then pays
a full and fair price for it at the time of the purchase or before
receiving a notice of the claim or interest of some other persons
in the property. Buyers in good faith buy a property with the
belief that the person from whom they receive the thing is the
owner who can convey title to the property. Such buyers do not
close their eyes to facts that should put a reasonable person on
guard and still claim that they are acting in good faith. 24
The assailed Decision of the CA held that the Andals were
buyers in good faith, while Spouses Peralta were not. Despite its
determination that fraud marred the sale between Bernardina
Abalon and Rellama, a fraudulent or forged document of sale
may still give rise to a valid title. The appellate court reasoned
that if the certificate of title had already been transferred from
the name of the true owner to that which was indicated by the
forger and remained as such, the land is considered to have
been subsequently sold to an innocent purchaser, whose title is

thus considered valid.25 The CA concluded that this was the


case for the Andals.
The appellate court cited Fule v. Legare 26 as basis for its ruling.
In the said case, the Court made an exception to the general
rule that a forged or fraudulent deed is a nullity and conveys no
title. A fraudulent document may then become the root of a valid
title, as it held in Fule:
Although the deed of sale in favor of John W. Legare was
fraudulent, the fact remains that he was able to secure a
registered title to the house and lot. It was this title which he
subsequently conveyed to the herein petitioners. We have
indeed ruled that a forged or fraudulent deed is a nullity and
conveys no title (Director of Lands vs. Addison, 49 Phil., 19).
However, we have also laid down the doctrine that there are
instances when such a fraudulent document may become the
root of a valid title. One such instance is where the certificate of
title was already transferred from the name of the true owner to
the forger, and while it remained that way, the land was
subsequently sold to an innocent purchaser. For then, the
vendee had the right to rely upon what appeared in the
certificate (Inquimboy vs. Cruz, G.R. No. L-13953, July 28,
1960).
We have been constrained to adopt the conclusion here set
forth because under the Torrens system, "registration is the
operative act that gives validity to the transfer or creates a lien
upon the land (Secs. 50 and 51, Land Registration Act).
Consequently, where there was nothing in the certificate of title
to indicate any cloud or vice in the ownership of the property, or
any encumbrance thereon, the purchaser is not required to
explore farther than what the Torrens title upon its face indicates
in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto. If the rule were otherwise,
the efficacy and conclusiveness of the certificate of title which
the Torrens system seeks to insure would entirely be futile and
nugatory. (Reynes vs. Barrera, 68 Phil., 656; De Lara and De
Guzman vs. Ayroso, 50 O.G. No 10, 4838). The public shall then

be denied of its foremost motivation for respecting and


observing the Land Registration Act. In the end, the business
community stands to be inconvenienced and prejudiced
immeasurably.
Furthermore, when the Register of Deeds issued a certificate of
title in the name of John W. Legare, and thereafter registered
the same, John W. Legare, insofar as third parties were
concerned, acquired valid title to the house and lot here
disputed. When, therefore, he transferred this title to the herein
petitioners, third persons, the entire transaction fell within the
purview of Article 1434 of the Civil Code. The registration in
John W. Legare's name effectively operated to convey the
properties to him.
After executing the Deed of Sale with Bernardina Abalon under
fraudulent circumstances, Rellama succeeded in obtaining a title
in his name and selling a portion of the property to the Andals,
who had no knowledge of the fraudulent circumstances
involving the transfer from Abalon to Rellama. In fact, the
Decisions of the RTC and the CA show no factual findings or
proof that would rebut the presumption in favor of the Andals as
buyers in good faith. Thus, the CA correctly considered them as
buyers in good faith and upheld their title.
The Abalons counter this ruling and allege that the CA erred in
relying on Fuleto justify its assailed Decision. They argue that
Torres v. Court of Appeals27 is the applicable ruling, because the
facts therein are on all fours with the instant case. 28
In Torres, the subject property was covered by TCT No. 53628
registered in the name of Mariano Torres. His brother-in-law
Francisco Fernandez, misrepresenting that the copy of the title
had been lost, succeeded in obtaining a court Order for the
issuance of another copy of TCT No. 53628. He then forged a
simulated deed of sale purportedly showing that Torres had sold
the property to him and caused the cancellation of TCT No.
53628, as well as the issuance of TCT No. 86018 in his name.
Soon, Fernandez mortgaged the property to Mota. Upon

learning of the fraud committed by Fernandez, Torres caused


the annotation of an adverse claim on the formers copy and
succeeded in having Fernandezs title declared null and void.
Meanwhile, Mota was able to foreclose on Fernandezs real
estate mortgage, as well as to cause the cancellation of TCT
No. 86018 and the issuance of a new one TCT No. 105953
in her name. The issue to be resolved in Torres was whether
Mota can be considered an innocent mortgagee for value, and
whether her title can be deemed valid. Ruling in the negative,
the Court explained:
There is nothing on the records which shows that Torres
performed any act or omission which could have jeopardized his
peaceful dominion over his realties. The decision under review,
however, in considering Mota an innocent mortgagee protected
under Section 65 of the Land Registration Law, held that Torres
was bound by the mortgage. Inevitably, it pronounced that the
foreclosure sale, where Mota was the highest bidder, also bound
Torres and concluded that the certificate of title issued in the
name of Mota prevails over that of Torres'. As correctly pointed
out by Torres, however, his properties were sold on execution,
and not on foreclosure sale, and hence, the purchaser thereof
was bound by his notice of adverse claim and lis pendens
annotated at the back of Fernandez' TCT. Moreover, even if We
grant Mota the status of an innocent mortgagee, the doctrine
relied upon by the appellate court that a forged instrument may
become the root of a valid title, cannot be applied where the
owner still holds a valid and existing certificate of title covering
the same interest in a realty. The doctrine would apply rather
when, as in the cases for example of De la Cruz v. Fabie, 35
Phil. 144 [1916], Fule v. De Legare, No. L-17951, February 28,
1963, 7 SCRA 351, and Republic v. Umali, G.R. No. 80687, April
10, 1989, the forger thru insidious means obtains the owners
duplicate certificate of title, converts it in his name, and
subsequently sells or otherwise encumbers it to an innocent
holder for value, for in such a case the new certificate is binding
upon the owner (Sec.55, Act 496; Sec. 53, P.D. No. 1529). But if
the owner holds a valid and existing certificate of title, his would
be indefeasible as against the whole world, and not that of the

innocent holder's. "Prior tempore potior jure" as We have said in


Register of Deeds v. Philippine National Bank, No. L-17641,
January 30, 1965, 13 SCRA 46, citing Legarda v. Saleeby, 31
Phil.590, Roman Catholic Bishop v. Philippine Railway, 49 Phil.
546, Reyes v. Borbon, 50 Phil. 791. 29 (Emphasis and
underscoring supplied)
We do not agree with the contention of the Abalons that the
ruling in Torresis controlling in this case. They quoted a portion
in the said case that is clearly an obiter. In Torres, it was shown
that Mariano had annotated an adverse claim on the title
procured by Fernandez prior to the execution sale, in which
Mota was the highest bidder. This Court declared her as a
mortgagee in bad faith because, at the back of Fernandezs title,
Torres made an annotation of the adverse claim and the notice
of lis pendens. The annotation of the adverse claim was made
while the forged document was still in the name of the forger,
who in this case is Fernandez. That situation does not obtain in
the instant case.
The records of the RTC and the CA have a finding that when
Rellama sold the properties to the Andals, it was still in his
name; and there was no annotation that would blight his clean
title. To the Andals, there was no doubt that Rellama was the
owner of the property being sold to them, and that he had
transmissible rights of ownership over the said property. Thus,
they had every right to rely on the face of his title alone.
The established rule is that a forged deed is generally null and
cannot convey title, the exception thereto, pursuant to Section
55 of the Land Registration Act, denotes the registration of titles
from the forger to the innocent purchaser for value. Thus, the
qualifying point here is that there must be a complete chain of
registered titles.30 This means that all the transfers starting from
the original rightful owner to the innocent holder for value and
that includes the transfer to the forger must be duly registered,
and the title must be properly issued to the transferee. Contrary
to what the Abalons would like to impress on us, Fuleand
Torresdo not present clashing views. In Fule, the original owner

relinquished physical possession of her title and thus enabled


the perpetrator to commit the fraud, which resulted in the
cancellation of her title and the issuance of a new one. The
forged instrument eventually became the root of a valid title in
the hands of an innocent purchaser for value. The new title
under the name of the forger was registered and relied upon by
the innocent purchaser for value. Hence, it was clear that there
was a complete chain of registered titles.
On the other hand in Torres, the original owner retained
possession of the title, but through fraud, his brother-in-law
secured a court order for the issuance of a copy thereof. While
the title was in the name of the forger, the original owner
annotated the adverse claim on the forged instrument. Thus,
before the new title in the name of the forger could be
transferred to a third person, a lien had already been annotated
on its back. The chain of registered titles was broken and sullied
by the original owners annotation of the adverse claim. By this
act, the mortgagee was shown to be in bad faith.
In the instant case, there is no evidence that the chain of
registered titles was broken in the case of the Andals. Neither
were they proven to have knowledge of anything that would
make them suspicious of the nature of Rellamas ownership
over the subject parcel of land. Hence, we sustain the CAs
ruling that the Andals were buyers in good faith. Consequently,
the validity of their title to the parcel of the land bought from
Rellama must be upheld.
As for Spouses Peralta, we sustain the ruling of the CA that they
are indeed buyers in bad faith. The appellate court made a
factual finding that in purchasing the subject property, they
merely relied on the photocopy of the title provided by Rellama.
The CA concluded that a mere photocopy of the title should
have made Spouses Peralta suspicious that there was some
flaw in the title of Rellama, because he was not in possession of
the original copy. This factual finding was supported by
evidence.

The CA pointed out Spouses Peraltas Answer to the Complaint


of the Abalons in Case No. 9243 in the RTC of Legaspi City,
Branch 5. In their Answer, they specifically alleged as follows:
2- These defendants [Spouses Peralta] acquired lot No.
1679-A by purchase in good faith and for value from
Restituto Rellama under Doc. No. 11212, page No. 26,
Book No. 60, Series of 1996 of Notary Public Atty. Otilio
Bongon, Legaspi City on March 2, 1995 copy of which is
attached as and made part of this answer as Exhibit "1;"
3- That these defendants were handed over by Rellama
xerox [sic] copy of the Transfer Certificate of Title No.
42103 issued by the Register of Deed of Legaspi City on
the 2nd day of August 1995 copy attached and made
integral part as Exhibit "1-A" and also Original Certificate
of Title No. (O) 16 as Exhibit "1-B"31
We have no reason to disturb this factual finding of the CA
because it is supported by the evidence on record. Spouses
Peralta filed a Petition for Review on Certiorari under Rule 45,
which allows only questions of law to be raised. It is a settled
rule that questions of fact are not reviewable in this kind of
appeal. Under Rule 45, Section 1, "petitions for review on
certiorari shall raise only questions of law which must be
distinctly set forth."32 A question of fact arises when there is "as
to the truth or falsehood of facts or when there is a need to
calibrate the whole evidence considering mainly the credibility of
the witnesses, the existence and relevancy of specific
surrounding circumstances, as well as their relation to each
other and to the whole, and the probability of the situation." 33 It is
further pointed out that "the determination of whether one is a
buyer in good faith is a factual issue, which generally is outside
the province of this Court to determine in a petition for review." 34
Whether or not Spouses Peralta are buyers in good faith, is
without a doubt, a factual issue. Although this rule admits of
exceptions,35 none of these applies to their case. There is no
conflict between the factual findings and legal conclusions of the

RTC and those of the CA, both of which found them to be


buyers in bad faith. The fact that they did not participate in the
proceedings before the lower court does not help their case
either.
On the issue of the legal standing of the Abalons to file this
case, we find that the CA correctly upheld their standing as heirs
of the deceased Bernardina Abalon. The appellate court ruled
that during her lifetime, Bernardina Abalon had promised her
heirs - siblings Mansueto and Amelia - that she would give them
the subject property. A duplicate copy of OCT No. (0) 16 was
delivered to them upon her death. Thus, the CA concluded that
the two siblings acquired the subject property by ordinary
prescription. Further, it deduced that the mode of transmission
of the property from Bernardina to her nephew and niece was a
form of donation mortis causa, though without the benefit of a
will.36 Despite this omission, it still held that Mansueto and
Amelia acquired the subject property through ordinary
acquisitive prescription because, since the death of their aunt
Bernardina, they had been in possession of the property for
more than 10 years that ripened into full ownership. 37
Under Article 97538 of the Civil Code, siblings Mansueto and
Amelia Abalon are the legal heirs of Bernardina, the latter
having had no issue during her marriage. As such, they
succeeded to her estate when she passed away. While we
agree with the CA that the donation mortis causa was invalid in
the absence of a will, it erred in concluding that the heirs
acquired the subject property through ordinary acquisitive
prescription. The subject parcel of land is a titled property; thus,
acquisitive prescription is not applicable. 39 Upon the death of
Bernardina, Mansueto and Amelia, being her legal heirs,
acquired the subject property by virtue of succession, and not by
ordinary acquisitive prescription.
WHEREFORE, the petitions in G.R. Nos. 183448 and 183464
are DENIED for lack of merit. The Decision in CA-G.R. CV No.
85542 is hereby AFFIRMED.

SO ORDERED.
MARIA
LOURDES
Chief Justice, Chairperson

P.

A.

SERENO